October 26, 1932

M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM


The house resumed from Tuesday, October 25, 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 His Majesty's government in the United Kingdom, subject to the legislation required in order to give effect to the fiscal changes consequent thereon.


CON

Frank Thomas Shaver

Conservative (1867-1942)

Mr. F. T. SHAVER (Stormont):

Mr. Speaker, before attempting to discuss the motion before the house I should like to extend to the Prime Minister and those associated with him as Canada's representatives at the recent imperial conference my sincere congratulations on the splendid results they achieved on behalf of all the citizens of Canada.

In attempting to discuss the question under consideration I shall have to approach it from two angles because the constituency which I have the honour to represent is about evenly divided between a rural and an urban population. The rural population are engaged for the most part in mixed farming, and the urban population are engaged primarily in the large manufacturing industries. From the standpoint of the rural population of my county I am very glad to say I can give my unqualified support to this motion because I believe that the agreements that have been entered into will provide much better markets for the mixed farming industry in eastern Canada, and on behalf of the textile industry in my county, which has been called upon to make some sacrifice, I am glad also to be able to say that while they will be forced to meet keener competition, it is not of such a nature as severely to injure that industry in my county. For these two reasons I am very glad to be able conscientiously and wholeheartedly to support these resolutions.

Many different attitudes have been adopted by members of the opposition. I believe that anyone discussing this question should approach it with an open mind, but I think we may conclude that the leader of the opposition did not approach it with an open mind for he really delivered his keynote speech in relation to the Canada-United Kingdom trade agreement two or three days before that agreement was presented to the house, during the debate on the address. In that speech he

578 COMMONS

Imperial Conference-Trade Agreements

devoted about six pages to this agreement and made seven major criticisms and about twice as many minor criticisms of the agreement before it was brought down. That proves to me conclusively that the leader of the opposition and his party had decided, whatever their motive may have been-it may have been for the benefit of their party; I do not know

before even the agreements were presented to the house to oppose them in their entirety.

The great diversity of opinion as to these agreements among the official opposition cannot escape notice. At one end of the line we have had the hon. member for Weyburn (Mr. Young), who is the extreme exponent in this house of the principles of Cobden and Bright, and at the other end of the line we have had a very moderate speech delivered by a manufacturer opposite, a protectionist, the hon. member for North Bruce (Mr. Malcolm). From another angle we have had the hon. member for West Elgin (Mr. Hepburn), who leads the Liberal party in Ontario, and who described his own position last year as swinging well to the left. Then we had the hon. member for Ontario (Mr. Moore), who I think we can say, judging from the very moderate speech he delivered the other day, swings a reasonably far distance to the right. Within those four comers we have had a great diversity of opinions expressed by hon. gentlemen opposite. The leader of the opposition, of course, in fiscal matters as in practically everything else adopts the Laodicean attitude; he is neither hot nor cold, but takes a middle course and proclaims himself a believer in the principle of tariff for revenue only. I think that perhaps explains this great diversity of opinion among his followers, as well as his habit of making such long speeches on every question he discusses, because he has to have something to suit every element in his party, so that each of his supporters can point to one paragraph when they go back home to their constituents and say that that shows they are consistent followers of their leader.

During the course of the debate there have been many criticisms from the official opposition of the protective principle embodied in these agreements. They have criticized that protective principle from every angle and have coupled with their criticism many severe attacks on the manufacturing industries of our country. I think that these attacks really culminated in the speech which the hon. member for Yorkton (Mr. McPhee) delivered the other evening when he quoted with great gusto the statement made by a

Manchester exporter referring to the twopenny, half-penny manufacturers of eastern Canada. He rolled that statement as a sweet morsel under his tongue. It apparently expressed his own ideas.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

George Washington McPhee

Liberal

Mr. McPHEE:

Hear, hear.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
CON

Frank Thomas Shaver

Conservative (1867-1942)

Mr. SHAVER:

I wish to say to the hon.

gentleman that there are several manufacturing industries in the count}' I have the honour to represent, and we have four thousand men and women who make a living in those industries. May I add that no class of people in Canada during these troublous times has made greater sacrifices to prevent unemployment and keep the wheels of industry turning to help the men and women of this country make a decent living than the manufacturers of Canada. If the member for Yorkton will come down to my county some weekend and give me the opportunity I will show him over some of the finest and best equipped manufacturing establishments that can be found anywhere in the world, and then I do not think he will again refer to our manufacturers as two-penny half-penny.

I wish to quote a paragraph from a speech delivered in this house ten years ago. It will be found in Hansard of 1922 at page 2658. It was delivered by a member of the government coming from the province of Quebec, one for whom I always had a very high respect. I always read his speeches, and his viervs on fiscal matters were very much in accord with my own. I refer to Sir Lomer Gouin, who, ten years ago, said this about the manufacturing industries of Canada:

I think I know the good old province of Quebec as well as any Canadian and I say without any hesitation that -what has contributed in a very large measure to make our province prosperous and our farmers satisfied with their lot is the fact that our manufacturers have supplied our farmers with a market where they can sell their products, and what I say for Quebec must be true, and it is true, of every province of this dominion where there are manufacturing establishments.

That statement by Sir Lomer Gouin is just as true in the province of Ontario as in the province of Quebec. Particularly is it true in the county I have the honour to represent.

Hon. gentlemen opposite, particularly those of the Liberal opposition, have referred particularly to the textile industry, and have attacked the cotton schedules. As I stated before there are three cotton mills in my constituency in which are employed about 1,500 people. For that reason I believe it to be my duty to correct some of the exaggerations and misrepresentations which have been placed before the house and the country.

United Kingdom

Let me say at the outset that the Canadian cotton manufacturing industry is owned, operated and staffed by Canadians to over ninety-five per cent of its capacity and to as large a degree as any other manufacturing industry in the dominion.

The retail or consumer price level of manufactured cotton goods in Canada is relatively lower than the average index of wholesale prices. Any comparison between the domestic and British and foreign cotton industry must be based upon the maintenance of fair and economic competition in regard to relative overhead, capital, manufacturing and wage costs in Canada, the United Kingdom and foreign countries.

The member for Shelburne-Yarmouth (Mr. Ralston), in his speech on the trade agreement between Canada and the United Kingdom, made a tabulation purporting to show the comparative duties on imported cotton goods under the Dunning, Bennett and conference tariffs. This tabulation is designed to show that the Canadian cotton manufacturing industry is developing and operating at excessive cost to Canadian consumers, and purports to prove that the protection afforded the Canadian cotton industry under the most recently changed tariffs is excessively higher than those in effect prior to 1930. All forms of duties and taxation imposed on imports are included under the 1930-1931 and conference rates, shown in the tabulation, and the inference is broadcast that this represents the protection now being afforded the domestic cotton industry.

.Obviously this line of reasoning is so exaggerated as to be discounted on the face of its own evidence. It is an established and easily demonstrable fact that, due to current low commodity price levels and the abnormal currency exchange situation, the actual protection per pound afforded the domestic cotton industry under the new tariff rates is lower than under the rates established by the Dunning tariffs introduced after the exhaustive investigations made by the Moore tariff board. The excise tax, sales tax and currency dump duties on importations offer no measure of protection to domestic producers; in fact, in actual operation, they constitute a penalty of upwards of two per cent on domestic industry, which must be deducted from current tariff rates in measuring the amount of protection afforded.

It is obvious that with cotton goods fixed today on the basis of raw cotton at around 6J cents as compared with 18 cents three years ago, the ad valorem or percentage tariff duties afforded a greatly reduced unit per pound or per s^ard rate of tariff. This was offset to some extent by the specific, or unit weight or 53719-37J

measure, rates imposed on importations in 1930. Manufacturing and wage costs in Canada have remained about stationary. Wages [DOT]in the English cotton industry were reduced 12J per cent in August, 1929, and again in September last by another 15J per cent, a reduction from 82J per cent to 67 per cent on the lists or l/8id. in the pound. Manufacturing margins in the world cotton industry, particularly in the United States and England, have been virtually wiped out during this period due to excessive production and disorganization of the industry. This condition has intensified export competition in the cotton trade to the highest degree reached in history. It made absolutely necessary the steps taken by the Canadian government to safeguard domestic trade and industry from such ruthless competition. These measures were taken through the power of arbitrary valuation for customs purposes of such distress, or dump, merchandise entering this country. The hon. member for Ontario (Mr. Moore), who has had more practical experience in tariff matters than any hon. gentleman on the opposite side of the house, commended the government for taking these necessary steps to protect Canadian industry against unfair competition. It should be emphasized that no arbitrary valuations have been applied on cotton goods imported into Canada from Great Britain.

The excise tax of three per cent on importations applied equally on importations of raw materials, supplies and equipment used in Canadian mills, and is purely a revenue tax. Upwards of two per cent of any benefits which might accrue by reason of the excise tax is offset by the application of this tax on imports of necessary raw materials and supplies.

The sales tax of six per cent, which is another purely revenue tax, is applicable equally on domestic production as on importations. It must foe applied on the duty paid valuation of importations to equalize its effect with the admittedly higher primary market or domestic mill prices. Sales tax, therefore, is entirely obliterated in consideration of protection measures.

The currency regulations are purely measures to offset the advantages in this market obtained by exporters from countries with depreciated currencies, and on the other hand, to offset the disadvantages of Canadian producers as against exporters from gold countries on account of the depreciation of Canadian currency. The principle of the depreciated currency tax is to maintain a relatively stable level between the purchasing power of the Canadian dollar in terms of Canadian mer-

580 COMMONS

Imperial Conference-Trade Agreements

chandise and wages and that of the foreign depreciated currency in terms of foreign merchandise and wages. In the case of the tax on British currency, Canadian regulations have consistently favoured British exporters and Canadian importers to the extent of from five to ten per cent in the pound sterling, representing a penalty to Canadian producers of anywhere from one to two and a half per cent on every invoice of goods imported from the United Kingdom. It must be remembered also that the Canadian cotton mills are paying a premium on all purchases of raw cotton and supplies imported from gold countries which offsets, together with other market considerations, the larger premium paid by British manufacturers on similar purchases.

These various factors combined, together with the low level of commodity prices on which values are now being fixed, made for a lower degree of protection per pound to the domestic cotton industry under present tariff rates than under the rates existing prior to 1930.

The next important consideration is the question of the consumer or retail price level of cotton goods in Canada. Comparisons of domestic mill price lists over a quarterly period during the past four years demonstrates a steadily lowering manufacturing margin in the Canadian cotton industry, in sympathy with world conditions, and shows that the drop in prices of domestic manufactured goods during this period in unit per pound measure has been greater than the relative drop in raw cotton prices during the period. It is also a significant fact that the retail or consumer prices ruling on manufactured cotton goods in the Canadian market during the current year have been the lowest in the history of merchandising in this country. Cheaper goods have been available on world markets than those supplied by Canadian mills, but quality for quality, the level of domestic cotton mill prices and the retail or consumer price level on manufactured cotton goods in the form of either fabric or clothing, have been maintained on an economic level with wholesale commodity prices in this country and throughout the world.

I am sure, Mr. Speaker, that every hon. member listened with interest to the statement of the leader of the opposition (Mr. Mackenzie King) appearing at the bottom of page 263 and the top of page 264 of Hansard. So that the memories of hon. members may be refreshed I will place the right hon. gentleman's words on record:

. . . and that if as a party we were returned to office our first objective would be to bring the tariff of Canada back to where it was at

the time we went out of office. May I go a step further and say in connection with that, so that there can be no mistake as to where we stand in the matter of British trade, and the British preference, that we vrould undertake to give to the trade of the United Kingdom, where goods are imported through Canadian ports, a British preference averaging fifty per cent of our general tariff.

I wish it had been possible that these words of the leader of the opposition (Mr. Mackenzie King), could have been broadcast to every person in my constituency, and particularly to the four thousand men and women who are employed in industry-that in the face of world conditions as they are today, in the face of countries with depreciated currencies, low standards of living and a very low wage scale, attempting to get into the Canadian market, if by some entirely fortuitous circumstance he should be returned to power he would restore the old Liberal tariff of 1930 and increase the British preference to 50 per cent. I can well imagine what the result would be to the textile industry in my own county. I know well what would happen to the cotton industry if importations again began to flow to our country from Czechoslovakia, from Japan, from southern United States and in increased quantities from Lancashire. I also know what the effect would be on the rayon industry in the county which I have the honour to represent, where 1,400 men and women are earning a living at the present time. It would simply mean that in a very few months their trade to a large extent would be taken away from them, that rayon importations would flow into Canada from Japan, Italy, Germany and Holland. It would mean that the large extensions which they have made to their factory since this government came into power would remain idle, that the 400 additional men and women now working as a result of the policy of the present government would foe thrown out of wofik.

I would also like to draw to the attention of the mill workers in my own constituency the probable, yes, what must inevitably be the effect, on the fine paper industry if the right hon. leader of the opposition should restore the rebate of eighty per cent on fine paper used in magazines, which would allow it to come into Canada from the United States over a tariff wall of five per cent. Thousands of tons of that paper came in for several years prior to 1930. Now, owing to the policy of the present government, carload after carload of fine book paper for Canadian magazines is being shipped out of the town of Cornwall and the village of Mille Roches.

United Kingdom

In addition, the right hon. leader of the opposition, according to his promise, would take off the duty on magazines imposed last year by this government. That would mean that the American publishers who are now publishing in Canada, using Canadian paper, would go back to the United States, and again use American paper. I think it is a fair estimate to say that if the right lion, leader of the opposition came into power now and put into effect this policy that he has promised lie would put into effect, within six months fifteen hundred men and women in the county of Stormont, who are at present engaged in industry and able to keep their families decently would be walking the streets unemployed.

What would be the effect throughout the Ottawa valley on this splendid woollen industry which got a new lease of life when this government came into power? I wonder if some hon. members opposite who represent industrial constituencies will go back to their people and tell them that their right hon. leader has made a promise of this kind. I wonder if the hon. member for St. James (Mr. Rinfret), w7ho is mayor of the great city of Montreal, and the other members representing that great industrial area, will tell their people of this promise. I am sure all Canadians were pleased to find, when they looked at the last census returns, that greater Montreal has a population of over a million people; I wonder if the Liberal representatives in that area will go to their constituents and tell them that if their leader should be returned to power he would take away the tariff protection they are now enjoying and would increase the British preference to fifty per cent. I wonder if the hon. member for North Waterloo (Mr. Euler) will go through that fine industrial area, Kitchener and the surrounding country, and tell his constituents that his right lion, leader proposes to restore the Liberal tariff of 1930 and increase the British preference to fifty per cent. I sincerely commend the government for not sacrificing Canadian industry when making these agreements.

Now may I be permitted to refer for a few moments to the other side of the picture, the benefits which will accrue to the farmers of my county. I believe this is the greatest and most effective effort made by any Canadian government to obtain not only wider and better markets but also more assured markets for Canadian farm products. I wonder how many hon. gentlemen realize what an assured

market means, a preferred market. We all recall the experience of the wheat pools in the fall of 1929. I remember that we heard criticisms of the wheat pools on both sides of the house. Some. hon. members, said they held their wheat off the market in the fall of 1929, but the defenders of the pools stated, and the same statement was made before the agriculture committee last year by an official of the pool, that at no time did they hold wheat off the market. They were ready to sell at the market price day after day, but it did not sell. The United Kingdom bought their wheat from the Argentine and other countries. Do you not suppose that if the preference of six cents a bushel had been in effect at that time it would have resulted in moving that surplus wheat out of Canada to the ports of the United Kingdom? That, Mr. Speaker, is a very good illustration of the splendid results that will ensue in connection with every branch of the Canadian agricultural industry when this agreement comes into effect.

Let us consider for a moment the size of this assured market where our farmers will meet on equal terms the competition of farmers of other parts of the empire, and will be protected from the competition of farmers in other parts of the world. Let us take for instance creamery butter. In 1931 Canada's total production was 225,802,635 pounds, but the United Kingdom imported that year 903,970,704 pounds, or practically four times as much as Canada produces. In cheese our total production was 113,704,109 pounds; the United Kingdom imported in that year 323,092,784 pounds, nearly three times as much. The same is true of concentrated milk; our total production in 1931 was 63,037,221 pounds and the United Kingdom imported in that year 313,470,080 pounds. Of eggs in shell our total production in 1931 was 286,882,447 dozens, and the United Kingdom imported in that year 259,203,080 dozens.

A tremendous potential market will be available for our bacon when article 6 of the agreement allowing minimum imports of two and a half million hundredweight or 280,000,000 pounds of bacon and ham imports per annum from Canada into the United Kingdom comes into operation. Canada will be given a potential market at once for 1,340,525,536 pounds, their importation in 1931.

May I be permitted also to place on Hansard a few figures which show the imports into Great Britain from foreign countries of

582 COMMONS

Imperial Conference-Trade Agreements

dairy products and eggs, still further illustrating the size of this great market which will be opened for the Canadian producer:

Dominion Bureau of Statistics External Trade Branch Imports of butter, cheese .and eggs in the shell into the United Kingdom (Calendar year, 1930)

Quantity

Commodities long

Butter

hundredweight

Total imports 6,821,620

Imports from-*

Russia 165,451

Finland 233,510

Esthonda 96,338

Latvia 49,200

Lithuania 20,574

Sweden 279,565

Norway 2,077

Denmark 2,318,525

Poland and Danzig 64,997

Germany 8,175

Netherlands 89,084

France 7,054

United States 134

Argentina 414,050

Other foreign countries.. .. 2,720

Total foreign countries. 3,751,464

Irish Free State 521,963

South Africa 25,825

Australia 950,582

New Zealand 1,564,436

Canada 210

Other British countries.. .. 7,140

Total British countries. 3,070,156

The same comparison holds good with regard to cheese, though in this case the margin is in favour of British countries. Total importations from foreign countries amounted to 407,595 long hundredweight, while importations from British countries totalled 2,704,721 long hundredweight. These importations were made up as follows:

Long

Cheese- hundredweight

Finland 755

Norway 324

Denmark 6,947

Germany 988

Netherlands 183,076

Belgium 1,617

France 26,660

Switzerland 37,715

Italy 144,650

United States 4,336

Other foreign countries.. .. 523

Total foreign countries.. 407,595

Irish Free State 1,919

South Africa 15,856

Australia 47,685

New Zealand 1,960,901

Canada _ 678,294

Other British countries.... 66

Total British countries.. 2,704,721

Now I come to a comparison of egg imports, and this is of interest to my own county as well as to many other counties throughout Ontario and Quebec where egg production has reached a high level. The importations of eggs in the shell were as follows:

Eggs in shell

Dozen

Russia 848,420

Esthonia 28,710

Latvia 416,730

Lithuania 325,430

Sweden 4,911,680

Norway 1,054,940

Denmark 67,283,830

Poland and Danzig 36,125,640

Germany 3,911,010

Netherlands 36,806,960

Belgium 23,336,560

France 6,587,310

Italy 649,120

Austria 600

Yugoslavia 111,700

Roumania 12,000

Egypt 4,514,790

China 17,125,680

United States 1,921,280

Uruguay 148,140

Argentina 773,190

Other foreign countries 154,520

Total foreign countries.. .. 207,048,240

Irish Free State 47,810,960

South Africa 4,674,550

Australia 5,546,530

Canada 150,250

Other British countries 182,270

Total British countries.. .. 58,364,560

These examples merely show the great, assured and preferred market which will be opened to producers of Canadian farm products when these agreements come into effect.

I am sure every member of the house, and particularly those on this side, listened with the greatest interest to the splendid address given the other evening by the Minister of Agriculture (Mr. Weir), in which he placed before the house and the people the effective measures already taken by this government for the development of agriculture, as compared with the comparatively feeble efforts of the party who sit across the way during the nine years they were in office. I am convinced, Mr. Speaker, that these agreements will provide a greater market than Canadian farmers have ever known, and will work to the lasting benefit of every type of agriculture in Canada.

In thinking of the part played by the Prime Minister in bringing about these agreements I am reminded of a sentence from Carlyle's essay on history, in which he said that history is the essence of innumerable biographies. That is a very true statement, and to mv

United Kingdom

mind it simply means that the history of any country is made up of the life stories of the men and women who have lived in that country; that it is a compound of the biographies of all the people who have had something to do with the shaping of the destiny of that country from its beginning. Some, of course, by reason of circumstance or education or the opportunities presented to them, or by the exercise of unusual ability, have made a greater contribution to the history of their country than others. I am sure that when the years have rolled by and the historian of the future comes to write the history of this great country in which we live, when he paints the picture of the great men and women who have contributed to the development of our country; when he describes in detail the lives and activities of the great statesmen of Canada from its beginning, I believe he will give a very prominent place to the name and the achievements of the present Prime Minister of Canada, and that he will record as not the least of those achievements the results which were attained at the recent Imperial economic conference.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Hon. IAN MACKENZIE (Vancouver Centre):

Mr. Speaker, the mild, innocuous

and yet constructive address to which we have just listened by the hon. member for Stormont (Mr. Shaver), to my mind is a complete repudiation of the statement which appeared yesterday afternoon in the Montreal Star. Referring to this debate the following statement was made:

Anything that is contributed from now on must be not so much vain repetition as faint, backbench echoes of the arguments already impressed by the leading debaters of all parties.

While humbly bowing to these superior stars I think it the duty of every hon. member of this assembly, regardless of the party to which he may owe his allegiance, to express his or her considered conclusions at this time in our history in regard to the resolution moved two weeks ago today by the Prime Minister of Canada (Mr. Bennett), with regard to the trade agreement between Canada and the motherland, and the agreements with the various component portions of the British Empire.

I agree most emphatically with the observation made a few days ago by the hon. member for Ontario (Mr. Moore) during the course of this debate, that this is an historical occasion in the development of our history, and I say it is no time for haste or hurry. These schedules are in full operation already,

and I think it is the bounden duty of every hon. member sitting on the floor of this house, regardless of his political convictions, to express his point of view at this time, without fear or favour, in order to let his constituents and the whole Canadian people know where he stands on this most important question.

I believe the speech which preceded mine is a complete illustration of that truism which was uttered in England not long ago by Lord Snowden, that pale, frail, splendid ex-Chancellor of the Exchequer. He said that as soon as you have a tariff system entrenched in the life of a nation, there you have sectional interest combating against the national interest. The address to which we have just listened, Mr. Speaker, was narrow visioned; the hon. member was looking only to that part of Canada from which he comes. There may be something in these agreements-I do not say there is not-of benefit to my province of British Columbia. There may be something here, if we agree with the remarks made the other evening by the hon. member for Yale (Mr. Stirling), which will be of benefit to our apple growers in that province. There may be some benefit here-I do not admit there is-for our lumber producers. There may be some benefit here-I do not say there is-for our producers of copper, zinc and lead. There may be something here for the fishermen of British Columbia; I do not think there is. There may be something here for the wheat producers of our western plains; I do not say there is. But, Mr. Speaker, even if these assertions should be true I say it is the duty of every man, be he Liberal, Conservative, Progressive or Labour, to look only at one result, one issue and one conclusion in regard to these agreements; that is the national interest of the people of Canada. The great British statesman Pym once said "That form of government is best which doth best actuate and dispose every part and member of the state to the common good." The guiding principle which I should like to have rule my remarks this afternoon, Mr. Speaker, is what I conceive to be the interests of the consuming masses of the Canadian people, because I believe I am here to represent their interests.

I am sorry the Prime Minister is not here at the moment, because I should like to say that this afternoon we had the most distinct proof of the absolute inadequacy of this alleged agreement. A question was raised in regard to whether the preference,-the absolutely useless preference-of six cents on wheat would be effective if wheat were consigned to storage at a shipping point in the

5S4 COMMONS

Imperial Conference-Trade Agreements

United States for shipment to Great Britain. The answer-and I want my western friends to take heed of this-was this: "There is the law; these are the regulations." It was not for my right hon. friend to interpret them, he said. Why? Because the conditions under which our Canadian wheat may be consigned to Great Britain will be regulated not by the Prime Minister of Canada but by the old country, and there is nothing in the agreement to safeguard our western producers in regard to wheat consigned through a port in the United States.

I. come now to another fatal, another tragic omission from this agreement. Have hon. members read carefully article 1 of the agreement between Canada and the motherland? They will find, if they will give it a relentless scrutiny, that there is in the first clause no guarantee for the Dominion of Canada of a preferential margin in regard to a single one of the items mentioned by the Prime Minister of Canada at page 117 of Hansard. What does that mean? It means that all this boasting and braggadocio about the superiority of the right hon. gentleman when it comes to bargaining results in disadvantage to this country, for the fact is that the old country delegates absolutely defeated him in this regard. What does Canada get? A mere shadow-

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
?

An hon. MEMBER:

You don't believe it.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

I will

give the hon. gentleman the proof in a moment. Let me quote from an article that appeared in the Montreal Star on the 23rd day of September of the present year-an article inspired by hon. gentlemen in the administration of the Dominion of Canada. What does it say in regard to article 1:

The reports which have disturbed Ottawa statesmen-

I presume that refers to the administration.

are to the effect that the British government takes the view that except with regard to wheat, copper, fish, asbestos and a few more items in respect to which it definitely tied its hands it is free to extend to foreign countries the general free entry into the British market which the dominions now enjoy under the Import Duties Act.

Section 1 is then quoted, and the article proceeds:

The foregoing section just quoted simply binds the United Kingdom. They are said to be contending to continue free entry to the overseas dominions, not to restrict it to them alone. . . . Manifestly from the Canadian viewpoint a preference which the rest of the world could share is no preference at all. Its value would disappear the moment it was made general.

In conclusion, the article states:

It is contended that the dominions must continue to receive their present margin of preference over any arrangement which may be made unless the spirit, if not the bond, of the conference itself is to be violated.

I have reason to bhlieve that this article was inspired by the present administration. And what is the conclusive proof that this government of Canada, at the conference, did not maintain for our Canadian exporters a preferential margin for our exports into the United Kingdom? Here is the proof. On the 21st day of October last the British government passed legislation with respect to these very items mentioned by the Prime Minister; and what did they do? They did not establish a maximum preference, as in _ some items, of 50 per cent, but a maximum rate of 33^ per cent, and for a period not of five years but of two years. That proves that within the four corners of this agreement there is no preferential margin; there is free entry but nothing to restrict the complete freedom of the British people to grant free entry to any nation in the world as well as to this dominion. Sir John Simon, the British Foreign Secretary, speaking four or five days ago in the British parliament, stated that there was nothing in the Ottawa agreement to restrict the freedom of the old country in reducing taxation so far as tariffs affecting other countries are concerned. This means that as regards this much-boasted free entry of our goods into the United Kingdom, a provision the significance of which, the Prime Minister tells us, it is impossible to over-estimate, really amounts to nothing. The right hon. gentleman has failed us, for the provision is not there; it is not to be found in the agreement. He has failed us, he has failed his own party, he has failed the people of Canada in this matter.

Being modest, Mr. Speaker, I wish to place on record categorically about fourteen objections I have to this vicious and iniquitous document. And may I say to the right hon. gentleman opposite that there is no one in Canada, there is no one in this parliament who would have greater pleasure this afternoon in standing up in this house and supporting these agreements than I should have, did they preserve the national integrity and fiscal autonomy of Canada, and were they conducive to the proper and free and unfettered development of the empire. But, Mr. Speaker, I feel the pull of a double loyalty. I had the thrilling emotion in a little village in the north western highlands on July 21 last, of listening, thousands of miles away, to the

5S5

ceremonies that were taking place in Ottawa, to the bells as they were chimed at three forty-five o'clock in the afternoon, in the tower of this building. In that remote village-

Far from the madding crowd's ignoble strife-

-I listened to the carillon of Canada in the tower of our parliament building, and I felt, as I say, a double loyalty. There was that loyalty within me which one derives from one's younger ideals and associations with the literature and traditions, and the splendid story of old Scotland. As Scotland's national poet said, referring to his own younger days:

E'en then a wish I mind its power A wish that to my latest hour Shall strongly heave my breast,

That I for puir old Scotia's sake Some usefu' book or plan could make,

Or sing a sang at least.

But now there is the other loyalty, the loyalty to this Dominion of Canada, this broad and generous dominion, with its decent and its dauntless people, the loyalty which is expressed in the admirable lines of Sir John Willison:

Oh bounteous land; oh generous inspiration

That floods the morning of the world to be,

That people are the builders of a nation,

Lofty, benignant, free.

Now, sir, the best that there is in these twin loyalties is absolutely destroyed, abrogated, dispelled and ruined by the agreements that have been arrived at as a result of the Imperial economic conference.

An hon. MEMBER; Oh, oh.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

I like

" fat men . . . sleek men, such as sleep o' nights."

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
CON

Alexander McKay Edwards

Conservative (1867-1942)

Mr. EDWARDS:

Don't worry about that.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

I am

worried about it because I feel that all our constitutional freedom dating from the Balfour formula of 1926 and developed by the Imperial conference committee of 1929 is in danger of destruction by the fiscal shackles that we are placing on Canada in these agreements. _

My tenth objection is that this agreement affords no relief and no genuine promise of relief to those engaged in basic industries or to the consuming population of this country. On the contrary it rivets upon them the burden of this system of excessive tariff imposts.

My next objection is that it constitutes an attempt to set up an imperial economic unit, and it imperils our fiscal autonomy.

My next objection is that the concessions offered to us in the British market are vague and illusory and will afford no real assistance to producers of Canadian natural products.

My next objection is that the agreement fails completely to remove the three per cent excise extra-tariff tax and the unfair duties imposed against the depreciated British pound. .

My fourteenth and, temporarily at least, my last objection to this iniquitous agreement

588 _ COMMONS

Imperial Conference-Trade Agreements

is that the conference has failed completely to deal with the question of exchange and the question of empire content.

Mr. Speaker, there were three vital questions before that conference and they were not touched at all: First, standardization of specifications. That question was discussed but not solved. Secondly, there was the question of empire content, a question of the greatest importance in connection with these preferences. Thirdly, there was the biggest question of all, according to the British members, the question of finding a solution for our financial and monetary troubles at the present time.

But what happened? I wish my friend the Minister of Trade and Commerce (Mr. Stevens), was in his seat. A committee of the conference was set up to deal with the monetary question and he was appointed chairman of the committee. How often in days gone by have we heard his voice ringing over the western Canadian plains and across the beautiful valleys of British Columbia in advocacy of currency reform, the stabilization of empire currency, and the raising of price levels throughout the dominion. But what happened? Mr. Neville Chamberlain, the orthodox apostle of conventional finance, came to that committee and laid down the law which was dictated by the old lady of Threadneedle street in London. I was there at the time, and the British papers said that nothing must transpire at this conference which would endanger the prospects of a solution of this question at the coming world conference. If that was true in regard to finance why was it not true in regard to trade? \\ hy tie the hands of Canada and the empire in regard to world trade? But the conference deliberately sidestepped this question of monetary reform, and as my hon. friend from Red Deer (Mr. Speakman), said, brought in simply a series of anaemic economic platitudes which were nothing but eyewash and whitewash from beginning to end. The bimetallic thunderer of East Kootenay (Mr. Stevens), has become the monometallic murmurer subservient to a Chamberlain. I searched through the report of that committee in vain for any of my hon. friend's well known declarations in favour of monetary reform. Not one word did I find in regard to silver, currency stabilization or financial reform. I scanned it carefully .but alas and alack, Mr. Speaker, I found no silver threads among the gold.

A further word in regard to soviet Russia It is well known to those who are familiar with the inside story of the conference that we got the establishment of this principle of fair com-

petition in exchange for the destruction of the trade agreement between England and Russia. Do hon. members realize that only a few days ago Mr. John Bromley, one of the unofficial labour delegates to the Imperial economic conference, stated at a meeting of labour delegates in Great Britain that he had received the deliberate assurance from the British delegates that they would not destroy the existing Anglo-Russian trade pact-; but yet it seems that the British delegates have subscribed to the Canadian Prime Minister's view in regard to Russian trade. We all remember the frothy outpourings of two years ago by our Prime Minister against the ungodly Muscovite. It was a heinous crime to import pulpwood and coal from Russia. But now we seem to have discovered more favourable channels of trade. While it was a heinous sin to import coal and pulpwood it has been a virtue to import caviar and fur skin. It is all right now to import oil from Russia. The Prime Ministers action in allowing soviet oil to enter Canada is the climax of oleaginous hypocrisy.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

Holy oil.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

My time is almost up.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
?

Some hon. MEMBERS:

Go ahead.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Air. MACKENZIE (Vancouver):

When I have the opportunity free from the restrictions of your cruel timepiece, Mr. Speaker, I intend to speak on this question at much greater length in this country than I can do at the present time.

In conclusion, I would say that a solution of the problems cf the world today does not lie in an agreement such as we have here. I am not an alarmist or a terrorist, but I wish to warn the members of the administration: If

you are going to have a financial ring in Canada in control of your credit and currency as you have at the present time, within the next eighteen months the economic and financial and capitalistic structure of this country may come crumbling around your ears. This government does not look to the interests of the consumers and of the primary producers. It looks exclusively to the interests of the coupon clippers in the Dominion of Canada.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
?

Some hon. MEMBERS:

No, no.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Yes.

Ycu are protecting the wealthy, idle men with idle money as against the interests of the consumers and the primary producers, and unless you wake up there will be a time come soon for a new deal throughout this dominion. I

United. Kingdom

submit that an intelligent application of Liberalism, using the term in its widest sense, to the problems of the present time is the most effective solution that can be offered with a view to the development of Canada, the empire and the world.

Mr. Speaker, intelligence is a wonderful quality, vision is a wonderful quality; the two combined together are unconquerable. When considering these agreements we should remember the inscription on the portals to this building, " Where there is no vision the people perish." The other day I was greatly impressed when the Prime Minister gave us the marching song of the new Toryism of Canada and the empire. He recited those great lines of Arthur Benson's immortal song:

Wider still and wider Shall thy bounds be set God who made thee mighty Make thee mightier yet.

May I give this house the marching song of Liberal thought and Liberal minds in regard to the problems of Canada and the empire, as it appears in previous lines of that same wonderful song:

Thine equal laws, by freedom gained,

Have ruled thee well and long;

By freedom gained, by truth maintained,

Thine empire shall be strong.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
UFA

Donald MacBeth Kennedy

United Farmers of Alberta

Mr. D. M. KENNEDY (Peace River):

Mr. Speaker, a few years ago we thought we were living in a golden age. Today there is a greater degree of pessimism in the world than there has been for many years. The problems with which we are confronted are partly national and partly international. Conference after conference has been held to try to solve the problems facing the great nations of the world, and especially matters concerning trade, disarmament and tariffs. Any one who has followed national and international conferences must have been impressed by the fact that there seems to have been tremendous difficulty at arriving at any definite solution of any one of our outstanding problems.

It is, therefore, with at least some degree of satisfaction that we have before us now an agreement arrived at in Ottawa. At least we may point to the fact that nations within the British Empire have been able to agree on some matters and put them down in concrete form by way of agreement for submission to the various legislatures and parliaments within the empire. I have tried to analyze the agreement before us and the various schedules in connection with it. While I am free to admit the articles in the agreement are complicated and extensive, especially

those items dealing with tariff changes upward and downward, yet on the whole I cannot agree with those hon. members who maintain that there has been an attempt to rivet indefinitely on this country a policy of high protection. I must say however that in my view some of our tariff schedules are extremely high, and when industries have to receive protection to the extent of 75 per cent either by tariffs or other means I wonder whether we should not be ready to allow imports from countries producing such goods. The statement may be made: "You will

destroy industry." Well, under the present circumstances it looks as though more than a few industries will be destroyed unless we can find a solution under which trade will become freer, and a system of exchange whereby the Canadian farmer may dispose of his products and obtain therefor the manufactured products of this country and of the world. That however is aside from matters with which I am about to deal.

In connection with the reduction in tariffs I think we must consider section 1 of the Import Duties Act passed by the parliament of Great Britain. It is as follows:

As from the first day of March, 1932, there shall, subject to the provisions of this act, be charged on all goods imported into the United Kingdom, other than goods exempted as hereinafter provided from the provisions of this section, a duty of customs equal to ten per cent of the value of the goods.

Then certain exemptions are named, and certain commodities on which duties have been collected prior to the passing of the act. Then, we find that section 4 reads as follows:

4. (1) This section shall apply to the following countries, that is to say, the dominions within the meaning of the Statute of Westminster, 1931, India and Southern Rhodesia, and any territories in respect of which a mandate of the league of nations is being exercised by, or which are administered under the authority of, the government of any such dominion as aforesaid.

(2) In the ease of goods which are shown to the satisfaction of the commissioners to have been consigned from any part of the British empire, and grown, produced or manufactured in any country to which this section applies, neither the general ad valorem duty nor any additional duty shall be chargeable until the fifteenth day of November, 1932, or if a later date is fixed for the purposes of this section by resolution of the Commons House of Parliament either generally or as respects any particular country, then, in cases to which the resolution applies, until that later date.

If I interpret correctly those two sections they mean that Great Britain is actually and definitely protectionist, and has abandoned

590 COMMONS

Imperial Conference-Trade Agreements

her old free trade policy. It seems to ine that if at the present time this parliament and that of Great Britain do anything towards ratifying an agreement which would allow free entrance into Great Britain of products which after November 15 or a later date would be subject to duty, we are not subscribing to the principle of fastening a high tariff on Canada or the empire. We are today facing a changed world, and especially is that so since Great Britain adopted the policy of protection. In order to be fair I should call attention to the exemptions in the first schedule, namely, gold, wheat, maize, meat, live quadruped animals, fish, tea, and so on. The schedule is somewhat extensive.

The question is asked: "Is it conceivable that Great Britain would raise her tariff against Canada?" Some years ago the question was frequently asked: "Is it conceivable that Great Britain will ever abandon free trade?"-and she did. We cannot tell what may happen, but I think it is fair to state that because of the terms of the Import Duties Act there is that possibility. If the agreement means anything it means that by it we are avoiding the application to the Dominion of Canada of the British protective tariff. And it would cover I presume manufactured goods going from Canada, and some other products. But I am more particularly interested in the provisions regarding wheat, cattle, and pigs. I have a lumbering industry in my constituency, but the prosperity of that rests almost entirely on the condition of agriculture, and I think that is true of most of the other industries, with the exception of the great coal industry. In view of the fact that Great Britain exempted wheat from all countries until the time of these agreements, it might be argued that she would exempt wheat for all time. But it is hardly conceivable that if these agreements were not ratified by the parliament of Canada our wheat would be exempt. If an agreement is signed between India and Great Britain, and between Australia and Great Britain, and ratified, is it conceivable that if we do not ratify this agreement we would still be in the same position as Australia and India? It may be said that this agreement is going through anyway, the government has a majority to do so. But as far as my attitude is concerned I take it I have to accept the responsibility of saying I want the agreement rejected or passed. A few years ago it was argued that Great Britain could not get along without Canadian wheat. We had that idea in our minds for many years, but some years

ago we woke up to the fact that if they could not get along without some of it they can nevertheless do without a great deal of it. I think it is foolish to say that we can reject this treaty if we like and still stay within the dominions' preference.

Now, Mr. Speaker, I do not believe that the so-called six cent preference-with exchange as it stands it is not quite that, I believe-will make much difference. It has been said by some that it may raise the price and by some that it will actually reduce the price. I think the argument that it will reduce the price to the people of Canada is rather trivial, and I think the statement that it will raise the price .is not reasonable, as far as I can understand the situation. However, before I deal with that I want to deal with this question; if we reject this preference what will happen to the farmers of western Canada? In my judgment they will have to pay to get into the British market. The cost of producing wheat in western Canada today is somewhere around sixty to sixty-five cents a bushel according to The Study on the Cost of Producing Farm Crops in the Prairie Provinces, by Hopkins, Armstrong and Mitchell. The price that wheat nets to farmers in western Canada today is somewhere between twenty-five and thirty cents a bushel on an average, if it is that. It is not any better, considering average grades and average shipping points. If under these conditions we have to pay an additional six cents to get into the British market I wonder if that will be in the national interest, or in the farmers' interest. I do not think it will be either, nor do I think it will be in the interest of the British Empire. The price we are receiving for wheat in western Canada today does not much more than pay the incidental cash outlays in connection with its production. I doubt if there is any allowance for fixed charges on land, or even a reasonable wage for the farmer.

Now this six cent preference will not raise the world's level of prices in my judgment. We have a tariff against wheat coming in from the United States of about forty-two cents, as it works out at present; thirty cent3 against the world and less than, that from empire countries. But the tariff does not keep up the price of wheat in Canada. I suppose the people of the United States came nearer thinking they could raise the price of wheat in that country by a tariff than any other country in the world having an exportable surplus. We all remembered how the tariff was raised against Canada because after an investigation into the cost of producing

United. Kingdom

grain in Canada and the United States by the United States tariff board in which it was demonstrated that Canadian costs were lower. In the United States the tariff is about forty-two cents, if my memory serves me correctly. The farmers were complaining because they did not get a better price, and when the slump started in 1929 we remember how the farm board, with Alexander Leggie at its head, was instructed through the Grain Stabilization Corporation to try and stabilize the price of wheat. Farmers in the United States.thought they could take advantage of the tariff because of the control of the situation by the Grain Stabilization Corporation. But while l think the Grain Stabilization Corporation did some good, cushioned the blow of the fall so that prices fell slower than would otherwise have been the case, the attempt to take advantage of the tariff on wheat proved an utter failure.

We shall still have to sell wheat outside the British Empire on the basis of our present production. Apparently we will have about the same export surplus outside the empire as the United States has outside of its home market. With their best efforts they have never been able to raise their wheat price above the world level, nor will it happen as a result of this six cent preference in Great Britain.

What then, is the value of the preference? I have already said that if we had to pay our way into the British market it would be a distinct detriment. But outside of that what is the situation in the world today as far as wheat is concerned It is simply a condition of ruthless competition by all wheat exporting countries, and the question is who is going to break first. So it seems to me that anything at all that can be done towards holding for us the market that we have always had will in the last analysis be of some value. But I want to say that the wheat exporting countries of the world, Canada included, are going to be driven to reduce production. They will come to it either by the ruination of a great many farmers or by improper tillage of the wheat areas and lower yields. It does not matter what may be our financial strength; we cannot continue indefinitely producing at a loss which runs from 25 to 50 per cent of the cost of production.

Then, of course, we have the situation with regard to exchange as between the Argentine, Australia and Great Britain. It has been stated here that though the Australian farmer gets more money for his wheat, because of the depreciated currency, really he is no better off, because measured in Canadian money the result is the same. The fact is, however, that

the Australian farmer pays his debts and spends his money in Australia, while we pay our debts in Canada. I do not think there is any use arguing this point at great length; such men as Sir Josiah Stamp and, I believe, the new Deputy Minister of Finance here in Ottawa, admit that the exporters who are operating in countries where the currency is depreciated have a tremendous advantage over those in countries where the currency is at a higher level. I do not think there is any need to argue that fact, and I do not know but that even with the six cent preference, considering the exchange and other factors, the Argentine still has a better chance to get into the British market than we have. I do not want to do anything that might bring about the loss of that preference; I do not want to appear indifferent to it, but while so far as that item alone is concerned we have an advantage, on the whole I do not know that we are any better off than the Argentine. In my judgment the question of raising price levels and dealing with currencies so that all countries exporting wheat to the markets of the world are on an even basis as far as currency is concerned is something which must be taken up in the near future if Canada is to compete in the world markets. The tremendous improvement in the machinery of production with regard to wheat probably would have brought about a world surplus in any case.

I was very much interested in the suggestion made the other day by the Minister of Agriculture (Mr. Weir). He did not advocate it, but he hinted that some people were interested in the reduction of wheat acreage. I said some time ago that we would have to bring about that reduction throughout the world. I do not see why we should go on producing at a loss; it is utterly useless, and so long as there is a huge surplus of wheat in the world which cannot be actually bought and consumed, that world surplus will ride ruthless over all the efforts we may make to stabilize prices. In some way we must bridge that gap between effective demand and supply. We know there are great difficulties in the way of reducing acreage; if we do it here and it is not done in other countries it will be utterly useless. It requires international action. But I would rather say that we had tried intelligently to attack the problem and had failed than to sit back and do nothing until our farmers are ruined and a sufficient percentage of them driven out of wheat production to balance the supply and demand throughout the world.

592 COMMONS

Imperial Conference-Trade Agreements

Great Britain has attempted to deal with price levels, in some respects, but through some of her responsible leaders Great Britain has said that there are distinct limitations to what may be done by one nation alone. One reason why I am glad we have this agreement with Britain is that Britain is giving a lead to the world, even though it is not a very distinct lead in the minds of some people, with regard to the question of money. In the Journal of the Parliaments of the Empire Right Hon. Stanley Baldwin is reported as having said:

We have no intention of returning to gold as^ long as gold behaves itself as it is behaving. We cannot give definite undertakings as to the future course of sterling prices, and experience elsewhere-in the United States, for instance- has shown the difficulty of one country endeavouring to raise prices. The policy adopted by the monetary authorities in this country has recently been one of cheap money and an abundant supply of money, which will produce an effect on prices in the long run. I am not at all sure that some, at any rate, of the dominions would not find a plank here on which they might take their stand, but that time will show.

The MacMillan committee, dealing with this question of raising price levels, has this to say at page 177 of their report:

Thus our objective should be, so far as it lies within the power of this country to influence the international price level, first of all to raise prices a long way above the present level and then to maintain them at the level thus reached with as much stability as can be managed.

We recommend that this objective be accepted as the guiding aim of the monetary policy of this country. The acceptance of such an objective will represent in itself a great and notable change. For before the war scarcely anyone considered that the price level could or ought to be the care and preoccupation, far less a main objective of policy, on the part of the Bank of England or any other central bank.

Now I should like to deal for a little while with the question of cattle exports to Great Britain. The removal of restrictions to this trade is of some advantage, and here again I say that actually we are working towards freer trade. I remember being told years ago in Scotland that the British embargo against Canadian cattle was nothing more than a protectionist dodge. If you have restrictions against the importation of wheat or cured meats, let us say, a little delay is not so tremendously important, but anyone who has handled live stock either on the railway or on the highway knows that when things go wrong and there is delay, costs increase rapidly and the loss results through the deterioration of the stock. So while there is not a great deal said about it I think the (Mr. D. M. Kennedy.]

removal of these restrictions will be to the advantage of agriculture generally, because after all there is an interdependence between our wheat farmers and our meat producers. Our shipments of cattle to the United States have continued in spite of the tremendously increased tariff against them, but our shipments to the old country have not increased as we might have wished. At the same time, however, I think it well that every effort should have been made to open up the British market to our cattle because, in spite of statements that the United States is on the verge of reducing tariffs it seems that every move during the last ten years has been in the other direction, and we know that when the Fordney-McCumber tariff was adopted it brought about the ruin of western stock raising. But here again I want to say that anyone who has visions of a tremendous expansion in our cattle industry may be a little too optimistic.

I should like to quote a statement made by Premier Bruce of Australia in lids remarks to the delegates before they got down to work on the definite agreements. I read from page 99 of the report of the conference:

The position of meat is causing the Australian government and a large proportion of our farmers and pastoralists the greatest concern. It would be difficult to obtain the endorsement of Australian public opinion to any reciprocal arrangement which did not include provision for some real benefit for meat producers. The inclusion of meat in the concessions which Great Britain finds herself able to make would not only mean that the beef cattle industry would be benefited, but that real assistance would also be given to the great wool-producing industry of Australia.

And here is what the Hon. N. C. Havenga, speaking for South Africa, said:

Up to now the union has not attempted to develop the meat-export trade to any extent, but largely owing to the slump in wool prices and the instability of the maize market, it has to consider the advisability of changing its farming system in the direction of meat production.

It looks, therefore, as though there will be plenty of competition amongst the dominions for a place in the British market, so that here too we are up against the position of having to adjust our costs, our money costs and any other costs we can adjust under the circumstances, in the hope of being able to get along until a policy of possible inflation raises prices generally of natural products in the world. It seems to me, in view of the quantitative regulations suggested in the agreements, that we are trying to do something which a number of hon. gentlemen in

United Kingdom

this house have been saying that the world will have to do-pian things. I think the world is slowly moving towards managed money, managed production, managed exports, managed imports and managed everything. The old system of doing business, of letting whoever thinks he can make a profit get in and do just as he likes, has broken down and we shall have to deal with matters on a basis where production and distribution, imports and exports, are planned in a way they have never been planned before. That, to me, is the suggestion behind the agreement in so far as the quantitative regulation is concerned.

It does seem as though there is a market for pork products in Great Britain, bacon and hams. Our chief competitors in the British market have been the Danes. There are also exports going to Great Britain from the Netherlands, from Sweden and from the United States. I think that Canada can ultimately send a reasonable amount of bacon and hams into the British market. Here again we are guaranteed free entry, for a certain quantity and nothing more, for bacon of good quality. I do not know what will happen in the United Kingdom, but I imagine that the exports that have been going forward from the United States will not receive the consideration that our exports will receive. They have been exporting a considerable amount. Take hams: the United States

supplied 600,000 long hundredweight in 1931 and Canada 72,488. I think it is a great mistake to expect that we can make tremendous advances in the quantity of our exports. The Prime Minister's statement is just a little too optimistic, in my judgment. In fact, it seems to me that in this debate, as in a great many others, the government is possibly a little too enthusiastic and the opposition a little too pessimistic. The Prime Minister's suggestion is that with favourable marketing conditions, and with the price maintained continuously above cost of production, Canada has potential possibilities for the production of eight million hogs, and so forth. If we can have favourable marketing conditions and a price maintained continuously above cost of production, then I believe it can be done. But how are,- you going to do that? We are all producing hogs, cattle, wheat and everything else at a loss today, and until this problem of adjusting price levels is tackled and a reasonable solution found for stabilizing prices at reasonable points, I do not think we can look for a tremendous increase-nothing like 53719-38

the increase suggested in the Prime Minister's statement-in our exports of bacon and pork products from this country.

I want to come back now to control of acreage and control of production. We have seen efforts made to hold up the price of export commodities. We know how very strongly these efforts were resented in some of the exporting countries. Any effort at stabilizing any commodity by governments will have to be on a basis where due regard is paid to the producer and the consumer, irrespective of whether he is a Canadian or a Britisher or who he is. You cannot get a reasonable agreement towards stabilization without regarding the rights of your customers as well as the rights of your producers. I believe that the suggestion made, I think, by Mr. Peterson of Calgary, that the export countries of the world ought to get together-he mentioned Canada, the United States, the Argentine and Australia-and try to agree upon exporting what the importing countries of the world really require and nothing more, has some merit in it, if we can do that and at the same time do it on a basis reasonably fair to the importing countries. But we need something further than what is contained in this agreement. Because the agreement does not in any way prevent us from doing these things, however, or will not prevent us in the future, I want to support it.

The point has been made that tariffs have been riveted on us for the next five years. I believe the leader of the opposition asked the question in his speech, whether, if Canada and Great Britain were both ready to change the terms of the treaty in the next five years, they could do so. I think that the last clause of the treaty with Canada, providing for consultation, surely indicates that; and if it happens that we have in office after the next election a government that wants to give Great Britain additional reductions in the British preference, surely the British people will not object to that. If the agreement does prevent a reduction in some of the intermediate and general tariff items, maintaining the spread between the preferential and the general and intermediate rates, it also rivets-if that is the correct term-for five years the free rates and also the rates that have been put into the agreement. In going through the agreement I made as rapid a calculation as I could, and I found about sixty or seventy items were reduced under the British preference below those of the 1930 tariff. Though there are additions in the general and intermediate, some reductions in the British preference are considerably below

594 COMMONS

Imperial Conference-Trade Agreements

the reductions in the Dunning budget. So that on the whole, having regard to the position of our farmers, having regard to any advantages there are for them in the tariff so far as the British market is concerned, and having regard to the fact that while it increases the general and intermediate tariff there are reductions in the British preferential tariff, I think it is fair to' assume that the general rate under which commodities will come to Canada-because there has been effective competition in practically all items, some from Great Britain and some from the United States -it is fair to assume, I say, that the general level under which goods will come in will be lower than before.

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink
LIB

Samuel Factor

Liberal

Mr. SAMUEL FACTOR (Toronto West Centre):

Mr. Speaker, I hope the hon. member who has just taken his seat (Mr. Kennedy, Peace River) will pardon me if I do not proceed along the lines of debate which he has pursued. He has made an exhaustive analysis of the agreement, but I am not yet certain whether he is opposing or approving it. I should also like at this time to make some general observations concerning the debate. So far as I am concerned-and I believe I am supported in this view by hon. members on this side of the house-I do not conceive it to be the duty of an opposition to oppose every measure or piece of legislation introduced in this parliament merely because it is proposed by the government of the day. So, with this motion introduced by the Prime Minister (Mr. Bennett) asking that parliament approve the trade agreement between Canada and the United Kingdom, if one comes to the conclusion, after an honest analysis of it, that it is for the general benefit of the Canadian people; that it will in some way improve the deplorable conditions that prevail in this country, I think it is the duty of that member, irrespective of and notwithstanding the allegiance and loyalty he owes to his party, to support the agreement. But if, on the other hand, after an exhaustive and careful analysis of the agreement and of its implications, in the light of the details that have been disclosed and further in the light of the speech of the Prime Minister in introducing the resolution, it becomes abundantly clear that this agreement will ultimately prove to be detrimental to the interests of this country as well as of the empire as a whole; that it will not in any way help to improve, but on the contrary will aggravate world conditions; that it will not create any new trade; that it will not relieve unemployment; that it will not

decrease, but on the contrary increase the cost of living and that it does not in any way help to solve the economic problems facing this country today, then if one comes to that conclusion it is the duty of every loyal Canadian citizen to shout from the housetops that this agreement is bad, iniquitous, that it is just as the hon. member for Vancouver Centre (Mr. Mackenzie) has said, a " fiscal fraud."

I think it was very unkind of the Prime Minister, in introducing this resolution, to suggest that any hon. member on this side who would dare to analyze or criticize this agreement would do so in order to gain a personal or party advantage. It is a flaunting insult, an affront to the intelligence of thousands of Canadians represented on this side of the house, for the right hon. gentleman to make such a statement, particularly so when the same right hon. gentleman gloated over the fact that this agreement is based upon the principle enunciated by the Conservative party before the last general election.

The agreement involves the consideration of many economic, constitutional, imperial, international, and, in the broad sense of the term, political questions. It is a complicated agreement, one with far-reaching effects, and it is binding upon this country and the rest of the empire for a long term of years. Let me for a moment brush aside the propaganda that has been circulated by the supporters of the government concerning this agreement. You know, Mr. Speaker, many false hopes have been held out to a people burdened with grief and distress that this agreement is the panacea; that it will cure our economic ills. Let us brush aside this propaganda. It is amusing, when we find all this propaganda, to hear the leader of the government accusing this side of playing politics. I should like to ask: Who is playing politics?

Let us examine for a moment the cold, indisputable facts. The imperial conference was an historic event. I had the pleasure of attending the opening ceremonies, and I must frankly confess I was greatly inspired at the sight of empire statesmen, great men gathered in this chamber representing a quarter of the population of the globe. I was particularly impressed by the opening remarks of the Right Hon. Stanley Baldwin and I should like to quote a passage from his speech. I know it has been quoted by other members; it was referred to this afternoon by the hon. member for Vancouver Centre, but in my humble opinion this

United Kingdom

passage contains matters of such vital, paramount importance for an unbiased mind to decide whether the conference was the success the other side claims it to be, that even at the risk of repetition, I should like to quote this passage which is contained on page 74 of the report of the imperial conference. This is what Mr. Baldwin says:

Reverting now to empire trade, we hope that as a result of this conference we may be able, not only to maintain existing preferences, but in addition to find ways of increasing them. There are two ways in which increases in preferences can be given-either by lowering barriers among ourselves or by raising them against others. The choice between these two must be governed largely by local considerations, but subject to that, it seems to us that we should endeavour to follow the first rather than the second course. For however great our resources, we cannot isolate ourselves from the world. No nation or group of nations, however wealthy and populous, can maintain prosperity in a world where depression and impoverishment reign. 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.

Those were the results that Mr. Baldwin hoped would flow from the conference. But what has been the result? I venture to suggest in all humility that in this dominion there are no two persons, no matter how expert they may be in economics, who can agree as to what the net or general results will be. But some results are certain, definite and fixed, and one of them vvas enunciated by the Prime Minister when speaking in Calgary. These are his words. Speaking of the conference he said:

One thing was certain, however, that nations outside the empire will be asked to pay some tribute for the privilege of trading with the empire.

I knew that some things were not so certain, but this thing was certain, Mr. Speaker, that the nations of the world would have to pay tribute to the British Empire for the privilege of trading with it. What an auspicious beginning for the world economic conference! It seems to me that instead of giving a lead to the world economic conference, it is rather a clarion call to another world trade war. I am very much afraid it will mark the beginning of a world trade war. Resentful reactions are bound to come from other nations. What about the array of the most favoured nations with whom we do a business of $100,000,000 a year, $36,000,000 of imports and $64,000,000 of exports? What will these most favoured nations do? I fear very much that this association of nations which we call the 53719-381

British Empire has as a result of this conference, consolidated its component parts to wage a world trade war more bitterly and more fiercely than any we have had hitherto, and that this mad economic nationalism founded upon the principle of a preposterously high tariff will not in any way help to promote the peace and freedom of the world.

What about our fiscal autonomy' and that of every other part of the empire? It is completely destroyed in this agreement. I need not go into the details, but it is abundantly clear in this agreement that the government of the United Kingdom cannot reduce its tariffs without the consent of the government of Canada, and it is equally clear that our fiscal independence is destroyed. Our fiscal policy is being shaped by the government of the United Kingdom, and we in turn are shaping and moulding the fiscal policy of the United Kingdom. Vicious results are bound to flow from the making of tariffs by treaties as is done in these agreements, and I say that no good can come from interfering with the fiscal autonomy of any part of the empire.

Further, are tariffs to be the basis of better relations within the empire? May I quote a passage from The Economist of September 24, 1932, referring to the Imperial conference :

From the moment the microphones were turned off and the opening session was closed, the conference descended from the clouds of imperial sentiment to the rock of hard selfish bargaining. . . . One of the unfortunate legacies of the conference is the bitterness and ill-will created between the British and Canadian delegates.

Will tariffs be the basis of better relations within the empire? Mr. Chamberlain in his speech in the British House of Commons declared that Canada was weakening in her loyalty to the empire. May I ask, will a better commercial relationship within the empire strengthen the empire bonds? May I further ask, are tariffs to be the foundation upon which to build a better commercial relationship within the empire? Will tariffs improve trade within the empire? Have-Canadian tariffs improved Canada's trade?' This government has been steadily increasing: tariffs since 1930, but have these sky-high tariff increases promoted or helped our trade? They certainly' have not. Trade is decreasing to an alarming proportion and unemployment has tremendously increased. There is not an hon. member on the other side of the house who will stand up and say that this agreement will in any way create or increase Canadian trade by one dollar.

Imperial Conference-Trade Agreements

Topic:   QUESTIONS
Subtopic:   M719-37 IMPERIAL ECONOMIC CONFERENCE CONTINUATION OF DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
Permalink

October 26, 1932