May 11, 1965

PC

Georges-J. Valade

Progressive Conservative

Mr. Georges Valade (St. Mary):

Mr. Speaker, I have a question for the Prime Minister which concerns the three points of privilege stated yesterday by Members of this House on the Government side, namely the hon. Member for St. Lawrence-St. George (Mr. Turner), the hon. Member for Notre Dame de Grace (Mr. Asselin) and the hon. Member for Lafontaine (Mr. Lachance). In view of the questions of privilege which were raised, which will very seriously endanger the reputation of the House and the Party in power, I am wondering whether the Prime Minister will consider referring the whole matter to a special investigating committee, as was done with the N.D.P. accusations of electoral fraud, and whether he would not consider taking this step so as to justify his own Members and clear this House from any bad reflections this matter could have.

May 11, 1965

Topic:   QUESTIONS OF PRIVILEGE RESPECTING CAMPAIGN CONTRIBUTIONS BY HAL BANKS
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LIB

Lester Bowles Pearson (Prime Minister)

Liberal

Right Hon. L. B. Pearson (Prime Minister):

Mr. Speaker, it was not a matter, as I understood it, which concerned the party in power. The matter concerned certain Members of this House, raising questions of privilege. This refers to information supplied to Members by certain other persons, and I do not think it is a matter of concern for the Government at all.

[DOT] (4:20 p.m.)

The House resumed consideration of the motion of Mr. Mcllraith for Committee of Supply, and the amendment thereto of Mr. Douglas.

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FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT

LIB

Herbert Eser (Herb) Gray

Liberal

Mr. H. E. Gray (Essex West):

Mr. Speaker, yesterday I was commenting upon the implications to the Government, to the Canadian people and to the auto industry of the fact that under this new agreement the same amounts of duty will not be collected on imports of vehicles and parts. I should like to suggest to this House that the increased revenue to the Government which will likely come from increased production in Canada as a result of this agreement will more than make up for the duty that it would have collected on imports, had this agreement not come into effect.

I should further like to point out to this House that in order to import duty free, a manufacturer must manufacture finished cars in Canada in the same ratio to sales in Canada as he did in the base year, and must maintain a certain Canadian content, or Canadian added value. And of course there is the increase in Canadian production to which Canadian manufacturers have committed themselves in writing, in those letters which have been tabled in this House. It is my understanding that, to the extent a manufacturer does not meet these requirements, he will be called upon to pay duty on his imports, so there is not a simple ability involved here on the part of a manufacturer to import cars and parts without paying duty.

Opposition Members have questioned the benefit of this agreement to the Canadian consumer. Certainly the price of cars to Canadians is an important factor and I think that this agreement will be the cause of bringing the price of cars to Canadians very close, if not exactly to the level of the price of cars in the United States, within a period of time which I hope will be as short as possible.

Canada-U.S. Automotive Agreement

One must remember that lower prices will have meaning only if Canadian consumers have the money in their pockets to pay them. The Canadian consumer is also the Canadian worker, the Canadian businessman and the Canadian producer of goods and services. Opposition critics in discussing this agreement, referring as they do only to the aspect of duty free imports and of non-collection of tariff amounts, wear unfortunately narrow sets of blinkers. They overlook the benefit to the Canadian consumer of some $38 million or more in increased production in Canada by 1968, and they overlook what this will mean in terms of additional jobs for Canadians. This will also mean more money for Canadians to spend. These are the major and primary aims of the agreement.

It is my understanding of the work force in Canada that at least one worker in every seven is employed in some activity linked with the auto industry, so we must not only consider the 80,000 people employed by the automobile manufacturers and the automobile parts manufacturers. For example, we must think as well of those employed in the paint, rubber, chemical, steel, aluminum and forest products industries. I suggest there is not a single part of this country not touched in some way by the automobile industry. We must strive for lower prices, but we must do so in a way which gives Canadian secondary industry not only a chance to survive, but also to adjust and expand while meeting changing trade conditions. This is the approach which I suggest has been followed by this agreement.

Some opposition Members I gather have felt that as soon as the agreement was signed there should have been an immediate decrease in car prices to Canadians to the United States level, but they forget that duty is only one factor in the higher price structure of Canadian vehicles. There is also involved the higher cost of production in Canada at this time, due to our smaller production lines, and so on. These methods of production in Canada and the costs resulting from them can certainly not be expected to change overnight, or even within a few months. Therefore the only way to have brought about an immediate decrease at the moment of signing the agreement, of Canadian car prices to U.S. levels, without any change in Canadian production methods, was simply to remove all the duties and permit manufacturers to bring in all the cars they want from the United States.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

Could I ask the hon. Member a question?

May 11, 1965

Canada-U.S. Automotive Agreement

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

I will be prepared to answer questions after I have completed my remarks.

This removal of duties by itself would mean nothing more than the destruction of the Canadian automobile industry, and the destruction of more than 80,000 jobs. The agreement has been designed in a way intended not only to prevent this very bad result, but also to expand Canadian production and to increase the number of jobs in Canada, since under this agreement there can only be duty free imports by manufacturers of cars and original automotive parts, and then only if they meet the production requirements in Canada as laid down by the Government.

I suggest that a harmful effect in the immediate short run, to employment and production in Canada similar to that which would come about at the moment of the removal of all duties by itself, would have come about if individuals were permitted to import cars and parts to Canada, at the very moment that the agreement was signed, in the same way as had been permitted manufacturers of original vehicles and parts, particularly if this was permitted before the industry in Canada was first given a reasonable period of time to readjust and retool. Those who suggest that people should be able to go to the United States right now and buy cars duty free before the industry has had an opportunity to readjust and retool, are again calling for the immediate destruction of Canadian jobs and the Canadian industry.

There have been complaints by the Opposition about the agreement between our country and the United States, because it does not contain provisions to deal with possible dislocations in Canada.

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NDP

David Orlikow

New Democratic Party

Mr. Orlikow:

Not possible-present.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

I suggest that the agreement itself contains nothing about this in so far as the United States is concerned either, and I would suggest to my hon. friend that he should read it. There is a reference to helping workers and firms in the United States in the Act now before the United States Congress calling for the implementation of the agreement, but this Act does nothing more than bring into effect with reference to this agreement the United States Trade Expansion Act of 1962. It does provide also for the President to make further proposals for adjustment assistance within a certain period of time after the Act is made law, but these proposals are not in any way spelled out.

Mr. Speaker, if you look at the Trade Expansion Act of 1962 you will see that in respect of assisting workers to adjust to changes arising out of that Act, it provides for payments of amounts equal to 65 per cent of the worker's weekly wages, less unemployment insurance. I should like to point out to this House that this is not particularly different from provisions now available to a very large number of workers in the Canadian automobile industry, under existing supplemental unemployment benefits, which make it possible for them to receive supplemental unemployment benefits, in amounts including unemployment insurance, equal to some 60 to 70 per cent of take-home pay. I am not suggesting that this is the entire answer to any problem of dislocation which may arise. I think our Government, where necessary and needed, should be prepared to take other steps. I am merely pointing out that what we are doing at this moment is not totally different from what is being done in the United States regarding dislocations, contrary to what some Opposition speeches up to this point have suggested.

It has been asked by Opposition Members whether or not this agreement has as yet brought any benefit to Canada. I should like to inform this House that since this agreement was announced Chrysler of Canada at Windsor has announced an additional shift which will provide some 1,000 additional jobs.

[DOT] (4:30 p.m.)

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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NDP

David Orlikow

New Democratic Party

Mr. Orlikow:

Tell us about Ford.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

This, Mr. Speaker, is a very important addition to employment in Windsor along with the expansion and creation of new plants such as the new General Motors trim plant which will employ in excess of 1,750 people, a plant that came into being after this Government established its designated area program and after this Government established the first tariff remission plan which this agreement replaces. The first tariff remission plan was based on the same concept of not collecting tariffs on imports of cars and parts from the United States, provided there is increased production in Canada.

I should like to bring to the attention of the House another very important example of the benefits that have already come to this country from this agreement even though it has been in effect in Canada for only a short period of time. This example is important in view of certain comments that were made by the hon. Member for Oxford (Mr. Nesbitt). I refer to an article in the

May 11. 1965

London Free Press of Wednesday, April 21. This report indicates that a $2 million plant, expected to employ eventually more than 700 persons, will be built in Ingersoll. The Vice President and General Manager of the plant has said, and I quote from the article:

...the auto pact between Canada and the United States was a "definite factor" in the firm's decision to construct another plant in southwestern Ontario. "The agreement most definitely is an asset to automotive parts manufacturers in Canada," he said.

I quote further from the article:

Civic officials, at a press conference at the Ingersoll Inn where the announcement was made, acclaimed it as the "greatest boost to the town in ages".

This has happened, Mr. Speaker, since the agreement was announced. I wonder why the hon. Member for Oxford did not trouble to bring this important piece of news to the attention of the House?

It should also be recalled, Mr. Speaker, that this agreement is coming into effect in a period when the Canadian economy and the number of jobs in that economy are expanding at a record rate, and this in large measure due to the policies of this Government. This expanding economy will certainly help to ease any problems of readjustment that may arise.

I must say I was somewhat surprised that the leader of the New Democratic Party would speak in such an approving manner with regard to the action of a United States U.A.W. official in asking the United States government to tell the Canadian government what it should do about adjustment of prices in the car industry in Canada. While I am sure this official's aims and intentions were certainly of the best, I did not think, in view of some of the other comments of the leader of the N.D.P., that I would see the day in this House when he would approve of an attempt to have the government of the United States tell Canadians how to handle their affairs.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

Somebody needs to tell this Government. They have no backbone.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

In approving this move the leader of the N.D.P. is not expressing himself in a manner which pays proper credit to the fine efforts made by Canadian U.A.W. officials. There have been strong and vigorous representations made by George Burt, the Canadian director of the U.A.W., and also by local union presidents such as Hank

Canada-U.S. Automotive Agreement Renaud, Alex Simkovitch, Charles Brooks and Reg Rudling to the government.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

What response did they get?

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

They have been listened to with a great deal of attention. Last night the hon. Member for Port Arthur (Mr. Fisher) referred to remarks made by the provincial Member for Windsor-Walkerville in the Ontario Legislature with regard to what the Member felt might be the result of this agreement, and I think other Opposition Members in the Legislature may have made similar comments. I suggest that as more details of how the agreement is working and will work become available, most of those who have expressed concern and criticism, whether in the Ontario Legislature, in this House or elsewhere will, I am confident, modify their views in the light of their further study of the agreement, and what will actually happen under it, and they will come to share the view of those on this side of the House that it represents aims beneficial to all Canadians.

Contrary to what has been suggested by some Opposition spokesmen, I am sure that the Government was and is conscious of its responsibilities to the auto workers and parts manufacturers in Canada. As I have indicated, before the agreement was signed the Government received representations and held discussions with representatives both of the auto workers and the independent parts manufacturers, and with the signing of the agreement steps were taken for the setting up of machinery for consultation on the effects of the agreement-

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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NDP

David Orlikow

New Democratic Party

Mr. Orlikow:

What steps?

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

-between the Government, labour and management. The Government held a meeting with the heads of the three major automobile companies to discuss the form of this machinery, and as a result of this meeting direct liaison by the national employment service with each company regarding possible labour adjustment was created.

With the announcement of the proposed Ford lay-off a special meeting was held by the Government with the President of the Ford Motor Company. Then a meeting was held involving the Government, the union and senior management representatives of Ford for the exchange of information on this announcement, and a special team went to work to try to be prepared to ease any adjustment problems that might arise in our city of Windsor as a result of this lay-off.

I think, Mr. Speaker, that there is an obligation to help smaller firms and to help work-

May 11, 1965

Canada-U.S. Automotive Agreement ers to adjust, where necessary, to changes brought about by this agreement. In my view this concept is expressed very well by an editorial which appeared in the Windsor Star of Monday, April 26, from which I quote briefly:

The Government, which negotiated and signed the auto agreement, has a responsibility to all workers in the industry. Even if the long term effects are beneficial, the responsibility to workers temporarily hurt by the plan is strong. The Government should take every step to make the transition as easy for the workers as possible...

There is also, in this case, a heavy responsibility on the company. It is laying off employees because it wants to be able to take full advantage of the larger markets provided by the auto plan. It must give every consideration to the employees whose services have helped it to prosper in the past and who will be needed in the more prosperous future...

It is a general responsibility to make sure that those affected along the way are made the beneficiaries, not the victims, of progress.

In our system needed legislation can be introduced into Parliament and proceeded with more swiftly than in the United States Congress, with its different system. I am confident that the Government will be prepared to take such further steps as may be required to assist in adjustment so that auto workers in particular will be able to benefit from this agreement to the same extent as their fellow citizens. But, Mr. Speaker, let us not lose sight of the major objectives of this agreement, the major objectives of expanding employment and production in Canada very substantially over the next few years. This agreement will lead to lower manufacturing costs in Canada which will benefit Canadian consumers. It will lead to increased production in Canada which will create additional opportunities for manufacturing in Canada as well as increased job opportunities for Canadian workers. I therefore urge the defeat of the amendment now before the House.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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NDP

Douglas Mason Fisher

New Democratic Party

Mr. Fisher:

Very well read.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

The hon. Member said he would answer a question. I want to ask a question about one thing I noted while he was reading his speech. He said that the short runs in Canada made the price of cars much higher in this country. I want to ask him how he accounts for the fact that Canadian made cars are now being sold in the United States for much less than they are being sold in Canada.

Topic:   FAILURE TO PROVIDE PROTECTION UNDER CANADA-U.S. AUTOMOBILE AGREEMENT
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LIB

Herbert Eser (Herb) Gray

Liberal

Mr. Gray:

Mr. Speaker, first I should like to point out to the hon. Member and the House that in delivering my speech I referred

to my notes to no greater extent than does the hon. Member himself, and particularly the eminent author from Port Arthur. It is my understanding that the sale to the United States to which the hon. Member referred is merely an experiment or trial involving a relatively small number of vehicles, in order to see what problems may arise in selling completely Canadian manufactured vehicles in the United States. Basically, from the point of view of expanding production and employment in Canada I think it is a good thing that the Ford Motor Company has adopted this trial procedure to see how this can be done. I think it is something that a company the size of Ford can do, inasmuch as it is only a trial involving some 400 cars a month over a period of only a few months.

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NDP

Thomas Clement (Tommy) Douglas

New Democratic Party

Mr. Douglas:

Does the hon. Member think that 80,000 Valiants by Chrysler is also an experimental run?

[DOT] (4:40 p.m.)

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May 11, 1965