October 26, 1932

?

An hon. MEMBER:

Pooh!

Mr. FACTOR.: If that is the extent of the hon. gentleman's argument, I have nothing to say to him. This agreement may divert a certain amount of trade to the United Kingdom, and I am certainly heartily in favour of that. But at what a price does it do it? I am not even so sure that it will divert the amount of trade that is claimed by the Prime Minister. I do not pose as an economic expert, but I do know that you cannot completely divert trade from the natural channel that it has been following, and if our natural channel is between Canada and the United States, we will say, that will continue to be the channel of trade.

This agreement will not create new trade for Canada. It will not give an impulse to trade, and what we need today more than anything else in this sorry world is more world trade to help us out of this mess. Indeed, I am not so sure but that this agreement designed to alter the direction and flow of trade will not add to the present trade difficulties and confusion and aggravate the already serious condition of business. May I quote again from page 541 of The Economist:

To sum up: Intelligent Canadian opinion realizes that the conference results cannot assure any special sort of prosperity for the commonwealth unless they are accompanied by an expansion of trade between its units and the other nations of the world. Canada cannot hope for much trade gains from the preferences in Britain until British . purchasing power is restored by an expansion of trade far beyond the limits of the commonwealth; and, per contra, the Canadian market will not offer much larger scope for the sales of British manufactured goods until Canada is able to sell profitably in foreign markets the balance of her exportable surplus of natural products which the British commonwealth cannot absorb.

I now come to that part of the agreement referring more particularly to the preferences granted to Canada by the United Kingdom. The Prime Minister in his usual modest way described these preferences in the following language:

In all the history of the empire nothing has been before achieved comparable in present benefit or in future promise.

Well, the Prime Minister may be an authority on future promises, but so far as the present benefits to be derived from these preferences are concerned, may I point out, as other speakers on this side have done, that these preferences are so riddled with qualifications, reservations and conditions that their value is very doubtful. The hon. member for Vancouver Centre has already referred to article 1 which guarantees the continued entry of certain Canadian products to the United

Kingdom market free of duty, but there is no guarantee there that the preferential margin will be maintained. Articles 2, 3 and 4, are made subject to the conditions which have already been referred to by my right hon. leader. These commodities must first be offered for sale to the United Kingdom at prices not exceeding world prices and in quantities sufficient to meet United Kingdom requirements. I shall not refer to article 6 as I do not pretend to be an authority on bacon and pigs. But article 1 to article 8, which contain our preferences, are, as I have said, burdened with qualifications and reservations. I quote again from The Economist of September 24, 1932. Referring to these preferences it says, at page 540:

In regard to wheat, the western grain trade and the leaders of the agrarian organizations are still very dubious of the value of the preference of six cents a bushel in the British market. They are afraid that it will mean tremendous selling pressure from Argentina and other wheat exporting countries in the markets of continental Europe, and that there will be a resulting depression in the world price, which will mean lower aggregate returns for the Canadian grain grower and smaller profits for the grain trade.

In order to retain the capper preference of four cents a pound in the British market, Canadian and other exporting dominions must sell at a price not exceeding the world price, and in quantities sufficient to supply the consumers.

May I say a word at this point concerning that part of the agreement under which we give to Great Britain our portion of the quid pro quo. I find, after careful analysis of the changes, that in connection with 133 items there is an increase in the intermediate tariff. Further than that, sir, one must come to the conclusion that there has been purely and simply a manufacturers' revision, or a revision for the wealthy man. Duties are reduced on linens, spirits, fishing tackle, guns, rifles and golf clubs. Tell me, how many working people would be interested in the purchase of these luxuries? How can the great masses of the people become enthusiastic over reductions in the tariff on these articles? I venture to suggest that on such luxuries the tariff provides the necessary revenue, and if for the benefit of the wealthy the revenue is now diminished by a reduction of the tariff rates, the great masses of poor people now overburdened by taxation will have to pay more taxes to make up the diminished revenue which must be replaced in some way.

Motorcycles are on the free list, but bicycles are not. Steel rims for bicycles are free. All these changes in the tariff are for the benefit

of the manufacturer. As I have stated, there has been a manufacturers' revision. On the other hand, what do we find in connection with those items which constitute the necessities of life? Let us consider item 532, which deals with clothing and wearing apparel made from woven fabrics. The rates shown under the column headed "Present Rates" are: British preferential tariff, 25 per cent; intermediate tariff, 30 per cent, and general tariff, 35 per cent. In addition under the British preferential tariff there is a duty of 3 cents per pound, under the intermediate tariff 3} cents and under the general tariff 4 cents. What has been the conference change? The British preferential tariff remains at 25 percent; no change. The intermediate tariff is 30 per cent, and again there is no change. The general tariff is 35 per cent, again remaining the same. We find tihat under the conference changes the British preferential per pound rate is 2 cents, representing a decrease of one cent; the intermediate rate is 3} cents, representing no change, and the general tariff 4 cents, again with no change.

Tariff item 532 represents commodities of necessity to the poor man. Despite that, however there has been no substantial reduction in the tariff rates. Then, let us consider tariff item 555 concerning clothing, wearing apparel and articles made from woven fabrics. The present rates are 30 per cent, 40 per cent and 40 per cent, respectively, plus a per pound duty of 25 cents, 32} cents and 35 cents. We will compare that with the conference rates of 30 per cent, 40 per cent and 40 per cent, and the per pound rates of 18J cents, 32i cents and 35 cents. There has been no substantial reduction.

Concerning tariff item 568a, socks and stockings of all kinds, there is a small reduction over the present rate. The present rates of percentage are the same, but there is a change in the per dozen rate. While the present rates per dozen are SI, $1.35 and $1.50 respectively, the conference rates are 75 cents, $1.35 and $1.50. If we were to go further into the items we would find the same condition existing in many instances.

There is one item, however, to which I should like to draw particular attention, namely, laundry soap. Under the heading "Present Rates" we find the rates per 100 pounds are 65 cents, 90 cents and $1. The conference rates are 50 cents, $1.50 and $1.50. Hon. members will note that there is an increase from 90 cents to $1.50 in the intermediate rate, and an increase in the general rate from $1 to $1.50. Turning to the trade returns for the fiscal year ending March 31,

United Kingdom

1932, furnished by the Dominion Bureau of Statistics, we find that the total import in this commodity was valued at $560,378. Of that amount $6,507 came from Great Britain and $552,296 from the United States. What will be the result? The price of soap will be increased. Then, turning to item 208 and following, in which certain chemicals are set-out, we find that the tariff changes are bound to result in the' raising of prices of raw materials, and consequently higher priced manufactured articles.

There are a few items to which reference has not been made by hon. members, and concerning which I should like to say a few words. In this connection I name items 206a, 236 and 476, which deal with bacteriological products, surgical dressings and surgical instruments, respectively-commodities used in the sick room. Changes in tariffs on these articles affect the sick, the infirm and the aged. Under the "Present Rate" column we find, in connection with item 476, that the rates are free in all three instances. The conference rate, however, is: British preferential, free, intermediate, ten per cent and general, ten per cent. Under item 236, surgical dressings, while the present rate is twelve and a half per cent, seventeen and a half per cent and twenty per cent, the conference rates are twelve and a haif per cent, 25 per cent and 35 per cent. I say that commodities such as these, which are for the relief of the sick and the infirm, and the aged, should be allowed to enter duty free-should be allowed world free. The two hundred odd tariff changes will raise prices and increase the cost of living. There is absolutely no redress for the masses of the people, and British trade will not in any way be increased.

The Prime Minister asks parliament to bless this marriage with the high protective tariff for five years. He asks that we bind parliament and the country for a period of five years, during which time we will be powerless to negotiate treaties with other countries. May I be permitted, Mr. Speaker, to make a pretty blunt statement? I am a comparatively new member in parliament, but I should like to speak frankly. Let us assume there may be a change in the government of the United States-and there is bound to be, if we may rely on present indications. Let us assume that the Democratic party is successful and desires to negotiate a treaty with Canada for limited reciprocity. We would be powerless to negotiate it. We are absolutely tied down, and I say that to make an agreement such as is now suggested is the height of folly. Further, I doubt very much whether this agreement is constitutional, and I suggest

59S COMMONS

Imperial Conjcrence-Trade Agreements

that succeeding governments should not be bound by it. I suggest to the government, therefore, that even now it is not too late to insert in this agreement a provision to the effect that at any time during the five year period the treaty may be denounced on six months' or a year's notice. If the agreement is as satisfactory as the government states it is, we shall not need to avail ourselves of this provision. If, on the other hand, it is not satisfactory, such a provision as I have suggested would be most beneficial.

I mentioned before, Mr. Speaker, that this recent conference in Ottawa was supposed to be an economic conference. After analyzing the agreements arrived at I often doubt whether it was really an economic conference. The conference was convened, great statesmen of the empire gathered in the midst of the world's greatest economic crisis. International finance is breaking down. Unemployment increases-that great tragedy of men and women willing to work but unable to find work, unable to supply food or shelter for their near and dear ones. The very foundations of our system are rocking and shaking.

In the midst of these conditions the conference was held, and what were its accomplishments? At best, assuming that the government is correct in all its contentions, it succeeded in diverting, shall I say a large volume of trade, to the United Kingdom. But what contribution has it made to the solution of the economic problems facing the world today? Even the currency and the credit problems were consigned to obscurity, as referred to by the hon. member for Vancouver Centre (Mr. Mackenzie). What message of cheer or hope has that conference brought to the 15,000 families in the city of Toronto who are on city relief? What message of hope or encouragement has it brought for the hundreds of other families that are too proud to ask for city relief and are being supported through other means? What message of hope has this conference brought to the thousands-yes hundreds of thousands- of unemployed, that work will be supplied to them to support their families who are now suffering hunger and despair? Great men were at that conference, great minds, seeking to evolve some remedy for a sorry and distressed world, but what were its accomplishments? I hope I am not too pessimistic; personally I feel greatly disappointed at the results. It should not have been called an economic conference, it should have been termed a trade conference, yes, a

political conference built on the foundation of a protective tariff.

I do fervently pray, Mr. Speaker, and it is my fondest hope, that when the world economic conference convenes in the near future it will be more successful than the last imperial conference.

On motion of Mr. Sanderson the debate was adjourned.

On motion of Mr. Guthrie the house ad," journed at 5.41 p.m.

Thursday, October 27, 1932

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
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October 26, 1932