October 28, 1932

LIB

William Duff

Liberal

Mr. DUFF:

I entirely agree with the Minister of Trade and Commerce (Mr. Stevens);

I am afraid your honour reads this rule too literally. Rule 306 states:

It is not in order to read articles in newspapers, letters or communications emanating from persons outside the house and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the house.

The hon. member who is speaking has not reflected on any other hon. member of the house, nor has he reflected on any proceedings within the house. He is just quoting editorials, and I submit that he is quite in order.

Topic:   IMPERIAL ECONOMIC CONFERENCE
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CON

Armand Renaud La Vergne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Conservative (1867-1942)

Mr. DEPUTY SPEAKER:

The hon. member is giving an opinion expressed in an editorial. So far as I am concerned I would prefer to hear the hon. member's own opinion, but if the house consents he may quote all the editorials he wishes. .

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?

Some hon. MEMBERS:

Agreed.

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IND

Angus MacInnis

Independent Labour

Mr. MacINNIS:

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CON

Armand Renaud La Vergne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Conservative (1867-1942)

Mr. DEPUTY SPEAKER:

The hon. member has spoken for forty minutes.

Mr. A. F. TOTZIvE (Humboldt): Mr. Speaker, I do not intend to follow the remarks of the hon. member who has preceded me (Mr. Maclnnis) except in so far as they may be incidental to what I have to say. I am afraid, however, that very few of the remarks of the hon. member will come under that heading, because he wandered far from the subject under discussion.

Whether or not I have any new thoughts to add to this debate, I consider it my duty to my constituents to express the views I hold in connection with these agreements, which views I feel to be in line with those of my constituents. There is no need to review the conditions which exist in Saskatchewan and throughout western Canada ; they have been so often and so thoroughly discussed that I think the people of Canada from one end to the other, and especially lion, members of this house, are fully aware of the conditions which exist. These difficulties commenced back in 1929, and by the time the general election was called in 1930 they had become so acute that the people of Canada were ready to grasp at any straw. Thus hon. gentlemen opposite who today form the administration were able to secure, through the promises they had made, the support of enough people in western Canada to enable them to get into power. I am pleased to say that the people of my constituency were not misled in that way. The present Prime Minister (Mr. Bennett) having been returned with a sufficiently large maj ority to enable him to put his policies into effect, he is not now in a position to say that he is unable to carry out his promised policies and that therefore the people of Canada should not judge him too harshly.

After the election, after the people had seen the return of the Conservative party to power with this large majority, they waited for the fulfilment of the promises. There was, however, no immediate increase in the price of wheat as had been promised, perhaps not by the Prime Minister himself but by at least a goodly number of orators working on Ibehalf of the Conservative party throughout western Canada. Indeed, in my constituency the statement was made by these orators that if the present Prime Minister and the Conservative party were returned to power, the price of wheat would immediately go up five cents per bushel. I ask my friends from western Canada; I can ask any hon. member: What has happened? Wheat has dropped in price until just this week it has reached the lowest price it had ever reached before in the history of Canada. But our people out there are good-natured, good-hearted, and not too prone to criticize rashly. They said: Although this promise with regard to the price of wheat has not been immediately fulfilled, let us give the Prime Minister a chance to put his policies into effect; Rome was not built in a day.

The same thing has happened -with regard to unemployment. It has been stated in the house that no less a member of it than the Minister of Justice (Mr. Guthrie) had made the promise that if the Conservative party were returned to power, unemployment would be done away with inside of a week. I am not going to insist upon that statement, because the Minister of Justice has more or less denied it, but there is no question that the statement was made and the people of Canada w-ere led to believe that the unemployment situation would be relieved in a very short time if hon. gentlemen who now occupy the treasury benches were returned to power. Again I need not say that that promise has not been fulfilled.

Then later on, these promises not having been fulfilled, the announcement was made that an Imperial economic conference was going to be held in London and that at it steps would be taken which would give the government an opportunity of fulfilling its promises. I recall very well the attitude of

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supporters of hon. gentlemen opposite in my constituency. After the present government had been returned to power, those gentlemen walked the streets of my own little town with their chests sticking out, telling the people: "Now just wait until Mr. Bennett has a chance, until the Conservatives have a chance, and you will see conditions change; at last Canada will come into its own." But you should see those very same gentlemen today. They are most pitiable; they are almost afraid to show their faces among their neighbours; they are in hiding because they feel so much ashamed of the way in which the great Conservative party and their almost superman of a leader have left unfulfilled the promises which they were so generous in making during the general election of 1930. As I said, then came the announcement that an Imperial economic conference was to be held and that it would take care of the difficulties through which we were passing. The conference was held in 1930 and, to put the matter very mildly, it was a fiasco. Nothing whatever was done; in fact worse than nothing was done.

After that fiasco the people almost lost faith in the Prime Minister and the great Conservative party, but again came the promise that another imperial conference would be held and that this one, which would be held in the city of Ottawa, would, according to the Prime Minister, produce advantageous results for the people of Canada. Not only did the Prime Minister promise that, but the press of Canada heralded it from one end of the country to the other. Once again, our people, who are more or less credulous, said: Well now, at last we are going to

get something from this great man and this great Conservative party. But what did we get? This is what I want to discuss to-night. Let me say at this point. I sometimes feel that my right hon. leader, the leader of the opposition (Mr. Mackenzie King), should be censured to some extent because he did not go from one end of Canada to the other making speeches prior to and during the conference, laying down policies that should be followed by the delegates of the various nations to the conference. It was too bad that he did not do that because, if he had done it, the Prime Minister would have had some excuse for the lamentable failure that he made of this conference. I have heard other hon. members say that they did not discuss the agreements. I want to say that I did discuss the agreements both before and during the conference. Of course the Prime Minister did not hear of this, and it had no

effect whatever upon the conference; but I found that wherever I went my constituents asked me: What about the Imperial conference? I said this to them: I hope and

pray that some good may come out of it, but unless the Prime Minister changes his views with regard to his fiscal policy and his Canada first policy, I cannot for the life of me see how any good can come out of it.

Again, after the conference, the usual propaganda for which hon. gentlemen opposite are so noted was put forth throughout the country, and the people thought: Well,

maybe we have got something out of it. But how they have been disillusioned! As the agreement is studied, as the advantages are weighed against the disadvantages, there is no question that the farmer of Canada has got nothing out of it, and the farmer after all is the backbone of this country. This is and always will be an agricultural country, and unless the farmer is prosperous, no other part of the community can become prosperous.

I read with interest the speech of the hon. member for Qu'Appelle (Mr. Perley). The hon. member is a personal friend of mine; he comes from my own province and I was interested in what he had to say. I wish to quote a few sentences from his speech as reported at page 550 of Hansard. He said:

I feel it my duty, having the honour to represent in this house a rural constituency in Saskatchewan, to say that before coming to Ottawa I made a pretty thorough canvass of my riding, and I did not find a single businessman or producer who was not anxious that as soon as possible after parliament met, we should pass these agreements and see if we could get increased markets for our products.

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?

An hon. MEMBER:

Hear, hear.

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LIB

Albert Frederick Totzke

Liberal

Mr. TOTZKE:

An hon. gentleman says, "hear, hear." I think the wish is father to the thought; they hoped these agreements would be passed as soon as possible in order that the people of Canada might not have the opportunity of analyzing them and finding out what was in them. Perhaps I should not have said that, because I did hope in my own heart when I left my constituency that there might be something in these agreements and I came down here with the idea of supporting them if there was anything in them to help us out of the distressful conditions now confronting us. But I wonder what sort of reports the hon. member for Qu'Appelle would get if he went back to his constituency now that the people have some idea of what these agreements really mean, provided he did not go simply to his own hard-boiled Tory friends for an opinion. The hon. member

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for Qu'Appelle in his address the other night quoted from the remarks of the hon. member for Yorkton (Mr. McPhee). He said, at page 653 of Hansard:

At page 544 of Hansard the hon. member (Mr. McPhee) is reported as follows:

"In 1930 we exported 207,000,000 bushels, and of this quantity we sent 77,000,000 bushels to Great Britain, and 129,000,000 bushels to foreign countries."

Concerning this year 1931 the hon. member (Mr. McPhee) said:

"We find that in that year we exported

194,000,000 bushels, of which 63,000,000 bushels went to the United Kingdom and 131,000,000 bushels to foreign countries." _ _

Had the hon. member been fair in his argument he would have said there was a possibility under this agreement of supplying Great Britain with the 131,000,000 bushels we had shipped to foreign countries. This agreement seeks to make possible the sale of that great amount of wheat in a sheltered market under the protection afforded by this agreement.

In effect the hon. member for Qu'Appelle says that had these agreements been in effect we could have sold in the British market all the wheat that we shipped to other countries of the world. Does he really believe that Canada has a chance to capture the entire British market for wheat? What about Australia and India? They are members of the British commonwealth of nations and have the same opportunities as we have of entering the British market under these agreements. Yes; and what about the other wheat producing countries of the world, the Argentine, Russia and other countries? They also will get a portion of that market. Let me give the average British imports of wheat for the last several years. In round figures Great Britain imports 200,000,000 bushels per annum. Canada exports all the way from 250,000,000 to 400.000,000 bushels of wheat. So the British market in itself is not big enough to take all our Canadian wheat, even though we had that entire market, and other markets are absolutely necessary.

The Minister of Agriculture (Mr. Weir) told us the other evening of the markets we had lost. He told us of the tariffs that had been put up against us, and sought to blame the previous Liberal government for losing those markets; he thought the Liberal government should have saved them for Canada. Perhaps he is a little too complimentary to the late government, for, good as it was, it was not able to control the tariffs of other countries. What does the hon. gentleman do now? He supports these agreements which, instead of making it easier for Canada to get into the markets of these other countries, will create so much dissatisfaction that it is going to be more and more difficult for us to enter those markets.

I should like to say a few words concerning some of the articles in this agreement. I want to deal briefly only with those affecting agriculture. We are interested, of course, in the other items, but the people of my province are interested more particularly in the items affecting agriculture. Article 1 reads:

His Majesty's government in the United Kingdom undertake that orders shall be made in accordance with the provisions of section 4 of the Import Duties Act, 1932, which will ensure the continuous after the 15th November, 1932, of entry free of duty into the United Kingdom of goods consigned from any part of the British empire and grown, produced or manufactured in Canada which by virtue of that act are now free of duty subject, however, to the reservations set forth in schedule A appended hereto.

I will not read schedule A, as it has been read several times already. All I wish to say in connection with that article is that I hope it will mean something. We must not forget, however, that New Zealand and Australia are accorded the same terms as we are under this agreement. New Zealand has always been our great competitor in butter, cheese and dairy products of all kinds, and if we were not able to compete with New Zealand prior to the passing of this agreement I am afraid it is going to be very difficult for us to compete with her from now on. But there are other countries that do not come under this agreement: Denmark, for instance, which has been supplying the British market to some extent with these products. I am sure, Mr. Speaker, you will agree with me that the people of Denmark are not going to let that market slip from them without putting up a fight. They have certain advantages over us. They are closer to that market, which means cheaper transportation, and besides, the currency situation gives them a further advantage.

Moreover, there is no guarantee under this article that we are going to have a preference in the British market. It is true it guarantees that our goods will enter the British market free, but I cannot believe that the British people will allow the cost of their food to be put up sufficiently to give us any substantial advantage.

Article 2 reads:

His Majesty's government in the United Kingdom will invite parliament to pass the legislation necessary to impose on the foreign goods specified in schedule B appended hereto, the duties of customs shown in that schedule in place of the duties (if any) now leviable.

And schedule B refers to wheat in grain, butter, cheese, apples, and so on. But what I am more particularly interested in is wheat.

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We are told that under this agreement we will have a six cents per bushel preference for our wheat in the British market. In the first place, that six cents a bushel is not a preference : it is a tariff against foreign wheat entering the British market. It does not mean that we are going to get a better price for our wheat in the British market; for the agreement distinctly states that we must sell at world prices. The six cents per bushel which other countries exporting wheat to the British market have to pay, for example, the Argentine, or Russia if she were again in a position to export wheat, will not to my mind keep their wheat out of the British market. We will, as I said before, have perhaps one hundred and fifty or two hundred millions of bushels of wheat which cannot be sold on the British market and which we must sell in other markets of the world. In those other markets we will meet the competition of Argentine and Russian and other wheat that may be kept out of the British market. What will that mean? It will mean that eventually the world price of wheat will be set not at Liverpool as it has been for many years, but at some foreign port, possibly Amsterdam, where we will meet the keen competition of these other countries that have been more or less kept out of the British market. As a result the tendency will be to force down the price, so that instead of this agreement helping the wheat producer of western Canada it will hurt him. Is it any wonder that the growers of wheat in western Canada are not very enthusiastic about this agreement? Do hon. gentlemen opposite think that this six cent tariff against foreign wheat will keep those countries out of the British market? Do they think it will tend to limit the acreage which they plant to wheat? If they think that, let hon. gentlemen look at the farmers of western Canada. If you had told those farmers three or four years ago that they would be selling wheat at 25 or 30 cents a bushel they would have laughed at you and said it was impossible, that rather than sell it at such prices they would burn it or throw it away. But what are they doing today? They are selling that wheat at 25 cents a bushel and they are going to continue to plant seed. They can do nothing else. And that is just what will happen in the other grain-growing countries that are competing with us in the world markets. They must continue to raise grain. The Danish people must continue to supply the British market with bacon, and if they have to absorb whatever tariff may be put

against bacon they will of necessity absorb it and carry on as best they can.

We have always had a certain preference in the British market for wheat, for the reason that Canadian wheat is the best wheat produced in the world. As I see it, all that this article in the agreement does is to antagonize other nations against us. They will not blame Great Britain for putting this tariff on; they will iblame Canada for forcing Great Britain to put it on against their wheat, and Canada will suffer the consequences.

Then article 5 deals with live cattle. I do not wish to say much about that. If hon. gentlemen opposite have had something to do with lifting the embargo on live cattle going into the British market, every credit is due them for it. We have been trying for years; my hon. friend from Melville (Mr. Motherwell) has worked a good many years trying to get that embargo lifted. Whatever credit may be coming to hon. gentlemen opposite in this connection I do not begrudge them. But I am afraid that with prices as they are at present this will not mean much to the producers of Canada.

Then there is the pig industry, which is something on a par with cattle. We are to get the same treatment in the British market as the British producer gets. What that will be we do not know; we can only live in hope that it may mean something, as we are doing with the rest of this agreement. There again the Danish producer will come into competition with us and will nullify any advantage we may have got.

Now I want to turn for a moment from this agreement and read a statement made the other day by the hon. member for East Essex (Mr. Morand). Referring to the hon. member for Weyburn (Mr. Young) he said:

The hon. gentleman has divided his world into two very definite parts; on the one side he has a wheat field with a toll gate and then on the other he has the rest of the world.

Well, Mr. Speaker, I do not know just what the hon. member for East Essex meant when he said that, but if he meant that the hon. member for Weyburn thinks everyone takes toll from the farmer, I am more or less in agreement with him. The farmer is in the position of the man at the foot of the line; the manufacturer, the wholesaler, the retailer all take toll and pass it on to the farmer who is the producer of the primary product; he has to pay it-he cannot pass it on. Hon. gentlemen opposite-including the hon. member for East Essex, apparently, from his speech the other day-see Canada as a preserve for the manufacturers, with high

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walls around it practically keeping everything out and a toll gate placed so that the manufacturer is enabled to take toll from everyone inside. We of western. Canada have been accused of being free traders. My hon. friend from Weyburn has that reputation. I have before, in this house, stated my attitude on the matter. We in western Canada, producers of commodities which must be sold in the markets of the world, and purchasing in highly protected markets the goods we need for production and for our own livelihood, are naturally at heart free traders. I have always said that we do not expect to get free trade, that we do not wish to injure any industry that has been built up in eastern Canada, which is fairly capitalized and is efficiently operated. We of course always insist on that efficient management. We have always said this, unless we can show that the industry is getting too much tariff protection, in which case we wish to have it brought down. That has been our attitude; at least it has been my personal attitude. But now, Mr. Speaker, I am not so sure whether that is the proper way to look at it. I am getting more and more to the position-perhaps because I sit opposite the hon. gentlemen who occupy the treasury benches-where I think that perhaps we should go all the way. As with the surgeon treating cancer, instead of taking a little nibble here and there, let us cut the whole thing out-

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CON

Frank Roland MacMillan

Conservative (1867-1942)

Mr. MacMILLAN:

Hear, hear.

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LIB

Albert Frederick Totzke

Liberal

Mr. TOTZKE:

My hon. friend from Saskatoon (Mr. MacMillan) says, "hear, hear." I am very glad to have his approbation. That suggestion may be a little drastic, but hon. gentlemen opposite through their policy of high protection and almost prohibitory tariffs are forcing the people to think along those lines. Hon. gentlemen think that the way to make Canada prosperous is to make the manufacturer prosperous. They have put the cart before the horse. If they make the primary producers prosperous, the farmer, the fisherman, the lumberman and the miner, they need not worry about the manufacturers- they will look after themselves.

I was interested in the remark of the hon. member for Kindersley (Mr. Carmichael), that retaliation against the United States might bring them to offer us better terms. Today he was referred to as the clerical gentleman who offered first one cheek and then the other, and then waded in and gave his assailant a good thrashing. He says that these agreements may force the United States to give us greater markets. That may be so;

53719-43^

there may be a change of government in the republic to the south, and we know the traditional attitude of the Democratic party with regard to tariffs. We know there is the possibility that certain reciprocal trade arange-ments may be suggested, but the hon. member for Kindersley did not say whether we would be in a position to accept such offers. Are we going to be in a position to make a trade agreement with any country in the world once these agreements come into effect? In these agreements we say that we will preserve the British preferential tariff and in many cases, in the schedules to these agreements, we have made the British preferential free and the intermediate and general tariffs equal. So there is no opportunity for Canada to conclude an agreement with any foreign country; we must preserve that British preferential. England can trade with other countries. Already approaches have been made by various foreign countries looking to trade agreements. Great Britain has been approached by Argentina, and I want to say that the Argentine trade is no small item in the British export business. No doubt Great Britain will conclude an agreement with the Argentine. Sweden and Uruguay have also suggested agreements, and even Russia has made approaches. We have heard hon. gentlemen opposite refer to Russia; we heard the right hon. Prime Minister, with tears in his eyes and with bated breath, tell us about this terrible Russian trade, but Great Britain is going to trade with that country. We were told that Great Britain was going to abrogate her trade agreement with Russia and that we would get some benefit from that act, but here we have Great Britain ready to make another trade agreement with that country, as she will do with any country when she considers it to be to her advantage to do so.

I notice, Mr. Speaker, that these schedules protect the manufacturer, and as a result increase the cost to the general consumer. Not only have the government given no thought to the farmers in drawing up these tariff schedules; they have put in the schedules an increase in the tariff on fertilizer, making it [DOT]till more difficult for the farmer to produce his crops. What will this higher cost of production mean? Will it increase our trade with Great Britain? If you look up the trade returns you will find that a number of these articles, especially in the chemical section, where we find the fertilizers which are so necessary to the farmers in some parts of Canada and which before lcng may become necessary to the farmers in western Canada, despite the high fertility of the soil, are not exported by Great Britain. We must get most of these

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things from the United States, so what does it mean when we increase the tariff in this way? To my mind it simply means that someone will start manufacturing these articles in Canada, and they will have the benefit of that protection. The other night we had a frank statement from the hon. member for Mount Royal (Mr. White), who said that this was a protectionist government and that these agreements were protective measures. That shows the Tory mind, the Tory attitude and the Tory approach to all agreements which they make. They look at things from the viewpoint of the manufacturer rather than from the viewpoint of the producer.

That is the trouble with these agreements; they make it almost imposi'ble to extend our trade with the other countries of the world. We do not say the British market is not important; I am not saying anything against it. But we always had free entry into that market and I am sure that free entry would have been continued. That market, however cannot absorb all our products, we must have other markets as well. But apparently hon. gentlemen opposite are not satisfied with building a high tariff wall around Canada in order to put into effect their policy of Canada first and keep out goods that may be manufactured in other countries. Now they wish to extend that wall to include the whole British Empire.

My time is almost up, Mr. Speaker, and in conclusion I should like to refer to the statement of the Prime Minister-"We have done well." So far as the farmers of western Canada are concerned I think the Prime Minister should have said, to use the vernacular, "We have done you well."

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LIB

Alphonse Fournier

Liberal

Mr. ALPHONSE FOURNIER (Hull) (Translation):

Mr. Speaker, may I, at the outset of my remarks, express the wish that the reiterated warnings of the Liberal party, against the danger attending the adoption of this resolution, may have the good effect of changing the mind of the leader of the government and his followers as regards their tariff policy. 1 fear, however, that my wish will not materialize and that the government will turn a deaf ear to the protests of the opposition. If the government will not follow the suggestions of the opposition in this respect, at least, we shall have the satisfaction of having laid bare to the people of Canada the whole motive of our opposition to the agreements between the United Kingdom and the Dominions, last August.

Recently, in a by-election, the agreements of the Imperial Economic Conference were explained to the people of a rural constituency of Ontario with the result that, after hearing

four or five cabinet ministers discussing at length this question, the people of that constituency came to the conclusion that their arguments were not very sound and rejected their policy. The government endeavoured to convince these people that Canada would greatly benefit by the agreements concluded at Ottawa, but it was all in vain. May I, by the way, take the opportunity of congratulating the member of that constituency (Mr. Golding) on his splendid success. His personal qualities, his zeal for the Liberal cause, his loyalty to the policy of the Liberal party together with the principles advocated by his leaders convinced his constituents, and were responsible for this great victory. The success is to the credit of the Liberal party and seems to be a disapproval of the policy followed, in the last two years, by the government.

In 1930, the Conservative party assumed power by pledging itself to raise the tariff so as to put an end to the economic crisis and decrease unemployment .

The tariff would no further aim at concluding agreements with foreign nations or friendly trade relations. It would neither help in obtaining sufficient revenues to administer public affairs, but would lead to an economic war with foreign nations. The right hon. Prime Minister (Mr. Bennett) repeated it from one end of the country to the other: "We shall use the tariff to blast our way to all the markets of the world." He contended that we might close our domestic market; that all we could produce to be consumed, would be produced here; that the Canadian market would be closed to foreign markets and by following this policy the unemployed would have work, prosperity would return to Canada, the purchasing power would increase and normal conditions would return to the level they were previous to 1930. I have briefly stated a few of the pledges made, in the course of the election, by the right hon. Prime Minister as well as by his followers. I do not think that I have exaggerated in any way, because, for the last two years, the conservatives have upheld the same pretensions.

I closely followed, this afternoon, the speech of the hon. member for Dorchester (Mr. Gagnon). I wish to congratulate him on his eloquence and literary achievement, however, I do not think he did himself justice when he stated: If the province of Quebec has placed its trust in the policy of the Liberal party, it is because, for a number of years, it was deceived by public men, the leaders of the Liberal party. I think the hon. member for Dorchester does not appreciate to its full ex-

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tent the intelligence and attainments of the people of Quebec. One is liable to be fooled occasionally, or even repeatedly, but it is impossible to deceive the people as a whole for thirty or forty years in succession. I think it is an insult aimed at Quebec to state that the people of that pi'ovince gave their allegiance to a political party which induced them in error, because they were unable to discern between truth and error. Moreover, if there is a party which has deceived, in the last election, the people of my province, it is certainly the Conservative party. The leaders of that party had recourse to all possible means, from the loftiest to the meanest in order to win the election. Now, when an election takes place, the Conservative party does not further contend that its policy will make for prosperity, but it admits that the crisis, from which we are suffering in Canada, extends to all nations; that the causes of this depression are not local, but independent of the legislation of one country or another and therefore world wide, the effects of which are felt in all countries whether they are protectionists or free-traders.

In 1930, the late government was blamed for 90 per cent of the distress prevailing then. Today, it is conceded by all members on the opposite side that the government is not responsible, that the measures they enacted would have given the best results in normal times, but that the present situation is abnormal, and for that reason, the measures enacted had not the results expected.

Following the election of 1930, an Imperial economic conference was held in London. Means wrere to be found at that conference to develop closer trade relations between all the component parts of the British Commonwealth, but especially with Great Britain. Previous to this conference, the Prime Minister summoned a special session of parliament and taking advantage of the fact that we had to come to the rescue of the unemployed and relieve distress, he made changes on a great number of items in the tariff. All these changes increased the tariff; they were adopted in a hurry, without due consideration or without consulting the tariff board then in existence and which however was shortly after abolished. The Prime Minister at that conference attempted to impose his views not only on Great Britain, but on all the nations of the commonwealth.

He reiterated what he had stated during the election of 1930. His party advocated the policy "Canada First" in which he had an unshakable faith. The Prime Minister laid down as a basis in the trade negotiations with

England and the other nations of the British Empire, a preference of a new order; he stipulated that Canada would maintain her present tariff on imports from Great Britain-this happened hardly a month after the considerable increase in our tariff had been resolved upon- however, he pledged himself to raise by 10 per cent the tariff against all foreign countries. In return, he requested England to grant to our products free entry, and levy on foreign goods the same duty of 10 per cent. The British government, at that period, was a labour free-trade government which did not admit that protection was in the best interests of England, and the British Prime Minister's reply was that it was impossible.

We cannot they said, tax food-stuffs entering Great Britain. This conference was not a success; it was a failure, a fiasco. [DOT]

For two years we have awaited the Imperial economic conference, at Ottawa. In the meantime, an election was held in England. The labour party was defeated and a national government was formed. At the Ottawa conference, last summer, the Prime Minister-he states so himself-endeavoured to have the same policy he had advocated in London in 1930 with minor changes adopted. He did not, however, generalize as he had previously done, but all the changes were founded on protection. The agreements were signed in August. I shall shortly discuss some of the clauses to prove that, for Quebec and even for the other provinces, the advantages to be derived from these agreements are very debatable. As Liberals, we cannot approve of these agreements, our principles tend to a lower tariff, to a tariff for revenues. In the discussions which took place at these two conferences, we note that a component part of the British Empire, Canada, endeavoured to impose her views on the other nations of the commonwealth.

In the past, the two political parties loudly proclaimed their autonomy as to domestic affairs. It is unnecessary to repeat what has already been stated in this respect. In 1859, Sir John A. Macdonald sent through the intermediary of his secretary of state, the following communications to the secretary for the colonies: "It is the duty of this government to assert the right of the Canadian legislature to adjust and determine the system of taxation, in whatever way it may deem proper, and this at the risk of displeasing the mother country. Sir Robert Borden gave expression to the same principle in 1918: "We shall not interfere in the domestic affairs of the mother country, but neither do we wish the mother country to dictate to us what our

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policy should be as regards the tariff or taxation." It was the first time, in 1930, that a Prime Minister endeavoured to impose his will as regards the domestic affairs of the other parts of the empire. He, therefore, opened himself to receive,-when the occasion presents itself-from the other countries of the empire, advice or even to be dictated to as regards our domestic policy. As a sequel to these discussions of 1930 and 1932, we abandon part of that autonomy for which we have struggled since confederation, and even as far back as the conquest of Canada by England.

I think that the Prime Minister and the other delegates to these conferences should have known-and they did know-that protection had been given a trial in other countries, and that the results had proved disastrous. Notwithstanding the example of the United States, Australia, Germany and other nations which had endorsed high protection, part of the British Empire' was made to sign agreements based on the principle of high protection.

May I quote a few extracts from an article signed by John T. Flynn, in Colliers Weekly, published in the second week of August, 1932. I shall read the quotation in English, as I have not the translation with me. This article refers to the economic situation of the United States at present, resulting from high protection :

For years we lived in a fools' paradise. We had our tariff walls; our chief buyers had none. We sold what we wished abroad save what we actually needed. We were young; we needed much and so trade moved in both directions.

But we developed fast. We shut out first one commodity and then another. Then came the war and soon we found ourselves selling very much and buying much less. After the war, with the Fordney-McCumber tariff bill, we attempted to close our ports to the trade of the world as completely as possible. Of course, we could hardly expect to do business with the rest of the world on this basis. We could not sell to people who were not permitted to pay with the only things they had to pay with,- their goods.

Yet we did do business with them. We sold them each year from half a billion to a billion dollars' worth of goods more than we bought from them. How were they able to pay for these goods? They were not. Our bankers simply loaned them the money. They still owe the loans.

This is briefly a description of the situation created in the United States by this high protection policy.

In concluding, Mr. Flynn suggests means which will be put into practice shortly; he names two:

What is the way out? Hopeless as it may seem, there is a way out. First we must put

an end to the policy of tariff boosting. Next we must put an end to the making of "most-favoured nation?" treaties designed to kill off reciprocity. Finally, we must summon other nations to sit with us in an international economic conference or council and see if, by a policy of give and take, we cannot make a beginning of lowering along the frontiers of all the nations of the world, the inhospitable walls which now shut out trade, intercourse, good will and good understanding.

This is, briefly, what could be applied to our country. As to population Canada holds the thirtieth place in the world. When the Liberal party was defeated in 1930 our little nation, holding the thirtieth place as regards population, occupied the fifth position as to her trade-both exports and imports. It has fallen within the last two years to the seventh place. Therefore other nations must have exported or imported more than us.

One can always find arguments in upholding principles, either economic or political. They are debatable. Our views are formed through studying; convictions are results. Notwithstanding all the deference I have for the convictions and views of the members on the government side, it seems to me that their convictions and views must be tottering when they perceive that their policy does not produce the results promised to the people in 1930. They no further state: protection will bring back prosperity, decrease unemployment, find markets for agricultural and manufactured products, but they state: wait until we apply these agreements and you will discover all the advantages the Canadian people will derive. The Conservatives follow the same tactics used in the past, and if the people were so gullible as to believe them, they could indefinitely remain in power under false representations.

May I now refer to the Ottawa conference itself. I shall quote certain extracts from the opening speech of the Prime Minister, who acted as chairman of the conference:

We meet in days when the machinery of world commerce is out of gear. International finance has broken down; the old-fashioned industrial life to which we have grown accustomed has undergone a change. We move towards a new economic order of things.

In 1930, the then leader of the opposition travelled through our countryside repeating the same thing, that the machinery of world commerce was out of gear. Only he made the following reserve: it was only the commerce of Canada that was out of gear. If trade was in the sad situation as represented in 1930, the Liberal administration was to be blamed. Two years later his argument necessarily extends to all the world commerce. He

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must have known in 1930 that not only Canadian trade was disorganized, but that the crisis had spread throughout the world. "International finance has broken down," but it is also on that argument that he was elected. He explained that we had not a financial system capable of meeting the needs of the people. What did he do to better this financial system? "We move towards a new economic order of things," but this is a truism; the trade of a nation, the trade of the world follows the same evolution as a child himself; in developing a new order of things springs up in the growth of a human being, as well as in the development of trade, but they do not seem to adhere to the same principles. A little further he continues:

We have a common purpose. We have a supreme desire to achieve it. And there can be no group of countries in the wide world so capable of united action as are the countries which comprise the empire.

What is that common purpose? It is clear, it is self-evident. For the last two years the Prime Minister has surrounded Canada with an almost impassable tariff wall. Not content with having applied this policy to our country, he has endeavoured for the last two years to surround the whole British Empire with the same tariff barrier, so as to exclude from the empire foreign exports.

It is the Right Hon. Mr. Stanley Baldwin himself who, at the outset of the conference, pointed out to the delegates that we should not forget that seventy per cent of the trade of the empire is carried on with the nations of the world, while there is only thirty per cent carried on with the nations of the commonwealth.

The main idea which seems to dominate in the mind of the Prime Minister, is to exclude all trade with foreign countries. However, it is absurd to think that we, in Canada, can dispose of all our products with the nations of the empire. There are not enough markets in the whole British Empire to absorb all we produce in this country, which is almost as large as the whole of Europe. We must have world markets. Where we differ with Conservatives is when they think by erecting tariff w'alls around the empire, in exporting what we can of our surplus production to the nations of the empire, we shall force the other nations to purchase our products. It is absurd to think that the other nations will pay tribute to us, a tax, will submit to our demands to trade with us.

The same thing will happen as in the United States which, after raising its tariff out of all proportion against the other countries, found that 38 nations raised their own to avoid paying tribute to the United States. This policy of the Prime Minister is economically impracticable. A tribute is paid only under great pressure. No human being wishes to bend the knee or pay a tribute if he can possibly help it. It is our present situation. The Prime Minister does not conceal the fact; in a speech delivered in Calgary, he again makes the statement; he is very lucid in this respect. We do not believe that by carrying on an economic war against other nations, we shall succeed in bringing back prosperit}' to this country. I am quite aware that the Conservative party is a war party which wants to apply war methods to trade. I fear that it is a fundamental error of Conservative principles. We do not trade with those we dislike or with those who will not welcome us or with those who place restrictions on our trade, but we have trade intercourse with those who offer us the best advantages or are friendly to us; never, however, with those, who are obnoxious to us in some way or other.

Further on the Prime Minister states:

What do we hope from this conference? The answer is, I think, from all of us, greater markets wdthin the empire. There is the answer from all of us undoubtedly, if we are persuaded, as I am, that greater empire markets mean as well greater world markets.

This claim that greater empire markets mean greater world markets is false. They wish to form an economic group of the whole empire. Other nations will unite together and surround themselves with tariff walls. When all have organized and united, the result will be that of 1914, a great war sponsored by trade predominance of one country over the others. If tariff wars are less threatening, at first, they necessarily lead later on to real warfare. The policy advocated in these agreements has that tendency.

In turning the page of this publication on the Imperial economic conference, I come across a statement of one of the delegates from Great Britain, the Right Hon. Stanley Baldwin:

International trade is so hampered by barriers of all kinds that a strong opinion is developing in favour of groups, not necessarily political in character, but offering to members economic advantages in the mutual opening of markets.

He himself recognizes that countries today, tend to surround themselves with tariff barriers to hamper trade, and what is worse, they endeavour after to grant themselves mutual concessions so as to compete against other groups. Let me further quote:

Reverting now to empire trade, we hope that as a result of this conference we may be able,

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not only to maintain existing preferences, but in addition to find ways of increasing them. There are two ways in which increased preference 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.

I do not contend that increase or decrease in tariffs, or even the preference granted to the mother country could entirely do away with the evil from which we, at present suffer. It would be one of the means to which we might have recourse. Both parties in Canada are at loggerheads as to the means to take. In granting a preference to England as we did in the past, since 1897, that is in maintaining our general and intermediary tariffs and granting a preference of 12| per cent on the general tariff, in 1897; of 25 per cent, the following year and 33| per cent, in 1902, and today, a prefererfce of 50 per cent, as the leader of the Liberal party stated, but without further increasing the duties against other countries, I think we could succeed in relieving the distress, today, by returning to this policy and establishing the tariff proposed in the Dunning budget of 1930. These are my humble views.

We have gone over what the Conservative party has done to this day. The results obtained by their policy do not further justify the application of those political principles.

The agreements themselves contain a number of articles, I note, however, that I shall not have time to discuss them, but a few of them have particularly struck me. Article I reads as follows:

His Majesty's government in the United Kingdom undertake that orders shall be made in accordance with the provisions of section 4 of the Import Duties Act, 1932, which will ensure the continuance after the 15th November, 1932, of entry free of duty into the United Kingdom of goods consigned from any part of the British Empire and grown, produced or manufactured in Canada which by virtue of that act are now free of duty subject, however, to the reservations set forth in schedule A appended hereto.

We must note that in February, 1932, our exports entered free in Great Britain. And it is on the pressing requests and entreaties.of our government that the British government has become protectionist-at least such are the contentions of the Conservative party. We must not forget that, in February, 1932, the

United Kingdom levied a duty of 10 per cent on a number of items imported from foreign countries and allowed our products to enter free. Is it reasonable to think that, even had the Ottawa conference not had any results, the United Kingdom would have taxed Canadian and the other Dominion's foodstuffs? Was it in England's interest to tax the foodstuffs coming from her colonies and thus deprive them of the English market. The mere thought of it is ridiculous.

The limited time at my disposal precludes my discussing all the articles. I shall simply refer to the last article which restricts the agreements to a period of five years. Future governments both in Canada and the United Kingdom are thus tied down.

We shall not be able to trade with foreign countries, we shall be bound by these agreements. Even if benefits were to accrue from these agreements, the fact that they tie us down for five years would certainly be a reason to repudiate them.

Reference was made to the fact that the exports of other countries were detrimental to our trade. All have read in the newspapers that shiploads of crude oil had entered Canada, and as a result the Arvida Aluminium Co. had employed 100 men more and that moreover workers had been required to refine this crude oil.

Reference was further made to the advantages of these agreements as regards Canada's dairy products. The press informed us, in September, that we were short of butter and that Canada would be forced to import at least 5,000,000 pounds. We were unable to compete with New Zealand butter in our own country, how are we going to compete against that butter in the United Kingdom, since New Zealand butter enjoys the same protection as ours on the British markets?

The following is what some people think of the present tariffs, in the United Kingdom. I shall again have to quote these views in English because I have not at hand the translation. The Right Hon. Mr. Snowden, after resigning his post, when the agreements were signed, stated his views. I quote the Evening Citizen, September 29, 1932:

"Six months' experience of tariffs," he wrote, "has disillusioned every unprejudiced protectionist. None of the blessings, which were to fall upon and fructify the sterile industrial soil has descended. Our foreign trade has declined considerably; unemployment has increased greatly, and the policy of the government has led to more foreign reprisals and restrictions.

"The British delegates to the Ottawa conference have come back after weeks of acrimonious disputes and sordid struggles with vested interests, with agreements wrenched from them

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to avert the collapse of that conference and the exposure to the world of the hollowness of talk of imperial sentiment in economic affairs.

"Nothing in my political experience has been more disgraceful and dishonest than the misrepresentations of the results of the Imperial conference which are being circulated in the Tory press."

And if I may be allowed to quote the Droit of Ottawa, which far from being a party newspaper, proclaims itself an independent newspaper, in its first edition October 18, 1932, this newspaper refers to an article by Mr. Camille L'Heureux, which states that we have dropped from the fifth to the seventh place among the trading nations of the world. The following is an extract:

Protection, as conceived by Conservatives, has not produced the results expected. People will conclude that high protection, as a means of bringing back prosperity, has failed in this country.

I am one of the youngest members of this house, however, if I may be permitted to give an advice to the Prime Minister, I would advise him to read the words of Sir Montagu Norman, Governor of the Bank of England, who, recently, in a lecture stated:

The difficulties are so vast, the forces so unlimited and so novel and the precedents so lacking, that I approach the whole subject not only in ignorance but in humility. It is too great for me.

Have you ever met a public man in the Conservative party admit his helplessness in dealing with the present problem? A thousand arguments were dug up to prove that they were right, and meanwhile the people were in distress, unemployment increased and farm products found no market. This afternoon, the hon. member for Dorchester stated that the Liberal members were to be pitied. May I reply to the hon. member for Dorchester that it is not the Liberal members who are to be pitied but really the farmers of his own county who cannot dispose of their products or pay their municipal taxes! Let the hon. member for Dorchester extend his pity to the 750,000 unemployed in Canada, and which are totally in want; to those rendered unhappy and miserable by the policy and measures adopted by this government! We have no need of his pity. When the people will be called upon to decide the issue, the hon. member for Dorchester will then be an object of pity and that will be extended to him.

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

Fizalam-William Perras

Liberal

Mr. F. W. PERRAS (Wright):

Mr. Speaker, I have the great honour and privilege to represent in this house one of the finest and fairest rural constituencies in Canada. I am deeply appreciative of that honour and consider it a pleasant duty to express in this

house the sentiments of those who have honoured me with their confidence. I feel that in electing me as their representative the people of the county of Wright showed good sense in not falling victims to the multitude of preelection promises made by the then leader of the opposition. They showed a keen sense of appreciation of the sound principles of Liberal doctrines and paid no attention to the rash and inconsequential promises of the present Prime Minister (Mr. Bennett). Would that heaven had willed that the majority of the electors of Canada should have had the same vision and the same sense of appreciation of the principles which were best for the welfare of Canada as had the electors of Wright county. If today the population of my county feels, as does the population of every other constituency, the tight pinch of the depression and the privations and hardships which go with poverty, they have the consolation of knowing that they did not bring them upon themselves. They know that in the dying days of 1929 the clouds were gathering and that the storm had broken out in many parts of the world. But they felt in 1930 that the Dunning budget would, if carried through, bring Canada past the crisis, so they voted for the Dunning budget, and today they feel that they did right.

The electors of Wright county could see that the storm was world-wide and they were prepared to weather it. But, sir, the worldwide adverse conditions are made ten times worse by the ill-advised policies of the Prime Minister, policies that in a cooler atmosphere, in a more collected state of mind, in a less reckless moment, he would never have framed. Times were getting bad the world over in May, 1930, but conditions were relatively good in the county of Wright. The farmer there lived in peace and contentment. The price for his butter, eggs, and other farm and dairy products enabled him to live happily. His sales were as numerous and as profitable as he desired, and his purchases of the necessaries of life or of implements or other manufactured goods were made under very favourable conditions. The farmers of Wright county got a fair return for their products and paid a fair price for their purchases. They were happy under Liberal rule.

Then came the elections. Then came the lavish promises, recklessly made by the present Prime Minister and his followers. Then they started to peddle gold bricks throughout Canada. Unfortunately, in the majority of the counties the electors chose them; but not so with the electors of my county. True,

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there were some who thought there was meat in those promises and who voted for the Tory party, but today you cannot get anyone in my county to say that he would do so again, or anyone to boast of what he did in so voting; because today one and all in the county of Wright feel the effect of the changed conditions and earnestly pray for a return to Liberal rule. None of the electorate of my county has forgotten the high prices that were secured in those days as compared with the ridiculously low and even famine prices that they now get for their products.

The present Prime Minister had made the promise that under his one-man government the prices of all farm products would soar away up; that all would be milk and honey; that all would get rich overnight, and that whatever unemployment there was would be ended. In those days of Liberal rule the pulpwood industry of Wright county flourished. Many hundreds of breadwinners were engaged in that trade, either as jobbers or day labourers, during the wood season. Many farmers of limited means, or those just starting out, or many men without farms, but living in the country, spent the winter months at that trade and all found therein their livelihood. But as soon as the change of government took place, so soon did conditions change in Wright county. With the coming into office of the new administration, the population lost faith and confidence, particularly in view of the fact that immediately matters started to get worse, prices fell, markets closed and unemployment increased. Prior to that time all had been peace and happiness.

There is no other constituency in Canada where the two great races, English and French, live in closer harmony and friendship; there is no other constituency where all creeds live in better understanding, where feelings of greater mutual respect and esteem prevail; there is no other constituency where greater loyalty to the crown exists than in the county of Wright. But today it would break your heart, sir, as it does mine, to go through once prosperous parishes and mingle with those unfortunate farmers, those unfortunate men, young and old, who are now unemployed, and see the distress in the faces of the mothers and the famished appearance of the children.

How did this all happen? Simply as a result of the ill-advised action of the Conservative party in changing so radically and quickly the policies that up to that time had made the people of my county happy and contented. My county is an agricultural one; its inhabitants live on the fruit of the land,

whether it be farm or dairy produce or lumber. For years the valley of the Gatineau has been known for the remarkable quality of the products of its farms and famous for the products of its forests. Its timber has had an international reputation. Private interests for years, yes, for over a century back, have made millions of dollars out of its timber. Companies by the score have been attracted to its vast resources. One of the most powerful lumber and pulpwood companies in the world has settled right in the heart of the Gatineau valley, mostly in my county.

All through the Liberal regime could, in my county, be heard the sound of the axe in the forest, the crashing to the ground of the majestic trees, the gay songs of the lumbermen, the buzz of the saws in the sawmills along the numerous streams, and the humming of large powerhouses along the picturesque Gatineau river. But today, because of the tariff policies of the Conservative party, the songs and sounds of activity are no more. Those tariff policies have cut off our markets, have shut off our avenues of trade, have chased away our customers. Our tariff walls are so high that the rest of the world cannot trade with us, nor can we trade with them. And now, to make matters worse, the Prime Minister asks that we make those markets even more impossible of success. He wants by this agreement to have us tied to one customer for three, five or ten years. No one is more loyal than are the electors of my county or than myself, but I say that the survival of the empire and of Canada is not dependent solely upon our trading exclusively with the empire. For years, ever since we have been able to trade, we have traded with the empire and the world, and under the Liberal regime and under Liberal trade policies we prospered. Why should we now tie ourselves up to one customer only, particularly when we find ourselves with a surplus production and feel so keenly the lack of markets? Why should we shut ourselves away from the rest of the world and sign an agreement to deal with one customer only for the next three or five or ten years?

If prosperity is just round the corner, as the Conservative party says, why does not the Prime Minister do something to help the farmers of Canada dispose of their surplus production at a reasonable price ? Why does he not do something to help them dispose of their present stock of pulpwood? Why does he not do something at once to enable them to realize on the timber that lies rotting in the bush and the cutting of which he encouraged when he urged the farmers to produce, saying that he would blast a way

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for them into the markets of the world? The Prime Minister solemnly promised to help agriculture, but now after two years agriculture is in a mess. Never at any time have conditions been so bad. After two years of this Conservative administration the farmer is ruined and on the verge of starvation. All the Prime Minister has to offer him now is an agreement the effects of which may not be felt for many years. What did the Prime Minister say at Calgary on June 13, 1930?

We will look over the top of the wall and beyond the horizon, to make provision for the Canadian agriculturist and secure markets for him.

What a consolation! For two years this . great architect of Canada's reconstruction has been building high walls around her. Now that the walls are so very high is it any wonder he has to look beyond the horizon to search for customers after having chased them all away?

Again at Regina on June 11, 1930, the Prime Minister said:

There is a good time coming. We may not live to see it.

How encouraging! Yes, Mr. Speaker, good times are coming, but we will not see them, it is true, under Conservative policies and tariff doctrines. Good times will come with the return to power of the Liberal party. Of that the electors of Wright county are convinced, and they only desire the opportunity to prove it again. The farmer is tired of vain promises. He is tired of waiting. He wants action and results, and he is entitled to them. A happy and prosperous farmer means a happy and prosperous country. A discontented and unhappy farmer, as is the Canadian farmer today, means a discontented and unhappy country, as is Canada today. From this agreement when can we expect results, if any?

May I point out that in September of this year Canada's total trade has decreased by

518.119.000 over the corresponding month of last year. Our total trade for the period ending September 30 of this year has been S459,596,000, a decrease of 8159,908,000 as compared with the same period in 1931.

Exports of lumber and other kindred pro-ductsh have also decreased. Exports of dressed lumber, such as boards and so forth, have decreased from $10,934,000 to $6,543,000; pulp exports have decreased from $14,146,000 to $8,134,000; and exports of newsprint from

553.492.000 to $40,215,000, all in the last six months.

May I, in conclusion, quote the words of the Prime Minister as reported in Hansard of October 12, 1932, at page 124.

Under favourable marketing conditions and with a price maintained continuously above the cost of production, Canada has potential possibilities for the production of 8,500,000 hogs by 1937, permitting of an export volume of 300,000,000 pounds of bacon and 10,000,000 hogs by 1942, permitting of an export volume of 500,000,000 pounds of bacon and hams.

Commenting on that, the Ottawa Citizen of October 15 says in an editorial, under the heading "Hogs of Empire":

Under the five-year plan of the imperial conference, Canada is apparently to become a land flowing with hogs and bacon in 1937. According to Premier Bennett's estimate:

"Canada has potential possibilities for the production of 8,500,000 hogs by 1937, permitting of an export volume of 300,000,000 pounds of bacon and 10,000,000 hogs by 1942, permitting of an export volume of 500,000,000 pounds of bacon and hams."

In the meanwhile, even at this moment, there is no scarcity of hogs or hams in Canada, but many thousands of Canadian people lack the purchasing power to indulge in anything so luxurious as breakfast bacon. There are millions of people similarly situated in the United Kingdom.

Perhaps the magic touch of the imperial tariff is going to make it possible for the United Kingdom to consume Canadian hogs by the million. But the imperial vision of this stream of hogs across the Atlantic ocean is hardly going to feed hungry people in Canada this winter, or next.

The vision of a great armada of 8,500 ships, every one with a passenger list of one thousand Canadian hogs, to do battle with Danish, Irish and other hogs outside of the imperial fold, is thrilling evidence of the high statesmanship of the Ottawa conference. How foolish of starving Canadian ex-service men to throw themselves into the Rideau canal when they need only wait five years to see this great imperial hog solution of the problem of hard times!

Mr. Speaker, to conclude my remarks, as the signing of the agreement will bring no better results to the farmers of my county, I shall vote against the measure now before the house.

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

William Gilbert Weir

Liberal Progressive

Mr. W. G. WEIR (Macdonald):

Mr. Speaker, we are in process of considering an agreement of far-reaching importance, an agreement which may have undreamed of effects on the domestic life of this country, an agreement that may completely revolutionize the entire status of the British commonwealth of nations by its complications and ramifications of tariff changes. It is an agreement which may go down in history as a turning point in international affairs. Realizing the importance of this agreement, as the government surely does, they place it before us as if it were some ordinary measure, and expect this house and the country to accept it. I am very much in sympathy with the suggestion made by several hon. gentlemen

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on this side of the house, both from the official opposition and from the group in the corner, that it would seem a much more reasonable course for us to discuss this measure in committee, getting information on the details, rather than proceeding as we are. As it is now we have the cart before the horse. Surely with an agreement as important as this is, arrangements could have been made to deal with it in that manner. It would not be so bad if hon. gentlemen opposite when they rise to discuss this measure would endeavour to give us some information on the details instead of indulging in generalities that leave us as much in the dark when they sit down as when they started. I cannot see how the government can expect us to vote intelligently on this measure with the little information they have so far given us. They may say: Let the measure pass and go to committee; then the detailed information will be given. But what will be the use of discussing the details after the whole thing is passed?

There met in this fair Canadian city a few weeks ago the leading statesmen of the British Empire. To what end? Whatever their intentions may have been at the beginning, they ended up by arranging a general increase in tariffs, and by fixing of trade agreements on the British Empire for the next five years that cannot be changed, regardless of what changed conditions may require. The action taken at the Imperial conference has really resulted in placing a tariff wall around the British Empire, thereby virtually making a zollverein out of the British commonwealth of nations and saddling high protection on us for the next five years. To me this is a dangerous course to pursue, and one that we may live to regret. It is dangerous for its effects on world trade; it is dangerous to Canada and the British Empire for its possible effect in causing other nations or combinations of nations to join together for a similar purpose; it is dangerous for its possible effect on international relations. May I here be permitted to read part of an article by Sir Arthur Salter on the imperial conference, which appeared in the London Times of September 27, 1932. Referring to the conference, he said:

In addition to reciprocal concessions on tariffs imposed for national reasons, Great Britain undertakes to impose new tariffs and not to remove certain existing ones without consent.

This is a real innovation in tariff history. Hitherto countries have imposed tariffs in the real or supposed interests of themselves or their producers; and they negotiated, successfully or

in vain, for general or reciprocal concessions. But even the most protectionist countries have not entered into engagements to put on tariffs they do not want or retain others they may find injurious.

The new engagements to impose and retain tariffs are, in general, for five years. This must both restrict the area and complicate the process of bargaining with other countries. It used to be argued that the power to impose tariffs ourselves would enable us to bargain down the tariffs of others. But to bargain it is just as necessary to be free to remove duties as to impose them. Our domestic policy, by limiting any pledges to a year, left this freedom, nominally at least, little impaired. A period of one year is not fatal to bargaining, but one of five years (in the sphere in which the agreements apply) most certainly is.

An engagement for five years, extending beyond the life of the parliament asked to ratify it, is a constitutional innovation. Such an innovation might well have been desirable as a part of a bargain with other countries for the purpose of limiting and reducing tariffs. It is surely regrettable that it should have been introduced for precisely the opposite purpose.

Next the agreements endorse the "compensatory" principle. It is when tariffs are in excess of a level which compensates for differences in costs of production that our industrialists are to have the right to protest.

This "compensatory" (or miscalled "scientific") principle is not new in the world's tariff history; on the contrary, it has played a great and disastrous role. But its endorsement in British policy is novel. This principle means that when an industry is specially unsuitable to a country protection, instead of being denied, is increased. To the extent to which it is applied it not merely reduces trade, it destroys its very foundation. The basis, and the only basis, of trade is that some produce more advantageously, and therefore more cheaply, than others. The only reason, apart from caprice or error, why any one buys from abroad is that he can get a given article at a lower price or a better article at the same price. Abolish this difference exactly by compensatory tariffs and trade is not diminished, it ceases.

After all the years that Canada has been working for complete autonomy as a British nation, finally culminating in the passing of the Statute of Westminster, it is hard to conceive how our statesmen and those from the other parts of the empire could take the backward step that appears to have been taken in this agreement, whereby Canada is restricted in making trade agreements with other countries and Great Britain cannot change her tariff without the consent of the dominions. That this has been done is clear from article 9, which is as follows:

His Majesty's government in Canada will invite parliament to pass the legislation necessary to substitute for the duties of customs now leviable on the goods specified in schedule E the duties shown in that schedule, provided that nothing in this article shall preclude His Majesty's government in Canada from reducing the duties specified in the said schedule so long

United Kingdom

as the margin of British preference shown in that schedule is preserved or from increasing the rates under the intermediate or general tariff set out in the said schedule.

Article 9 refers to schedule E. I find that in that schedule there are 215 items. Over 90 of the items are free under the British preferential tariff, and the intermediate and genera! rates are the same; consequently there is no chance cf changing any of the items in that particular schedule, because the margin of preference has to be maintained. And most of the items contained in the schedule cover articles which when they come into this country would reduce the cost of production and the cost of living. Great Britain has agreed to a similar undertaking, according to article 3 of the agreement. Let me read it:

His Majesty's government in the United Kingdom undertake that the general ad valorem duty of ten per cent imposed by section 1 of the Import Duties Act, 1932, on the foreign goods specified in schedule C shall not be reduced except with the consent of His Majesty's government in Canada.

Surely, Mr. Speaker, that is sacrificing the autonomy of both Great Britain and Canada.

Much has been said in this debate about bragaining in tariff making. For a country such as Canada, which is so dependent on export trade, I am opposed to it. Every deal, you may say, is a bargain of some kind. I do net agree. Canada must sell her exports in the markets of the world, and is not in a position to pick and choose to any great extent. I liken Canada's position, as the hon. member for Souris (Mr. Willis), did, to that of a man doing business with a storekeeper. A goodwill relation develops; they do not dicker over every sale. If they are fair to each other and the storekeeper ha3 the goods of the quality desired, and when, as often happens, advantage can be taken of some particular condition, the storekeeper will endeavour to share that advantage with his customer. That is not bargaining; that is mutual confidence and good-will, and what applies in business applies equally in international trade.

I must hurry to deal with two or three other features of the agreement. First I should like to say a word or two with regard to the removal of restrictions on our export cattle. Everyone is glad that this restriction against shipping female cattle into Great Britain has been removed. The hon. member for Marquette (Mr. Mullins) endeavoured to make much of this accomplishment; he virtually said, "Even though the whole agreement is bad surely you can give the government credit for accomplishing something." I am quite prepared to give the hon. member for Marquette all the credit that is coming to him

for the valuable work he has done in that regard, but I think he should be equally prepared to share that credit with other people. The hon. member for Souris (Mr. Willis) was more generous when he said that the agitation for the removal of this restriction had been going on for thirty years. Why then, I ask the hon. member for Marquette, should not some credit go to other people? Why not give some credit to the officers of the various live stock breeders' associations throughout the country for the valuable work they have done? Why not give some credit to the various ministers and deputy ministers of agriculture and the live stock men connected with all governments in Canada for the work they have done? Why not give some credit to Hon. Duncan Marshall for the very valuable contribution he made in his good will effort to have this restriction removed? Why not give some credit to Miss E. Cora Hind of the Winnipeg Free Press, who did very valuable work, and who is the first lady to go to Europe by way of Churchill travelling on one of the early grain boats. In any case, I do not think an Imperial economic conference was necessary in order to have this restriction removed.

I should like to ask the hon. member for Marquette how he feels with respect to the duty on cream separators and barbed wire. He has been a rancher for many years, and I presume he knows something of what goes into the cost of producing live stock and dairy products in western Canada. Under previous tariffs these two items were free. There is now a duty of 25 per cent in the case of cream separators and 10 per cent in the case of barbed wire. I should like to take just a moment or two to indicate what this will mean. In 1930 our total importations of barbed wire amounted to $334,000, while in 1932 they amounted to $135,000. These importations were made up as follows:

1931 1932

United Kingdom $ 9,312 $10,382

United States

187,192 39,076Belgium

86,811 28,330Germany

27,905 13,470Netherlands

22,944 34,752

So it will be seen that this increased duty will materially increase the cost of barbed wire, since such a large proportion of our imports comes from foreign countries. That does not apply only to barbed wire; it applies also to other classes of wire which the farmers use.

With respect to cream separators the situation is even more disturbing. I find that our total imports in 1931 were over $1,000,000,

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while in 1932 they amounted to 8455,000, and we did not import any cream separators from the United Kingdom at all. Our imports were made up as follows:

1931 1932

United States

$859,311 $338,323Belgium

85,953 ....Finland

28,140 2,207Germany

6,960 11,448Sweden

106,701 103,663

This clearly shows either that Great Britain does not make a separator suitable for ordinary farm purposes in this country or that they cannot sell their machines at a competitive price. From what I can learn the British manufacture a separator that is used in large centralized creameries rather than the ordinary farm separator, and consequently it cannot be expected that we will receive any cream separators from the United Kingdom. In addition, apparently the cream separator manufacturers in this country are limited to only two or three makes. On the basis of our importations from foreign countries, during the past five years this duty will cost the farmers of Canada about $176,000 more annually for their cream separators.

I must hurry along. I now wish to deal with that part of the agreement to which the government has pinned its greatest faith, and which they hoped would win the sympathy of western Canada. A good deal of misleading propaganda has been broadcast in an attempt to spread the idea, particularly in western Canada, that this agreement will make it possible for the farmers of the west to receive an additional six cents per bushel for their wheat. Article 4 of the agreement, which has to do with wheat, reads as follows: It is agreed that the duty on either wheat in grain, copper, zinc or lead as provided in this agreement may he removed if at any time empire producers of wheat in grain, copper, zinc and lead respectively are unable or unwilling to offer these commodities on first sale in the United Kingdom at prices not exceeding the world prices and in quantities sufficient to supply the requirements of the United Kingdom consumers.

In dealing with this matter the other day the hon. member for Souris very skilfully avoided that little joker which says that the wheat must be sold at world prices and in quantities sufficient to supply the requirements of the United Kingdom market. I give my hon. friend credit, however, for his attempt to explain some of the details of this agreement which have been avoided by other speakers on the government side. I should like to take the illustration given by my hon. friend in dealing with this matter. He stated that if there were two ships, one from Canada and the other from Russia, each carrying 300,000

bushels of wheat to dock at Liverpool, the Russian ship would have to pay $18,000 to the British government before the wheat could be unloaded, whereas the Canadian ship would go in free of tolls. That is all very well, but we must remember that according to the agreement wheat must be sold at world prices. Do you think for a moment that the Russian wheat would stay there and pay that toll? Certainly not; it would proceed to the next nearest competitive market and save that $18,000. But there is still a more important feature. The Russian ship, together with hundreds of other ships, would speed with all haate to that other market, and as a consequence that market would become glutted, causing a reduction in price which in turn would bring about a lower price on the Liverpool market, which would be the price paid for Canadian wheat. So I am afraid that in this respect the agreement has been a leap in the dark and that the government is not going to get very much out of it.

In this connection I should like to read part of an editorial which appeared in the Winnipeg Free Press a few days ago:

British Millers and Wheat Prices

Perhaps the demand which is said to be made by the British authorities at the instance of the millers upon Ottawa for information as to whether the government is doing anything to keep wheat at its present dizzy height of about 50 cents a bushel Fort William is the first fruits of the interlocking of authority between the two governments over certain matters effectuated by the third article in the Anglo-Canadian agreement.

By this article Canada agrees to supply wheat, copper, zinc and lead in such quantities as required by the United Kingdom and at prices not exceeding world prices, in default of which the preferential rate may be withdrawn. According to this if the world price is less than the level of 50 cents a bushel at Fort William, Canada must sell at this lower price and in quantities equal to the demand of the British millers. The world price is to be set, presumably, in whatever market on the continent there is the greatest glut of competing wheat.

As I read this, it would seem that Canada must at all times supply the requirements of the United Kingdom market even if it was felt that the price prevailing at the time is not a profitable or a reasonable price at which to sell. If Canada should hold out for a higher price for her wheat, the preference would be cancelled, according to this agreement. That is important, and it is one thing that is certainly in the agreement. It seems to me that this arrangement might quite possibly move the centre of the world's grain market to some other place than Liverpool. That may not be any of our affair, but I am suffi-

United Kingdom

ciently British to want to see the centre of the world's grain market remain within the British Empire.

Another thing that is important, and it is very important, is this. Canada has always enjoyed a premium in normal times over competitive wheats. We are now obliged to sell at the world price. What will become of our premium? Our 1930-31 crop sold, most of the time, at a premium of from 10 to 15 cents per bushel over competitive wheats. With tariff duties against our wheat in foreign countries, the tendency is to buy high grade wheat, because the cumulative effect of the tariff is not so great. Consequently our higher grade wheats will be in greater demand and at a higher premium. There is nothing in this agreement to indicate that we shall be able to maintain the premium which has really sold Canada's wheat, which has made a reputation for our wheat and permitted us to sell it in competition with wheat produced anywhere in the world. Nor is there anything in the agreement that will prevent other countries from bonusing exports, and thereby holding their place in the British market.

I desire to deal with the wheat situation of the British Empire as it appears from a review of the past five or six years. The figures I have are for the years 1925 to 1930, inclusive, for the chief empire wheat producing countries, Canada, Australia and India. [DOT]The figures are taken from the twentieth report of the Imperial economic committee on the wheat situation in 1931, are the average for the six years and are for wheat and wheat products. These are the figures:

Bushels

Total net imports United Kingdom. 220,000,000 Net imports from Canada, Australia

and India 105,000,000

or 47-8%

Canada-total net exports-all countries 300,000,000

Canada-net exports to Great Britain 72,000,000

Balance to be sold outside Great

Britain 228,000,000

Australia-net exports-all countries 96,000,000

Australia-net exports to United Kingdom 27,400,000

Balance to be sold outside United Kingdom 68,600,000

In other words, the total net imports to the United Kingdom of wdieat and wheat products has been 220,000,000 bushels. Of this 105,000,000, or 47-8 per cent has come from the three chief wheat exporting countries of the British Empire, of which Canada's contribution was some 72,000,000 bushels out

of a net exportable surplus of 300,000,000 bushels. So that we have had to sell in foreign markets some 228,000,000 bushels.

Australia's net exports were 96,000,000, of which 27,400,000 went to Great Britain. In the past six years Canada has marketed 24 per cent and Australia 284 per cent of their total exports in Great Britain. On the other hand, Great Britain has imported 33 per cent of her requirements from Canada, and 12| per cent from Australia.

The average yearly imports of the United Kingdom for the past six years of wheat and wheat products has been 220,000,000. Canada and Australia's net exports alone have been 396,000,000 for the same period. So that the two countries still have to look to outside markets to sell some 176,000,000 bushels of wheat and wheat products. This 176,000,000 bushels will undoubtedly find increased competition in foreign markets because of the restriction on foreign wheat in Liverpool, with a consequent lowering of world prices which we are obliged to take in the United Kingdom according to the terms of this agreement. So where can there be any possible advantage to empire producers?

Granting for a moment that the 220,000,000 bushels of empire wheat imported to the United Kingdom receives the six cents a bushel preference over foreign wheats-which I do not admit-the other 176,000,000 presumably is to' be sold for less. How, then, is this six cents per bushel going to reflect back over the whole, or back to the farmers of Canada, as I understand the hon. member for Rosetown has claimed that it would be. Granting that one possibility, there is only one class that could gain, and that is the exporter or handler of wheat who happened to be lucky enough to get it sold in Liverpool unless a national marketing organization is established. I must confess that I cannot see how this six cent preference, with article 4, can be of any value, and it may even tend to lower prices.

The Minister of Agriculture and also the hon. member for Qu'Appelle made much of the point of a sheltered market in Great Britain for Canadian products. This sheltered market for wheat in Great Britain draws to my mind the picture of a man standing down in the lowlands, with the hills around him, holding an umbrella over himself while a downpour of rain is beating upon him. His shelter from the umbrella will be of value to him just so long as the rain does not flood him out at the bottom, but that will not be long; and this applies equally to empire wheat imported into the United Kingdom. Consequently I cannot see anything to be gained for this country in the statement that we shall have a sheltered

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market in Great Britain. I am afraid the hon. gentleman cannot take much satisfaction out of this accomplishment. The price of wheat has already dropped fifteen cents since they started to consider these agreements.

The hon. member for Long Lake (Mr. Cowan), the other day, in a burst of fury, exclaimed, "Where is your world market today!" I presume he was implying that there was no world market for Wheat. Let me say to him that the world market for wheat today is the same as it has been for years and is reflected in the quotations of the various exchanges every day in a very scientific manner. If I drew a correct inference from his remarks, namely, that there is no world market for wheat today, why then stipulate a world price in this agreement?

I must pass over some other observations which I should like to have made, but let me ask: So far as western Canada is concerned, wrhat do we really get out of these agreements? Certainly nothing on wheat. Mighty little on cattle, because very few cattle from western Canada can go to Great Britain, and our hands are tied so that we cannot make our own arrangements in other directions should the opportunity arise-and it is quite conceivable that it might. Little or nothing on hogs or poultry, because you cannot produce hogs at 3 cents and poultry at 10 cents in western Canada; and in any event how are we going to sell to Great Britain with a 25 to 30 per cent exchange rate against us? So far as I can see, what we have really got has been an increase in tariff on barbed wire, cream separators, fertilizers and a long list of other goods the consumer requires. I am afraid we have lost more than we have gained.

There is one thing more I might mention with respect to the wheat situation. The other day the Prime Minister referred to the regulations with respect to the export of wheat from this country through American ports, and it was clear at that time that he was not sure in his own mind whether the preference would be applicable to Canadian wheat if consigned to American ports, and then reconsigned to Liverpool. I think the situ-attion has been cleared up today by statements emanating from the British parliament, but that was a particularly serious situation had Great Britain not been willing to accept the spirit of the agreement, but had instead held definitely to the wording of the agreement. Just how serious it might have been can be seen from the following figures of our domestic exports via eastern Canadian and

[Mr. W. G. Weir.l

American ports for the past few years. The movement of our wheat was as follows:

By By

Canadian American

ports ports

Bushels Bushels

1926

56,000,000 127,000,0001927

48,000,000 135,000,0001928

73,000,000 164,000,0001929

43,000,000 79,000,0001930

45,000,000 86,000,0001931

45,000,000 62,000,000

I am giving these figures only in round numbers, but they are sufficient to show the manner in which our shipments have gone out during this period of time.

I think the real test of the value of this agreement should be, first, does it provide for any extra trade for this country? It does not; it merely diverts some trade and, in my judgment, will tend to restrict trade. Second, does it reduce the cost of living or the cost of production to the primary producer in this country? This it does not do; instead it will tend to increase the costs of living and of production because of increased tariffs. There are two other very definite objections, namely: it is an interference with our national autonomy, and it constitutes the thin end of the wedge towards making an independent trading unit out of the British Empire, to which, in the words of the Prime Minister, other nations will be required to pay tribute if they wish to trade. I think every hon. member should consider the agreement with these points in mind before deciding upon the manner in which he will vote.

When the distinguished statesmen of the British Empire met in this fair city of Ottawa, leading economists, statesmen and students the world over were urging, yes, pleading, for a reduction in world tariffs. In spite of that our statesmen went ahead blindly and increased tariffs in the face of a contrary public opinion. I think the conference would have made a greater contribution to the peace, happiness and prosperity of the world had it forgotten about trade agreements and presented a united front to the world in favour of the reduction of war debts, an all-round decrease in tariffs, and the establishment of a medium of exchange by which the countries of the world could do business. It does seem a strange anomaly that this conference of British nations should meet here in the capital city of Canada and say that nothing could be done with the vexed problem of exchange because of a coming world economic conference, and at the same time, and in spite of a contrary public

Questions

opinion, tie their hands behind their backs so far as tariffs are concerned right on the eve of that world conference. They indicated clearly that they were not interested in the reduction of tariffs; that they hope to maintain them and fix them upon the world for years to come.

May I close by saying that so far as Canada is concerned what is needed today more than anything else is the courage to trade with the world.

On motion of Mr. Heenan the debate was adjourned.

On motion of Mr. Stevens the house adjourned at 10.40 p.m.

Monday, October 31, 1932

Topic:   IMPERIAL ECONOMIC CONFERENCE
Subtopic:   CONTINUATION OP DEBATE ON THE MOTION FOR APPROVAL OF TRADE AGREEMENT BETWEEN CANADA AND THE UNITED KINGDOM
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October 28, 1932