April 10, 1957

LIB

Stuart Sinclair Garson (Minister of Justice and Attorney General of Canada)

Liberal

Mr. Garson:

No, clause 3.

Topic:   AGRICULTURAL PRODUCTS MARKETING ACT
Subtopic:   AMENDMENTS EXTENDING POWERS OF PROVINCIAL MARKETING BOARDS
Permalink

Clause agreed to. Clause 2 agreed to. On clause 3.-Onus.


LIB

Stuart Sinclair Garson (Minister of Justice and Attorney General of Canada)

Liberal

Mr. Garson:

Topic:   AGRICULTURAL PRODUCTS MARKETING ACT
Subtopic:   AMENDMENTS EXTENDING POWERS OF PROVINCIAL MARKETING BOARDS
Permalink

Amendment agreed to. Clause as amended agreed to. Bill reported, read the third time by leave and passed.


UNITED KINGDOM FINANCIAL AGREEMENT ACT

AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST

LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Hon. W. E. Harris (Minister of Finance) moved

the second reading of Bill No. 238, to amend the United Kingdom Financial Agreement Act, 1946.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

Is the minister going to make any comment on this?

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

No, Mr. Speaker; I made a statement on the date of the signing of the agreement, which I think covers all the essential matters of the bill.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. J. M. Macdonnell (Greenwood):

Mr. Speaker, I wish to make a very brief comment on this measure because it seems important and worth while very briefly to recall to our minds the circumstances under which this transaction was first carried out. I wish to read very briefly from what was said by Mr. Ilsley in this house on April 9, 1946, at the time the original agreement was made, in speaking of the circumstances of the granting of the credit and the reason for doing so. I am reading from page 765 of Hansard:

During the five years from 1946 to 1950, the United Kingdom will be going through a period of transition and reconstruction, both in its domestic and in its international economic affairs. In this period it will be endeavouring to revive and establish its export trade, which was so seriously curtailed during the war when all Britain's manpower was mobilized for war service, war production and only the most essential civilian purposes. It will take time for British exports to get back to their pre-war volume, although the progress made over the past few months is encouraging.

And so on. Then, I wish to read a very brief word of my own in the same debate. I am reading from page 776 of Hansard:

As the Minister of Finance has said, one of the aims is that we should give the British a breathing spell; give them a chance to get on their feet;

10, 1957 3395

United Kingdom Financial Agreement Act

give them a chance to pay us this loan, and in doing so be able to increase and increase and increase their foreign trade, so that we shall be able to sell them more and more goods.

When this agreement was originally made it was made on the basis that it was good business for us to assist Great Britain, whom we hoped would become again, as she had been in the past, one of our best customers. The agreement pursued its course until last autumn, when we remember that the British, pursuant to the terms of the original agreement, asked for a waiver. We remember that there was some considerable discussion about the granting of the waiver. They got into some difficulties in the congress of the United States and, as a result, new agreements were entered into which amended the original agreement and substantially altered the rights of the United Kingdom. Instead of having merely the right to ask for a waiver of interest, they were granted the right to several occasions on which they could ask for a deferment, both of principal and interest. That is the agreement we have before us. I wish to read very briefly from what was said in the British House of Commons when the matter arose. On March 6, when the act was passed, Mr. Thorneycroft, chancellor of the exchequer, said this:

In the view of Her Majesty's government these agreements fulfil in a satisfactory manner the aim that appropriate modifications of the language of the existing agreements should be made to carry out the spirit of their original intention.

Under the new arrangements Her Majesty's government will pay all the annuities in full and with interest, even if it claims any deferments. No question can therefore arise of any default on our obligations.

I should like to draw one other thing to the attention of the house. Under the original agreement the right of the British government to ask for a concession depended on a certificate from the international monetary fund, whereas under the present agreement the wording is such that the government of the United Kingdom can reach its own conclusion and make its own request without any reference to the international monetary fund.

I think there are one or two questions that I should like to ask when we get into committee, but I thought I would put on the record briefly what I have said just as a reminder of the background of this legislation.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink

Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Applewhaite in the chair. On clause 1-Agreement approved.


PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

The question I wish to ask the minister is this. Under the original agreement made with the United States in

United Kingdom Financial Agreement Act the autumn of 1945, as I understand it, there was a clause which provided that no other loan agreement should be made with any commonwealth member on better terms than the one made in the autumn of 1945. As a result the action had to be a sort of three-cornered action, United Kingdom, United States and Canada. That arrangement has been carried through; that is to say, our agreement says that the United Kingdom may require this to be done if the government of the United Kingdom defers the payment required to be made in the same calendar year under the financial agreement between the government of the United States of America and the government of the United Kingdom, signed at Washington. The question I wish to ask is this. It would have been more satisfactory, perhaps, certainly in the view of some people, if we had an agreement which was not conditioned on the other agreement. Will the minister explain whether that was really out of the question and whether the agreement had to be carried through on the original three-cornered basis?

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Mr. Chairman, the original agreement, as my hon. friend has said, provided for a three-way understanding, so to speak. That is to say we could not have made an arrangement with the United Kingdom nor could the United Kingdom have made an arrangement with another commonwealth country more advantageous than that being contemplated by the United States agreement. Under those circumstances when there were only three of us concerned and since the original loan was negotiated for a sum of money which represented about the amount that the United Kingdom felt they would require at that time it was made up of a certain sum from the United States and a certain sum from Canada. The problems that have arisen under the two loan agreements have always been common problems and have been considered by the three countries as one.

It is true that there was one matter that was perhaps concerned only with Canada and the United Kingdom rather than the United States but that does not enter into these matters. When the United Kingdom felt that they would be obliged to ask for a deferment or a waiver of the payments due in December they did it on the basis of an emergency, as it were, at that moment, and seized the opportunity to ask for renegotiation of both agreements having in mind that over the period of eight or nine years the situation had changed. It was by an unanimous conclusion, and I think without any consultation, so to speak, that all three countries assumed

they should continue negotiations on a tripartite basis as they always had and to come to a common agreement if at all possible.

Whether or not it would have been possible to negotiate separately is another matter, but as I say none of us thought we should do so. It is true that we did not meet as three persons around a table or anything like that but the negotiations went on with all three parties being aware of the position of the other two parties on every point until an agreement was reached. We felt that that was a proper course; indeed, I think it led to an earlier settlement than any other course that might have been followed would have done. I am satisfied that all three governments feel that this is the proper way to continue the business of the repayment of the two loans.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

Did I understand the minister to say that there was no suggestion from any quarter that it should be on any basis other than a tripartite basis?

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Mr. Chairman, I am sorry but I did not hear the opening words of my hon. friend's question.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

Did I understand the

minister to say that in the renegotiation there was no suggestion from any of the three parties that it should be other than on a tripartite basis as in the past?

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

No, no one suggested that we should deal separately.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
PC

James MacKerras Macdonnell

Progressive Conservative

Mr. Macdonnell:

Am I correct in thinking that this was the first request for any waiver since the commencement of the agreements? Something the minister said made me doubt that this was the case but it had always been my understanding. Is it correct?

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

That is correct.

Topic:   UNITED KINGDOM FINANCIAL AGREEMENT ACT
Subtopic:   AMENDMENT RESPECTING DEFERMENT OF ANNUAL INSTALMENTS OF PRINCIPAL AND INTEREST
Permalink

Clause agreed to. Schedule agreed to. Title agreed to. Bill reported, read the third time and passed.


April 10, 1957