August 12, 1944

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Mr. COLD WELL@

W'ell then, if not, you

are only insuring the bad risks and therefore the premium will probably have to be very high. It confirms what was said by the hon. member for Winnipeg North Centre; we are running the risk of the good trades making a good profit for the individuals or corporations that make the trade, and the country is apt to take the loss on the poor risks, unless the premium is very high and perhaps almost prohibitive. I think we should have a clearer picture of what we are undertaking in this bill. I can see some circumstances under which this is a very good measure indeed. On the other hand, I think the committee is entitled to more information than we are getting, regarding the basis of premiums and the method of operation and so on.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Mr. MacKINNON (Edmonton West):

I

believe all that can be done now is to give in a general way the objectives of the legislation. Details to which my hon. friend has just referred must be worked out by the corporation. Although exporters will not be in any way compelled to come in under this legislation, it is hoped that the legislation will be largely used.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I think the purpose of this measure is clearly set out in the preamble; that is, that it is desirable to promote the revival of trade and particularly during a period of transition. Before the war Canada traded with a great many countries, including practically every European state. The war has brought about a condition in Europe of complete disorganization, and the problem so far as our external trade is concerned with these countries and their particular problem within their own boundaries is to get their economic life reorganized so that they can proceed on a more secure basis after the war terminates. Years ago I had a good deal of experience, if I may modestly say it, in export business. There were certain places where exporters would not sell grain because of the risk involved; there were other countries with which, by virtue of their reputation for paying their debts and meeting their obligations, business proceeded on a secure basis. Let us picture for a moment the conditions which will exist when the war is terminated and these countries, particularly in Europe and the far east, attempt to get their economic life reestablished. What shall we find? We shall probably find that the old firms, for instance in European countries, with whom Canadian exporters did business year by year, have disappeared.

But individuals of these firms may still be alive. They may endeavour to get their business reestablished and import goods that the people of their country need for the ordinary affairs of life. What will happen? Let me give an illustration: You may have a country like Norway, which has suffered tremendously during the war. Norway may want to import certain types of machines or machine tools or goods of another character to get her own economy reestablished. This

Export Credits Insurance

measure provides a method of giving encouragement, or getting the wheels going again. It is founded after all on two simple principles, the first principle that of insurance and the second, in part II of the act, the principle of direct government intervention. Let us suppose an exporter in Canada gets an inquiry from a firm in Norway for one hundred thousand dollars' worth of machine tools. He says, "Can I safely take that risk? I know these people; they are honourable, they are good people. But what assurance have I that when I ship the goods with a draft attached to them they will be able to meet the draft on the other side so that I shall be paid for my goods?" That is where this measure steps in, as I understand it. The exporter in this case can take out a policy of insurance that he will receive payment for his goods. A premium is charged to him on the insurance and he doubtless adds to the price of his goods the cost of the premium he pays to the corporation. Well, the goods are shipped. He receives payment. The premium remains in the insurance fund. You can duplicate that scores or hundreds of times with machine tools or grain or pulp and paper or any other commodity we may be selling from Canada.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Arthur Graeme Slaght

Liberal

Mr. SLAGHT:

_ Suppose he does not get paid?

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

Did we ever get that

money back?

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

No, I do. not think we did. And I have no hesitation in saying to my hon. friend that, so far as I was personally concerned at the time the loan was made, I thought it was a rotten risk. But countries with which we have done business in the past have not been like that. For instance, one might have in mind the Scandinavian countries, where the sense of business integrity and personal honour is high. The reputation of those countries for meeting their obligations has been good. Obviously the risks in dealing under this measure with nationals of countries of that kind are much less than w-hen dealing with governments or peoples of countries, the standard of business integrity of which might not be nearly as high.

In my view this is a very constructive measure. It is true that in the end we may have some loss. In the meantime, however, it is a mechanism for getting much needed goods and supplies to these devastated countries, for purposes of their reconstruction. I say to the committee-and I am sure every member will agree-that it is of great importance to Canada that countries like Belgium, France, Norway, Denmark and Holland be reestablished and get going again in a normal fashion. Perhaps we are not so greatly concerned with selling goods in the next year or two; but if we have long vision, as we should have, we must be concerned with what our opportunities will be ,for trading with those countries, not two years from now, but possibly five years, ten years or twenty-five years from now. In my view,this measure will help to bring about the desired end.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Gordon Graydon (Leader of the Official Opposition)

National Government

Mr. GRAYDON:

Is there any parallel between the principle of mutual aid in war and the principle behind this measure, in peace?

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

As was pointed out last night by the Minister of Finance, this is not a mutual aid measure at all, in the sense in which we have been discussing mutual aid in the house in the past two or three years. Mutual aid was simply a provision of goods by the Canadian government to countries which could not otherwise pay for them, so that those countries might wage war more effectively. This measure is on a different basis. For instance, it contemplates, under part II-and reference was made to this last night-that if for example the government of China gets a loan of $100,000,000 from the Canadian government, either directly or through the guarantee of Chinese bonds which may be bought by Canadain nationals, the loan will be paid. That is expected on the part of both parties to the contract. But that is not the condition in connection with the mutual aid bills we have had under consideration. Under part I of this bill the goods are shipped, the insurance premium is paid, and all is done under the expectation that the draft- against such goods will be paid. The insurance principle is to provide that- if, in any event, something happens as a result of which a particular shipment is not paid for, these funds can be called upon. Precisely the same principle is applied in connection with the insurance of our homes. For instance, for the last forty years I have had my home insured, but I have never had to call upon any insurance fund. During that time however, I have had the protection. Perhaps someone else

Export Credits Insurance

who carried insurance suffered a fire loss, and collected from the insurance company. The same simple principle is found in this bill.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

I think the minister has laid a pretty good foundation for a number of questions which I should like to ask before leaving to attend a committee sitting. I do not think what he has said will facilitate the ' passage of the bill, because he has spoken for the last twenty minutes-as a matter of fact I timed him at nineteen minutes. It would have been much better procedure to have let the minister in charge of the bill answer some of the questions which the minister who has just spoken tried to answer.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

Thomas Alexander Crerar (Minister of Mines and Resources)

Liberal

Mr. CRERAR:

I should have kept quiet.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Ernest Edward Perley

National Government

Mr. PERLEY:

The minister said yesterday that there was a general request for this measure by exporters. What type of exporters will take advantage of the measure? Will they be exporters of natural products, or exporters of industrial products? To what extent does the minister expect grain exporters to take advantage of the measure?

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Mr. MacKINNON (Edmonton West):

I can say to the hon. member at the outset that it will be largely the smaller exporters of manufactured goods. But the legislation makes provision to cover any exporter of any line of goods.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Heber Harold Hatfield

National Government

Mr. HATFIELD:

If all exporters do not come under the regulations set up by the board, then the small exporters will not have a chance in the world of gaining anything from this measure.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Mr. MacKINNON (Edmonton West):

They all come under the board.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Heber Harold Hatfield

National Government

Mr. HATFIELD:

I understood the minister to say a few moments ago that they did not have to come under the board.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Mr. MacKINNON (Edmonton West):

They do not have to, but they all may come under it.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Heber Harold Hatfield

National Government

Mr. HATFIELD:

They may; but if they do not all have to come under, the small exporters will not have a chance, because the large exporters, who have branches in foreign countries, will secure this business before the small exporters can get their applications through the board, and get into the business. We had the same experience when dealing with South America. We found that the governments of South American countries furnished so much exchange for the purchase of certain import goods. It was our experience that the automobile manufacturers and the paper manufacturers, with their branches

in South American countries, took over all that exchange and got all the business before the small exporters had a chance to get any of the business. The same will happen in this instance. The small exporters will not have a chance.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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LIB

James Angus MacKinnon (Minister of Trade and Commerce)

Liberal

Mr. MacKINNON (Edmonton West):

I believe this corporation will assume the risk in connection with a situation such as my hon. friend has just described.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
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NAT

Heber Harold Hatfield

National Government

Mr. HATFIELD:

Yes. but the large

exporters with branches and salesmen on the ground will have the advantage over the small exporters and they will have all the business before the small exporter can get through all the red tape.

Mr: MacKINNON (Edmonton West):

There is no attempt made to eliminate competition.

Topic:   EXPORT CREDITS INSURANCE
Subtopic:   MEASURE TO FACILITATE AND DEVELOP TRADE BETWEEN CANADA AND OTHER COUNTRIES
Permalink

August 12, 1944