April 15, 1946

FARM IMPLEMENTS

PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31

LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Right Hon. J. L. ILSLEY (Minister of Finance):

Mr. Speaker, I think it desirable to make a statement to the house in regard to the supply and price of farm implements. Throughout the war years, and continuing through to the present, the question of ensuring an adequate, supply of farm implements is one which has consistently been given special attention by the government. Towards the end of 1941 when the needs of war caused acute shortages of steel and component parts, hon. members will recall that a rigid control and allocation of all forms of steel and components was found necessary and a far-reaching priority system was set up. When doing so, however, particular attention was given to the needs for farm implements and they were placed in the very special position of receiving a priority as high as essential war production in regard to production programmes agreed upon from time to time. A special international committee was formed cpmprising representatives from the United States, United Kingdom and Canada to screen the requirements of the allied nations for farm machinery and equipment so as to determine minimum essential needs in relation to agreed food programmes. This committee worked out the allocation of available materials for each country aqd maintained a fair balance in its distribution. When this had been accomplished it became the responsibility of each country to determine what machines and equipment were produced to meet essential needs.

Through these special measures hon. members will be interested to know that despite the most urgent pressures for direct war equipment the government was successful in providing for Canada a steady flow of farm implements throughout the course of the war.

Notwithstanding this fact, however, it is true that a greatly expanded agricultural production, obtained despite a serious decline in farm labour, has meant that the demand for machinery and equipment continues far in excess of available supply. A significant barometer of the demand in this field has been the fact that in farm auction sales, prices bid for used machinery and equipment have been often far in excess of maximum ceiling prices on new equipment.

[The Governor General.]

Immediately following the cessation of hostilities the question of diverting all possible industrial production facilities towards meeting the demand for farm machinery and equipment was taken energetically in hand. The urgent need for food is so apparent that I need not emphasize it. Suffice it to say that it is the obvious duty of all producing countries to increase agricultural production to a maximum and all practical steps toward this end must be taken.

In studying the measures necessary to secure a maximum production of farm machinery and equipment the wartime prices and trade board, to whose administrative jurisdiction this question is entrusted, has reached the conclusion that some recognition of the uncontrollable war-time increases in the cost of materials, labour and general overhead is simply inevitable if vitally needed machineiy and implements are to be secured. This decision was reached after a careful study of cost information submitted by the farm implement industry. Accordingly, on Saturday, April 13, the board announced that maximum retail price ceilings for Canadian-made farm machinery and parts will be increased by twelve and a half per cent. Naturally, this step was taken with considerable reluctance. However, faced with the plain fact that increased costs of materials and component parts produced in Canada, or imported for assembly here, together with increased labour and other overhead costs, could not be absorbed at present price levels, it was obvious that a maximum production of farm machinery and equipment could not take place unless some relief was afforded. I/should add that the analysis of costs conducted by the prices board indicated that a price increase of upwards of 30 per cent above 1941 levels would have been required to regain 1941 profit percentage margins for the farm implement industry. Consequently, the price advance of only 12i per cent means, admittedly, a serious profit squeeze upon the industry, but in this transition period the government believes the prices board approach in the case of farm implements to be fully justified in view of the imperative need for holding down to a minimum, cost adjustments in the important basic industry of agriculture.

With one minor exception of a 5 per cent increase to adjust an anomalous situation on a small volume of implements (principally imported items) at the commencement of the price ceiling in the fall of 1941, prices have been held at or below the ceiling prices of the basic period in 1941. This rather remarkable record was made possible partly by

Farm Implements

reason of large war contracts which expanded the volume of the industry and partly by insisting that increasing costs be absorbed by the industry instead of being passed on to the farmer consumer. Now that war production has swung over to normal supplies, however, the cost increases, as I have already stated, can no longer be absorbed and a reasonable price adjustment had to be worked out. In their submissions the companies disclosed increased costs since the basic period of 1941 averaging, roughly, materials and components 20 per cent, labour 28-J per cent, and general overhead 23 per cent. Unit costs in the coming year will run higher than this for some time due to premiums on castings, increases on imported components and higher than normal overheads which bring the over-all cost increase close to 30 per cent. In fixing the increase in the ceiling price at not more than 12i per cent the board has in mind that only through volume production can the Canadian farm implement industry survive, under the present level of costs and selling prices so that the price increase now authorized means that the companies must do their utmost to achieve a maximum volume of production. That I should add is exactly what is needed to meet the chronic shortages of farm implements which exist to-day. It will be of interest to recall also that on July 1, 1944, the exchange tax and all customs duties were removed from imported farm implements so that farmers are now assured that the Canadian price level must be fully competitive with other markets. I am further informed that retail farm implement prices in the North American continent are at least 25 per cent lower than in any other market in the world to-day.

To sum up, I wish to say that with the price adjustment now authorized and with the steps taken to give priority assistance in the securing of raw materials, such as steel, castings and component parts, I believe that the serious shortage in farm implements will begin to be remedied this year. I must warn, however, that with the best will in the world all shortages cannot be overcome immediately and that factors beyond our control, such as, for example, the recent strike in the steel industry in the United States, and the present coal strike, can seriously upset all forecasts or plans. It follows that strong inflationary influences are present in this field, both here and in the United States where about 50 per cent of our supplies of farm machinery and implements are obtained. For example, the United States farm implement industry during the months of January and February, 1946, showed a production decrease of, roughly,

20 per cent over the same months of 1945, or figured in dollars a total of some $110,000,000. Because of the dependence of the Canadian farm implement industry upon the United States for certain essential components, such a sharp decrease there inevitably affects production here.

The squeezed down price increase which has been allowed in the Canadian field of manufacture will, with the cooperation of the farm implement industry, ensure a maximum production in our own field of manufacture to the full extent that materials and labour are available, but there remains a very definite hazard that more serious price advances in import prices, over which we, of course, have no control, may yet be witnessed. *

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. JOHN BRACKEN (Leader of the Opposition):

Mr. Speaker, the Minister of Finance has just made a statement with respect to the announced policy of raising the price ceiling- on farm machinery by 12J per cent. He has sought to justify that policy on the grounds of increasing costs to the manufacturers and of the need for human food.

I want to commend the minister for making this statement, because it gives us some idea of the justification the government offers for this proposed increase. When the house adjourned on Friday evening we learned of the forthcoming announcement to be made through the press-and I am sure we are pleased to hear from the minister to-day. But I do not think I should let this opportunity pass without saying two or three things about the matter.

Speaking for those around me on this side, I think the government is going about the process of removing controls in the wrong order. Here is an increase in the price of farm machinery with no corresponding increase in the price of farm products. It is an increase in the price of farm machinery at the time that farmers are starting to seed their crops, and at a time when the world is short of food. As I say, I think the government's policy is to be criticized for the way in which the government is going about it, and for the timing of the announcement. The machinery which the farmers need to-day is already in the shops, and yet the prices to be paid for it are tomorrow's prices and not yesterday's. I welcome the minister's statement, but I am afraid we cannot support the policy or the reasons he has given for it.

It follows an announcement of a few days ago of an increase of $5 a ton in the price of steel, at which time there was no announcement that anything would be done to make possible an increase in the wages of steelworkers. I submit that the plans for the

Farm Implements

removal of these controls ought to be better correlated than they are, according to the evidence we have.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I am sorry to interrupt the hon. gentleman. I permitted him to make a few remarks but, as he knows, statements made by ministers at this stage are not debatable. That is a rule of the house.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

I thought myself that debate was not permissible, but I should certainly like to say something in answer to what my hon. friend has said.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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?

Thomas Miller Bell

Mr. COLD WELL:

Could not an arrangement be made whereby this particular matter might be discussed by the house? There are many of us representing agricultural constituencies and we should like to say a word and incidentally to revise our whole attitude towards the stabilization of agricultural prices. An opportunity should be given before the house adjourns to discuss this subject.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

As I have already pointed out, statements of this kind made by ministers are not debatable. I understand that hon. members are of the view that it is necessary to debate the question. If they will consult Hansard they will see the information which the leader of the house gave on Friday night when he intimated that the . house would probably be called upon to-day to resolve itself into committee of supply. When a motion to that effect is put to the house by the Speaker, hon. members will have an opportunity to discuss this matter. I consider it the duty of the Speaker to point out to hon. members that the minister's statement is not debatable.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

We accept your ruling, Mr. Speaker, whatever it is. I simply wish to point out, however, that the minister has been allowed to make a statement and the house is denied an opportunity of saying anything about it.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

Lionel Chevrier (Minister of Transport)

Liberal

Mr. CHEVRIER:

Under the rules he is allowed to make the statement.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Again I regret the necessity of interrupting the hon. member, but I think it is my duty to refuse permission to the hon. member to make the remarks which he is submitting to the house. It is a well-known practice in this house, and one which is observed every day, that ministers may be allowed to make statements of the kind under discussion, but such statements are not debatable. That is not a matter of ruling by the present Speaker; it is a practice of the house. As I pointed out a moment ago, however, hon. members will have an opportunity to

discuss their grievances to-day when the house is asked to resolve itself into committee of supply.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Mr. Speaker, I should like to say a word with regard-

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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?

Some hon. MEMBERS:

Order.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

Gordon Graydon

Progressive Conservative

Mr. GRAYDON:

Either this is debatable or it is not.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I am afraid I cannot give the minister permission to engage in a debate.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

In view of this announcement to-day, and the fact that we are not allowed to debate the matter, I wish to move the adjournment of the house under standing order 31 for the purpose of discussing a definite matter of urgent public importance, namely, the government's policy as announced last Saturday of permitting an increase of 124 per cent in the ceiling price of farm implements, without permitting a corresponding increase in the price of farm products and thus imposing on the farmers extra production costs just at the time when they are preparing maximum production to meet the critical food situation.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. member wishes to avail himself of the privilege afforded by standing order 31 to move the adjournment of the house for the purpose of discussing a matter which in his opinion is urgent. Before going any further I ryould call his attention to a ruling given by the Hon. Mr. Rhodes, then Speaker, on April 5, 1918, which wrill be found at page 744 of Beauchesne's Parliamentary Rules and Forms, third edition:

There is one point mentioned by the hon. member to which I would reply, and more especially for the benefit of proper decorum in the house on the matter of urgency. Urgency, within the meaning of the rule, is not a question whether the matter proposed to be discussed is of urgent importance-

And I insist upon these words.

-it may be of infinitely urgent importance to those affected-the question is whether it is urgent within the meaning of rule 39: in other words, whether it is a matter of that urgency which would cause harm to the public interest if the ordinary opportunities provided by the rules of the house were not able to permit the subject to be brought on early enough.

It is the duty of the Speaker to point out to the house that we have before us now routine proceedings and orders of the day and that preparations have already been made for the consideration of to-day's business. It is my duty to see that these orders of the day are followed. Hon. members, have been apprised since Friday last of the business

1" that would come on to-day and have prepared themselves accordingly. I realize that it is the privilege of every member to avail himself of standing order 31 and to move that

Farm Implements

the business prepared for to-day shall be set aside to enable him to move the adjournment of the house. It is for the Speaker to decide whether the matter which it is proposed to discuss is of sufficient urgency and of sufficient public importance to warrant the suspension of the order of business. On this question the Speaker has not to decide "whether the matter proposed to be discussed is of urgent importance," but to decide whether it is urgent within the meaning of standing order 31. If hon. members will look at Hansard of Friday they will see that the leader of the house stated that probably on Monday the house would be asked to resolve itself into committee of supply. Every hon. member knows that, except on Thursday or Friday, before going into supply the question is put by the Speaker, and any member has then an opportunity to rise and discuss grievances. I would ask the hon. gentleman to wait until there is a motion for supply, when he will have the opportunity to discuss this matter. For that reason, I must rule that there is no urgency sufficient to justify setting aside the orders of the day to enable the hon. member to discuss the matter.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

Then Your Honour's

decision is against me?

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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LIB

James Horace King (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Yes, it is.

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

May I have an opportunity of saying a word with respect to the ruling?

Topic:   FARM IMPLEMENTS
Subtopic:   PRICES AND SUPPLY-MOTION FOB ADJOURNMENT UNDER STANDING ORDER 31
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April 15, 1946