March 23, 1949

EXPORTS AND IMPORTS, 1946-48 EXPORT OF CANNED MEATS


On the orders of the day:


SC

Patrick Harvey Ashby

Social Credit

Mr. Patrick H. Ashby (Edmonton East):

should like to direct an inquiry to the Minister of Finance or the appropriate minister. On February 9 a number of questions asked by me were passed as orders for returns. I received an answer to the first two, but not to the others; I was informed that they would be answered elsewhere. I should like the minister to see that I am provided with correct answers to the questions that were not answered.

Topic:   INQUIRY FOR RETURN
Subtopic:   EXPORTS AND IMPORTS, 1946-48 EXPORT OF CANNED MEATS
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Hon. Douglas Abboit (Minister of Finance):

I will ask my colleague the Secretary of State to look into the matter and see what the situation is.

Topic:   INQUIRY FOR RETURN
Subtopic:   EXPORTS AND IMPORTS, 1946-48 EXPORT OF CANNED MEATS
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TRANS-CANADA AIR LINES FIFTEEN PER CENT INCREASE IN FARES- SUSPENSION OF TRAVEL TAX

PC

John George Diefenbaker

Progressive Conservative

Mr. J. G. Diefenbaker (Lake Centre):

To

clarify something that took place last night, I should like to ask the Minister of Trade and Commerce a question. Last evening in his budget speech the Minister of Finance announced the elimination of the fifteen per cent tax on air travel tickets. Almost at the same time an announcement came over the air that Trans-Canada Air Lines had increased the cost of its tickets to the extent of the reduction announced by the Minister of Finance. When did the directors of Trans-Canada Air Lines come to know that this reduction was to take place, or did they meet after the minister made his budget speech?

Topic:   TRANS-CANADA AIR LINES FIFTEEN PER CENT INCREASE IN FARES- SUSPENSION OF TRAVEL TAX
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LIB

Clarence Decatur Howe (Minister of Trade and Commerce)

Liberal

Right Hon. C. D. Howe (Minister of Trade and Commerce):

The decision to increase Trans-Canada Air Lines fares, by a scale which has been on file for some time with the

Board of Transport Commissioners for Canada, was made at least six weeks ago- certainly before there was any knowledge of the proposed budget action. I myself learned only last Monday about the budget action.

Topic:   TRANS-CANADA AIR LINES FIFTEEN PER CENT INCREASE IN FARES- SUSPENSION OF TRAVEL TAX
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PC

Gordon Knapman Fraser

Progressive Conservative

Mr. Fraser:

Who arranged the timing?

Topic:   TRANS-CANADA AIR LINES FIFTEEN PER CENT INCREASE IN FARES- SUSPENSION OF TRAVEL TAX
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IMMIGRATION

INQUIRY AS TO REGULATIONS PROTECTING CANADIAN ORCHESTRAS


On the orders of the day:


PC

Norman James Macdonald Lockhart

Progressive Conservative

Mr. N. J. M. Lockhart (Lincoln):

I should like to direct a question to the Minister of Mines and Resources and ask him to take it as notice. Based on information I have received, may I ask him if there are any immigration regulations in effect which would protect the interests of Canadian orchestras against an invasion of their rights by United States orchestras? I have received a telegram or two objecting to that.

Topic:   IMMIGRATION
Subtopic:   INQUIRY AS TO REGULATIONS PROTECTING CANADIAN ORCHESTRAS
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LIB

James Angus MacKinnon (Minister of Mines and Resources)

Liberal

Hon. J. A. MacKinnon (Minister of Mines and Resources):

From my knowledge of the regulations I think I can say these matters would be dealt with individually. If a person were coming in from another country for the purpose mentioned by the hon. member, that would be taken into account in dealing with the application.

Topic:   IMMIGRATION
Subtopic:   INQUIRY AS TO REGULATIONS PROTECTING CANADIAN ORCHESTRAS
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PC

Norman James Macdonald Lockhart

Progressive Conservative

Mr. Lockhart:

There used to be immigration restrictions.

Topic:   IMMIGRATION
Subtopic:   INQUIRY AS TO REGULATIONS PROTECTING CANADIAN ORCHESTRAS
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FOREIGN EXCHANGE CONTROL ACT

CONTINUATION IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951

LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Hon. Douglas Abbott (Minister of Finance) moved

the third reading of Bill No. 85, to amend the Foreign Exchange Control Act.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUATION IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. George A. Drew (Leader of the Opposition):

Mr. Speaker, there has been no recorded vote on this bill at any stage, and it is my purpose to seek a recorded vote. Before doing so I wish to refer to two considerations which I think should be in the minds of hon. members in regard to this matter.

It has been pointed out already, and I think it should be emphasized, that every leading expert actively associated with the international exchange problem at the highest level has stated that if there is to be a return to normal trading among nations a solution must be found which will give some measure of freedom of movement to the exchanges of the world. As I mentioned yesterday, Mr. Paul Hoffman, who administers ECA and is also mainly concerned with the allocation of Marshall funds, has stated

Foreign Exchange Control that there must be a solution this year of the problem of convertibility. If that is so, there is every reason why parliament should not extend beyond one year legislation which gives extraordinary powers going far beyond the control of exchange itself.

That, Mr. Speaker, is something which has been overlooked or disregarded in any of the very limited explanations that have been given from the government side of the reasons fpr carrying forward this bill in its present form. This is not merely a bill to control exchange; it is a bill to control import and export as well. The argument originally presented was that the additional features were only for the purpose of supporting the effective operation of government action to control exchange, and were not intended as devices to deal with the export and import of goods, though that effect was clearly covered by the wording of the act. Later the Minister of Finance announced that he had been informed by his experts that under the provisions of the act he could control import and export, and since then this has been an important feature of the act itself.

If the optimistic viewpoint expressed by the Minister of Trade and Commerce and the Minister of Finance in regard to trade is in fact borne out, then there is every reason why a bill of this kind, which carries forward arbitrary controls over trading which can have no meaning once our exchange operates as a normal instrument of balancing accounts between countries, should not be approved by this house. If in fact the statements of the secretary of the treasury of the United States and Mr. Hoffman are based upon sound information-and I think we should assume they are-they look for a decision in this matter during the present year. Therefore the government should be under the compulsion of immediate action; and if this legislation is extended for only one year there will be more reason for the government to act immediately and initiate the appropriate action to return to actual convertibility between the pound and the dollar. Until there is a return to that convertibility, this country faces possible disaster, no matter what optimistic statements may be made in this house or elsewhere.

We have it within our power to give leadership in something which relatively is of more concern to Canada than to any other nation in the world. Surely we have the trained brains; surely we have men of sufficient mental vigour and confidence in themselves to give leadership in breaking the log jam which is backing up international trade between western nations whose ability to defend their freedom will depend very largely in the years that lie ahead upon their ability

Foreign Exchange Control to extend their trading strength and their, economic interdependence and co-operation. Therefore it is not only something that is in the interests of Canada; it is a challenge to Canada's maturity and capacity to deal with international problems.

For that reason, Mr. Speaker, I do not believe this bill should go forward in its present form, covering a two-year period. For that reason I believe it should not get third reading, and the government should take appropriate steps to reduce the life of the bill to one year.

In addition to the reasons I have given as to why that should be done in any event, reasons related to the statements made publicly by those best informed in the matter of international exchange, may I point out another reason why this house should refuse to extend the life of a bill of this kind, which in addition to controlling import and export has such a profound effect upon our whole economy. Our system of parliamentary control of expenditure is based upon an annual review of the action of the government. For hundreds of years that basic principle has been firmly imbedded in our parliamentary system. We should not disregard it when we have placed before us a bill which can affect the whole domestic and external economy of Canada in the years immediately ahead.

Out of the surplus collected in the form of taxes in 1948, more than $400 million had been lent for the purpose of dealing with the operations under this fund. That system again is contrary to our established methods of handling the public revenues. Other countries deal with similar exchange operations by setting up a fund for the purpose, to which money is voted in the ordinary way by parliament at the time the estimates are dealt with. That, I submit, is the way it should be done here. At the end of the year, in the usual way, there should be an opportunity to review the act itself as well as the results of the operation of the act. It is not enough to say, as has been said, that the accounting must come before this house every year. The bills that are dealt with by this house should be related to the accounting and should be amended from time to time to adjust them to the circumstances which that accounting discloses.

In this particular case we are told that our exchange is as strong as any other in the world, that our dollar is as sound a money unit as any other in the world. If that is so, why should we carry forward for two years, let alone for one year, emergency measures which in themselves suggest that that statement is not correct? The adoption of these additional measures covering the operation

of exchange indicates a belief in another method than the historic device of the normal balancing of trade. If our exchange is as strong as it is claimed, and as strong as it certainly has a right to be, with our enormous resources and raw materials, we should not give to this or any other government that arbitrary day-by-day power by order in council over the import and export trade of this country.

There are so many inconsistencies, Mr. Speaker, in the statements made in support of the procedure which is being followed that it is difficult to understand exactly what argument the government has put forward in favour of the contention that these measures should be extended for two years. The Minister of Finance has said that if we returned to something in the nature of a free dollar we would then have an addition to our cost of living of some seven or eight per cent. At the same time he says that our dollar is worth as much as the United States dollar, so I do not know how he arrives at that conclusion. Moreover, although he says he is greatly concerned about the addition to the cost of living of the seven or eight per cent which might result from having a free dollar, he has at the same time been placing a twenty-five per cent excise tax on many of the daily requirements of the people. If a matter of seven or eight per cent is of so much concern in the one case, it is difficult to understand why a twenty-five per cent increase on other necessities can be regarded as unimportant simply because it happens to be something that is imposed by the government itself. Yet that is the only reason one can find for the difference between the two situations.

Let me sum up in this way. If we believe that exchange is really what the word implies, and that exchange, given a realistic relationship to the actual value at the moment, of the unit of currency, does act as a measure which will balance international trade; if we believe that it is not necessary for the government to have these powers which go far beyond exchange; if we believe that bills covering matters of this kind should not give by order in council the arbitrary authority conferred here for a period of more than one year, then I submit that the members of this house should vote against the third reading of the bill which carries all these objectionable features into effect.

Let there be no doubt about one point. We have made it clear that we believe there must be some measure of reference to the international monetary fund during a period when the adjustments are made. By an amendment which was proposed and which was ruled out of order, we advocated the taking of steps-

within a year, or if possible within a shorter period, during which exchange control would still operate-to restore something in the nature of convertibility. Whether this bill is passed or not, but particularly if it passes, our position is that this government should without delay take the initiative in seeking a return to convertibility, which means so much to the future advancement of Canada.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUATION IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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CCF

Major James William Coldwell

Co-operative Commonwealth Federation (C.C.F.)

Mr. M. J. Coldwell (Roselown-Biggar):

Since we are going to vote for this measure, may I say a word? I agree with the leader of the opposition (Mr. Drew) that there is some incompatibility between the minister's statement about exchange and the incidence of excise tax. I agree that the excise tax has the effect which devaluation of the currency or inflation of prices might have. But I submit that to take the initiative in bringing about convertibility, as suggested by the leader of the opposition, is not in the best interests of this country.

A few years ago the United States did something of this kind. The effect was to impede the efforts that were being made for recovery, particularly in the United Kingdom. I believe convertibility is desirable, but in view of the circumstances I do not think the time has arrived when that can be safely undertaken. The bill upon which we are about to vote grants powers to the government for the period that will be required in order to bring about a measure of economic stability among some of the nations of the world.

We know, for example, that the customer upon whom we must rely for a great deal of our trade and commerce believes it will be 1952 before she is able to approach the required balance in her economy. If it is suggested that the government does not need the powers granted by this bill for two years, I think it is likely that no government would endeavour to carry on a policy of this kind if it was unnecessary to do so.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUATION IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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?

An hon. Member:

You do not know them.

Topic:   FOREIGN EXCHANGE CONTROL ACT
Subtopic:   CONTINUATION IN FORCE UNTIL SIXTY DAYS AFTER OPENING OF FIRST SESSION OF PARLIAMENT IN 1951
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March 23, 1949