March 15, 1961

RAILWAYS, CANALS AND TELEGRAPH LINES


Fourth report of standing committee on railways, canals and telegraph lines-Mr. Howe.


SUPPLEMENTARY ESTIMATES, 1960-61


A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1961, was presented by Hon. Donald M. Fleming (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.


STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE

PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Hon. Donald M. Fleming (Minister of Finance):

Mr. Speaker, I wish to make a brief report to the house on the meeting of the Canada-United States joint committee on trade and economic affairs which took place in Washington yesterday and the day before.

The United States was represented by Hon. Dean Rusk, Secretary of State; Hon. George W. Ball, under secretary of state for economic affairs; Hon. Douglas Dillon, Secretary of the Treasury; Hon. Henry R. Fowler, under secretary of the treasury; Hon. Luther H. Hodges, Secretary of Commerce; Hon. Stewart H. Udall, Secretary of the Interior, and Hon. Orville L. Freeman, Secretary of Agriculture. The United States delegation also included Hon. George C. McGovern, coordinator of the food for peace program.

The Canadian government was represented by my colleagues the Minister of Trade and Commerce, the Minister of National Revenue, the Minister of Agriculture, and myself. The Canadian delegation also included the under secretary of state for external affairs, Mr. N. A. Robertson, the Canadian ambassador to the United States, Mr. A. D. P. Heeney, and officials of the various departments.

This was the first meeting of the committee since the new United States administration took office. The Canadian ministers were anxious that the United States members 90205-6-190

should view individual problems in the context of the entire framework of economic relations between our two countries. Accordingly we took the occasion to review at some length the Canadian economic situation and to show which features of our situation were common to both countries and which features were different. Both countries, for example, have shared the same experience of a slowing down of growth and of high levels of unemployment. We reviewed together the measures both countries had taken to stimulate greater economic activity, and we were agreed that an expansion of growth would result.

Both countries have had special problems related to the balance of payments. In this respect, however, our problems in Canada have been somewhat different from those of the United States. It was valuable to have an opportunity at this meeting to explain these differences to our United States colleagues and to analyse features of our balance of payments along the lines I followed in this house when introducing the supplementary budget last December.

The United States balance of payments was examined in the context of the world financial situation. As hon. members are aware, there have been serious problems of international imbalance associated with short term capital movements. Now that the major currencies are convertible and capital moves more freely it is clear that the industrial countries of western Europe and North America will have to continue and improve their methods of consultation about the economic policies of individual countries as they may affect others. We believe that the organization for economic co-operation and development will provide a very useful forum for such consultation.

It was clear from our discussions this week that the members of the committee are in broad agreement that the 1960's will produce new and rather different problems from those both countries have faced in the past. The great expansion of the economies of the western European countries is presenting a competitive challenge to both the United States and Canada. We found that the United States side attached great importance, as we do ourselves, to ensuring that the development of regional trading groups and any arrangements between them do not restrict the traditional access of North American exports

Canada-U.S. Trade Committee to the markets of western Europe. The committee agreed, especially, that in the current tariff negotiations at Geneva the six countries of the common market should assure that access. Canadian ministers were particularly gratified to learn that the new administration would continue to co-operate closely with Canada in pressing the Six for a satisfactory settlement in GATT with respect to trade in agricultural products.

The relations of Canada and the United States with the Six and the Seven will be of the greatest importance in the years to come. The establishment of the new O.E.C.D. will provide a framework in which Canada, the United States and their European partners will be able to examine and discuss each other's policies with respect not only to trade and economic matters but also to the vital task of assisting the less developed countries. I was able to report to my United States colleagues that Canada was the first country to complete parliamentary approval of the O.E.C.D. convention, having done so by unanimous vote of both houses, and Canada is now in a position to ratify.

In the meetings this year special attention was also given to the problems facing the underdeveloped countries. I am confident that the long-standing co-operation between the two countries in this field will be continued and indeed strengthened. I was struck by the conviction within the committee that the developed countries, particularly those with surpluses to invest abroad, must find satisfactory and equitable means to respond to the needs of the developing countries, and above all defeat the threat of poverty and starvation in so many parts of the world.

Ideas and actions, some of which are developing and others of which are planned in connection with the use of food to help raise levels of consumption and standards of nutrition were discussed, including the latest developments in the United States food for peace program. The United States indicated support for multilateral arrangements such as the Canadian proposal for a world food bank, which they had joined in sponsoring before the United Nations general assembly last October .This proposal is at present being given detailed study by FAO and it is expected that recommendations for appropriate action by governments will be forthcoming later this year. Other points relating to agreement on the continuation of close consultations to ensure that present and potential commercial markets for food products are not disrupted are recorded in the communique and I need not repeat these at length. I may say, however, that Canadian ministers were very pleased to receive from the new administration such a clear undertaking in this regard.

The committee also discussed a number of matters less general in scope but of direct importance to trade and economic relations between our two countries. Measures taken by Canada since our last meeting were reviewed. In this regard I had the opportunity to give a full explanation of the proposals put before parliament in the supplementary budget, notably its tariff and tax provisions. As a result of our useful discussions on this subject, I believe our United States colleagues have a full understanding of these proposals.

Canadian ministers raised a number of points bearing on our exports to the United States, such as import restrictions on agricultural products and on lead and zinc, certain customs problems, and the difficulties raised for Canada by the United States export subsidy on cotton manufactures. As a result of these exchanges of view I believe the United States members of the committee should have no doubt about the difficulties faced by Canadian exporters as a result of United States policies in these fields.

This meeting of the joint committee provided a welcome opportunity for Canadian ministers and the new United States secretaries to meet each other and gain a clear understanding of points of view in both countries. This meeting, like previous meetings of the committee, was characterized by the utmost frankness and friendliness.

Following the meeting my colleagues and I had the honour of being invited to call on the President with whom we had a most interesting talk. This meeting afforded an opportunity for further discussion of trade and economic questions and of the visit of the President and Mrs. Kennedy to Ottawa, which is awaited by Canadians with pleasant anticipation.

Mr. Speaker, may I table for the information of the house a copy of the communique which was issued at the conclusion of the committee meetings. If it is the wish of hon. members perhaps it could be printed as an appendix to today's Hansard.

Topic:   STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE
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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Is it agreed that the communique be printed as an appendix to Hansard today?

Topic:   STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE
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?

Some hon. Members:

Agreed.

[Editor's note: For text of document above referred to, see appendix A].

Topic:   STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE
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LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Hon. L. B. Pearson (Leader of the Opposition):

Mr. Speaker, I am sure all hon. members will have listened with interest to the minister's statement. Although we have not had the advantage of seeing the communique which presumably was issued yesterday and which has now been tabled, nevertheless from the minister's statement

and from press reports-especially, I may add, the latter-we are able to get a picture of the meetings that have just taken place in Washington.

The minister in introducing his statement said it had been decided that the individual national problems between the two countries would be considered within the framework of international economic policy. It is perfectly clear from the minister's statement that more attention was given to the framework than to the picture, because the communique deals almost entirely with international economic policies and the views of the two governments in respect of them.

In so far as the minister's statement dealing with these matters is concerned, it is satisfactory to note that the two governments are in general agreement on the usefulness of O.E.C.D., which is apparently to be pretty carefully restricted to consultative matters on the desirability of further progress being made in the discussions now going on through GATT and the desirability of co-ordinating policies in respect of international agricultural disposal matters. It is all to the good that the two governments should try to reach agreement on these matters, and that agreement, though in very general terms, seems to find expression in the communique so far as we can judge from the minister's statement.

The minister made little reference to individual problems between the two countries. However, we learned from the press that they had come up and the minister indeed did mention that fact, and that there was an exchange of views in regard to them. I would have hoped that there would be no hesitation on the part of the Canadian representatives to take up with the United States governmental representatives such questions as national oil policy, the United States policy on base metals and the policy of that country in giving additional contracts at this time to their uranium producers when only a year ago they told us there was a surplus of uranium and that was why they had to refuse to take up their options on our uranium.

I would have hoped, Mr. Speaker, that the government would make the position of Canada perfectly clear in these matters. We learned from the press-the minister did not confirm the fact this afternoon, though he did mention it-that the United States ministers challenged the assertion that the new class or kind provisions did nothing to contravene Canada's obligations under GATT, thereby confirming the view that we on this side take about these provisions.

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Mr. Fleming (Eglinion):

No.

90205-6-190i

Canada-U.S. Trade Committee

Topic:   STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE
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LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

These ministerial meetings, which have been going on now for six years, are valuable; they are useful and additional machinery between the two countries. In the exchange of views that takes place at these meetings not only are individual problems discussed but ministers on both sides of the border are given a chance to get acquainted generally with each other's points of view. I am sure that at this time this is particularly valuable because of a new administration in Washington. We are told in the press that as a result of this meeting Canadian ministers will now be able to take up the telephone and get in touch with their opposite numbers in Washington. Judging by the communique and the minister's statement, I would say that has been the main achievement of the meeting.

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CCF

Hazen Robert Argue

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

Mr. Hazen Argue (Assiniboia):

Mr. Speaker, the minister said in his statement there was broad agreement between Canada and the United States that the 1960's would produce new problems. I think that is a conclusion that we all were aware of in advance. The minister has outlined a number of problems, but there is no indication in his statement that there has been any conclusion as to the solution for those problems. However, the minister did say that in dealing with the inner six, Canada and the United States would continue to co-operate in pressing on the inner six the need for a satisfactory settlement with regard to agricultural products being imported into that area. We can only hope that this pressure will be successful. Instead of a forward step in obtaining extra markets or increased markets for our products, what it really means is just holding the line.

The minister went on to talk at some length about the problems and the possibilities of expanded sales of Canadian food products and the whole question of economic assistance. There seemed to be no agreement following these discussions. There seems to be no agreement that Canada will have a peace corps. We ourselves are going to do nothing to increase economic assistance by way of a greater provision of food products. There was an assurance from the United States, which we are glad to receive, that that country will not interfere with our normal commercial markets for food products. That leaves beyond decision the whole field of non-commercial markets into which the United States has moved in a very big way.

The minister said that after speaking to the Americans he has come to the conclusion that they have a full understanding of Canada's tariff proposals. I am not sure

Canada-XJ.S. Trade Committee whether this is good or bad, Mr. Speaker. It might result in some very severe retaliation. I am sure the Americans will thank the minister for his information and instruction.

There has been no settlement of many outstanding problems such as the whole question of the disposal by the United States of its agricultural surpluses in non-commercial markets, the problem of exports of oil from Canada and so on. No doubt there was a very welcome exchange of ideas. The minister talked of a friendly and frank approach. The minister and his colleagues have had so many laudable things to say about the new United States administration that we had really hoped they would have been able to achieve more concrete results.

On the orders of the day:

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L L

William Moore Benidickson

Liberal Labour

Mr. W. M. Benidiclcson (Kenora-Rainy River):

Mr. Speaker, I should like to address a question to the Minister of Finance. I wonder whether in his two-day visit to Washington he had an opportunity to observe the apparent accord and concert between the President of the United States, his new administration, and the chairman of the federal reserve bank, Mr. Martin, aimed at a reduction of interest rates and acceleration in the pick-up of the economy. If so, does he intend to seek similar harmony in this country?

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PC

Donald Methuen Fleming (Minister of Finance and Receiver General)

Progressive Conservative

Hon. Donald M. Fleming (Minister of Finance):

Mr. Speaker, the subject of the relations between the government and the central bank did not enter into our discussions yesterday. I happen to be well acquainted with Mr. Martin, the chairman of the federal reserve bank of the United States, and I think I have some familiarity with the policies that have been followed in the United States in the monetary field.

I think there is no occasion in this situation for casting aspersions or throwing brickbats about in the Canadian field. The fact is that the situation in this regard is precisely as I indicated to the house in a recent discussion of the matter. When the hon. member talks about the program of the new administration in the United States, I should add that there was some little discussion on that matter; attention was drawn by the Canadian ministers to the close resemblance of the program submitted to congress by the President of the United States to that already submitted to this parliament by the government in the speech from the throne read on November 17 last.

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LIB

Lester Bowles Pearson (Leader of the Official Opposition)

Liberal

Mr. Pearson:

That must have made them laugh.

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L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

I should like to ask a supplementary question. The minister has referred to some similarities. Did he also notice the gap between the basic interest rates prevailing in the United States and the basic interest rates in this country?

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PC

Daniel Roland Michener (Speaker of the House of Commons)

Progressive Conservative

Mr. Speaker:

Order. I am sure the hon.

member is asking for information which is equally available to all members of the house.

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EXTERNAL AFFAIRS

PC

Howard Charles Green (Secretary of State for External Affairs)

Progressive Conservative

Hon. Howard C. Green (Secretary of Slate for External Affairs):

Mr. Speaker, members of the opposition seem to be very hard to please this afternoon, and I am hoping they will not receive my announcement in such a manner. I am pleased to announce the appointment of Mr. H. F. Feaver as Canada's first ambassador to Tunisia. Direct diplomatic relations have, of course, existed between Tunisia and Canada since September 9, 1957, when His Excellency Mongi Slim, presented his credentials as first ambassador of Tunisia to Canada. The appointment of Mr. Feaver will complete the diplomatic connection with a country whose role in international affairs is one of great and growing importance and with which we have enjoyed particularly effective co-operation at the United Nations. As a matter of fact, Tunisia has made an enviable reputation as a member of the security council during the current year.

Hon. members will recall that Mr. Feaver's appointment as ambassador to Switzerland was announced last month. His present appointment to Tunisia will mean that he will concurrently represent Canada in that country as well. Although his normal residence will be in Berne, he will pay frequent visits to Tunisia.

Mr. Feaver, a native of Nova Scotia, has had a long and distinguished career with the Department of External Affairs both at home and abroad since 1930. He has served in Washington, Tokyo, London and The Hague. He was Canadian minister to Denmark from 1954 to 1956 and Canadian ambassador there from 1956 until his return to Ottawa in August, 1958, where he has since been chief of protocol.

At the same time I should like to announce that for some time it has been the government's hope that it would be possible to establish some Canadian diplomatic representation in Iraq. Discussions to this end have recently been taking place with the Iraqi government. I am pleased to inform the house that it is the government's intention to accredit to Baghdad Mr. Paul Andre Beaulieu, Q.C., the Canadian ambassador to Lebanon. Under this

dual accreditation arrangement, Mr. Beaulieu will continue to maintain his residence in Beirut but will, of course, be in a position to pay regular and frequent visits to Baghdad as well.

Mr. Beaulieu was born in Outremont, Quebec, was educated in Montreal and practised law there prior to the war. He joined the Department of External Affairs in 1940 and has since seen service in Washington, Paris, London and Boston, where he was consul from 1949 to 1951. He was originally appointed charge d'affaires of the Canadian legation in Lebanon in April, 1958, and became ambassador there in October, 1958, when the status of the mission was raised to embassy.

Mr. Beaulieu's appointment will demonstrate Canada's recognition of the increasingly important role which Iraq is playing in international affairs and the growing need for closer relations between our two countries. This appointment also is one of several, of which the Sudan, I hope, will be another, intended to strengthen Canada's representation in Asia and Africa.

Topic:   STATEMENT ON SIXTH MEETING OF JOINT CANADA-U.S. COMMITTEE
Subtopic:   EXTERNAL AFFAIRS
Sub-subtopic:   TUNISIA AND IRAQ-AMENDMENT OP CANADIAN DIPLOMATIC APPOINTMENTS
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March 15, 1961