December 18, 1947

TRADE AGREEMENTS

CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM

LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, I wish to give the house a statement on trade and financial arrangements between the governments of the United Kingdom and Canada, for which hon. members have been waiting.

As the house is aware, it was recently agreed with the United Kingdom government that a mission should come to Ottawa to discuss the trade and financial arrangements between the two countries, with special1 reference to the United Kingdom's purchasing program of Canadian supplies in 1948.

The mission, headed by Sir Percival Leisching, Permanent Secretary of the Ministry of Food, arrived in Ottawa on the 25th November. There has since been held with them a series of most valuable and comprehensive discussions covering the whole field of our trade with the United Kingdom, and I am happy to announce that as a result of the exchanges which have taken place agreement has now been reached with the United Kingdom government on all matters under review.

Both countries at the present time face a common difficulty, namely, a shortage of United States dollars. From the Canadian standpoint, this and other factors limit the extent to which the balance of the credit, provided for under the Financial Agreement Act of 1946, can be drawn on in order to make supplies available to the United Kingdom. Canada has made a very great effort-not exceeded by that of any other state-to assist in the restoration and reconstruction of countries damaged and destroyed by war. But she cannot continue indefinitely to export on credit, and import for cash. From the United Kingdom standpoint, her own shortage of hard currency equally limits the extent to which she can afford at this time to make payment in dollars for goods supplied from Canada.

The discussions with the United Kingdom mission centred around (1) the necessity for Canada of maintaining a balanced agricultural program and (2) the basic dollar difficulty in both countries. However, though there may have been a shortage of dollars on both sides, there has been also on both sides a surplus of good will and mutual understanding. Also, if there has been a common difficulty, there has been a common objective, the maintenance at this time and the extension in the future of a stable and steady market in the United Kingdom for Canadian farm produce. This means a restored and vigorous economy in the United Kingdom and a steady rise in her industrial production and exports. It means also a prosperous Canadian agriculture, the value of which has become increasingly realized in the United Kingdom during the war and post-war years.

Canada wishes to continue to send to the United Kingdom all those supplies of foodstuffs and raw materials which are playing such a vital part in sustaining the United Kingdom's reconstruction program. The United Kingdom's need for such supplies, in order to maintain the progress now visible in her recovery, is so strong and compelling that any interruption at this time would have very serious consequences.

In the arrangement for the provision of supplies, however, Canada has not been asked and will not be asked to go further than her financial situation permits. Likewise the United Kingdom will itself decide how to dispose of its present limited financial resources in the way most effective for its recovery.

It is in this spirit of mutual interest, mutual understanding and mutual assistance that the discussions have been conducted. It is in the same spirit that agreement has been reached.

The agreed arrangement provides for the continuance of the wheat agreement with the United Kingdom and for the continuance and renewal of the contracts for livestock products at prices adjusted accordingly. Thus the balance of Canadian agricultural production will be preserved, and there will be no interruption in these supplies to the British market.

The arrangement also provides for continued supplies to the United Kingdom of certain raw materials needed for reconstruction purposes, in particular timber and non-

Trade Agreements

ferrous metals, though the quantities have been adjusted in relation both to United Kingdom needs and the demands for these products from other countries.

In estimating the probable trading deficit on this basis, account has been taken of the increased exports from the United Kingdom and the sterling area which, following these discussions, are expected to be made available for the Canadian market during the coming year. The arrangement provides that in the three months period up to the 31st March next, the expected deficit of 145 million dollars should be financed by drawings on the Canadian credit up to 45 million dollars and by the payment by the United Kingdom of 100 million dollars. Our government will review the position at the end of the three months period.

A statement substantially similar to this is being made today in London by the United Kingdom Prime Minister.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. JOHN BRACKEN (Leader of the Opposition):

Mr. Speaker, I should like to ask the Prime Minister, before we proceed with other business, one or two questions arising out of the statement he has just made. He stated in one place that there had been agreement in all matters under review. Might I ask him to tell the house whether there has been agreement on the amounts to be provided and on the prices to be paid under the various contracts we already have with Britain?

And I have one other question. The announcement just made relates to the matter to be discussed this afternoon in the resolution dealing with the extension for three months of the Agricultural Products Act. Up to the present we have not had notice of any changed position by the government. Now the Prime Minister makes a statement announcing some changes, the implications of which we cannot readily grasp. My suggestion to the government is this. In view of the changed position of the government with respect to certain of these matters, and in view of the debate that is now on or which will begin in just a few minutes, I suggest the propriety of delaying this debate for two or three hours until the members of the house can examine the statement the Prime Minister has made, and that we proceed with the debate in which we were engaged yesterday or some other one. That is only fair to the house in view of this late announcement respecting the matter which we are now debating. If the Prime Minister could indicate whether there has been any agreement on prices in

these contracts and the amounts to be supplied, could we have that information at this time?

One other sentence in the Prime Minister's statement is confusing. He said the wheat agreement was to be continued very much as it is, as I gathered, but with respect to livestock matters he said prices were to be accordingly adjusted. To me that sentence meant nothing. Perhaps it could be explained or enlarged upon either by the Prime Minister or the Minister of Agriculture.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Mr. Speaker, my hon. friend has made a rather lengthy statement. I am not able to recall all that he has said. At the beginning of his remarks he asked a question about amounts and prices. The prices of all but wheat are to be adjusted. As to continuing the discussion at the moment, if hon. gentlemen feel they would be embarrassed, of course the government would be anxious to meet their wishes. However, if there are many taking part in the debate on the resolution with regard to the Agricultural Products Act, I would feel that it might be preferable that the debate proceed forthwith in order that we may be sure of concluding it in time.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

May I make a comment, just here?

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

Yes.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

My suggestion on that is this. I recognize that the government desires to get this particular legislation passed before we adjourn.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

It must.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

On behalf of this party, I undertake to see that it comes to a vote before adjournment time to-morrow night, if that will help the Prime Minister over the difficulty he sees.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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?

Mr. COLD WELL@

Mr. Speaker, I was going to suggest that if we could get further information from the Minister of Agriculture in the debate which is to follow, it might give a great deal of information to the house which we could not get merely out of an examination of the statement made by the Prime Minister, which statement leaves a good many things to the imagination. I do not know whether the Minister of Agriculture is prepared to go ahead; but speaking personally, I should like more details before I am prepared to discuss this matter.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

That suggestion would be acceptable to us.

Trade Agreements

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

The Minister of Agriculture is generally equal to any emergency. He tells me that while he had hoped to delay his remarks until he might have a chance of replying to what others may say in the debate, he is ready to proceed. If he is ready to do so, it would be preferable that we should go on with this debate.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

John Bracken (Leader of the Official Opposition)

Progressive Conservative

Mr. BRACKEN:

May I ask the Prime Minister if we may have copies of the statement he has just read?

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council)

Liberal

Mr. MACKENZIE KING:

I shall send to my office for copies. I believe some have been made, and I shall be glad to have copies given to my hon, friend at once.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

May I say at this point that I would not want any misunderstanding later on with regard to the situation. I do not think it should be insisted that I make my speech as soon as we enter upon discussion of this question. I have only one opportunity to speak. It is not my motion. I should have the right to speak on it when I think the time has come for me to speak, at which time I expect I shall have many things to answer.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

Gordon Graydon

Progressive Conservative

Mr. GRAYDON:

Answer for.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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LIB

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

I have no objection to either procedure-to saying anything that can be said now, or on the orders of the day, in order to indicate what the present position is, or to answering questions put to me directly while some other person is speaking in the debate-but I do not want to exhaust my right to speak at the beginning of the debate.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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?

Mr. M. J. COLD WELL@Rosetown-Biggar

Mr. Speaker, if I may make the suggestion, I should think it would be satisfactory if the minister would make a statement now on motions or on the orders of the day. He would not by doing so exhaust his right of reply in the debate which will proceed later.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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PC

Gordon Graydon

Progressive Conservative

Mr. GRAYDON:

He will need all the time he can get.

Topic:   TRADE AGREEMENTS
Subtopic:   CANADA-UNITED KINGDOM-TRADE AND FINANCIAL ARRANGEMENTS-1948 U.K. PURCHASING PROGRAM
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December 18, 1947