November 19, 1979

NDP

Lorne Edmund Nystrom (Whip of the N.D.P.)

New Democratic Party

Mr. Nystrom:

Mr. Chairman, 1 want to make a few comments more in the terms of a representation than a series of questions.

First of all, I agree with the parliamentary secretary when he said the producers are generally pleased with the tariff revisions that are being made in this bill. My communication with them is the same as his, that is to say, they are pleased with the revisions. But a lot of producers would have liked to see the revisions go a bit further. My opinion-and it is only my opinion-is that I think we are a little too cautious when we come to GATT. I think we are a little too concerned about being free and open traders. I am not talking about building huge tariff walls or anything of that sort, but I want to remind the House that historically in Canada the average agriculture tariff has been 1 per cent or less. That is a very low tariff when compared to tariffs in other countries or tariffs for other goods in our own country.

1 believe the producers in Canada need more protection than has been given to them in the past. I make that representation to the parliamentary secretary based on many conversations that I have had with producers, horticulturalists and producers of other commodities from one end of this country to the other. As a nation and as a people, when we talk about farm production one of our objectives must be to strive toward the goal of self-sufficiency. Many people ask what we mean by that. People say that we produce a lot of food in this country, that we have a lot of land, that we are capable of production and so on, but I want to tell the parliamentary secretary that according to the Department of Agriculture, if wo take away grains and oil seeds, in 1978 our net deficit in the production of food was about $1.6 billion to $1.8 billion. That is if you take away grains and oil seeds.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

Why do you do that?

November 19, 1979

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

Lorne Edmund Nystrom (Whip of the N.D.P.)

New Democratic Party

Mr. Nystrom:

I am just doing that to point out to the hon. member for Mississauga-

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

Take away oranges-we do not produce any.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

Lorne Edmund Nystrom (Whip of the N.D.P.)

New Democratic Party

Mr. Nystrom:

I hope the hon. member for Mississauga will get up and enlighten us on farm goods, as he did a while back on the Indian problem.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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?

Some hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

Lorne Edmund Nystrom (Whip of the N.D.P.)

New Democratic Party

Mr. Nystrom:

If you take away the two commodities we produce in abundance, we find we are a net importer of food in Canada. According to the Science Council of Canada-that is part of my phrase on self-sufficiency for the hon. member for Mississauga-even with the oil seeds and grain that we produce in abundance on the prairies, by the year 2000 we will be a net importer of food. That concerns me.

I could point to many studies and statistics to show that agricultural land is going out of production. For example, I think of the Niagara Peninsula. A friend from there was talking to me about some of the problems that the grape growers and the wineries have. In the Niagara Peninsula a lot of good farm land is being paved over and used in a permanent sense for other than producing food. That concerns me as well.

One way of aiding in self-sufficiency-I stress one way because it is not a magical formula-is to give the producers a bit more tariff protection than we have given them in the past. That is one way of becoming a little more self-sufficient in food. I do not have to go into all the other arguments about self-sufficiency of food or why it is important. One could look at the United Nations' report made public last week. It talks about an immense crisis coming before the end of the century in terms of world food production and our capability to produce food. One can look at other stats that came out recently showing that in the world this year we will be consuming more food than we produce. That means we will be going into reserves and using food which has been stockpiled for emergencies.

This country and other countries around the world must be concerned about the production of food, and we must be concerned about producing as much as we possibly can. In the past we have said that perhaps we can rely on imports, that perhaps imports are cheaper. Perhaps we think that American chicken, eggs, fruit and so on are cheaper, but I remind hon. members that that hurts Canada in terms of the extra farmers we could have, the extra jobs we could have in producing, processing and transporting that food. It also hurts Canada in terms of balance of trade and its impact on the dollar.

If this were a more general debate, Mr. Chairman, one could give the House many statistics about the economic loss of not being self-sufficient. One could give the House figures of jobs lost in Ontario as well as right across the countrv because we are not self-sufficient in many food areas.

My representation to the government across the way is that I think there are many different fruits and vegetables and many different items where there could be another minor

Customs Tariff

adjustment upward in terms of tariffs. The member for Mississauga is concerned about costs. We are not talking about building huge tariff walls. The Ontario Federation of Agriculture, the Canadian Federation of Agriculture and reputable farm groups have good relationships with all political parties in this House. They are not talking about that either. They are just talking about some seasonal tariff protection. Some of that is provided in this bill. The bill is going in the right direction, we know that. However, a lot of producers do not think it is going far enough.

As the hon. member for Timiskaming mentioned, there is concern that perhaps the apparatus that gives us the eight-week tariff may not come into effect rapidly enough when there is a problem. The committee should be thinking more about ways of becoming self-sufficient in food, producing more of the food consumed in this country. Agriculture is the key industry, the number one industry in this country. Historically countries with a strong agricultural base are those which do best in the world community.

In terms of specifics, historically we have had no tariff on potatoes. Apples were mentioned. Apple growers in British Columbia have brought their concern to my attention. Although the situation may be relatively rosy in that province at the moment, growers in Washington and Oregon have started an immense program of planting new orchards. When they come on stream in a few years, that will cause serious competitive problems and may create a lot of difficulty for B.C. apple producers. I remind the committee of the competitive advantage the Americans have because of cheaper land costs, better growing climate and so on.

Another commodity is potatoes. Coming from New Brunswick, the Chairman knows a lot more about that than I do. New Brunswick is a tremendous potato producing area. Again we must look at the possibility of adequate tariff protection for our potato growers. It is relatively easy to get into potato crops; it is not like apples where it takes some time for the tree to grow. The potato market can be rapidly distorted with prices going up and down. It is a relatively quick enterprise to get into.

These are some of the concerns I have. They are motivated by the primary concern that one of our fundamental objectives in a food policy for this country is to be self-sufficient. For some of our foods, that will require an upward push, not a great one though, in tariffs in this country. In my opinion, that will not be a cost to the consumer in the long term but will protect consumers, giving them a guaranteed supply.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

Mr. Chairman, I did not understand the explanation with regard to the tariff on an American product being at the American price. I suppose it is a price at a given time in a given area. If that is so, what we are talking about is a 16 per cent advantage.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

No, no.

November 19, 1979

Customs Tariff

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

The hon. member says no. It comes into Canada and the parliamentary secretary said it was at the American price.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Donald Alex Blenkarn

Progressive Conservative

Mr. Blenkarn:

Converted into Canadian dollars.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

When you bring something into Canada, you pay for it with the Canadian dollar. That causes an immediate disadvantage of 16 per cent. Our dollar is worth only 84 cents U.S. The tariff for a most favoured nation, and that applies to the Americans, is 15 per cent. That does not even cover the exchange. When translated into Canadian dollars, there is no longer an advantage.

There are two other matters about which 1 am confused. Why are we being asked to pass schedule I in November when it does not apply to some of the commodities? In Canada we do not have an asparagus crop in October. Therefore, it does not have to be changed from one number to the other. By the end of October, that does not apply. That would only apply in the spring. This bill may have been drafted two or three years ago, but I still do not understand why it should apply to October.

In schedule V, which applies to after October, there is a totally new number, section and rate. After the end of October, instead of Vh cents it is 5 Vi cents but not less than 15 per cent. It was 10 per cent previously. Therefore, it does not apply. A bill was not passed previously to make it apply so 1 do not understand why it should be applied now.

I would like to know from the parliamentary secretary how many other numbers in clause 2 do not apply. The new act will apply from the end of October. Beets, turnips, potatoes and apples are covered after October because they are stored and sold later. They are probably sold from September on. Therefore, the schedule would cover the period from September to the end of October. I presume this was anticipated. If not, it really does not matter because it would be void.

One of the problems with a new government is that it does not always check the figures of the previous government. When something is presented later than its effective date, there is no point in presenting it. I am sure the officials can advise how many items in clause 2 that are covered by schedule I and replaced by schedule V are null and void. We should not pass them. They might as well be taken out.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Ronald Stuart (Ron) Ritchie (Parliamentary Secretary to the Minister of Finance)

Progressive Conservative

Mr. Ritchie (York East):

Mr. Chairman, the hon. member has raised two questions, the first one reopening the question as to what the duty applies to. The best answer is to say that, as is usually the case, the duty applies to fair market value in the country of origin. In the example he used, the United States, that would be in U.S. dollars; the duty would be applied and the fair market value would be converted to Canadian dollars and the duty applied in Canadian dollars. The lower value for the Canadian dollar is in one sense an additional protection rather than the reverse, because the same price in U.S. dollars costs more when imported into Canada in Canadian dollars; you would have to lay out more Canadian dollars to get it.

On the other question of how much of this bill is null and void, it is proper to say that in a sense none of it is null and void. What this bill proposes is to enact into law the arrangements, including the seasonal arrangements and the tariffs, applying in seasons of high production here; they will apply next year and into the future until amended. There is some interesting history, though. These items, all of which were brought in by the November budget of last year, were never enacted. That did not matter until Parliament was dissolved, because during the interval between Parliaments the items the government of the day chose to act on happened to be only ones that introduced tariff cuts as opposed to tariff increases, and those were dealt with by a remission order.

As is ordinarily the case, the budget became effective before its provisions were enacted, but in this case, in line with the normal procedure, the remission order has to be regularized. Thus, part of the bill before us deals with something which has already been done under emergency powers, if you like. Then the bill goes on to deal with the other things originally proposed by the tariff board and contained in the budget. To me, this suggests that the whole of the bill is necessary even though parts of it pertain to things which have already been done.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

I thank the parliamentary secretary for his lucid explanation.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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?

An hon. Member:

It won't help any, though.

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Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

It might help. I agree there might not be any point in picking out the ones that have never been used and which were therefore triggered by the budget rather than by special order because many of them were raised, not lowered, and only the lower ones were used. In many of these cases the changes which have been made, I gather the parliamentary secretary is telling us, have involved reductions in tariffs, not increases.

Clause 2 includes all those items in schedule I so really we have lost money. Is the amount shown anywhere in this document? Is an estimate made of the sum which might have been anticipated had the changes not been made? In other words, does this indicate what revenue from duty resulting from these amendments, either raising or lowering the amounts, might have been expected? This presents us with a real problem because there is no way of knowing from what we have before us what the general purpose of these changes is- for example, whether they reflect changes negotiated under GATT. Nor do we know how they are applied. There is no indication that Canada has entered into international agreements with regard to specific commodities and I am not able to tell from the bill whether we have decreased or increased total income from duty. Some items moved up 5 per cent, say, or down 3 per cent, but from the point of view of the workings of the economic system it is impossible to tell where we are going. Maybe I am missing something. I see nothing here enabling us to estimate the results of these changes this year as

November 19, 1979

compared, for example, with last year, and 1 am suggesting we do something about this from now on. As I say, if I am missing the point I should like the parliamentary secretary to tell me. He has been very helpful so far.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Ronald Stuart (Ron) Ritchie (Parliamentary Secretary to the Minister of Finance)

Progressive Conservative

Mr. Ritchie (York East):

I do not think the hon. member is missing anything that is right before his eyes at all. To answer one of the points he made, I understand that these rates were not set in negotiation with GATT but that if we wanted to raise them now we would have to go back to GATT. That is the only implication as far as GATT is concerned of which I am aware.

On the question of the effect on duty payable, there are two points to be made. The first is that the previous government chose only to put into effect those parts of the measure which lowered duties. We have estimated a decline in duties collected of about $5 million in the current fiscal year. Next year, though, we expect a slight increase in the duties collected. Taking account of the length of the season, the weighted average collection of duties is expected to rise from 5.4 per cent to 6.1 per cent, and that .7 per cent increase should mean a slight increase in duty collections.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

I thank the parliamentary secretary for that information. 1 understand, then, that the GATT figures cannot be changed here. Will they supersede or apply on top of this, or are we still going to change our customs and duty regulations unilaterally rather than in the way it is being done by GATT? Are they going to specify the periods? The understanding that many of us have is that they are going to set the regulations. This is one of the reasons we are interested in the time element of the exemption periods and the periods in which duty is applied.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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PC

Ronald Stuart (Ron) Ritchie (Parliamentary Secretary to the Minister of Finance)

Progressive Conservative

Mr. Ritchie (York East):

Mr. Chairman, I cannot add very much to what I said previously to the hon. member. My understanding is that, first of all, this act stands by itself, it cannot be interfered with by GATT, and, second, in effect the food and agricultural negotiations have been largely taken out of recent GATT agreements. So I think the basic thing is that, so far as the act is concerned, there is no limitation from known GATT actions.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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NDP

William Arnold Peters

New Democratic Party

Mr. Peters:

Mr. Chairman, before we pass clause 1 should like some assurance as to the trigger mechanism. 1 know it has been said by a number of people in this debate that that trigger mechanism is sufficient. It is my guess that if it were sufficient, we would still have a strawberry crop in Niagara and we would still be producing soft fruits in that area in competition with a number of other areas, which we are not.

It seems to me that in the representations that have been made to the agricultural committee it has been stated that the trigger mechanism does not work because the tariff board administers it instead of the Department of Agriculture. It has been the gist of the arguments in the representations made before the committee that if the Minister of Agriculture would triggger the mechanism, it would work. As I understand it,

Customs Tariff

they are not complaining about the times, just about how they apply it and when they apply it. I understood from the parliamentary secretary a little while ago that this might take anywhere from two days to two weeks and that there was some discussion about setting an exact date, but that was waived. Would setting the exact date or period not be much more advantageous if it were inserted in the act and lengthened, rather than having a trigger mechanism which is not very responsive to the needs of producers?

I am raising this question simply because we have a potential in Canada right now in relation to energy and developments that are taking place, and we have had great difficulty with the hot house industry in this country. Now we are going to put some more money into the hot house industry and operate it in conjunction with Ontario Hydro, using heat from nuclear plants and thermal plants to generate that kind of production.

Topic:   GOVERNMENT ORDERS
Subtopic:   CUSTOMS TARIFF
Sub-subtopic:   MEASURE TO AMEND
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November 19, 1979