April 2, 1937

REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

That is not what I said, and I shall answer the minister in a minute.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

My hon. friend read

with great indignation a number of the items in this particular item we are now discussing. He told us in what a confused mess the tariff was, and how necessary it was that parliament should take hold of it.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

I read with great indignation the words, "of a class or kind not made in Canada," and I referred to the method of interpreting those words.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

My hon. friend referred to ammeters, arm rests, wheel housings and so on, of a class or kind not made in Canada. These are included in the recommendation of the tariff board which was made after the investigation to which I referred. This tariff board was appointed by the government of which my hon. friend was a member. I am not quarrelling with that. I simply say that ive are going around in a circle if we say that parliament should take hold of this thing, should try to simplify the tariff, should do this and do that, and should do so and so after examination by the tariff board. We have here an item which follows one of the most exhaustive examinations ever made by the tariff board, and then it is not right.

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REC
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

That is the conclusion I reached. With respect to the other matter, my hon. friend made it quite clear that his criticisms of the Department of National Revenue and its rulings were not confined to the present administration.

Customs Tariff

I would point out to him one important reform which this government instituted with reference to the interpretation of the effect of the clause, "of a class or kind not made in Canada." I think he overlooked it when he spoke. The government was made the subject of criticism when we arranged that in order to be ruled as being of a class or kind made in Canada an article would require to be made in sufficient volume to take care of at least ten per cent of the normal Canadian consumption. I submit that that was a very great step forward. My hon. friend comes along a year later and levels criticism at the government; but he does not say one word about that tremendous advance which was made. Is that fair to the Minister of National Revenue and to the government?

There has been an important reduction in the number of the orders which he criticizes so severely. I venture to say that the number of orders dealing with articles of a class or kind made in Canada was never so great in the history of this country as it was between 1930 and 1935. I am not criticizing that, I am simply saying that the inauguration by this government of the ten per cent control feature operated to reduce very materially the number of orders issued with respect to that phase of the customs tariff. I doubt very much if we can get away from the necessity of having somewhere an authority to define what goods come under this or that classification. At the present time any individual or corporation who regards himself or themselves as prejudiced by any interpretation made by the Minister of National Revenue has a remedy in the form of an appeal to the tariff board.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

How can they appeal if they never hear of it?

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Then they certainly cannot be injured.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

They did not hear of it until it was publicly exposed. I know the law.

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Subtopic:   CUSTOMS TARIFF
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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

We are not speaking about the made-in-Canada ruling now.

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Subtopic:   CUSTOMS TARIFF
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REC
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I am referring only to the made-in-Canada ruling. I am trying to stay in order by discussing what relates to the item before the committee. The discount is a feature under the control of my colleague. This is the amendment which was made, I believe last year: .

Provided when it is established that any articles, though of a class or kind made or produced in Canada are not offered for sale to the ordinary agencies of wholesale or retail distribution or are not offered to all purchasers on equal terms under like conditions, having regard to the custom and usage of trade, such articles may be exempt from the special or dumping duties.

I submit to my hon. friend that it was quite an advance to make that amendment to the section of the customs tariff. It is of great assistance to the minister in preventing abuses which may arise with respect to that made-in-Canada feature. I admit at once that that is a difficult matter to administer, but I doubt very much if it would be practicable to submit all such rulings to the tariff board in the first instance. I submit that it is a normal procedure for an investigation to be made, and a decision to be rendered by the minister as to whether or not certain goods are of a class or kind made in Canada, and to make that public to all those affected. They can appeal to the tariff board if they disagree with the ruling so given. I submit that that procedure is much more simple than to have a hearing by the tariff board, in the first instance, with respect to which many could not possibly be advised or be aware of just what bearing it might have on their interests. If they have the ruling before them, they know where the shoe pinches and can get the situation remedied by appeal if they wish.

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LIB

James Lorimer Ilsley (Minister of National Revenue)

Liberal

Mr. ILSLEY:

We provided last summer for appeal to the tariff board. Up to that time the tariff board did not have jurisdiction. The department's determination whether an article was of a class or kind made in Canada was final; but under the Tariff Board Act an order in council was issued conferring upon the tariff board jurisdiction to hear appeals in that class of cases.

I wish just to add that there is nothing more difficult in the administration of the customs tariff than making "made-in-Canada" rulings. A whole branch of the department is occupied with "made-in-Canada" questions. The rulings involve investigations which are sometimes very expensive, and naturally the conclusions that are arrived at are contested. The reason that it is very important to decide whether an article is of a class or kind made in Canada or of a class or kind not made in Canada is not the reason stated by the hon. member for Kootenay East (Mr. Stevens). Usually it does not change the tariff rate, but the reason manufacturers are so anxious to have articles made by them ruled as of a class or kind made in Canada is that importations of these articles are then sub-

Customs Tariff

jected to the dump duty. That is of very great importance. There are very few decisions to guide the department. The number of articles in commerce is legion. I do not know how many articles there are in ordinary use in this country, but it would probably run into the hundreds of thousands, and there is a tremendous volume of work in classifying these articles. The question goes before the department and the department makes hundreds of these decisions.

As I said a few minutes ago, I think that since I have been in charge of the department there have been over six hundred decisions which ruled that articles were not of a class or kind made in Canada. There does not seem to be much to do except to go ahead and make these decisions as best we can and give the tariff board jurisdiction, as we did about a year ago, to decide whether we are right or wrong.

Mr.STEVENS: The minister rather adroitly drew the discussion away from what I have been seeking to impress upon the committee. I did not cite this as confusing; I cited it to show how broad a single item in the tariff might be. I emphasized the fact that there were probably fifty different articles in the item, and then I went on to say that this was subject to the provision respecting a class or kind not made in Canada; then I went on to show' that innumerable bulletins are issued, most of them without authority of order in council, and a great many, indeed most of them, without reference to the minister.

Now the minister says: We have changed that to a certain extent; they must be able to supply ten per cent of the home market. I ask the Prime Minister, from his long record of advocacy of low tariff policies, does he think that the supplying of ten per cent of the market in Canada is sufficient for the changing of the tariff without an order in council or a hearing? I ask him to think that over. -

I have said over and over again that I am not reflecting on the present minister; I made it clear that this is something wdiich has grown up over the years. The Minister of Finance (Mr. Dunning), who is supported in this by the Minister of National Revenue (Mr. Ilsley), says that they do not see how any other system can be adopted; he says these bulletins are issued. In these bulletins occur these vmrds, and this is the justification for the policy that has grown up over the years: " The following ruling transferring goods from the category of a class or kind not made in Canada to that of a class or kind made or produced in Canada is issued in accordance with the government's undertaking to give

adequate notice to parties concerned." It does not say so here, but the inference is that they will notify parties concerned.

But, Mr. Chairman, you will at once appreciate, as will other hon. members of the house, that though the collector of customs in Montreal or Toronto or Vancouver is notified that such a change is made, he does not send out a copy of each of these bulletins to everybody who may be concerned. It cannot be supposed that he can possibly know ten per cent or even five per cent of the people concerned. That is the point I am making. There is no public knowledge of these bulletins, and I will venture this statement without fear of contradiction, that there is very little knowledge of them among the skilled officers themselves, because the number of bulletins is so great that there is not a human being who could keep them all in mind.

Twice this session it has been proved that firms, big firms, one which imports ten or fifteen million dollars' worth of goods into this country, and another that has been doing business for forty years, did not know of these things, and the departmental officer said: It is rather unfortunate, but these firms ought to have known. But the firms did not know. They are not "dumb"; they are among the best, firms operating in this country. Then how can an ordinary little firm which has a very small turnover be expected to know? I can assure the house that some of the largest firms in Canada had no knowledge of changes that have affected competitors favourably, and so were prevented from getting the same benefits. It is not good enough to say: Well, you have an appeal to the tariff board. How can a man appeal to the tariff board if he never heard of it?

Sir GEORGE PERI,EA : Is that, on a question of discount?

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

One is a question of discount, and the other is a question of the value for duty. Let the government get this: The

minister says that I am criticizing. I am not criticizing the government in a political sense.

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Subtopic:   CUSTOMS TARIFF
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I did not use the word in that sense. I took what the hon. member said in good faith.

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF
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REC

Henry Herbert Stevens

Reconstruction

Mr. STEVENS:

I heard what the minister said. I was a minister in a government, and the minister taunted me with that. What has that got to do with it? I said that this practice had grown up under all governments for many years. I thought that was a broad enough statement to invite consideration by the present government. They have been in office only two years. I am not referring to what

Questions

may have happened when they were in office before. I have served in three different governments in this country. At one time I was minister of customs, and the minister may say to me: Well, why did you not see to it then? I was just getting to it when I was kicked out; that is all. But this custom having grown up and become prevalent, I ask the committee- never mind the government if they are not concerned about it-to take notice of these facts.

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Subtopic:   CUSTOMS TARIFF
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Item agreed to. Progress reported. At eleven o'clock the house adjourned without question put pursuant to standing order. Monday, April 5, 1937


April 2, 1937