July 10, 1956

LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe (Port Arthur):

I said nothing of the kind. I said I had no authority to stop it. The reason I had no authority to stop it was that the opposition prevented me from passing legislation which would permit me to do so.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Thank heaven for the opposition!

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

The minister did not make any attempt to stop it when he had the authority. I believe he has authority to stop it under the Export and Import Permits Act.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe (Pori Arthur):

You had better read the act again.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

The minister does not want to do anything about it; that is the trouble. Bast night he spoke about iron ore and the fact we were producing so much we had to export most of it. That is not the position on the west coast at all, although it may be in the eastern part of Canada.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe (Pori Arthur):

Does my hon. friend challenge my statement that I have no authority to stop this export.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Certainly.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe (Pori Arthur):

Well, you are quite mistaken.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Mr. Speaker, I hope you will allow me time for all these interruptions by the minister.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

John Whitney Pickersgill (Minister of Citizenship and Immigration)

Liberal

Mr. Pickersgill:

But not for provoked interruptions.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Oh, don't you pop up.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

John Whitney Pickersgill (Minister of Citizenship and Immigration)

Liberal

Mr. Pickersgill:

I do not take up as much time as the hon. gentleman.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

Your interruptions are not very impressive, and I would advise you to keep out of this debate.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

John Whitney Pickersgill (Minister of Citizenship and Immigration)

Liberal

Mr. Pickersgill:

If the hon. gentleman has anything to say about immigration, I will reply to him.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

So farms iron ore is concerned, the minister is evidently interested only in selling this abroad.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Jean Lesage (Minister of Northern Affairs and National Resources)

Liberal

Mr. Lesage:

You had better talk to Mr. Duplessis about that. Ask the hon. member for Three Rivers (Mr. Balcer) about it.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
PC

Howard Charles Green

Progressive Conservative

Mr. Green:

I am getting a lot of help here, but unfortunately it is not much good. I should like to read to the minister an extract from a speech made by Dr. Hume with regard to the processing of iron ore in Canada. This speech was made on March 9, 1953. He said:

No one needs to minimize the difficulties of research directed towards the processing of this ore to the pig iron stage at or close to the point of origin.

He was referring to the Quebec-Labrador ore.

But perhaps a really concentrated effort on the part of Canadian metallurgists and scientists would seem important at the present not only to investigate much more fully possible methods of treatment but if present methods are totally unsuited to conditions as we have them, to devise new methods, an accomplishment surely not beyond Canadian inventive capacities.

Then he said:

It is suggested as not beyond the possibilities of our research scientists to find ways and means in

Natural Resources-Development Canada to utilize electric power and iron ore occurring together in the same area to at least effect a partial processing which would be of immense benefit to this country. The Ontario research foundation has been doing excellent work on the study of iron and our mines branch at Ottawa has a number of scientists well versed in the technology of treatment of all kinds of ores. Thus well directed efforts might accomplish much toward reducing our iron ore to the metal before shipment outside Canada . . .

It is not my intention to advocate extreme views in this regard but even a partial solution would bring great additional wealth to this country and show that we are capable of handling our heritage for the welfare of our nation with not only great credit to ourselves but perhaps by discovering new processes we might bestow great benefits on mankind as well.

And then he said:

There is no reason, however, to hesitate to tackle the problem because it is hard and with hundreds of millions of tons of iron ore in sight with mining on a large scale assured for many years a success promises rich rewards nationally.

Then just this year Mr. P. E. Cavanagh, director of metallurgy of the Ontario research foundation, had this to say:

... it appears certain that most of this iron ore will be exported to the United States and Europe.

In this situation it is proper for us to consider means of converting some or all of this Canadian ore into semi-finished or finished products here in Canada. Several proposals for establishing new steel industries in Canada to use large tonnages of this iron ore have already been advanced.

So much for iron ore, Mr. Speaker. Then another example is in the production of heavy water. Canada's whole atomic program is based on the use of heavy water. We are giving a reactor to India and we hope to sell reactors to other nations based on heavy water. For some years there was a plant manufacturing heavy water at Trail. It is true it was owned by the United States but Canadians learned how to manufacture heavy water there. A few months ago that plant was closed and now Canada gets all her heavy water from Savannah, Georgia, the only heavy water plant on this continent. Talk about concentration of nickel and the dangers of concentration-there is the only heavy water plant and this Canadian government has apparently made no attempt whatever to have heavy water produced in this country. We are going to require a great deal of it in the future with new reactors and with the development that takes place, but no move has been made to produce our own heavy water. I might go on to deal with other products, other resources, but my time is running out. I think those will suffice as an illustration of what we have in mind.

Then, the amendment mentions the correction of the present serious unfavourable trade balance. If we process our own resources to a greater degree, that of course would go

5836 HOUSE OF

Natural Resources-Development some way towards meeting this problem of an adverse balance. I suggest also that we should stop this bowing to Washington at all times. This course has been followed by this government ever since the end of the second war. They hurriedly adopted United States arms for our defence forces to just as great a degree as they possibly could. This attitude has been carried on ever since.

The other day the minister announced the changes that had been made in the GATT agreement. He pointed out that the United States had made concessions to Canada, and that they had benefited and that we had benefited. The Montreal Gazette punched a hole in that argument very neatly when they said that concessions on an equal basis would be all right if our trade were anything like on an equal basis, but it is not. Before the government starts cheering too loudly about getting equal concessions from the United States under GATT, I suggest that they should take into consideration some way of bringing trade between the two countries more nearly into balance.

At the same time as there has been this bowing and scraping to Washington, we have had an indifference towards commonwealth preferences. Of course, these preferences were fought tooth and nail by the Liberals in 1932. That party, now in power as the government, had no use for them. The former minister of national defence expressed the attitude of the government very clearly when he was questioned in the house about preferences on October 12, 1949, and the late Tommy Church asked him this question at page 705 of Hansard:

May I say to the hon. gentleman that the proposal also hangs preferential trade on the sour apple tree, like John Brown's body.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
?

Brooke Claxton

Mr. Claxton:

That is a good place for it too.

Our own Prime Minister, speaking here on June 22, was asked by the hon. member for Prince Albert whether he would be opposed to any extension of the British preference. This is the Prime Minister's answer, as recorded at page 5284 of Hansard:

That is not correct as a general statement. The matter will have to be considered in all its aspects and of course in the light of its possible repercussions upon the general tariff and trade arrangements which are still in force and which have proved to be of quite substantial benefit to Canadian trade.

The Prime Minister obviously is not very much interested in the preferences, and I think the Minister of Trade and Commerce is even less interested than the Prime Minister. Canada should be buying more in the commonwealth and less in the United States, but there is very little indication of a policy of that kind being adopted.

Finally, the amendment proposes that wider financial participation by Canadians in the development of Canadian resources should be fostered. Even the members of the government admit that this situation should be remedied, but what do they propose to do about it? So far, we have heard no proposal which would meet that situation. Tax exemptions? No, not a word about that. Tax reductions? Oh, no, they are holding off the reduction in taxation in order to help them win an election next year, although there are surpluses now in the moneys coming into the treasury.

Perhaps this is the most important point of all, because here is a case where a vision could be held out before the Canadian people, a vision of Canada for Canadians. The president of the University of British Columbia summed up the picture very neatly when he spoke in Rochester, New York, about a month ago. President Norman A. M. MacKenzie is not a politician, is not a partisan in any sense of the word. He is one of the outstanding Canadians today. Here is what he told an audience at the University of Rochester:

He said Canada is delighted to have United States capital in the country.

But "some of us like being Canadians and want to remain Canadians, and we are not unaware of the influences and pressures infiltration and intervention of this kind bring with them and imply".

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Edward Turney Applewhaite (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Applewhaiie):

Order. I am afraid I must advise the hon. member that his time has expired. I have allowed some time for the interruptions which occurred.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink
LIB

Anton Bernard Weselak

Liberal

Mr. A. B. Weselak (Springfield):

Mr. Speaker, I have listened with considerable interest to the speeches which have been made in the course of this debate. The amendment urges this government to take such steps as will ensure the greater processing of our raw materials in Canada. A great deal has been said in the course of this debate regarding the trade deficit which Canada suffers from at the present time in her trading relations. I think it is only common sense to recognize that any country which is experiencing the industrial development and expansion which Canada is experiencing today requires a great deal of specialized equipment, tooling equipment and other items to expand her industrial potential. I think a striking example of this is the pipe which is being imported into Canada at the present time for the construction of the trans-Canada pipe line which eventually will add a great deal to the industrial development and indeed to production in this country of ours.

In discussing the trade deficit a great deal has been made of the statement that Canada

is suffering an increasing trade deficit as a result of her trading relations. Very little has been said in the course of this debate about the increase in exports which this country is experiencing throughout the world.

In the mail this morning I received the dominion bureau of statistics daily bulletin for Monday, July 9, and the first paragraph makes interesting reading as far as this debate is concerned. The section is headed: Domestic Exports in May Reached Record Value and Volume

The article states:

Canada's domestic exports reached an all-time high record total for a month of $428,501,000 in May, topping last year's May total of $367,100,000 by 16-7 per cent and bettering the previous monthly peak of $411,700,000 in June, 1953 by slightly more than 4 per cent, dominion bureau of statistics reports in its monthly summary. In the first five months of this year exports to all countries advanced 11-6 per cent to $1,846,300,000 from $1,654,200,000 a year earlier. The volume of exports, also a record, rose 12-5 per cent in May and 7-9 per cent in the 5-month period, while prices averaged 3-8 per cent higher in May and 3-4 per cent in the cumulative period.

I submit, Mr. Speaker, that these export figures indicate an expansion in our industrial economy which is going forward apace.

On the second page of this bulletin are some rather interesting figures in so far as the group values of exports are concerned. These figures are given in millions, with comparisons for the same period last year. Agricultural and vegetable products, $358 million as compared with $297 million last year; animals and animal products, $102 million as compared with $101 million last year; fibres, textiles and products, $8 million as compared with $7 million last year; wood, wood products and paper, $612 million as compared with $597 million last year; iron and products, $154 million as compared with $128 million last year; nonferrous metals and products, $356 million as compared with $326 million last year; non-metallic minerals and products, $110 million as compared with $71 million last year; chemicals and allied products, $98 million as compared with $92 million last year; miscellaneous products, $44 million as compared with $32 million last year. Across the whole range there has been a substantial increase in our exports in the 5-month period this year as compared with last year.

Then, if we look at the main commodities themselves which are entering into our export trade, I think we can get some idea as to what percentage of those commodities form the raw materials to which the Leader of the Opposition has made reference. At the top of the list we have newsprint paper, a fully processed commodity. We find that in the 67509-371

Natural Resources-Development 5-month period of this year exports of this item have increased from $267 million to $290 million. Wheat, which is incapable of processing, and is generally shipped in its natural state, has increased from $134 million to $191 million. Planks and boards dropped slightly from $151 million to $131 million. Wood pulp, which is capable of further processing, increased from $118 million to $125 million. Nickel increased from $89 million to $93 million. Copper and products increased from $59 million to $85 million. Aluminum and products dropped from $88 million to $80 million. Fish and fishery products rose from $45 million to $46 million. Farm machinery and implements are at the same figure, $42 million.

In this whole range of products which are set out on this sheet, actually the only products which are capable of further processing are wood pulp, nickel in some instances, copper in some instances, zinc in some instances and iron ore. These are our main export commodities, and a very small portion of them is made up of commodities that are capable of further processing in Canada. In this respect, Mr. Speaker, I would like to make some comparisons between 1939 and 1954.

It is true that in this 15-year period our exports of raw materials increased by 288 per cent but alongside this export of raw materials we find that in this period the index on durable manufactures rose from 107-9 per cent to 297-9 per cent or an increase of 277 per cent, which is less than the increase in our export of raw materials. The index on non-durable manufactures rose from 108-2 to 222-4 or an increase of 206 per cent. I think these figures indicate that where it has been economically feasible secondary industries have been established in Canada at a pace which compares favourably with the increase in our exports of raw material.

If we look at the exports we find that exports of partially and fully manufactured goods have risen in that period from $511 million to $1,846 million or an increase of 361 per cent which is far in excess of the percentage increase of our export of raw materials. Our total export of raw materials in 1954 amounted to $1,082 million. It is interesting to note that of this total figure 75 per cent comprises agricultural and other products which are generally exported in their natural and unprocessed state. The remaining 25 per cent or roughly $304 million were mineral and forest products which are quite capable of further processing.

In the same period in 1954 we imported $473 million worth of raw materials of the

Natural Resources-Development same category and this figure indicates, as the Minister of Trade and Commerce and other speakers have stated, that we are a net importer of raw materials to the tune of roughly $170 million in the year 1954 and not net exporters.

The official opposition in this house has advocated that a policy be adopted by this government of encouraging the maximum processing of raw materials within this country. In the course of the speeches which we have heard I do not think that any definite statement has been made by the Conservative opposition as to how they would achieve this end or just what actually would be done by them, should they form the government, to increase the industrial production in this country. However, I recall that the manufacturers' association of Canada were not quite as wary as the Conservative party concerning what means they would suggest be employed to achieve this end. They stated point-blank that they felt the tariff structure in this country was not such as to encourage the expansion of secondary industries. I believe the figures I have quoted indicate there has been a progressive expansion of industry in Canada and that industries have located themselves in this country where they have found it profitable to do so.

I do not think that in this country there is a lack of businessmen with sufficient foresight that where an industry can be established within the country which can compete with other industries in the home and the world market any opportunity would be overlooked by those businessmen to establish such an industry within Canada.

If the only answer lies in the suggestion of the manufacturers' association, then the work which has been done over the past 25 years in encouraging international trade would be lost. In addition to that we would create in and for Canada a state of economic isolation. We would try to reach absolute self-sufficiency at the cost of isolating ourselves from the trading markets of the world. I submit, Mr. Speaker, that if we were to follow that policy we would be going against the record of history. A reading of history indicates to me that in 1930 this method was tried. We tried to isolate ourselves from the other markets of the world and endeavoured to create tariff walls to prevent other people from bringing their goods into this country in competition with our own industrial development. The government of that time no doubt sincerely felt this was the answer, but before its reign was over it found this was

[Mr. Weselak.J

not the answer, and in 1932 the British preferential tariff was brought in in an effort to open the markets of the world to our primary production.

In 1935 the Liberal government came into power and in 1937 a statement of policy was adopted by Mackenzie King in which he stated that this party would bend every effort toward breaking the shackles which prevent free international world trade. I think this government has done that because in the period during which it has been in power protective tariffs in Canada have been reduced by close to 40 per cent and during that period our trade relations with other countries have increased tremendously and our exports have also increased proportionately. By adherence to GATT and bilateral agreements with such countries as Japan and the U.S.S.R. we have opened new markets particularly for our farm products and we expect these markets will be of great benefit to us in the future.

If we were to follow the suggestion of the opposition to its logical conclusion, it would appear to me we would have no alternative but to create an atmosphere wherein we would establish in this country uneconomic secondary industries which would not be capable of competing in the world markets without a certain amount of subsidization or protection. I suggest that the creation of this atmosphere would have an adverse effect upon the economy of this country. If we were to use protection as a means of achieving this end we would soon find we would lose our markets throughout the world.

As has been aptly said, trade is a two-way street. We must buy a certain amount from other countries in order to receive an open port into their markets, and I think this experience is illustrated by the bilateral agreements which have recently been concluded with Russia and which two years ago were concluded with Japan. On the other hand, if we were to try to subsidize these markets we would of necessity have to tax the people in order to meet the cost of such subsidization. If we were to sponsor or force uneconomic industries to establish themselves in this country we would possibly, as I have said, lose our world markets. We would be restricted to our own local markets and as a result we would naturally have to restrict our primary production because we would have no market for it.

This is a serious thing to us in western Canada. Our primary production through agriculture in western Canada is very great. We are dependent for approximately 70 per cent of our production in grain or foreign

markets, particularly in wheat. The expansion of the discovery of raw materials in western Canada has been encouraged by the markets which have been made available for these products and the effect of the development of raw resources in the western provinces is that there have been established service industries and other light industries which are required to service the raw material industry which has been developed as the result of the discovery of such materials, and they are continuing to develop and establish themselves in those particular provinces.

In my own constituency we have a very large pulp and paper mill which is dependent practically completely upon foreign markets. We have recently had brought about mineral developments in the Bird river and Cat lake areas where many metals are being discovered and which are presently being developed and mine shafts being sunk. If we were to adopt the policy of restricting our exports I am sure that these industries would definitely suffer. In my view, this proposition which has been put before the house should be scrutinized very closely. It has many implications which, if carried to their logical conclusion, would certainly have a serious and bad effect upon the economy of the country.

Topic:   TABLE I
Subtopic:   SUMMARY OF ESTIMATED EXPENDITURES ON RESEARCH BY FEDERAL GOVERNMENT
Permalink

July 10, 1956