Hon. George Prudham (Minister of Mines and Technical Surveys):

Mr. Speaker, I

desire to table the French edition of the report of the administration of the Emergency Gold Mining Assistance Act for the fiscal year ended March 31, 1952.

Mr. H. O. White (Middlesex East):

I should like to address a question to the Prime Minister, in view of the absence of the Minister of Agriculture (Mr. Gardiner) and his parliamentary assistant. This question arises out of the statement made by the veterinary director general in British Columbia recently to the effect that the clean-up of the foot-and-mouth disease having been accomplished, Canadian cattle would be admitted into the United States as early as September. Will the Prime Minister indicate to the house whether such is the case?

Right Hon. L. S. St. Laurent (Prime Minister):

Mr. Speaker, all I can say is that I read with interest that dispatch reporting what the veterinary director general is supposed to have said and I hope it is true. I hope there will be no more outbreaks; and if there are no more outbreaks, I hope the United States administration will recognize the situation and will give effect to it at the earliest possible moment.

Mr. L. E. Cardiff (Huron North):

Mr. Speaker, I should like to direct a question to the Postmaster General or to the Minister of National Defence. I do not know to which one it should be directed. It is with regard to a man who is serving in Korea and who

has not received any mail since February 27. I can give the minister the letter-there is nothing personal in it-the man's address and all particulars. Mail has been sent to him. I am informed that there must be, somewhere, a considerable amount of mail directed to him; but he has not received any since February 27.

Hon. Brooke Claxton (Minister of National Defence):

If the hon. member will give me the letter I will go into the matter with my colleague, the Postmaster General (Mr. Cote), and see what, if anything, can be done.

Hon. Alphonse Fournier (Minister of Public Works) moved

that the house go into committee of supply.

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

Mr. Speaker, I propose to take this opportunity to renew the discussion of a subject that has been raised on earlier occasions, and to bring before the house once again a proposal that has been made, without success, by various members of this party from time to time. It seems to me that this is a particularly appropriate time to raise the question of the possibility of taking some positive action to revive the traditional trade within the commonwealth, and particularly with Great Britain.

When I say that this seems to be a particularly appropriate time, I say it in view of the fact the trade fair now taking place in Toronto is serving to emphasize the vital importance of trade in our economic affairs and in the economic affairs of the free world.

May I say that I had the privilege of being at the trade fair yesterday when it was opened by the Minister of Trade and Commerce (Mr. Howe); and I do think that Canadians have every reason for satisfaction that this fair should be so well patronized by Canadian producers, and also that it should have attracted such excellent exhibits from so many other countries.

There are, however, certain aspects of that trade fair which, it seems to me, call for attention from all of us who recognize that there is perhaps no other highly developed country in the world which is so dependent upon the maintenance of external trade as is

Suggested Commonwealth Conference Canada today. Those who visit that fair will see very convincing evidence of the extent to which Germany, Japan and Italy have rebuilt their productive capacity, and are once more capable of exporting machine tools, steel products, textiles and fine equipment of all kinds which are going to compete in the markets of the world in a manner which will call for the attention of every company and every individual interested in the export trade.

One of the most interesting exhibits at that fair-perhaps the most interesting in many ways-is the very large exhibit from Germany. No Canadian needed to be told that Germany is capable of producing machinery and steel products of all kinds of the very finest type. At that fair they will see that Germany has revived that production, and that never at any time were they producing steel products generally, cutlery and things of that kind, of a finer quality than is to be seen there. The same is substantially true of Japan and Italy and of other countries that only a short time ago were simply beginning to rebuild their industrial capacity.

1 was speaking to one of the exhibitors, amongst the German group, who was interested in textiles. He pointed out the very high quality of the textiles that they were seeking to sell here in Canada. He pointed out that it was of high quality, but that nevertheless they were able to sell it at a favourable price because their wage levels were lower in that country than in Canada. It was interesting to me that this representative of a German textile firm should have seen fit to point out that very obvious fact to me when I was examining those textiles which might be competing with Canadian textiles in the near future.

However, there was another point in connection with these products from Germany, Japan and Italy which was not pointed out, and which perhaps was not so apparent. We sometimes are inclined to forget that Germany, Japan and Italy wiped out their accumulated obligations, wiped out the enormous debts they had created in building up their military potential for war, which they lost, and by an extreme form of inflation, which practically wiped out the value of their money, they liquidated for all practical purposes their huge accumulated government obligations. Therefore, the people of those countries are not being taxed in very substantial sums today for the payment either of carrying charges or of capital repayment on past obligations.

This country, which found it necessary to assume heavy obligations because of German, Japanese and Italian aggression, still finds

itself in the position of paying both maintenance charges and capital charges on those accumulated obligations. They constitute a very substantial figure in the total of the tax moneys which are collected from our people. Then also, as compared with us, the people of Germany, Japan and Italy are not assuming defence obligations on the scale that we are. It may be that they will soon do so. Up to this point they have not been permitted to undertake expenditures of that kind.

We find, therefore, that from the tax point of view, as well as from other points of view, these countries are in a very favourable position to compete with us and to compete with other countries which have carried forward the obligations which they incurred during the years of war, and the obligations which we are now accepting as part of the common effort to preserve the freedom which we won during that war.

It may not be easy to determine what the exact amount is, but it would appear that part of the cost of everything that we must sell in the export market resulting from taxation alone would be close to 25 cents on the dollar. That is a very heavy figure to include in the price of the things that we must sell in competitive markets of the nature which we now see opening out before our eyes. No longer are we in the fortunate position that, with our capital producing capacity maintained, we have such great advantages over those other countries. Their capital producing plant has been greatly restored; much of it is new and of the very finest type. Much of it was produced on the North American continent. That modern plant will be competing all over the world with the exports of this country, of Great Britain and of other countries which are carrying forward heavy past obligations and assuming new obligations for the defence of freedom.

For these reasons it seems that we should examine the whole question of external trade, both export and import, with a sense of urgency and with a recognition of its importance, such as we have not been impelled to recognize at any time since the days before the last world war.

In referring to the trade fair I am of course speaking only of industrial production. But we also have in this country a great and primary concern with agricultural production and agricultural exports. We start with one simple fact, a fact emphasized only a few days ago by the Prime Minister (Mr. St. Laurent) in a speech he made about the importance of the export trade to Canada,

when he pointed out that of every dollar that Canadians earn one-third is earned by export trade.

No other highly developed country in the world is nearly as dependent upon the maintenance of export trade as we are, for our continuing prosperity. It is with the recognition of that fact that I suggest we should examine at this time our position, and why we should be seeking the return and expansion of our traditional markets at a time when those traditional markets have been lost or are being greatly reduced in respect of those lines upon which we depended so greatly.

There is no doubt about the fact that on a percentage basis there has been a serious reduction in our exports to the United Kingdom, that traditional market upon which we have depended so largely in the past. There has been some attempt to minimize the seriousness of the situation so far as the United Kingdom market is concerned by pointing out that in current dollar figures there is an increase in the dollar value of the exports from Canada to the United Kingdom.

We are told that the dollar exports to the United Kingdom have been increasing month by month this year. That is true. But I am going to suggest reasons why we should not have any false sense of satisfaction from the figures placed before us. I shall suggest reasons why we should examine how these figures are made up, and why it is that there is a dollar increase at this time.

During the first four months of the present year there was an increase each month over the corresponding month last year. There was an increase in January of 3-2 per cent over the figure for last year; there was an increase of 10 per cent over February of last year; there was an increase of 28-1 per cent over March of last year and there was an increase of 29 -3 per cent over April of last year. But there is another figure against which that must be balanced. During those same months there was a decrease each month in the imports of this country from the United Kingdom. In January the decrease was 9-6 per cent; in February, 6-5 per cent; in March, 7-8 per cent and in April, 20 [DOT] 6 per cent.

Therefore we see that as our exports are increasing month by month percentagewise over the corresponding months last year, our imports from the United Kingdom are at the same time decreasing to a considerable extent. That indicates further dangers which must be faced in connection with our exports to the United Kingdom.

Suggested Commonwealth Conference Then, Mr. Speaker, there are other considerations in connection with trade which I think should be borne in mind. We are told that our export trade with the United Kingdom is increasing. We are told that in dollar value it was higher last year than it was in the years immediately before the war. In current dollars that is true. But we have heard in the house a term used which should be employed if we are to see what has actually been happening. That term is "constant dollar value"-that is, the real value of our dollar in what it will buy at any given time.

I have before me a break-down of the figures supplied in the prices and price index compilation of the dominion bureau of statistics. From these I have found that the position on the basis of constant dollar value is far from reassuring. I see that in 1938 we exported to the United Kingdom, in the dollars of that time, goods to the value of $340 million. In 1939 we exported goods to the value of $328 million, while in 1947 the value of our exports to the United Kingdom amounted to $751 million. Last year it amounted to $631 million, which was an increase from $470 million in 1950. In dollars of last year that looked like a reassuring increase. But when these are reduced to terms of a constant dollar value, to the actual value of the dollar as worked out by the dominion bureau of statistics, and when you take the general wholesale price index, you find these results in connection with our exports to the United Kingdom:

Constant

dollar

value

million

1938 $333-3

1939 330-5

1950 222-5

1951 262-7

In other words, in constant dollar value, in terms of buying units in the hands of our people, exports to the United Kingdom last year and the year before were substantially below the constant dollar value of our exports in 1938 and 1939. This has come about at a time when the value of our exports to the United States, in terms either of current dollars or of constant dollar value, has been increasing by leaps and bounds.

We have been told in this house that there is no reason for alarm about our export situation. As I recall the words, we were told that we could sell what we could produce. When we examine these figures we must all begin to wonder why it is that so many people are wondering about their exports at this time. There is no use telling the cheese producer in this country that he can export all that

2846 HOUSE OF

Suggested Commonwealth Conference he can produce. There is no use telling the hog raiser that he can sell in the export market all that he can produce. There is no use telling the cattle producer that he can sell all that he can produce. There is no use telling the poultry raiser that he can sell all that he can produce. They know differently.

They know that these markets have either disappeared or been reduced to a mere trickle in some ol the most important lines of our historic export trade. True there is a large export, but that is made up mainly of raw materials required for defence production and defence preparations. I am not questioning the wisdom of supplying to the manufacturers of Britain essential raw materials required for the production of those things needed for the common defence of freedom. I do not think that we should be misled, however, by the fact that this demand, superimposed upon their ordinary production, is what has largely accounted for the maintenance of our export figures to the United Kingdom at this time.

In very substantial measure the same is true of our exports to the United States. We are exporting large quantities of unprocessed and semi-processed materials which could very well be manufactured in this country to the advantage of Canadian workmen in every part of Canada. I qualify my remarks by saying that as a partner in a great combined effort to preserve the peace and to defend freedom we should not be unwilling to contribute those things which are essential for the common defence of our freedom.

Nevertheless, in connection with our exports both to the United States and to the United Kingdom, I think the time has come to recognize that this may be a costly type of export in the long run, whatever temporary advantages we may seem to get. A very considerable part of that export is made up of raw materials which are being sent out of Canada in a form which gives to us the lowest dollar value and the lowest factor possible.

I think we might well re-examine the possibility of greatly increasing our own production of finished articles from some of these raw materials in a way that will give Canadian workmen jobs from our own raw materials instead of exporting them: always with the qualification that I am not suggesting that we should place a barrier against the supply of raw materials essential for the common effort.

We have learned in the past that it is not wise to put all our eggs in one basket and to become completely dependent upon the United States for exports no matter how friendly our own association with that great country may be. We have had most convincing

evidence in the past that there may come a time when the people of the United States will not welcome imports on a large scale of those things which they are producing in their own country. We know what happened in the early 1930's when barriers were raised against the exportation from this country of agricultural products upon which our agricultural economy had been so dependent.

I believe that there is a better understanding today between our two countries in regard to our common problems. Nevertheless we must not forget at any time that the United States and Canada are largely producers of similar products, both agricultural and industrial. For that reason we are always confronted with the possibility that if producers in the United States can fully meet the demands of their domestic market we may find it extremely difficult to sell products of that kind in that country.

Again I would point out that there is an exception. Undoubtedly we will be able to sell in the United States raw materials of the kind which they need for industrial production there. I can only repeat that no matter how friendly our relationship with the United States may be we should not disregard their success in following a policy of rational self-interest. We should not forget that the reason for the immense success of industrial production in the United States has been that the government of that country has at all times decided that the first concern of the government of the United States was to create employment for the workers of the United States. The reason they were able to absorb such immense immigration into the United States over the past seventy-five years was the fact that they decided that they were concerned first of all with industrial production in their own country. Certainly no one in the United States could possibly criticize any Canadian who said that, while bonds of friendship could not be closer or warmer than are the bonds of friendship between our two countries, we also believe in the same policy and we think that we should use our resources to create employment not only for the Canadians of today but also for those millions of potential Canadians who can come here if we fully employ the resources that we possess.

If we accept that proposition, then our exports to the United States may not be as large in the years ahead, and we may therefore find ourselves in the position of needing export markets and needing them very soon. It is with that thought in mind that I believe we should be exploring every possibility of reviving these traditional markets which are not markets in a country with a production

parallel to ours but are markets in a country which to a very substantial extent has a complementary production and greatly needs the things that we can sell. I am not limiting my arguments to the United Kingdom. I direct them to the whole commonwealth because I believe that there are many types of production that are required in very large quantities in the other nations of the commonwealth.

I think there is one very significant reason why we should be seeking every possible means to reopen and expand our normal export business and to increase trade with the nations of the commonwealth. To the extent that trade is in itself the very lifeblood of our economy in Canada we should be seeking to revive and expand those channels of trade for which our communications are already established. This country grew up as a nation with great communicating lines east and west to the seaports on the Atlantic and the Pacific. Reduce or fail to expand that overseas trade and we not only injure our whole domestic economy and place it in a precarious position because of its dependence upon what happens in the United States but we also reduce the opportunities that should be open to those seaports which were intended and are designed today to carry our trade to the seaports of the world across the Atlantic and Pacific oceans.

These are all reasons why we should be seeking in every way we can to overcome the greatest barrier in the way of the expansion of that trade. I am certain that no one in this house will suggest that we are selling all that it would be desirable for us to sell to the United Kingdom, Australia, New Zealand, South Africa, India, Pakistan or to any other part of the commonwealth or the areas associated with it. Explanations are offered as to why that business cannot be maintained. I find, for instance, that in the Economic Record issued by the United Kingdom information office in April of this year there is a statement which puts forward the official point of view of the United Kingdom with respect to this subject. It reads as follows:

United Kingdom imports have to be cut. . . Britain, would far rather buy more from Canada, not less. It is not because of socialism or nationalization or the incompetence of politicians that cheese purchases have had to be wiped out this year. It is just that the dollars are not there-as simple as that. Canadian buying from Britain is dropping steadily. In 1951 it averaged $31-9 million a month; this year it is running at $22-5 million. That is why British purchasing in Canada is having to be cut further despite the United Kingdom's hunger for the things Canada produces.

3, 1952 2847

Suggested Commonwealth Conference

There is also the recent statement of the minister of food for Great Britain, the Hon. Mr. Lloyd George. He said:

For balance of payment reasons we are regretfully compelled at present to confine our purchases of Canadian food mainly to cereals and flour.

These statements seek to emphasize the fact that there is a dollar shortage in Britain. Efforts are being made to increase the number of dollars available to the British for the purchase of Canadian products. If we are to accept that proposition, then I think there is a gloomy prospect before us in the months and years ahead. Looking back over the records of the years before the last world war we see year after year much larger sales by Canada to the United Kingdom than purchases from them. The reason for that was that while they were buying from us we were buying from other people, and there was a rotation of credits which was a part of the normal financial business of the nations of the world at that time. At that time we had not thought that it was necessary to balance buying and selling exactly between nations. All nations sought to reach some ultimate balance of buying and selling as a total of all transactions. We do not think, however, that we should only be able to sell to any country just the exact amount that country buys from us. If we expect to produce all that we should produce then we should be able to sell to any country the amount that country can buy from us. Otherwise we will be getting very close to the kind of airtight financial compartments which caused so much trouble in the thirties and which, in the minds of some people, contributed greatly to the pressures which caused increasing tension in so many nations before the last world war.

If we can only expect to produce in that way and just sell the same amount as we buy, and this must be worked out in some way with other nations, it would seem that what we are going to do is to arrive at something like barter on the grand scale between nations. It may not be called barter. That barter would involve a great number of individual transactions, but if this is to be on a rigid basis of equal buying and selling then the individual trader, the keen businessman who built up international trade in the past, is going to find himself hamstrung in his efforts to build up trade for his own particular article.

The sooner we get back to the point when free men, trading as free men in the markets of the world-in agricultural products, in industrial products, in any other kind of products-can create their own markets by their own initiative and by their own skill,

2848 HOUSE OF

Suggested Commonwealth Conference the sooner we will get back to the time when free economy will be working in the way it should.

Let us not deceive ourselves. There is no source of wealth except production There is no source of taxation to pay the social services and all the othe~ things that we need in this country except the taxes that can be imposed upon income which depends upon production. That production in turn depends in this country at this time upon maintaining an export of at least one-third of all we produce. It would be well if we could increase that still more-in the highly developed products that we can process and manufacture-whether it be agricultural or industrial products.

We must maintain those exports to maintain our production. We must maintain those exports to maintain the flow of money from which taxes can be drawn to maintain our services in Canada. Therefore, the maintenance of those export markets is the very foundation of the level of the social and other services that we have undertaken to give our people.

There is no easy solution. I hope no one will suggest there can be any easy solution. There is a shortage of dollars in Britain and in the other nations of the commonwealth, but in the past we were able to trade in currencies of different types. We were able to buy our jute in India; we were able to buy cotton in Egypt; we were able to buy bauxite for our aluminum production in other countries using sterling as the basis of exchange. We have been able to buy many of the things not produced in the United States with the credits that we established by our surplus sales to the United Kingdom over our imports from them.

In the same way, by some device, if we are going to return to normal economic methods, we must find some way to establish convertibility of the dollar and pound. It will be said this is a very difficult problem. It will be said this is something the United States with its immense power and means still has not been able to solve. That is so.

The United States is not so dependent upon the solution of that problem as we are. The United States has not the same historic reasons for wanting and for needing the solution to that problem as we have. The United States has a very small export surplus as compared with ours, related to their total production. They want convertibility, I have no doubt of that; but the urgent necessity for convertibility has not impressed itself upon them to the same degree because, to a very large extent out of their immense wealth, they have been able to establish

dollar credits in other countries which are in some measure overcoming currency problems for the time being.

Artificial methods of that kind, however, will offer no satisfactory solution to this difficulty. I should think that every Canadian and every person in the whole free world who understands what has happened will always recognize a debt of gratitude to those in responsibility in the United States for the unparalleled acts of generosity since the close of the last world war which have had so much to do with saving great parts of the world from the threat of communism.

We, undoubtedly, will always be indebted to them for the vision and generosity which prompted them to advance enormous sums to rebuild the devastated areas in the free countries, and for restoring their productive capacity.

We are coming to a time now, however, when we must seek normal methods if we are going to win this economic struggle in which we are engaged. How often do we need to tell ourselves that this struggle in which we are engaged today is just as much an economic struggle as it is a military struggle. We must preserve our economic strength if we are going to be able to maintain the military strength to hold back the threat of communistic aggression and in that way to preserve peace. If we are going to win, by military power, a victory over the threat of communist aggression, then we must win the economic struggle in which we are engaged at the same time. The solution of this problem is one of the objectives that we must attain if we are to win this economic struggle. Unless convertibility of the dollar and the pound is to be restored in some way, it is going to be extremely difficult for us to build, through the whole free world, a strong, normal economic system which will be the lasting foundation of those other efforts which we trust will maintain peace in our time.

With the assurances that have been given by the governments of the western world I am not in any doubt that, if there were in western Europe or in other areas communist military aggression which affected our security, the free nations would find a way to bring their forces together under circumstances that would meet that military threat. Because of the difficulties of hurdling the dollar-pound problem we would not be prevented from putting forward our military effort. We would find some way of getting past dollar-pound convertibility so that our military strength could be brought together in a united effort to defend ourselves against communist military aggression.

If we have meant what we have said when we have stated over and over again that the economic struggle is part and parcel of the whole struggle, we should not know ourselves to be possessed of less vision, less initiative and less courage in tackling the financial problem than we know we would show in tackling the military problem. Certainly it will be difficult. There will be no easy victory in this great economic and military struggle. Whatever the methods are, we should be seeking some solution of this problem of dollar-pound convertibility.

When the suggestion has been made that a full-scale commonwealth conference on trade and on financial affairs be held for the purpose of seeking solutions which will maintain and expand our trade within the commonwealth, I know it is pointed out that there is to this problem no answer that is in our hands but that the answer lies in finding enough dollars in the United Kingdom and in the other nations of the commonwealth. Very often that statement is made as though this were a problem exclusively for attention on the part of the government of the United Kingdom and the governments of the other nations of the commonwealth. I submit, Mr. Speaker, that as we see what is happening to our own export markets in many vital lines of production, we must recognize that this is our problem just as much as it is a problem of the United Kingdom or of any other nation of the commonwealth.

Look at what has happened to cheese export, simply as an example of what is happening in this country today. No dollar figures will help to convince the cheese producer that everything is all right in the export markets at this time. Last year cheese was being sold at 36 cents a pound. Now we are told that it is to be sold at 27 cents a pound, with a 24-cent a pound advance on the price to be paid.

It is not the mere fixing of the price that matters. It is a question as to how much cheese we are going to be able to sell. For one hundred years and more the United Kingdom has been our great market for the sale of cheese. That is the market that has been establishing the basic value of our cheese. Now we find ourselves in the position where that market is not open to us. No floor price or no fixed price that may be established by the government is going to solve this problem.

The question in the mind of the cheese producer is not only "What is the price?" but "How much can I sell?". At the present time it is extremely uncertain how much can be sold. The cheese industry in this country is gravely threatened at this time. That

Suggested Commonwealth Conference industry largely affects the whole dairy industry in Canada because of its effect on other dairy values. Those who have been in the habit of producing large numbers of eggs for the export of egg products are not satisfied, by any statement of dollar totals, that all is well with the export business at this time. Those who have been selling hogs for the purpose of export are not convinced that all is well simply because dollar figures may suggest an extremely large total of exports. In the words of the food minister of Great Britain, at the present time they are forced to confine their purchases of Canadian food mainly to cereals and flour. That is a situation which we must tackle in some way unless the cheese industry and the whole dairy industry in this country are going to be seriously threatened. We all know what has been the impact of the foot-and-mouth disease and what results have followed it. They would not have been so serious had these other markets not been cut off. It is true that very recently the Minister of Agriculture (Mr. Gardiner) announced a quadrilateral deal under which we are to sell certain animal food to Great Britain in an arrangement which has been made between Canada, Great Britain, New Zealand and the United States. That very transaction indicated what can be done when people get together to tackle this problem.

When New Zealand, Canada, Britain and the United States are able to find a solution of this kind, it does suggest that there is some possibility of still wider arrangements, but it would be infinitely better if we could lay the foundation for arrangements that could be made by normal marketing methods, instead of getting into rigid intergovernmental transactions of that kind, which present collateral problems through the very fact that it has been necessary for governments to carry out those transactions.

If we believe in a free economy, if we believe in freedom of trade as free men and women, then surely it is the function of government to seek the methods and the procedure by which we can return to free methods of trading, to the seeking of markets, to the building up of markets by individual initiative, vigour and vision. That is what we should be seeking at this time when we now find ourselves confronted with the necessity of intergovernmental transactions of this nature.

I submit, Mr. Speaker, the very fact that it was possible to enter into a transaction of that kind does suggest the advisability of wider discussions which will seek some method by which we can open out these markets, by which governments can provide

2850 HOUSE OF

Suggested Commonwealth Conference the vehicle tor international trade, instead of becoming the vehicle themselves.

No one, surely, can be in any doubt that if something is not done soon to make it possible to reopen the markets for cheese, for egg products, for other food products, as well as for products of all kinds, the farmers of this country may find themselves in a very serious situation.

No matter what the attitude of the government may have been in the past, I do urge the reconsideration of this whole question in the light of events as they now are, not merely in relation to agricultural products, but in relation to products of all kinds. There are many things that could be done. I know that the Canadian government has made efforts to assist in expanding this trade.

I know that a government agency has done a great deal to increase trade between Canada and the United Kingdom. I know that the dollar-pound board has sought to encourage the movement of exports and imports between Canada and the United Kingdom. I know that there has been recognition of the need for education in regard to the possibility of increased business not only in Canada but in the United Kingdom. It is not only in Canada that efforts need to be made to create the wider understanding of the importance of this movement of production from one country to the other.

Our people undoubtedly need to be impressed with the fact that increased purchases by Canada from the United Kingdom will increase their opportunity to buy from us. Also in the United Kingdom there must be a greatly increased understanding of the importance of a number of factors if they are going to sell in our market. There are great opportunities for sales in Canada of heavy machinery of all kinds. With the tremendous expansion that there is going to be in hydroelectric development in Canada in the years ahead, they could be selling more generators and other electrical equipment here in Canada. They could be selling machine tools of many kinds.

Mr. Howe:

Why are they not?

Mr. Drew:

For one reason that the Minister of Trade and Commerce very correctly pointed out from time to time, namely, that the Canadian purchaser must be assured of delivery and of maintenance of supply. And that was exactly the point I was making, that education is greatly needed in the United Kingdom, and the industrial producers of the United Kingdom in every line of production must realize that if they are going to sell in this country, whether it be electrical equipment, whether it be automobiles or whether it be

[Mr. Drew.l

anything else of that kind, they must give competitive delivery and competitive maintenance.

Mr. Abbott:

And competitive prices, too.