Mr. McGEER:

My hon. friend says,

"Therein lies the danger." What are we in Canada, as part of the British empire, doing to hold our place of leadership in the world's greatest theatre of potential development and trouble, the Pacific ocean? We have in British Columbia and Alberta two of the richest provinces in the dominion. The Canadian section of the north Pacific is richer in natural resources than are Australia and New Zealand combined. What are we doing to fulfil our responsibility on the Pacific ocean? We should realize what is being done by the motherland in Singapore and Hongkong and by our sister dominions in the antipodes and do likewise. But all we do is to reduce a rather niggardly subsidy that should be increased to encourage development on the Pacific. That kind of economy is not going to help the Minister of Finance to gather the taxes necessary to meet the obligations of the dominion. It is not going to help the cities of Vancouver, Prince Rupert and Victoria to gather the taxes necessary to meet their municipal obligations. It is not going to help British Columbia and Alberta to distribute

their grain, lumber, minerals and innumerable other products to Pacific ocean markets. These products should be flowing into these markets in much greater volume than they are at the present time and this volume will not be increased until this country recognizes that it must maintain not only an internal but an external transportation service to all the markets of the world.

I appreciate that these are times of great difficulty, but it seems rather extraordinary that a nation like Japan, with fewer resources than the dominion, or a country like Great Britain, with fewer resources than we have, can find the money and the means to build and develop a shipping service for commerce and at the same time maintain a naval program costing far more than its ocean shipping service. We in Canada have no naval service to maintain and yet we cannot continue to pay a niggardly subsidy for the development of^ our shipping services. Just recently the shipping service of Great Britain was recognized as being in need of assistance and an extensive program of subsidies was brought into effect.

I should like to point out one other matter to the committee. Japan has adopted another technique; she has appropriated to herself that of Great Britain in establishing protectorates over Egypt and India by establishing control over Korea, It is not a question of what Japan may do to-morrow; we know what she has done already in the way of expansion. Unquestionably she is moved to establish the government in Manchuria, and she has now arrived at the point where she can establish a measure of authority over northern China. She has devised a form of Monroe doctrine and has sufficient authority to say to London that she will not approve a sterling loan to the Nanking government. We in western Canada feel that there are great opportunities as well as great responsibilities for the empire on the Pacific ocean. These opportunities and responsibilities are not confined to western Canada; they are not confined to the dominion as a whole; they apply to Canada as a nation and as one of the members of the commonwealth of nations known as the British empire. We should not overlook the fact that there are only about 70 millions of people of British extraction in the 500 millions of people who make up this empire. The position of leadership which the people of the British empire have held in a world of 2,000 million people is something that has been challenged before, is being challenged to-day and will be challenged in the future.

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If in our desire for economy we allow ourselves to be bound by the outworn, impossible, impractical and absurd conventions of orthodox economy and orthodox finance, which have been abandoned by every country that appreciates the future, then having put the wealth of our nation in pawn, we are now sacrificing the possibilities of progress to pay the pawnbrokers' exactions. It may be that this is the way in which we are going to manage the currency and credit of this nation so that it may be issued in terms of public need. But if we are going to sacrifice trade on the Pacific ocean in the name of economy, we are going to repudiate the most important promise that ever was made by any government to the people of a nation, namely, that currency and credit would be created and issued ini terms of public need. The kind of economy involved in this reduction, will prove to be a ghastly expense to the people of Canada, and it is not the kind of economy that .they expected they were going to receive after the last general election.

Mr. DUNNING:

While the Minister of Trade and Commerce does not need support in view of the fact that he takes the responsibility and has been kind enough to absolve me from it in connection with these reductions, I think, after the very eloquent and informative remarks to which we have just listened, I should at least indicate my full support of him in what he is trying to do in the way of economy in this matter. I do so for the reason that the committee might reach the conclusion that some great disaster is about to fall upon the trade of Canada across the Pacific ocean as a result of the reduction of $149,000 in the subsidy to be paid for the Canada, China and Japan service. I did ask every one of my colleagues to endeavour to secure the discharge of the various public services under their control for the least amount of money. If that is orthodoxy, then I am orthodox. I believe it is my duty to the taxpayers of Canada to ask all my colleagues to endeavour to secure the discharge of the public services under their control for the least possible expenditure of money, and I am prepared to stand on that. I am sure that the Minister of Trade and Commerce assured himself that no detraction from the service now being rendered on the Pacific ocean would take place as a result of the saving to the public treasury of this $149,000.

Mr. CAHAN:

That is the assurance we desired to have.

Mr. DUNNING:

The minister can base his views with respect to the matter only upon information which is supplied to him, as my hon. friend well knows, confidentially by the companies operating.

Mr. CAHAN:

That was quite sufficient.

Mr. DUNNING:

On the basis of that information he makes up his mind and makes his recommendation to the government of Canada, reasonably sure, as I say, that the service will not be impaired and merely desiring to secure for the people of Canada the maximum of service for the amount of money voted. Now that is a simple matter. It does not relate itself to a world crisis; it does not really relate itself to the rising power of Japan; it does not really relate itself to a world war. It is a question of whether in the judgment of the Minister of Trade and Commerce of this country the service now being given to Canadian trade across the Pacific can ibe performed for a lesser subsidy than was paid during the last year. I am standing by the Minister of Trade and Commerce.

Mr. McGEER:

There was no assurance of that kind given at all. When I asked the minister the reason for the change he gave the curt reply that it was merely economy. With respect to the Atlantic service he gave the other reason, namely, that there had been an improvement in the general returns made, warranting his opinion that no harm would be done to that service. But in reply to my question-and that is the only reason I spoke- he said, "Well, we have decided to economize on the Pacific," quite irrespective of what is going to happen on the Pacific. Well, we have had a little intimation of what has happened in discriminatory freight rates and a great many other matters, and in British Columbia we feel, at least as the representative of one of the constituencies of that province, I feel that we have to make ourselves heard a little bit; and I can assure the Minister of Finance that if he is going to economize by paring things on the Pacific, things which I think we need out there and which I do not think he should pare, then I will use not only Japan but anything else I can think of to convince the committee that the minister is wrong in that regard.

Mr. STEVENS:

I am quite sure that the minister is at liberty to make a statement in this connection. Has he received any information from the company which is given this Pacific subsidy that the service will be curtailed somewhat by the reduction? I

Supply-Trade-Mail Subsidies

recall very well that two years ago, when a larger reduction was proposed than was actually made, it was stated that the service would be somewhat curtailed, I believe by extending the service from two to three weeks, or cutting out one voyage in. connection with each of the ships, or a portion of a voyage, or one voyage on two or three ships. In any case, if this results in cutting down that service then it simply means that the traffic will go to the Japanese ships or the President line, that is, the Dollar line, running from China to Japan to Seattle, San Francisco and so on. It means something similar to what has happened in the competition on the Australian route, which I notice the minister has recognized by an increase in subsidy, that is, competition of the Matson line with the Canadian-Australian line. That competition has become so real that I venture to say that a very substantial proportion of the Australian business that used to come through Canada is now diverted through San Francisco and Los Angeles. That is a distinct loss to Canada and I am glad to see that the minister has increased that subsidy. It was originally 8100,000. Then it was increased to $150,000, then to $200,000, and now he has increased it to $300,000, which is away below what the United States government pays to its lines. The China-Japan route is the old main route, on the Pacific, of the Canadian line. The Canadian Pacific, of course, was the pioneer on that route; I remember forty years ago when the old Empresses, little vessels of 5,000 tons, were looked upon as the most wonderful ships on the Pacific. They look very small to-day. Then there was

a gradual development to the larger vessels. I will venture this statement, that there will be a curtailment in the service commensurate with the reduction, in subsidy, and I would ask the minister whether he has any assurances as to the maintenance of the service.

Mr. EULER:

I am very glad my hon. friend has asked that question. I have no intimation whatever from the company that there will be any curtailment or that any curtailment will be demanded on the basis of this subsidy. I may say this, that the company concerned is not pleased with the cutting down of the subsidy; I hardly expected anything else, but I will say also to the hon. member for Vaneouver-Burrard (Mr. McGeer) that although I am not able constitutionally to go into heroics, I am just as much concerned about the prosperity of this country as is perhaps, any other hon. member. I am not doing anything by way of cutting down subsidies with the knowledge or hope or belief that the trade of Canada is going to suffer. Further, I am not afraid to retrace my steps if I find I am wrong. If I should be convinced, as I am not-and I do not think I shall be-that by reason of cutting off $100,000 or a little more from a certain subsidy the interests of this country are going to be vitally affected, I shall not be afraid to alter my course. This action might still be taken. I do not think it will need to be, but if it must be I am perfectly prepared to take it. As I say, however, I cannot go into heroics and assert that because of a small cut in the subsidy the whole of the trade on the Pacific is going to be ruined. But if such a danger should arise, I think we could take steps to avoid that terrible catastrophe. I desire that if possible the vote be passed. If not, I would make a motion that the committee rise.

Mr. McGEER:

There was not any desire on my part to go into heroics. I wanted to give the committee some facts on the situation with regard to trade development. One feature to which I did not refer at all but which the minister might look into, might induce him, instead of decreasing the subsidy, substantially to increase it to the benefit of the people of Canada. We know that as a result of competition on the Asiatic coast much of the work of repairing and improving and reestablishing ships is done on the docks on the other side of the Pacific. Much of the employment that is given on the ships is governed by the same conditions. I feel that the time is coming when we should be prepared to recognize the necessity of developing a Canadian merchant marine service that will permit us as a nation to help the British empire to enjoy during the future the same kind of leadership in the Pacific theatre of trade that the British empire has enjoyed in the Atlantic during the last 200 years. We have in Vancouver a port that is not only competing with every other port on the Pacific ocean, but definitely competing with the port of Seattle; and if the minister would take a trip along the Pacific coast, as I have done recently, look at what the United States government is doing in Honolulu, in San Diego, in San Pedro, in San Francisco and in Puget sound at Bremerton, which is part of the port of Seattle, and note what is being done in the establishment of a naval and airplane base in Alaska, he would find that although Vancouver enjoys the unique position of being the largest grain shipping port in the world, it is not securing anything

Supply-Trade-Mail Subsidies

like the measures of assistance that ports of the United States competing with Vancouver, and ports in China and Japan and Australia and New Zealand are now securing. If I spoke in a way that could place my utterances in the realm of heroics beyond the constitutional capacity of the minister, may I say to him that I am only beginning, and if I have worried him to-night he is going to have a rather bad time in the future.

Mr. EULER:

Go as far as you like.

Mr. McGEER:

I appreciate the attitude that the minister has taken, because I think there is an opportunity of doing something in the development of Pacific ocean trade; that we can possibly advance subsidies to the benefit of Canadian seamen, Canadian dock workers, and Canadian trade generally.

Mr. McNEVIN:

Mr. Chairman, I think that the Canadian taxpayer-

The CHAIRMAN:

Order, we have a motion to rise.

Mr. BENNETT:

Oh, no, the minister did not make a motion.

Mr. EULER:

My suggestion was that the item might carry, but, if not, I would make that motion. .

Mr. BENNETT:

If the minister made the motion he made it before the member for Vancouver-Burrard spoke. Therefore that member should not have spoken. Since he has spoken, the hon. member who now rises to speak has the right to speak.

Mr. EULER:

I did not make a motion. I merely intimated to the committee that if the debate were to continue I should prefer to make a motion that the committee rise.

Mr. McNEVIN:

The Canadian taxpayer will recognize that an expenditure of almost $2,087,000 is a substantial amount to grant as a shipping subsidy. The minister is to be commended for making this reduction, and, with the expectation of increased trade, we would be well advised to pass this item.

Mr. STEWART:

I submit that we will make better progress if we take these items one by one, as we did the items on Public Works. We have been running backwards and forwards from one to another. If we call one item and deal with it and finish it, we will get on more rapidly.

Item stands.