April 21, 1936

LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

If the hon. gentleman will permit me, that is only as to valuations under section 43.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Well, we are dealing with valuations for duty and that is all section 38 previously dealt with.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

No, section 38 (4) deals with valuations under an entirely different section; it deals with valuations under section 35.

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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Perhaps so; we will discuss that when we come to it. I am now dealing with this point, and the minister cannot contradict me; it is now provided by this proposed amendment that the decision of the tariff board, if a decision is given, is final without regard to the minister or the views of his technical advisers and without regard to any approval or disapproval by the government or parliament of Canada. This bill provides that section 43 of the Customs Act is to be amended by adding a new subsection 3. I think 1 have read section 43 into the record; under subsection 2 of section 43 it is provided that when an order of the governor in council authorizes the minister to fix a value for duty purposes, then the value thereof so fixed by the minister, by virtue of such authority, shall be published in the next following issue of the Canada Gazette. Such fixation in itself is a finality

Customs Act-Mr. Cahan

under the sections as they now read. The proposed new subsection 3 of section 43 reads:

(3) In the case of any value for duty established under the provisions of this section ...

That is, the prior subsections of section 43.

. .. after the first day of January, 1036, any interested party may apply to the tariff board by way of appeal therefrom. The tariff board shall thereupon conduct a public inquiry and issue its declaration as to whether such value or some lower value is required and for what period the same is required to prevent the importation of the goods into Canada from prejudicially or injuriously affecting the interests of Canadian producers or manufacturers.

I have no objection to that, but the amendment proceeds:

If a lower value is found by the tariff board to be appropriate, such lower value will become at once effective. If appeal is made to the tariff board such value authorized by the minister shall in default of any declaration by the tariff board in the meantime cease to have force and effect upon the expiration of three months from the date of any such application to the tariff board.

The explanatory note for this new subsection states:

This amendment is rendered necessary to comply with undertakings entered into with the United States and Japan.

I suggest that this note might have been modified to this extent, that in order to comply with the undertaking entered into with the United States this amendment is not necessary, but it is necessary, and only necessary, to implement the undertaking entered into between the Prime Minister and the Japanese minister.

I should like to remind hon. members that before the great war Germany made a demand upon Canada; in fact, if I may use the vulgar phrase, Germany attempted a similar bluff against Canada, in the days when Mr. Fielding, as Minister of Finance, was in charge of tariff legislation. But Mr. Fielding had sufficient determination and courage to call that bluff, not only with the hearty support of the parliament of Canada but with the unanimous approval of the people of Canada. No government of Canada ever before accepted such humiliating conditions as those demanded by Japan and expressed in this proposed amendment.

Under section 43 the governor in council, on the report of the minister, with the assistance and advice of the expert officers of his department, must first be satisfied that goods are being imported into Canada under such conditions as prejudicially or injuriously to affect the interests of Canadian producers or manufacturers. That frequently must lead to

a prolonged investigation of fact, with the assistance of such expert advice as can be obtained by the minister not only from his own department -but from the Finance department and the Department of Trade and Commerce. Then the governor in council, having been so satisfied as to the facts, under the present act authorizes the minister to fix the value for duty of any class or kind of such goods. But as provided in the amendment, any interested party, the Japanese government or any Japanese exporter, is thereupon authorized to appeal to the tariff board from the decision of the government and of the minister, and on such appeal the tariff board may, as provided in this amendment, conduct an inquiry and declare its decision overriding the prior decision of the government and of the minister, and the declaration of the tariff board when so made is final.

I should like very much to know what would be the opinion of the hon. member for Ontario (Mr. Moore) with regard to such a radical change as that in the tariff legislation of this country. I should like to hear that opinion, in view of the long study and investigation of customs matters which he made under a previous government. If this proposed amendment is enacted, then neither the government nor parliament may revise the declaration of the tariff board as to the value for duty, even though such declaration overrides the value fixed by the minister with the approval of the privy council of Canada. This amendment presumes that both the government and the minister have acted improperly. It presumes that they have not investigated the facts as they were in duty bound to do, or that they have not in good faith fixed the value for duty under the statute as at present existing. Furthermore the amendment provides that in default of any declaration by the tariff board within three months from the date of application to the board, then the value for duty fixed by the minister with the government's approval shall cease to have force and effect. In other words, for the first time in the history of this country legislative authority is given to a tariff board and it may decide by its own default. I would like to suggest that in oriental countries "saving of face" is essential to the preservation of the reputation of and respect for governments and individuals in all social, political and commercial dealings. "Saving of face," as it is known in the east, preserves one's own selfrespect by ensuring the respect of others with whom one has either political, commercial or social dealings. I am confident that when the Japanese government received the Prime Minister's letter of December 26 last, and again

Customs Act

when they received a translation into the Japanese language of this section of the bill which is now before the house, the members of that government and the Japanese manufacturers and merchants interested found it difficult to restrain their personal feelings of derision, or their secret contempt for a government and a country which would prove so complacent under the circumstances. We are next-door neighbours to the great empire of Japan, and we shall have in the future even more complicated political and commercial relations with its government and its people, but I am convinced that it was a sorry day for Canada when the Prime Minister wrote the letter of December 26 last, and that if this amendment is enacted by parliament in its present form it will seriously impair, if not preclude, the possibility of the Canadian government maintaining in the future this country's just rights in any political or commercial controversy which may hereafter arise between Japan and Canada.

I certainly regret, and I think that upon careful study of the facts a great number, even a majority of the members of this House of Commons, although they may not feel free to express their opinion, will regret the letter which was sent to the Japanese government dealing with this matter, and which has bound this country to make certain concessions in favour of Japan that are not in accord with the existing legislation of this country, and which I think will tend to place this country for a long time in an inferior position in dealing with the government of the great nation of Japan, which is almost our neighbour, being divided from us only by the North Pacific ocean.

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Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. McPhee in the chair. Section 1 agreed to. On section 2-Territorial waters of Canada.


LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

I have a motion to delete the section.

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LIB

William Daum Euler (Minister of Trade and Commerce)

Liberal

Mr. EULER:

I move:

That sections 2, 3, 9, 12 and 13 of the bill be deleted, and that the numbers of the remaining sections be changed as follows:

Section 4 to section 2.Section 5 to section 3.Section 6 to section 4.Section 7 to section 5.Section 8 to section 6.Section 10 to section 7.Section 11 to section 8.Section 14 to section 9.Section 15 to section 10.Section 16 to section 11.Section 17 to section 12.12739-129

Section 18 to section 13.

Section 19 to section 14.

Section 20 to section 15.

Section 21 to section 16.

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CON

James Earl Lawson

Conservative (1867-1942)

Mr. LAWSON:

Are we to understand that the information contained in the explanatory notes is accurate? If so, section 2 appears to be covered by the mere matter of dropping the provision with respect to territorial waters. My understanding is that the reason the amendment is asked for is that it is alleged there is difficulty in handling prosecutions, because the master of a vessel is not required to keep records specified in section 3 of the bill.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

Well, that was the reason for proposing the amendment. There is a reference in section 2 and further references in other sections to "territorial waters of Canada" to be deleted. For reasons which I could discuss at the present time, although I do not think such a discussion would be necessary, it was thought best to deal in one bill with all these changes in connection with territorial waters of Canada. The considerations are important. Representations were made by the government of the united kingdom, and as I said in my remarks on second reading it would be better not to use the phrase "territorial waters of Canada." For that reason we are now taking out all the sections in which the phrase occurs, and will later bring in a bill dealing with them all together.

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CON
LIB
CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The real point the hon. member made was that there is also a provision with respect to manifests.

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LIB
CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Regardless of territorial waters. Surely we do not wish to lose that.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

It will not be lost; it will be in the bill to be introduced.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Would that be a proper place for it?

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

I think so, because the provision in the section is that the master of every vessel arriving in the territorial waters of Canada from a port or place outside of Canada and of every vessel found within the territorial waters of Canada shall do so and so. There would be no objection to making some provision with respect to manifests carried by vessels within the three mile limit.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I had that in mind.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

But if we are going to do what we hope to do the obligation to carry

Customs Act

manifests will extend to certain vessels within the nine mile belt outside the three mile limit.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The only point I make is as to whether the minister desired to retain the benefit of what he suggests within what we might call the narrow three mile limit, rather than the twelve mile limit established by the decision of the privy council.

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April 21, 1936