February 25, 1936

?

Some hon. MEMBERS:

No, no.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I said, "fair and impartial." It must be remembered that I made a great distinction. I have not talked with any fair and impartial man of the Liberal faith who suggests for a moment that the reciprocity agreement of 1911 could have been maintained in this country during the war. And what is more, it could not. All you have to do is to read it and you will realize why it could not. All you have to do is to give it the most casual reading and you will realize that it could not have been maintained. Be that as it may, during the long years from 1914 to 1918 it was impossible to discuss matters of that kind.

But President Wilson having come into office, without asking any concessions from us except in two minor matters to which I shall presently refer, gave us free access to the United States market. AVe had free access to that market for years. We built up a vast trade between Canada and the United States. AVe established a channel of trade; we made it increasingly deep; and then all of a sudden, without notice, that channel was blocked and that trade destroyed. I have said in the house, and I repeat, that I saw many Canadians in western Canada, engaged in the ranching business, ruined. I remember one great rancher who reckoned his wealth in millions who was completely and absolutely ruined because he had made his preparations for the United States market. For, mark you, the cattle business cannot be built up in a year or two years. If you go into the business of raising cattle to-day you must prepare to ship them and to market them two and three and even four years hence. It followed therefore that, plans having been made upon the basis of the Underwood tariff, Canadians in western Canada, finding suddenly that they were confronted with a tariff wall

over which they could not send their commodities except at a great loss, were compelled to go into bankruptcy and were in fact ruined. I shall not deal further with that history beyond saying that' if any hon. members are interested and will turn to the Cambridge History of the British Empire, volume six, they will find there the record of these tariff matters.

There is another document to which I shall refer. It is the diplomatic memoirs of the late General Foster, who at one time was Secretary of State of the United States and who had more to do with the negotiation and discussion of matters affecting reciprocal trade between the United States and other countries of the world than had any other statesman of his time. He was minister to many countries. He ultimately, as I said, became Secretary of State of the United States. He met our delegates in 1892;- he met the joint commission in 1898, and he dealt with many of these matters as I have indicated.

On motion of Mr. Bennett the debate was adjourned.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock. RAILAVAY ACT AMENDMENT

The house resumed from Friday, February 21, consideration of the motion of Mr. Reid for the second reading of Bill No. 2, to amend the Railway Act (rates on grain).

Hon. C. D. HOAVE (Minister of Railways and Canals); Mr. Speaker, when the debate on this bill was adjourned last Friday I was making a few comments. I stated that this question is now before the governor in council, and obviously any partisan position on my part would be quite out of order. However it does not seem to be out of order for me to bring out a few points in reference to the subject. A considerable point was made of the fact that export and domestic rates to Fort AVilliam are equal. But it may be pointed out that Fort AVilliam is not a seaport, therefore not comparable with Vancouver. Montreal on the other hand is a seaport and railway rates to that port present a differential between domestic and export. Similarly Saint John and Halifax are sea ports and there is a decided differential between domestic and export rates to those cities. So while much was made of the argument that the situation in the west differs from that in the east I think the facts do not support that view.

Railway Act-Rates on Grain

Coming back to Vancouver, we find three rates on grain on Canadian railways; an export rate, which is the Crowsnest rate applied to the movement westward, a domestic rate which applies on high grade wheat, that is wheat of milling quality, and which is about double the export rate, and a third rate for low grade wheat and grains of that sort. This latter rate was put into effect voluntarily by the railways two or three years ago. On the United States side of the line they formerly had three rates; an export rate, a domestic wheat rate and a rate for coarse grains, but two years ago there -was a hearing before the Interstate Commerce Commission, and I think the judgment of the commission was appealed to the supreme court. The result was that these three rates were combined into one rate, but I point out that the combined rate which applies on all three movements is practically equal to our domestic rate. In other words the Interstate Commerce Commission have never been able to take the view that our own board of railway commissioners have taken, that the Rocky mountains should be ignored in making rates. I think the people of British Columbia who feel that they are suffering an injustice under the domestic rates on grain westbound would do well to keep in mind that they have a distinct advantage both in their export rate and in their feed grain rate, and that the domestic rate is the one that applies south of the border for all movements.

The question then comes as to whether after all any great injury is done to the Pacific coast on account of the existing differential. True, if the rates were equalized as the bill in question suggests, Pacific coast consumers would enjoy a somewhat lower rate on feed grain for the poultry and dairy industries, and on high grade wheat that is consumed at the coast. On the other hand a very important grain for its dairy and poultry industries is corn, and I may remind them that most of the com that enters Canada comes either from the Argentine or from Africa, and that Vancouver enjoys the cheapest rates for carriage of corn of any part of the country except the Atlantic seaboard ports. Alberta imports a great deal of corn through Vancouver, and we have had no great objection from Alberta to the fact that the domestic rate which applies on Alberta wheat to Vancouver applies also on corn coming in through Vancouver and consumed in Alberta.

In spite of the handicaps of which we have been told, the poultry business on the Pacific coast is perhaps in as prosperous condition

[Mr. Howe.)

as at any other point in Canada. In fact I think one carload of eggs moves from Vancouver into the Montreal market each week, indicating that the egg business at least must be on quite an efficient basis to make such a movement possible. I mention these points to show that there is another side to the freight rate picture than that presented to us by some hon. members from British Columbia. I have not examined the evidence given before the railway board in the case now on appeal. That case will be heard by the governor in council, whatever happens to this bill. It seems to me therefore that the mover of the bill has served all proper objects in bringing this discussion before the house, and I would suggest that at this time he might consider withdrawing his bill.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

Mr. Speaker, the hon. member for Comox-Alberni (Mr. Neill) made an observation the other evening as to the effort made by the late government to induce the railway companies to consider the situation in connection with rates on feed grains with the shippers or with the authorities of the province of British Columbia. I hardly think the language he suggested is the language that was used, but we did suggest a conference, and as a result an agreement was arrived at which I understood was regarded at the time as being fairly satisfactory. But after listening to British Columbia members during this debate, I gather that they are not very well satisfied with what took place, and regard the relief given as utterly inadequate. I merely mention this lest it might be thought that by silence I acquiesced in the statement as to the language used made by the hon. member for Comox-Alberni, which is hardly the fact.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. H. J. BARBER (Fraser Valley):

Mr. Speaker, I have listened with care to the remarks of the Minister of Railways (Mr. Howe) in regard to this bill. He made a statement about corn, intimating that corn is used for cow feed in the western part of the country. I can assure him that we do not use com to feed cattle in our district. But we have been using considerable corn for feeding poultry, and it was the opinion of a large number of members from western Canada some time ago that we might well substitute barley for corn and thereby increase the market for barley from Manitoba and other parts of the west. That is one reason why the poultry people of our section have been asking for a lower rate on feed grain, namely, in order that we might give preference to the

Railway Act-Rates on Grain

Canadian product. I do not think I need deal further with the remarks of the Minister of Railways.

But to deal with the bill, the unfortunate part of this freight rates matter is that it has been dragged into the political arena, and some persons in British Columbia have taken it upon themselves to try to convince the people that they are the only real advocates of lower freight rates on feed grain to our province. I think I am safe in saying that every session for the last ten or fifteen years this matter has been up in the house, and such men as the hon. member for East Kootenay (Mr. Stevens), the hon. member for Comox-Albemi (Mr. Neill) and others who have been here for some years will bear out the statement that irrespective of party we have endeavoured to secure for the Pacific coast and the producers of our section of British Columbia a lower rate for feed grain. I am not going to review the whole situation, since this bill was up before us in 1925. An appeal was made to the government which was in power prior to 1930; that appeal was dismissed and no further action taken.

Just as my leader has said, the only action taken was back in 1933 at which time there was an appeal to the privy council, and through an order in council which was issued certain directions were made. I have before me the report of the appeal of the Canadian Freight Association, No. 1848, order No. 51669, Board of Railway Commissioners for Canada, and at page 33 I find these words:

These rates, among other matters, were then the subject of an appeal from the board's judgment to His Excellency the Governor in Council, which was dismissed by order in council P.C. 349, dated February 25, 1933, in which it is stated:-

"One of the most important subjects involved in the said appeals was grain shipped from prairie points to points in British Columbia for use for feeding purposes, it being alleged that by a reduction in the rates of the lower grades of grain not only would an outlet be provided for a large quantity of grain -which was not marketable under present conditions, but the development of the dairy and poultry industries of British Columbia would 'be greatly assisted.

As a result of negotiations which took place with members of the governments of the provinces of British Columbia, Alberta, Saskatchewan and Manitoba during the period of the recent .interprovincial conference, the representatives of the railway companies intimated that in order to assist in the movement of the lower grades of grain for the purposes outlined' above, they would be prepared to put into effect tentatively substantial reductions in rates on the grades of grain involved. This offer has since been accepted by the governments of the said provinces as satisfactory to them.

Under that the rate was reduced from 41i cents to 30 cents. British Columbia has sent representatives to appear before the railway commission, and has spent a considerable amount of money in paying these men, but despite those payments the only results which were ever secured were obtained at the time the late government held office. Credit for those results I believe must go to the Hon. R. J. Manion, then Minister of Railways and Canals.

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LIB

Clarence Decatur Howe (Minister of Marine; Minister of Railways and Canals)

Liberal

Mr. HOWE:

Does the hon. member say that is the only result that was ever secured? Does he not remember 1922, when the Rocky mountains were removed from the western rate structure?

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

I am talking about domestic rates at the present time. The farmers of the Fraser valley did not benefit from that, but I admit that the port of Vancouver did. We are pleased to have had that, but we are now discussing a question of domestic rates. May I now refer to the appeal. I believe the hon. member for New Westminster (Mr. Reid) made application for the appeal. I find in the report this statement:

Mr. T. Reid, M.P., made application dated May 30, 1934, on behalf of the Fraser Valley Surrey Farmers' Cooperative Association, for an order of the board directing the Canadian Pacific and Canadian National railways to establish the same rates on feed grains and mill feeds from prairie provinces to points in British Columbia for domestic consumption as are now in effect on grain and grain products from the prairie provinces to points in British Columbia for export.

In addition to the hon. member's application communications asking for reduction in the rates were received from the Fraser Valley Milk Producers' Association, the corporation of the district of Surrey, the hon. member for Vancouver East (Mr. Mclnnis), the Chilliwack board of trade, through myself, the Vegreville chamber of commerce and the council of the: city of Vancouver. These applications were in favour of the reduction. Then we had others which were not so favourable. There was the corporation of Delta which had forwarded a communication opposing any reduction in rates on feed grain and mill feed from the prairie provinces to British Columbia owing to the fact that a considerable amount of grain was produced in the province, and that therefore the grain growers there would suffer. At that time, in 1933, they pointed out that in British Columbia a total of 6,161,000 bushels of grain was produced, of which there were 1,717,000 bushels of wheat, 4,507,000 bushels of oats and 307,000 bushels of barley. Then we

52U

Railway Act-Rates on Grain

had further objections along similar lines from the Delta Farmers' Institute. Further, Mr. W. W. Southin of Ladysmith, British Columbia, stated that he had been in the poultry business for twenty 3'ears and he communicated with the board, opposing any reduction in the rate. The gentleman representing the province of Alberta advocated that the differential should be reduced to three cents over other rates. These are the points the board had to consider.

The hon. member for New Westminster, while representing an association of farmers also represented the province. I find these words in the report:

On July 24. the Attorney General of the province of British Columbia, advised that Mr. Reid, M.P., would represent that province in this matter.

The hon. member was retained by the province. The board claims that no new arguments were advanced, and at this point I should like to refer to one or two arguments the hon. member has raised. I believe he mentioned them on the occasion upon which he spoke a few nights ago, and they are worthy of some consideration at this time. The hon. member made a statement with reference to the shipment of grain to Japan, and return, for about twenty-five cents less than the rate to British Columbia. So that there may be no misunderstanding I shall quote the hon. member's statement before the board of railway commissioners.

In this connection. Mr. Reid stated (p. I486): "There was a time last year when I believe we could have brought good Canadian wheat back from Japan to the Fraser valley at about twenty-five cents a ton less than the cost of inferior grades brought from a distance of 642 miles." The distance named is the Calgary-Vancouver mileage. The rate on what is termed inferior grades, namely, feed grain as described in the C.F.A. tariff No. 145, is 30 cents, or $6 per ton. The export grain rate is 20 cents or $4 per ton. Mr. Reid stated the average ocean rate, Vancouver to Yokohama, in that year was 61 cents per bushel, or about $2 per ton, so that the cost to Yokohama would be $6 per ton-

Or exactly the same as it cost to land the grain in Vancouver. That is not taking into consideration that there might be another $2 on the return trip from Yokohama to Vancouver. Hon. members will see that in the argument advanced the other day the computation was not quite correct.

I believe the minister referred to the United States rate. The United States rates in the state of Washington, considered from the standpoint of our domestic rate, were a little lower, but in comparison with the new rate under tariff 145 the Canadian rate

is still lower. I could go through these arguments for some time, but I will summarize brieffy by stating that a man presenting the case for the farmers' association and representing the attorney general of a province should have had some new evidence before he appeared before the board. One argument he advanced was that the personnel of the board had been changed. It would appear however that the evidence was the same as had been filed, and that nothing new had been presented.

As I stated a short time ago the difficulty has been that this matter has been injected into the political arena. My first experience was in 1930 when the hon. member for Van-couver-Burrard (Mr. McGeer) who, I am sorry to say, is not now in his seat, came to my district and there secured a nomination from the farmer party and the Liberal party, no doubt expecting that if he could secure all the Liberal and farmer votes his opponent would have a very small chance of being elected. His main plank in that campaign was freight rates. He said, "I have served you well, and I am coming to you now and asking you to elect me as your representative that I may still continue to serve you." Cartoons were circulated throughout the district showing that Chinese and Japanese were having our grain delivered to them at a rate of twenty cents while the poor farmer in the Fraser valley had to pay 41i cents. Well, Mr. Speaker, I find that the hon. member for Vancouver-Burrard did serve British Columbia about the year 1925 and perhaps part of 1923. Members here at the time very kindly handed over to him their files and all the information they had in order that he might carry on in the interests of our province. But he did not work for nothing, for I find according to a record which has been supplied me from Victoria, that at the conclusion of his services he presented a bill to the province for SS9.307.49. His bill was carefully reviewed and he was allowed S52.723.23. When the farmers of my district found out that he had been well paid for his services they came to the conclusion that there was nothing more coming to him.

I do not blame the hon. member for New Westminster, but he also appeared here and was retained by the provincial government, and I find that the hon. gentleman was paid S380 for his trip to Ottawa. A question was placed on the order paper in the provincial legislature and I find, according to the votes and proceedings of the British Columbia legislature for February 22 of last year, that the

Railway Act-Rates on Grain

following questions were answered by the premier:

1. Is Mr. Thos. Reid, M.P., retained by the province as provincial representative in connection with freight rates or marketing questions, or either?

The answer to that question was "Yes." This further question was asked:

Has he been paid any sums; and, if yes, how much and on what basis?

The answer to that question was:

$380; procuring information, compiling data, stenographic services, telegrams, travelling and hotel expenses.

The hon. member for New Westminster came to Ottawa and as far as I could find out he delivered the same speech that he gave in the House of Commons, and he expected to get results from that.

The minister has suggested that the hon. member should very kindly withdraw this bill. I say to the minister and to the house that the people of the Fraser valley and of British Columbia expect some action from the government on this question. In the last four or five years during which this bill has been before the house it was supported to a man by the Liberal party. The Prime Minister (Mr. Mackenzie King) supported it; the Minister of Justice (Mr. Lapointe) supported it; the Minister of Trade and Commerce (Mr. Euler) supported it; indeed, every member who then sat on this side of the house supported the bill. They endorsed the principle that the Crowsnest rates should be extended through to the coast. Therefore, if the hon. member for New Westminster said in his riding, "If you will elect me and return the Liberal party to powder you will receive the benefit of the extension of the Crowsnest pass agreement and an equalization of freight rates," I say he was warranted in making that statement because of the action of the Liberal party in the house, and I say, that the people of our district and of British Columbia are not going to stand for any suggestion that the bill be withdrawal.

The minister says that an appeal is pending before the privy council. The appeal before the privy council is of a wholly different nature. It is an appeal on the question of feed grains, another matter entirely; but this is an extension of the Crowsnest pass rates.

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LIB

Clarence Decatur Howe (Minister of Marine; Minister of Railways and Canals)

Liberal

Mr. HOWE:

My hon. friend is mistaken. It is an appeal on the domestic rate.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

I understood from the

papers that it was as I indicated. At any rate the minister can very easily remedy that, instead of waiting like the government did in

1930 until the privy council disappeared and the appeal along with it. The minister could recommend the passing of an order in council dismissing the appeal and accept this legislation as a government measure, and that is what the people of our province expect.

In conclusion I want to say to the hon. member for New Westminster that the poultrymen generally throughout British Columbia are not worrying to-day so much about freight rates as over what is going to happen to their industry under this Canada-United States trade agreement, which I shall have an opportunity I hope of discussing in the near future. In the meantime they are looking to the government and to the party that supported this legislation for the last four or five years to come through now and make this bill law.

Mr. G. W. McDonald (Souris): Mr. Speaker, I desire to speak very briefly on the motion now before the house. It means a great deal to the people in our part of the country. We have been passing through very severe droughts during the last five or six years, and have had to bring in a great deal of seed and feed grain. I know the railways give a very favourable rate on seed grain, and they reduce the rate by one-third on all feed grain, but the fact still remains that after cutting off one-third of the rate they have collected as much on the domestic rate as is being paid on the export rate. In the last few days, we have heard a great deal about the export rate and the domestic rate. My opinion is that the railways are giving a very favourable export rate for the purpose of encouraging the sale of our grain abroad. But would it not be just as laudable to encourage the consumption of grain within our owm provinces?

I am rather in sympathy with the resolution moved by the hon. member for New Westminster (Mr. Reid). I know that the hon. member who previously occupied the seat I now occupy in the house moved that a duty be imposed on com for the purpose of encouraging the home consumption of barley. It might be said that we would not use very much barley, but much more grain has been brought into our part of the country during the last six years than we have shipped out, and we have had to pay the domestic rate on the grain brought in. It is quite true that the farmers have been treated pretty liberally, the government paying two-thirds and the railway the other third, but altogether the railway possibly collected more money on the domestic rate than they would

Railway Act-Rates on Grain

have collected if the grain had been shipped out. It is pretty hard to make the ordinary member of the house who is not an expert on freight rates, and still harder to make the average farmer understand why we should have two rates for carrying the same commodity over the same distance, and in many cases the domestic rate is higher even for a shorter distance. We would like to have an opportunity to appear before the board of railway commissioners. I desire to put it on record that the people whom I represent wish to see the domestic rate done away with, and I believe there is some justice in that view.

Before this bill is withdrawn I would suggest that the government at least promise the hon. member for New Westminster that something will be done in the matter of freight rates because there is really not much use in referring the matter to the board of railway commissioners as, judging by past experience, we pretty well know beforehand, what sort of an answer we are going to get from them. The people of Manitoba, and I think the people of Saskatchewan and Alberta, believe this equalization of freight rates would be a very fine thing for the western provinces and for the railways themselves, because it must be remembered that raising the tariff does not always bring in a higher revenue, nor does raising the railway rates bring a higher revenue to the railways. Put the rates on the same basis and the railways will not be the losers; they will be the gainers.

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LIB

Thomas Reid

Liberal

Mr. THOMAS REID:

(Westminster): Mr. Speaker, I have listened very attentively to the various speeches which have been delivered in connection with this bill which has been introduced into the House of Commons now for the fifth time. Before dealing with the remarks of the Minister of Railways (Mr. Howe), I should like first to deal with some of the remarks made by certain hon. members, particularly the hon. member for Fraser Valley (Mr. Barber). We have to-night witnessed the spectacle of a certain type of politician who during an election weeps crocodile tears for the people of his district and then when he enters the house evades giving the support he should give. On every occasion when I introduced this bill he stated that it was too bad that this matter was being dragged into politics, but he himself went around during the last election saying that reductions were necessary.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

Mr. Speaker. I rise to a point of order. Freight rates were never made an issue in my campaign until the hon. mem-

ber injected it at the eleventh hour. I never made freight rates an issue during the election,

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?

Mr. RETD@

I have never made in the house a statement that I have not been ready to substantiate to the limit, and I am ready to stand behind the statement I have just made. It is touching the hon. member pretty hard; the truth is evidently pinching him. He has always endeavoured to drag this matter down to the low depths of that political stuff which we sometimes come across in the backwoods.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

It could not be brought down any lower than the hon. member has brought it.

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LIB

Thomas Reid

Liberal

Mr. REID:

The hon. member referred to the hon. member for Vancouver-Burrard (Mr. McGeer) receiving some $70,000 or $80,000 when the hon. member for New Westminster only received $380.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

And he made only one trip.

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LIB

Thomas Reid

Liberal

Mr. REID:

I am glad the hon. member brought up this matter. I should like to point out-I want all the lawyers in the house to take note-that I believe I got better results for $380 than were obtained at the time the $70,000 or $80,000 was spent. I got two of the commissioners to support me, just a little more than was achieved in the previous appeals.

While we are on this subject we might as well clean up some other matters. During the last election I did not state that the Liberal government would put the Crowsnest pass agreement into effect. During the election I stated, as I have stated in the House of Commons, that if I was elected this would be the first bill introduced in the house, and there it is. I stated that I would keep on fighting until British Columbia got some measure of equality. Those are the statements I made from the beginning to the end of the campaign, and I repeat them here to-night. They are the very statements I made to the former Minister of Railways, Mr. Manion. The hon. member referred to the poultrymen not worrying. He will probably have something to say about the trade agreement. He is the type of individual who claims that the trade agreement signed by this country and the United States is the cause of the low prices being received for eggs because of the great influx of eggs from across the line.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

I deny that statement.

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?

Some hon. MEMBERS:

Order.

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

On a point of order-

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LIB

Thomas Reid

Liberal

Mr. REID:

Let the hon. member take his medicine.

Railway Act-Rates on Grain

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CON

Harry James Barber

Conservative (1867-1942)

Mr. BARBER:

On a point of order; the statement made by the hon. gentleman is not correct. Before I left home I made no such statement with regard to the treaty. This remark is to be compared with many others the hon. member is making to-night.

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February 25, 1936