October 25, 1932

CON

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

Conservative (1867-1942)

Mr. BENNETT:

The oil paid duty. The question was as to whether or not it came

strictly within an item in the tariff, there being in the tariff a provision for free entry into this country of crude petroleum. Then petroleum, not crude, but of a certain specific gravity, was subject to a rate of duty, not being free. The question was whether that would be a proper classification of this particular quality of oil or whether it should be designated a type of gasoline because of its high quality content, and the fact that it was alleged-and this is still under investigation-that it did not require to be refined to produce gasoline, but had only to be rectified which was not refining within the meaning of the section, there being, as will be remembered by the house, a provision in the agreement providing for entry into this country on specified terms of oil from the British Empire. That meant oil from Trinidad which is coming into Canada, which is not crude in its natural form or state, but which is a mixture of crude and other petroleum products.

Topic:   QUESTIONS
Subtopic:   RUSSIAN OIL SHIPMENTS
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SOLDIER SETTLEMENT


On the orders of the day: Mr. CAMERON R. McINTOSH (North Battleford): I have a question to direct to the Minister of Labour. I understand a special committee is investigating the administration of the Pension Act as accepted by parliament under the old government in 1930. So far as I can see, no attention has been paid to the investigation of problems concerning returned men on the land throughout Canada. My question is: Does the minister or his department intend to have soldier settlement conditions across Canada investigated by a special committee of parliament later in the session?


CON

Wesley Ashton Gordon (Minister of Immigration and Colonization; Minister of Labour; Minister of Mines)

Conservative (1867-1942)

Hon. W. A. GORDON (Minister of Labour):

This is the first intimation I have had from any source that there was any desire on anybody's part for such a committee to investigate. The hon. member, in referring to the position of returned soldiers upon the land is, I take it, referring to what are commonly called soldier settlers. The condition of these men is constantly under review by the field staff of the soldier settlement board, land settlement branch. If the hon. member knows of any difficulties which are not now under review, I should be very glad if he would make known those difficulties to me. They will be promptly investigated, and if any injustice is being done, which I greatly doubt, by the department, it will be immediately rectified.

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Topic:   QUESTIONS
Subtopic:   SOLDIER SETTLEMENT
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IMPERIAL ECONOMIC CONFERENCE


The house resumed from Monday, October 24, consideration of the motion of Right Hon. R. B. Bennett (Prime Minister) for approval of the trade agreement entered into at Ottawa the 20 th day of August, 1932, between representatives of His Majesty's government in Canada, and 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

Harry Butcher

Liberal

Mr. HARRY BUTCHER (Last Mountain):

Mr. Speaker, for a few minutes last evening before the debate was adjourned I had been dealing with one of two features of two or three of the articles in this agreement. During the few minutes that are now at my disposal I wish very briefly to draw attention to two or three provisions in other articles of the agreement. I should like to revert to article 3 which reads:

His Majesty's government in the United Kingdom undertake that the general ad valorem duty of 10 per cent imposed by section one of the Import Duties Act, 1932, on the foreign goods specified in schedule C shall not be reduced except with the consent of His Majesty's government in Canada.

Schedule C includes the following items:

Timber of all kinds imported into the United Kingdom in substantial quantities from Canada, in so far as now dutiable.

Fish, fresh, sea.

Salmon, canned.

Other fish, canned.

Asbestos.

Zinc.

Lead.

I cannot imagine that this extraordinary provision will be agreeable to the majority of the British people, but I think they are well able to take care of their rights and privileges in the matters both of duties generally and of duties on food in particular, I remember in the year 1923, a Conservative government then being in power in Great Britain, it was decided to place duties on food. The British government referred the matter to the people and the people answered in no uncertain terms; they were not going to have their food taxed. I h.ave it in mind that the time will come in the not far distant future when once again the British people will be asked to express their approval or disapproval of the action of their government in permitting the food of the people to be taxed, and I firmly believe their answer will

be precisely the same as it was in 1923. In that year only the men in Great Britain had the right to vote on this important question. When the next election comes, the women too will record their votes, and notwithstanding the fact that the majority of the men in Great Britain have always been opposed to taxes on food, I firmly believe that the women of Great Britain are even more opposed to such taxation. They have to make up the family budget and they know the difficulties of providing food for the family. That question, however, may be left, so far as the British point of view is concerned, to the British people, but I foresee there may be very embarrassing times for the government of Canada. The time may come when the matter of a reduction of the duties on these items may be referred by His Majesty's government in Great Britain to His Majesty's government in Canada and then emphatically there will be a most embarrassing time for His Majesty's government in Canada.

Just a few words concerning article 9. There has been much discussion as to the effect of this article which reads:

His Majesty's government in Canada will invite parliament to pass the legislation necessary to substitute for the duties of customs now leviable on the goods specified in schedule E the duties shown in that schedule, provided that nothing in this article shall preclude His Majesty's government in Canada from reducing the duties specified in the said schedule so long as the margin of British preference shown in that schedule is preserved or from increasing the rates under the intermediate or general tariff set out in the said schedule.

One thing is abundantly clear, whatever else may be in dispute, and that is that there are 159 items in the schedule under which no reduction of the intermediate or general rate of duties may be made for the coming five years. In other words, the shackles with which trade in those items is at present encumbered are riveted for that period of time. There are a few outstanding examples coming under this particular article to which I should like to draw the attention of the house. On tomatoes the intermediate tariff is 27 per cent; general tariff, 30 per cent; British preference, free. Last year we imported from the United States of America tomatoes to the value of $1,321,432, and nothing from the United Kingdom. What does that mean? I think it means that throughout the year and in particular during those portions of the year when Canadian tomatoes are not to be had, the people of this country will have to pay more for the privilege of eating that article of food. There are many others, but two in

United Kingdom

particular I wish to draw to the attention of the house: Barbed wire fencing and cream separators. They have already been referred to. I think it is most unfortunate that the government decided to restrict competition in these two items. We have not been bringing in barbed wire from Great Britain to any extent, and no cream separators at all. The farmers of this country will in all probability have to pay more for their separators in future.

I wish to refer briefly to article 13; I shall not read the whole of it as my time is passing rapidly. It commences by saying:

His Majesty's government in Canada undertake that on the request of His Majesty's government in the United Kingdom they will cause a review to be made by the tariff board ... on any commodities specified in such request (of the United Kingdom)

It goes on:

-after the receipt of the report of the tariff board thereon such report shall be laid before parliament and parliament shall be invited to vary wherever necessary the tariff on such commodities of United Kingdom origin in such manner as to give effect to such principles.

Now I wish to refer to the statement made by the Prime Minister in the course of his address. Referring to such recommendations of the tariff board he said:

The government, of course, could not, without being guilty of a sharp departure in constitutional practice relating to tariff and other financial matters, abrogate its responsibility of recommending to parliament all decisions affecting our tariff structure.

The Prime Minister has in those words confirmed the contention continually made from this side of the house that it was contrary to constitutional practice that tariff changes should be made by order in council. [DOT]

In the two minutes I have left I should like to summarize the conclusions at which I have personally arrived in regard to this agreement. I have arrived at two conclusions in its favour:

1. The list of items now permitted to enter Canada free from Great Britain has been increased from 81 to 159, which, though good in itself, does not compare with the provisions of the Dunning budget, in that the latter placed 270 new items on the free list and increased the total number of such items to 589.

2. This action will probably result in an increase in the total trade between Great Britain and Canada..

That is all I can say in favour of this agreement. I find against it:

1. The principle of high protection has been placed more firmly than ever in the saddle by

reason of the fact that there have been increases of duties on 139 items under the intermediate and general tariffs.

2. In respect to the 159 items permitted to enter Canada from Great Britain on the free list, as the margin of preference must be maintained under the provisions of article 9, Canada is precluded from making favoured nation agreements with respect to those items for five years.

3. The majority of the items to be admitted free or under reduced duties are items that will be purchased by manufacturers for further processing, and it is at least doubtful if any reduction in the cost of the finished article will be passed on to the consumer.

4. The general effects of the increased duties under the intermediate and general tariffs will be (a) to increase the cost to the consumer of such goods; and (b) to invite reprisals from the foreign nations to which those duties apply.

5. The agreement offers no remedy for the fact that the exchange differential at present wholly nullifies any possible or alleged advantages under the preferences, and therefore our primary producers will to a very large extent be unable profitably to avail themselves of such alleged advantages, thus rendering the proposed benefits quite illusory.

My conclusions, Mr. Speaker, are that the disadvantages of this agreement outweigh its advantages, and therefore I must of necessity vote against the resolution.

Topic:   QUESTIONS
Subtopic:   IMPERIAL ECONOMIC CONFERENCE
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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. G. B. NICHOLSON (East Algoma):

Mr. Speaker, I trust that the hon. gentleman who has just taken his seat (Mr. Butcher) will not consider me in any sense discourteous if I do not make any effort to follow him in the interesting address which he has just concluded.

Personally, Mr. Speaker, I look upon the resolution now before the house and the agreements that we are asked to sanction thereby as the most important matters that have been brought before the parliament of Canada in this generation, and it is my opinion that a very great majority of the people of this country look upon them in the same light and that they have been anxious and still are anxious that they should be accepted by this parliament unanimously and without political controversy. I believe also that when we assembled here on the sixth of October, if one may judge from the expressions of opinion from all corners of the house, it was the desire of the majority of the members, without regard to political complexion, that these agreements should be accepted in that same spirit.

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But the right hon. leader of the opposition (Mr. Mackenzie King) decreed otherwise, and in a speech of very considerable length called upon his followers to oppose the resolution and vote against the agreement. The reasons prompting the hon. gentleman to do that I am not going to attempt to discuss or analyze; but taking the speech he delivered as the key to his opposition to the whole scheme and as the lead that he gave to his followers as to the course they must take in opposing this treaty, the right hon. gentleman's position soon becomes obvious. I should like to divide the reasons he gave into six parts:

The first instruction to his followers was to abuse the Prime Minister. That could be taken for granted.

Secondly, he endeavoured to convince the house and the country that the Prime Minister had imposed some kind of brutal, unjust and burdensome agreement on the people of the United Kingdom.

The third was that other members of his following were to take precisely the opposite position and maintain that the United Kingdom representatives had imposed an agreement exactly similar in character upon Canada, and had in fact, as was stated by the hon. member for St. James (Mr. Rinfret), assumed a dictatorship as to the course that Canada should follow in her fiscal and commercial arrangements.

The fourth position of the right hon. gentleman was that in making these agreements for a period of five years the constitutions of all parts of the British Empire had been shaken to their very foundations.

His fifth objection was that in working out these agreements, negotiations or as the right hon. gentleman was pleased to term it, bargaining took place.

Sixth, and most absurd of all, was his contention that this agreement means diversion of trade, that the governments of the United Kingdom and of the British dominions together with the producers and manufacturers in each of these countries met together in secret conclave and there entered into some kind of devilish conspiracy to divert trade from foreign countries to the British Empire and dominions, thereby endangering the peace of the world.

I suggest, Mr. Speaker, that that is a fair summary of the position which the right hon. gentleman took in his opening speech, and I submit also that members who are supporting him on the other side of the house have followed with fair consistency the lead that he there gave to them. May I just briefly analyze one or two of those positions before coming to the main theme I wish to discuss?

First, abuse the Prime Minister. Mr. Speaker, you can take it for granted that in any debate in which the right hon. leader of the opposition participates or in any speech or address that he delivers, even if it be one to the ladies' society of some church, at least one-half of his time will be taken up by a vituperative denunciation of the Prime Minister. I would just remind the right hon. gentleman and his follower's that at the moment the Right Hon. R. B. Bennett is the Prime Minister of Canada, and furthermore he does not occupy that position through any log-rolling scheme or bargaining, as the right hon. gentleman was pleased to term it, but by virtue of the numbers who were elected to support him by the vote of a very considerable majority of the electors of this country-a position that my right hon. friend the leader of the opposition never had the satisfaction of occupying.

I come now to the five year period for which the agreements have been signed. Personally I look upon that length of time as one altogether too short. 1 have the consolation however that no government coming into power in Canada will presume to make any attempt at interference with these agreements. As a matter of fact all governments will look upon them in exactly the same sense as the delegates looked upon them; all governments will consider the agreements as the beginning of a great scheme of inter-empire development. In regard to the stipulated time, I say without hesitation that many of the industries which will ultimately profit by the agreement cannot hope to reap full advantage from them within a space of less than five years.

In that connection I should like to make some statements concerning an industry with which I am particularly familiar, namely that of lumbering. The statement has been made by many hon. members that the agreements mean nothing, so far as lumbering is concerned. A few moments ago the hon. member for Nipissing (Mr. Hurtubise) made a correction in Hansard, stating that last night he had said all Ontario lumber men looked upon the agreements as useless. It is strange that the Canadian Lumbermen's Association and the committee representing lumber men in all parts of Canada have never been apprised of the fact that lumber men anywhere looked upon the agreements in that light. At a later point in my remarks however I shall deal with that angle of the matter. I say now that Canada could not hope to recapture in less than from three to five years the British lumber market she has lost during the last

United Kingdom

ten years. I wonder if hon. gentlemen realize the operations necessary to produce lumber in the quantities and qualities demanded by the British market? First of all, that market has been completely saturated with lumber dumped into it by Russia and other countries in northern Europe. This has been a direct result of the Soviet policy of dumping. Secondly, because we have lost the trade the lumbermen of Canada have not sufficient stocks, and this applies particularly to eastern Canada. When we enjoyed the market in Great Britain for our lumber from 600,000,000 to 800,000,000 feet crossed the Atlantic each year. Our lumbermen have not sufficient lumber in their yards cut to United Kingdom standards, and for that reason it is impossible to step into that particular market, as is suggested by some hon. members, without taking the time necessary to provide the stock. If in September of this year we had begun to produce logs and to cut lumber for the British market, our product would not become merchantable to any degree until 1934. Therefore, under what sort of trade agreement lasting for only six months or a year, as suggested by hon. members opposite, could we enter the United Kingdom market with our lumber?

Then the accusation is made that in our negotiations we descended to bargaining beneath 'the dignity of representatives of countries within the empire. I wonder if there was any bargaining when the right hon. gentleman opposite was negotiating the French treaty. Unfortunately the hon. member for Quebec East (Mr. Lapointe) is not in the house, because his name is attached to that treaty. I wonder if he resorted to any bargaining, or did he just have the French delegates bring in the treaty on a wooden platter and say to him, "Just sign here, at the point marked 'X'."

Topic:   QUESTIONS
Subtopic:   IMPERIAL ECONOMIC CONFERENCE
Sub-subtopic:   CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
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CON

Peter McGibbon

Conservative (1867-1942)

Mr. McGIBBON:

The results would indicate that.

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Subtopic:   IMPERIAL ECONOMIC CONFERENCE
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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

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Imperial Conference-Trade Agreements

operators in Russian wood. Russia probably owes us today more than all the other timber creditors put together. . . .

Colonel Morgan did not say that in self defence he was compelled to enter into another contract with the Soviet republic under the terms set out here.

. . . and during the past few years we have been one of the firms acting as agents for the Russians here. This may surprise you, but it is quite obvious that so long as Russian timber can come into this country and is demanded by the buyers we are forced to be in that trade.

I should like to refer to the question of whether or not these agreements will be of any advantage to the Canadian lumber trade on the Pacific and Atlantic coasts. When I was asked to become chairman of the committee I made this statement to the lumbermen's association: "It makes no difference to me whether a cargo of lumber is shipped from Ontario, from British Columbia, from Nova Scotia, from Quebec or from New Brunswick, so long as it is a cargo of Canadian lumber. It means that advantage to Canada." After considering the matter in all its aspects and consulting with the governments concerned for five months before the conference, as well as during the sittings of the conference, the committee made the representations set out in their submission, asking for a twenty per cent preference. They also asked for control of Russia, a partial or complete embargo. Paragraph 21 of the agreement is much more to the advantage of Canadian lumbermen than an embargo against Russia would have been, because it provides for adequate protection against anything in the nature of state dumping from any part of the world. It is true that we did not secure the preference for which we asked, but we did secure a ten per cent preference for Canadian lumber in the United Kingdom market, plus the control of state aided dumping.

Looking back at the position the Canadian lumber trade occupied in the United Kingdom ' market before 1920, and indeed before the war, when we supplied that market to the extent of 1,250,000,000 feet board measure, as one who has given some thought and study to the question, I say that as conditions gradually become normal and as the present saturated condition of the United Kingdom market clears up, we will get back there with our lumber. We are doing it now in a small way; I know that in British Columbia, where their business is built on such a basis that they can more quickly take advantage of a turn or change in trade routes, they are now profiting to some degree at least by the pro-

vision in the agreement continuing the ten per cent preference indefinitely in relation to Canadian lumber and timber.

Just last week we had in Ottawa the representative of one of the largest importing firms in the United Kingdom. This gentleman visited New Brunswick and Quebec, where he met lumber and timber operators; he came to Ottawa, where he discussed the matter with the manager of the Canadian Lumbermen's Association, and he went to Toronto, where he interviewed officials of the Department of Lands and Forests, as he did in the other provinces. That gentleman now is on his way to the Pacific coast. What was his purpose in making these calls? As he said himself, his purpose was not to buy lumber today; the market is not available for lumber now. That gentleman came here to establish contacts through which his firm can purchase lumber in the latter part of 1933, in 1934 and thereafter. That was his aim. The lumbermen's committee had no thought that we were going to step right back into the markets that had been taken away from us by ten years of dumping, but as one of those who have studied the question I do not hesitate to say that when conditions become stabilized, under these agreements the Canadian lumber industry will get back that portion of the British market it once held.

What would it mean to the industrial life of Canada if we were to regain that market? It is not a new market; it is a market we lost through the competition-which is not competition at all-that I have suggested. Here is what it would mean: directly and indirectly the production of one billion board feet of lumber in this country would mean the employment of 60,000 men meaning a total population connected with this industry of 200,000 and according to the figures supplied by the bureau of statistics, this would mean a maintained population of 600,000. On the average, the British market absorbs more than 300,000,000,000 feet of lumber. Because of the character of its industries, there is no other country which uses the same quantity of sawn lumber and timber in proportion to its population.

I should like to revert briefly to the bogeymen set up by hon. members opposite. It has been stated that Canada and other parts of the empire sought to impose unfair conditions during the period of the economic conference. In this connection I should like to refer also to the statements made by the hon. member for Shelburne-Yarmouth ridiculing the whole conference and those who took part therein. The manner in which hon. gentle-

United Kingdom

men opposite have contradicted themselves indicates clearly their predicament. I am sure the Canadian people will appraise for themselves the manner in which the Prime Minister and his associates attended to the interests of Canada during the period of the conference. In connection with those representatives who came from other parts of the empire I say, without fear of satisfactory contradication, that never at any time, in the history of the empire or at any place was the empire represented by more broad-minded, keen-sighted or patriotic men than assembled here in Ottawa in July and August last. I will go further and say there has never been drawn together representatives of any country or group of countries who met with greater determination not only to serve the interests of the particular country which they represented but to do their utmost to bring about conditions beneficial to all represented. While everything was not achieved which some people thought might have been achieved, while the conference did not usher in the millennium, I am confident that as time goes on it will be more and more admitted that this conference opened up a new epoch in empire development. I am convinced that the achievements obtained at Ottawa have marked out a course which in due time will be followed by the countries of the world in their efforts to improve conditions for mankind.

Just one other matter and I am finished. The hon. member for Shelburne-Yarmouth, the hon. member for Antigonish^Guysborough, the hon. member for Ni.pissing and the hon. member who has just taken his seat (Mr. Butcher), have all stated that the lumbering industry will not benefit in any sense from these agreements. Other hon. members have said that the apple industry, the agricultural industry and the fishing industry will not benefit but I will say just this: These agreements will come before this house in committee ; they will be considered clause by clause and paragraph by paragraph and I suggest to the right hon. gentleman who leads the opposition, who is so fond of moving amendments that he goes the length of asking you, Mr. Speaker, to give a ruling on amendments not before the house, that he bring in a resolution asking that the lumbering, fishing, apple and agricultural industries of Canada be removed from the benefits of these agreements. If that were done I should like to see what action the hon. member for Shelburne-Yarmouth, the hon. member for Hants-Kings (Mr. Ilsley) and the hon. member for Vancouver Centre (Mr. Mackenzie) would 53719-34J

take on an amendment of that character. I make this suggestion in an effort to show the sincerity of hon. members in opposing this agreement.

Topic:   QUESTIONS
Subtopic:   IMPERIAL ECONOMIC CONFERENCE
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IND

Alan Webster Neill

Independent

Mr. A. W. NEILL (Comox-Alberni):

Mr. Speaker, when I first heard this agreement explained by the right hon. the Prime Minister (Mr. Bennett) I felt very hopeful. I thought there was much of promise in it, but the more I dive into the intricacies of the thing and investigate the peculiarities of its terms, the less hopeful and more disappointed I become. I am beginning to think now that instead of being full of promise, it is full of promises, many of which are of an illusory character. I think that some such idea may have passed through the mind of the right hon. the Prime Minister when I find him warning us of the danger of sticking too closely to the letter of the agreement and telling us that we must depend more on the obligations, not necessarily written but forming part of the warp and woof of the agreement. An analogous situation might be that of a lawyer drawing a mortgage and omitting to put in anything about the payment of interest. Upon his client objecting he would say: "Well, yes, there is nothing about interest in the actual mortgage, but the intention to pay interest is part of the warp and woof of the whole transaction." I think the mortgagee, in the one case, and the industrialist, the worker and the unemployed, in the other, would prefer to have any benefits expressed in the bond.

Later on we find a sort of omnibus phrase which is perhaps calculated to cover up any charge of neglect or inability to improve conditions. This indicates that the government, the Prime Minister being the government, has no desire to make it any too easy for us or for the worker to get out of the present situation. I quote the exact words as follows:

Well, we have no desire to undermine that high courage, that resourcefulness and ability of our citizens to emerge out of difficulties, strengthened by trials as by fire.

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LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

Hear, hear.

Topic:   QUESTIONS
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IND

Alan Webster Neill

Independent

Mr. NEILL:

Yes-hear, hear. It sounds very nice, but let me say to the right hon. Prime Minister that we have had enough of fire; we want to get out of the fire. We are looking for a lead and a leader; we want policies to help us get away from these things.

Topic:   QUESTIONS
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CON

Peter McGibbon

Conservative (1867-1942)

Mr. McGIBBON:

See the Vancouver Sun.

Topic:   QUESTIONS
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IND

Alan Webster Neill

Independent

Mr. NEILL:

I do not take the Vancouver Sun, therefore I am ignorant of what it has recently said.

We have had enough of that courage which we have to use when we tell our children

Imperial Conference-Trade Agreements

that they cannot have enough to eat; we have had enough of that resourcefulness which a man mu9t exercise to pay rent, light, fuel and food bills living in a town and receiving a relief wage of $15 per month for himself and his wife. We have had enough of that, we want to get away from it.

The principal interest in this agreement, so far as that portion of British Columbia with which I am most familiar, Vancouver island and the lower mainland is concerned, centres around the lumber, fish and farm items. As far as butter is concerned, the British government has agreed to put a duty of fifteen shillings per hundredweight on butter imported from foreign countries. This is equivalent to about three cents per pound or ten per cent. That is not an unreasonable preference, but it is largely nullified by the fact that the same privilege is given to New Zealand and Australia. They, being members of the empire, receive the same advantages. But these countries are our principal competitors and it will be practically impossible for us to meet the competition of New Zealand and to some extent, that of Australia. I do not blame the government for this; it is not responsible altogether for the situation, but the fact remains that the preference has been rendered almost useless.

The question of eggs is very important to British Columbia. The British government is imposing a duty on eggs from foreign countries ranging from one shilling to one shilling nine pence per great hundred. In our figures that is equivalent to about two to three cents per dozen or possibly eight or ten per cent. Because of our distance from the United Kingdom we can compete only with storage eggs. But there again we run up against a 25 per cent disadvantage in the fact that Denmark and Holland, our real competitors, are close at home, able to send in fresh eggs, and their currency conforms to the British currency, consequently they have a preference of 25 per cent over us and we have a preference of only 10 per cent over them.

There is a proverb which says: "Whilst the grass is growing, the horse may die." That is what is taking place in British Columbia to a very considerable extent. Hundreds and hundreds of poultrymen have been squeezed out of business, absolutely ruined, not for lack of this tariff, but because the government of the day, for the last two years-and it is more than two years now-have persistently refused to consider the application of the farmers of British Columbia in connection with their appeal from the railway board which ruled that we must pay more than double the freight rate on wheat from

the prairies, as compared with the rate for export. They have not even given us the advantage which would accrue to some extent if they had dealt with it and rejected it, in which case we might have taken up another line of appeal. They have, however, done absolutely nothing, thereby allowing wheat to come from the prairies at such a rate that it can be exported to China and the eggs produced thereby shipped to Vancouver cheaper than the wheat can be brought from the prairies to the poultrymen in British Columbia.

Topic:   QUESTIONS
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CON

John Anderson Fraser

Conservative (1867-1942)

Mr. FRASER (Cariboo):

Did those conditions not apply under the former government?

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IND

Alan Webster Neill

Independent

Mr. NEILL:

Not for two years; and in

any case two blacks do not make a white. Perhaps hon. gentlemen opposite are where they are today partly because the Liberal government neglected the matter to some extent, but not to the extent of two years. If the hon. gentleman cannot raise a better argument than that, he had better change to the other side of the house. We are not talking of the sins of the past; we are talking about the sins of the present administration. The amending of that condition would be of more use than this illusory preference which sounds pretty good but is really of very little value.

The two lines from which the districts that I have indicated in British Columbia hope to derive benefit, are fish and lumber. In both those instances, however, we have been singularly unfortunate. As regards lumber we were led to believe we were to get a preference of 20 per cent. I hold in my hand an editorial from a Conservative paper in British Columbia. I shall not read the whole of it, but this is the sense of it. Premier Tolmie understood that fish and lumber were to get a 20 per cent preference, but when he heard that Britain refused to give more than 10 per cent because Canada held back on textiles, he wired to Ottawa emphatically protesting against two basic industries in the west being sacrificed on account of secondary industries in the east. So much to the credit of Premier Tolmie. In these days he is entitled to all the credit he can get and I give it to him freely and without sarcasm. The preference we get is this: the British government have put a duty of 10, 15 and 20 per cent on lumber imported from foreign countries. The only item that amounts to anything is the first one: planks, deals and flooring, 10 per cent. The other items are small in extent. One article on which we receive no preference

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is lumber for shipbuilding and props. We might have shipped a good deal of lumber for shipbuilding, but we are forbidden to do that. Much has been made by speakers in the house and in particular by the Prime Minister himself of the fact that British Columbia, on account of this 10 per cent preference, would be able to get part or the whole of that business in lumber which is now shipped from the western United States, Oregon and Washington, to the British market. That is true. We have obtained some of it. We have something like 65 per cent of it now, but that is not wholly due to the ten per cent preference-that of course, counts its full weight-but it is also due, to the extent of some 7 per cent, to the incident of the exchange which amounts to about that sum. That exchange is likely to disappear at any time; its operation is uncertain; you cannot calculate on it in building sawmills or anything of that kind, and it is very doubtful whether the ten per cent alone would be of any value if it were not for the addition of the exchange.

There is one thing we do know and are quite sure of, in spite of my hon. friend who has just spoken, and that is that a ten per cent preference will not allow us to compete with Scandinavia. I have an illustration under my hand, but I have not time to quote it all. In working it out I have allowed fairly and justly for the preference on the one hand and the disadvantage of the long haul, which is something like $12 a thousand on the transportation. On the other hand I have put the ten (per cent duty, and I have not forgotten that the ten per cent is paid, not only on the lumber but on transportation too. This leaves an advantage to the British merchant to the extent of $3 a thousand to buy from Scandinavia rather than from British Columbia. The British people will continue to buy from Scandinavia, as they always have, such lines as they furnish, and what is not available there, they will buy from the United States. Of the latter part we will get a portion on account of the ten per cent preference and the exchange situation, but that and that only. We shall not be able to go into competition with the ordinary Scandinavian market in Great Britain.

As regards Russia, the matter depends upon article 21. The British have undoubtedly, as has been made so much of, abrogated the agreement, that is the favoured nation agreement, but that is talked about as if they had imposed an embargo. They have done nothing of the kind. This is an ordinary condition necessary to the readjustment of their arrangement. The very sentence in which they give notice of the abrogation expresses a fervent and no doubt willing and sincere desire to increase their trade with Russia. Under article 21 only one action could be of any good to us in British Columbia, and that would be a complete embargo. There is no suggestion in article 21 that in any way we can get or are entitled to that. It is hardly likely that the British people, needing lumber as they do,, would accept a complete embargo, especially as they find we are engaged sub rosa in dealing with Russia. If you will read article 21, you will see the real meaning of it. Somebody said that he was not able to understand it. It is quite simple. This is what the British say they will do: If, through state action on the-part of any foreign country, there is what, might be called dumping, the British government will take steps to prohibit the entry from such foreign country of such commodities for such time as may be necessary to make effective and to maintain-what? "The preferences hereby granted." What is the preference? It is ten per cent, and that is all in God's world they have to do. They have to maintain the preference of ten per cent. They have not to let our lumber in; they have not to impose an embargo ; all that they have pledged themselves to do is to take such steps as will enable them to maintain a preference of ten per cent, and a preference of ten per cent will never permit us to compete with Russia. That: is the explanation. If it enabled us to do so, we would have to give the government credit for the suggestion. I am willing to go this far: I believe the Prime Minister, tried to have this brought about, but he was attempting an impossibility. We must face the situation. It is a case of trying to make water run up hill. Our natural markets for our British Columbia timber for export, besides Japan and so on, are in the northern United States, Nebraska, the Dakotas and so forth, and the midwestern states. The farmers there want cheap lumber and that is what we have. Anyone can sell No. 1 lumber; it is the second grade we want to get rid of. We have indulged in a tariff war with the United States, but I do not blame the present government for this because it was the United States who started it. Bernard Shaw expressed the opinion that a tariff war of this nature is like a man finding a dead oat in his garden, throwing it into his neighbour's garden, his neighbour throwing it -back, each of them keeping on doing that and getting madder and madder without any specific advantage to either, or even to the cat. Let me give an example of the situation: in British Columbia we make

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a pastry flour which requires a soft wheat. We can get that just a few miles across the border in Washington, but owing to the tariff situation it is more profitable for us to send to Australia for that soft wheat. So it is with lumber. The United States, in the course of this merry game of throwing the cat backward and forward, imposed on our lumber a duty of $4 a thousand. It absolutely killed our trade. In a town near where I live a mill was running, in spite of all the depression, two shifts a day, and they had to shut down absolutely; and there are others in the same position. Now we are going to try to force open a market seven thousand miles away, with a handicap of $12 a thousand on the transportation of lumber, and with a people who really do not want our lumber. What they want is first-class, not second-class lumber; they require lumber cut in a certain way in which we as a rule do not cut it, and which involves our installing expensive machinery which we shall not use part of the time when we are cutting for our own domestic market. But we have to do all these things to try to get our lumber into a market that does not want it. We have lost a market in the northwest United States worth $39,000,000 a year, and in return we hope to capture a share of the lumber shipped from the United States Pacific seaboard to Britain the total value of which does not exceed $4,000,000 annually. In a case like that would it not be better to have a little reciprocity, I might say a little common sense? The American farmer in the northwest wants our lumber, and Canada is the only place where he can handily get his supply. The American timber man wants to ship his hardwood into Ontario. So why not have a little reciprocity and accomplish the two things together? Perhaps after next month it will be easier to have a little reciprocity with our neighbours to the south.

Now I come to fish. We are also unsuccessful about that. The canneries as far back as last April said that they wanted a specific duty, that that was the thing that would suit them best in dealing with competition from Japan. They did not get it; I do not know why. They got a ten per cent duty while they expected a twenty per cent duty. A duty of ten per cent is very small. There is need for a specific duty or a higher ad valorem duty in order that we may meet the unfair competition from Japan and the soviet republic This ten per cent that we have been granted will enable us to compete successfully with the United States in Great Britain because in addition to the ten per cent duty we have

the advantage of the exchange situation. But we cannot compete against Japan, whose yen is very much depreciated at the present time, and article 21 does not apply to that situation at all. Possibly we might get more help than we can get by tinkering with the whole list of tariffs if we put a check on the unscrupulous labelling of salmon tins. Quite recently a large quantity of our third best variety salmon was shipped to Australia and labelled as such, but when it arrived there the labels were taken off and were replaced by others indicating that the salmon was the first variety. That will hurt our trade very much, and that is the fault of the present government. Last year I protested against the regulations that were put in force governing the inspection of salmon. They were a travesty on common sense and exhibited a minimum of efficiency; in fact, no efficiency at all. That led them to label the tins. What they should have done, and they will have to come to this yet, is to provide for the embossing in the tin itself of three words: First, Canada-they have that now; second, the variety-sockeye or chum, etc.; so there can be no deception; third, the grade, whether it is standard or choice. But none of these things can be done under the present foolish regulations. I predict, however, that even this year the regulations will have to be changed. That would help to stop this Jap competition. The ten per cent duty will not help us against the Japs, but it will against the United States.

Here is another little item in British Columbia that could be helped along without applying tariffs at all. The British Columbia fisherman fishes in territorial waters off the coast in competition with the American. He gets halibut and a certain grade of salmon called springs. The best market for both these fish is the United States. There is a duty of two cents a pound against our fish entering the United States, and consequently our fishermen have to take two cents a pound less than the Americans who use our ports. That is rather galling. That also calls for a little reciprocity. The present Minister of Finance (Mr. Rhodes) when he was Minister of Fisheries took a keen interest in this question and promised to take it up at Washington. Had he retained that portfolio I have no doubt he would have done so, but the fisheries have been placed in the hands of a man who knows as much about fish as we know about who is the vice prime minister of Italy, we will say. Nothing has been done, and I predict that nothing will be done under the present incumbent of the ministry of fisheries. The government have made a treaty with the United

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States with regard to the St. Lawrence, and a very little whisper there-because although it is a big matter to us it is a small matter to the United States-would have arranged for this thing and we would not have needed to worry as much about tariffs and so on.

As regards the treaty as a whole, while it does not look so bad if you look at it from a little distance, when you examine it more closely you find that practically every preference has been cancelled by the exchange situation, with the exception of those items involving competition with the United States, where, owing to their exchange situation with Great Britain being worse than ours, we have the advantage. While the exchange situation cancels any tariff benefits there might otherwise be in this agreement, these benefits are accompanied in almost every instance by increases in the duties on the home market, adding to the already overburdened tax-paying consumer and working man. You can paint a sparrow to look like a canary, but the test is, can it sing? And the test of these tariffs is: Will they accomplish the purpose for which it is alleged they are intended, and if so, when-in one or two or three years? Before the next election, I suppose, would be the hope at any rate. Faith and hope are fine things in a spiritual sense but mighty poor things with which to do trade with the grocer, and a mighty poor explanation to give to your wife and children of why they have little to eat.

Why is the unemployment situation in British Columbia so acute? Because it has been neglected by the Minister of Labour (Mr. Gordon), who I regret is not in his seat. It is almost five months today since parliament prorogued, and we were told the day of prorogation that steps would be taken at once to make agreements with the provinces, that if the cities could not finance their obligations the provinces would have to lend them the money, and when we asked where the provinces would get the money the government told us that they would pay their share and lend the provinces money. Scores of men heard that declaration. The minister told us today that he was in hopes of some arrangement being come to by and by. The local British Columbia papers say that it is hoped to have an arrangement perfected in a few days. But we were told that very same thing four, three, and two months ago. It is true That single men are being taken care of by the government, but married men are not. Many of the smaller cities are bankrupt, and when they go to the provincial government for assistance and say they want a loan according to the terms of the bargain announced in this House of Commons and in Bill No. 72,

the province says: We are waiting to hear from the Dominion government. I do not know what the government is doing, but I hope it will soon get a move on because these men are in desperate circumstances. Action is imperative now-not a year or two from now, not in the far distant future, but now. Let me give an illustration. A few days ago a man in my home town killed his wife and two children and himself, and a charitable cornoner's jury brought in a verdict of temporary insanity. It was not insanity. That man was not insane, he was desperate, with no work and no food, and no hope of work or food. That is what prompted him to take that action. It is to men like this that the government says that they must have faith and hope. "You have to be purified as by fire. We are going to help you," the government says, "with this whole bunch of preferences, 221 of them. If you do not like some particular one of them, there is an awful jumble of them anyhow. We have arranged for you a preference of ten per cent in the wide British market on grindstones." Now the value of grindstones exported from Canada to Great Britain last year was precisely $23. If that is not a consoling fact or a good argument to use with the grocer, try this item: Food, canned clams, preference 10 per cent. The total export of canned clams from Canada to the British market last year was 336 pounds -not tons, not hundredweight, but pounds. This is the sort of tripe that is dished out to these men -who do not know where their next meal is coming from.

Instead, Mr. Speaker, of these dubious tariff helps and these grubby reforms, why does not the government follow the line depicted by the poet who said, "And still the bold brave man is fortunate." Let the Prime Minister be the bold brave man, and he will be fortunate. Let him take his courage in his hands and deflate currency and inflate prices as they have done in Great Britain. Would that not be a step which would give immediate results, which would immediately relieve the situation, which would increase prices and give immediate employment? If it was all right for Great Britain to do it-and it has been a success- and for a number of other nations, it could not be wrong for us. Probably it would add 25 per cent to the price of wheat, and give immediate help to our lumbering, fishing and manufacturing industries. Would that not be better than to drift along as we are doing now? Why wait until the burden on the unemployed and on the taxpayers becomes unbearable?

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I should like to direct a few remarks now to the general principles of the agreement. I particularly object to the clause which binds subsequent parliaments to tariffs high or low, or binds us to anything of that description. If it is right to do that for five or ten years, why not for twenty years? Why not perpetuate parliament? Why not pass a law to the effect that the present government may stay in power until they die of old age or ineptitude? If it is right to do these things, it is right to extend them a little. We can change the laws that have been passed concerning internal matters, but we cannot when they deal with outside nations; we cannot repudiate treaties.

Another vital objection I have is that British tariffs still stand too high. In this connection let me quote the Post, which is by no means an anti-government paper:

In other words have the reductions in British tariff been small and disappointing compared to the increases in the general tariffs on many items?

That is what the Post says,-not lowered, as Mr. Baldwin so eloquently pleaded for. I stated last year, and am so reported in Hansard, that I would be in favour of an empire conference not so much for itself, but because I thought it would lead to a world conference and a world reduction in tariffs, which, by the way, was so strongly recommended by the League of Nations. Last year I pointed out that each nation was simply building higher walls around itself, trying to grab or steal a little from its neighbour, and not increasing the aggregate trade one iota. I predicted then and I predict now that we would have five groups, namely the British Empire, Europe, the United States, South America and the orient each combined together, five groups bucking each other to grab the trade, trying to steal trade from each other, instead of thirty or forty countries doing it as they are doing it today. Already there has been a zollverein started in Europe taking in six or eight prominent nations. We want more, not less trade; we want a policy which will stimulate and not hinder trade.

Now, here is what Mr. Baldwin states:

Let us therefore aim at the lowering rather than the raising of barriers, even if we cannot fully achieve our purpose now, and let us remember that any action we take here is bound to have its reactions elsewhere.

Then, here is what The Economist says:

Where the real failure of Ottawa lies is in the total absence of any vindication of the truth that economic progress is to be sought in the general lowering of tariff values.

Everything which interferes with universal trade is so much to the bad. Then, here is what Lord Hailsham states:

We have made it plain that we regard excessive restrictions on international trade as an international evil and we have made it plain that we in the empire are going to set an example in trading to get rid of that evil.

Something happened in this chamber to prevent his carrying out that most desirable object. What it was is perhaps for some one else to say. Last spring when I went home I was asked my opinion concerning the conference and I stated that an Imperial economic conference would be all right, but that there should be a world conference to deal with the abandonment of reparations, the world wide abolition of tariffs-except in a small way for revenue purposes-and to stabilize monetary world-wide currency. I was pleased to hear the hon. member for North Bruce (Mr. Malcolm) the other day use almost the same words.

Another quotation from a British newspaper states:

But if a tariff ring is to be put around the empire as Mr. Bennett desires, Washington is likely to demand the payment of $50,000,000 of war debt due in December,-which would mean new economies and new taxes.

I believe the world's salvation lies in a world conference. Much of the success of such a conference would depend upon the spirit in which we approached it. Certainly the harmony within the conference would not be helped if the British Empire placed around itself a wall excluding trade from the United States. Nor would it help the harmony of such a gathering to have our Prime Minister boasting that foreign nations will pay tribute to the British empire. I do not like that word "tribute." It reminds me of the days of the Caesars, a time when the historian said, "At that time all the world paid tribute to Caesar." The Prime Minister would need only to get himself a toga, appear seated on his pinnacle of power and say, Caesar-like: "All the foreign nations must pay tribute to us." I hope he will say, "us" and not "me."' But, Mr. Speaker, paying tribute to the Caesars has gone out of date. That may have been done two thousand years ago, but we do not act like that nowadays. That is a very poor motto to inscribe on our portals when friendly nations come hoping to arrange friendly trade agreements.

It is regrettable that the treaties are not open to alteration. In one of Nellie McClung's novels the heroine is a little girl whose father drank himself to death. The publican who was supposed to be responsible

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for the father's downfall later died also. The little girl's brothers and sisters who had been attending Sunday school asked her whether the publican had gone to heaven or to hell. The story relates that the little girl replied, with a fine mixture of truth and charity: "Well, we all hope he has not gone to where we are afraid he has." We will say the same about this treaty. We will all hope it turns out better than we believe it will-but always looking forward to a world conference.

The Imperial economic conference was confined within too narrow limits. That conference was representative of twenty-five per cent of the world's population, and the delegates should have looked forward to a world conference. Early in their deliberations they should have placed themselves on record concerning three basic matters. They should have said they were in favour of the abolition of reparations, world wide low tariffs, and a world wide stabilized monetary system. Then they could have shown their sincerity by following these ideals in their empire conference. Of course it could not have done anything about reparations, but action could have been taken concerning empire low tariffs and empire stabilized currency. Had such action been taken the British Empire would be in a much better position to approach a world conference. As I see them, the three points I have mentioned are the most important matters for consideration in the world to-day. None of them would restrict trade, as these empire tariffs propose to do; on the contrary they would increase trade throughout the world. We would have demonstrated that the age of national selfishness is past and that only by working for the good and prosperity of the world could each nation obtain or achieve for itself the fullest measure of freedom and prosperity.

I have only another minute or two more at my disposal, Mr. Speaker. Let me give an illustration of our economic situation. In the veldt in Africa, a portion of that country which would correspond to our prairies, I have enjoyed a perfectly calm day with brilliant sunshine, not a trace of cloud in the sky, not a breath of air or wind. All of a sudden the leaves of the trees begin to tremble and shake, and still there is no sign of wind or cloud: It is rather a weird thing the first time you see it, but those who realize its significance make an immediate bolt for shelter, because it presages one of those terrible and violent thunderstorms that are common in that part of the country. And, sir, to bring it down as an analogy to the political situation today, when I see good

Anglo-Saxons born in Canada, England, Scotland, with no suggestion at all of foreign origin or point of view-when I hear them frankly expressing communistic ideas, and saying: "I voted Conservative last time, but next time I am going to vote communist," I sometimes wonder if we should not listen to the noise in the tree tops and take steps, quick steps, to do something to help the industrial and unemployment situation lest the whole economic fabric topple about our ears.

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LIB

Joseph-Achille Verville

Liberal

Mr. J. A. VERVILLE (Lotbiniere) (Translation) :

Mr. Speaker, I am not so conceited as to think that I shall throw new light on this debate which henceforth will be known as the Imperial Economic Conference agreements, held at Ottawa in August last.

If I take part in this discussion, it is because I wish to register my protest against these agreements which I shall designate as a screen invented and worked out by the Prime Minister of this country to conceal the unfitness of his government.

In fact, should we refer casually, to the circumstances which surrounded the birth of this government, we are immediately reminded of the numerous, pompous, misleading and unpractical pledges which made up the Conservative party's program, at the last election, namely: the solving of the unemployment problem within thirty days after the voting, work for everybody, a greater trade activity, the expansion of industry, special and exaggerated protection, to the latter, and this to the detriment of all classes of society; a considerable increase in the prices of farm products, success, plenty of work for all, and finally protection for everyone.

Two years have elapsed since the last election, during which the people of Canada, shamefully deceived, in vain awaited the fulfilment of all these high-sounding promises and continuously saw its hopes frustrated.

After two years of a vacillating and bad administration, two years under a regime of protection, the lot of the people, far from having improved, is worse by 100 per cent.

People had been promised that business would pick up and prosperity follow.

It is interesting, today, to make an inventory of our economic activities and to investigate whether the policy of this government is not really responsible for the situation we are in: the federal and provincial! governments, municipalities, private companies, public utility services and individuals are practically bankrupt and so undeniable is this state of affairs, that if, at present, the Canadian people were

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called upon to liquidate the public debt, per capita, they would be unable.

It is useless to harbour any illusions in this respect.

Let us frankly admit that we are practically bankrupt, if we are not so officially. And what is true of governments is also too true of individuals. The government is greatly responsible for this state of affairs because of the policy it pursued and of which the last summer conference is a logical sequel.

I again state, if we seek for the causes of this deplorable situation and sad state of things, we must place, for the most part, the responsibility on this administration. Not content, this government still wants to further tie our hands by trade agreements from which we shall derive no benefit.

An alarming increase in the number of unemployed, an inconsiderate expenditure of public money, an extravagant and foolish increase of the public debt-in the millions- a disastrous and discouraging decrease in the prices of farm products, a guilty negligence of all which pertains to the farm, a too high level in prices on manufactured articles-

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LIB

Jean-François Pouliot

Liberal

Mr. POULIOT (Translation):

Dismissal of postmasters.

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LIB

Joseph-Achille Verville

Liberal

Mr. VERVILLE (Translation):

-upsetting of trade, the ruin of property owners in cities and even in rural sections because of an unceasing decrease in the value of property, the closing of natural channels for the sale of our products, these are the evil effects of a regime of exaggerated protection, advocated, inaugurated, enforced and so highly praised by our friends opposite.

Indeed, it is a marvellous result, and one must, I think, be very bold to maintain publicly after such acts, that this government has done its best and has some worthy deeds to its credit.

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October 25, 1932