Clause 3 of the bill refers to certain tariff items which appear in schedule B, and which are to become part of schedule A to the act, if it is passed. I would refer particularly to item 207c which refers to ethylene glycol and mixtures of ethylene glycol and other glycols in which ethylene glycol predominates, for use in the manufacture of antifreezing compounds. In the rate schedule there is shown a proposed British preferential tariff of 10 per cent, a most favoured nation tariff of 10 per cent, and a general tariff of 25 per cent.
When we were on the budget resolutions a few days ago I raised this question with the Minister of Finance and inquired why he proposed to place tariffs of 10 per cent and 25 per cent on an article or commodity which hitherto has had free entry. As I understand it, if it has been imported for the purpose of making explosives it has been on the free list since 1926. Since 1939 it has been on the free list for both antifreeze and explosive purposes. It is proposed to leave the ethylene glycol to be used in the manufacture of explosives on the free list, but to impose tariffs of 10 per cent and 25 per cent on the glycol used in the manufacture of antifreeze.
When I inquired of the minister as to the reasons for that, he expressed the preference that this question should be left until the bill was before the house. In order to accommodate the minister I did that. Now that the bill is before the house it is important that we give due consideration to this rather major change.
It is a major change in two respects, Mr. Chairman. In the first place it involves a commodity which is very widely used in Canada, particularly in the agricultural parts of Canada and perhaps more particularly on the prairie provinces, where antifreeze is a commodity that is used not only for domestic purposes by those who own automobiles and so forth but is also used in tractors, combines, trucks and all other vehicles that have to be
exposed to below freezing temperatures. It is easy to imagine the great effect it might have on the price of antifreeze if this protection gives the Canadian manufacturers of antifreeze, or of the base product, ethylene glycol, an opportunity to raise their prices unduly.
I have gone over the tariff board hearings on this question, as suggested by the minister, and I am not too sure that we come to the same conclusions. Quite obviously we do not, because I am opposed to the imposition of this tariff. Apparently the minister is in favour of it. On going through the hearings before the tariff board we learn that there were originally two companies that made representations calling for the imposition of a tariff. Up until November, 1954, the two companies interested were the Dow Chemical Company of Canada and the Dominion Tar and Chemical Company of Canada. There was a slight change in the line-up in November of 1954, because Union Carbide Canada, which is a subsidiary of Union Carbide of the United States, purchased the plant owned by the Dominion Tar and Chemical Company in Montreal East, and then of course became directly interested in this product.
What is the result? Representations were made actually by three companies, but as a matter of fact there are only two companies now which are in a position to manufacture ethylene glycol in Canada. In addition to that, I am given to understand that Dow Chemical itself is a subsidiary of a United States company, which is Dow Chemical of Midland, U.S.A. So here we have the situation that at the present time two companies, both subsidiaries of parent companies in the United States, appear before the Canadian tariff board to argue for the imposition of a tariff on the base used in the making of antifreeze.
What are they asking? I turn to the evidence again, and I should like to read from the words of their own representative to show what they are actually doing. On page 55 of the evidence of October 5, 1954, Mr. W. T. Wood, who appeared for Dow Chemical Company of Canada, is reported as having given the following evidence. The chairman asked him the following question with reference to the brief which had already been presented:
I see these words "rightful share of the domestic market". If your cost is 17 cents (that is per pound) and the United States is 10 cents, and the tariff were such as to bring the laid down cost of the American product to 17 cents then you would have the entire market.