I wish to ask a question of the Minister of Trade and Commerce. Under article 6 of the agreement entered into at the Imperial conference of July last it is provided that Canada shall have the right to free entry of 2,500,000 hundredweight of bacon and ham. I notice a dispatch from London wherein this has been contradicted; it is claimed that a mistake was made by the typist and that there is one "0" too many. They claim that we have the right to only 250,000 hundredweight.
Hon. E. B. RYCKMAN (Minister of National Revenue):
The hon. member for
North Waterloo (Mr. Euler) yesterday asked me a question, which I said I would answer to-day, in regard to the possibility of reducing the value of the pound sterling for customs purposes from $4.86f to a lower figure. All customs rates for duty were originally fixed upon that value.
I feel that at the present time, in view of the disturbed condition of exchange quotations, it would be unwise for us to consider
any alteration in the present arrangement until it becomes apparent that exchange quotations are more stabilized. Changed circumstances with changed requirements may quickly come.
It might be appropriate at this time, however, without entering into too much detail, to explain to the house the circumstances which prompted the government to establish the present basis.
In September, 1931, the commodity price index wholesale in Great Britain as published in the Bank of England Statistical Summary was 99.2. In that month, as all hon. members are aware, Great Britain suspended payments in gold, and the immediate result was an increase in commodity prices in Great Britain. For October, 1931, the figure was 104.4, and in November, 106.4. Since that time the index figure has moved closer to the 100 mark, and in the month of October, 1932, it stood at 101.1, November 101.1, and in December, the last month for which figures are available, it was 101. Comparing that ' figure, therefore, with the index as in September, 1931, it will be noted that there is actually a slight increase in wholesale prices in Great Britain.
If prompt action had not been taken by our government in September, 1931, to continue to value the pound sterling for customs purposes at |486f, the net result would have beeD that the tariff against Great Britain up to about twenty per cent would have been wiped out, and in some cases indeed the British exporter to Canada would, owing to exchange, be receiving a bonus.
Action could perhaps have been taken by way of special surtax or quota system as has been done by other countries who were faced with unfair competition from countries whose currency had become depreciated, but we adopted the more moderate course of endeavouring to maintain so far as was possible the status quo, with this slight exception that having regard to the fact that there had been an increase in commodity prices in Great Britain variously estimated by experts at the time at anywhere from seven per cent to ten per cent, we decided that although regular duty would be assessed on the basis of $4.86f to the pound sterling, special or exchange dumping duty would only be collected on a basis of $4.40 to the pound sterling, which represents approximately a discount of ten per cent from the par value.
Since that time representations have been made to me both to increase and to lower the
C.N.R.-C.P.R. Bill-Mr. Manion
figure of $4.40, but everything considered I believe it has been fair and reasonable to all interests affected.
As I stated at the outset, I do not believe this would be an opportune time to make any [DOT]change in this arrangement.
There was only one ruling made by the minister of which the minister had any knowledge. It happens in the ordinary course of business that it is necessary to determine on the spot how an entry should be treated. The result was that our officials were consulted with regard to an entry and, not knowing at what rate the exchange should be computed, they inquired of one of our largest banks as to what they were to do as respects exchange. The answer came that the last rate that was published was $1.18. If they wished to be secured against risk, they would be safe in putting it at $1.25 and making their adjustment afterwards. They adopted the course taken upon the statement of the bank that that was the proper thing to do. Owing to an indisposition I was not in the house yesterday afternoon or evening, but I read the announcements made in the evening papers. I considered the matter, consulted with those who were interested and made up my mind that in view of the- special emergency in the United States and the fact that the par rate is dollar for dollar and no quotations were available, and as some special order had to be given, the fair thing to do would be to set a rate of par for par until we had some different information. With that in view I sought to make it clear that it would be only fair at this time and until the matter was settled, whioh will be no doubt by Friday, that par for par and dollar for dollar should be the prevailing rate.