March 9, 1939 (18th Parliament, 4th Session)


Albert A. Brown

Conservative (1867-1942)

Mr. A. A. BROWN (Hamilton East):

Mr. Speaker, when the house adjourned yesterday I was referring to certain industries which had been affected adversely by the Canada-United States trade agreement. In the 1935 agreement only four items of the primary metal group, which would cover such products as bars, rods, plates, sheets, castings and forgings, were affected. In 1937 the imports of those four items amounted to $2,919,000. In the new agreement concessions are made to the United States on some forty items, the imports of which from the United States amounted to $23,000,000 in 1937. The United
Canada-United Stales Trade Agreement
States press release states that the reduction in duty on these items will improve the position of the United States producer in competition with the Canadian manufacturer.
In 1937 Canada imported machinery from the United States to the value of over $50,000,000. These importations did not include items such as aircraft, electrical apparatus, or motor vehicles. Numerous concessions have been made in this field, either the duty being bound or the tariff reduced. In the new agreement certain concessions have been made in the electrical apparatus and machinery group. In 1937 the imports from the United States of these items amounted to nearly $7,000,000. Certain reductions on some of these items were made in the 1935 agreement, and the imports increased from $4,334,000 in 1935 to $7,425,000 in 1937. Total Canadian imports from the United States in 1937 amounted to $491,000,000. The importations of non-agricultural products in that year amounted to $237,000,000. Under the present agreement duty reductions have been made on items which were imported in that year to the extent of $144,000,000. The 1935 rate has been bound on items which were imported in that year to the extent of $45,000,000. The free rate has been bound under the new agreement on items which were imported .to the extent of $48,000,000. These figures do not include imports of, articles the duties on which have been reduced under the most favoured nation clause, and which were imported in 1936 to the value of $74,000,000.
It is quite obvious that the reductions of the tariff and the concessions made in the 1935 agreement resulted in an increase of importations of United States goods into the Canadian market at the expense of the Canadian producers. It is also obvious that the additional concessions and reductions in duty which have been made are going to increase still further United States imports. As the Canadian market is restricted, these importations will be at the expense of the Canadian manufacturer and the Canadian workman.
During the course of the debate on this resolution I believe that the members on this side of the house have been successful in pointing out that the government did not make the proper preparations for the negotiation of such an important treaty, and that the failure to make these preparations seriously handicapped the representatives of the government during the period of negotiation; that the government was woefully ignorant of the economic condition of the industries of this country because it did not consult those industries whose interests have been

affected by the agreement; that the government did not take the same precaution to protect the markets, industries and workmen of Canada as did other countries in the form of quotas and restrictions; that the manufacturing and secondary industries and Canadian workmen have been sacrificed for some temporary and speculative benefit to the cattle and lumbering industries; that the interests of the vegetable and fruit growers have been sacrificed; that this agreement has diverted traffic from Canadian to United States ports; that the government has sacrificed productive revenue in making tariff reductions, which revenue produces purchasing power, and employment, making it necessary to replace this with a non-productive tax which will create unemployment and handicap Canadian industries; that this government has sacrificed part of our British preference in our best markets in wheat, fruits, and lumber; that this agreement will cause grievous harm to our transportation system, railways and steamships, by sending traffic north and south, instead of east and west; that this treaty is not reciprocal, because the United States tariff is much higher on items entering United States markets than the tariff on the same items entering the Canadian market; that this agreement is regarded as a purely economic agreement entered into by the three countries, regardless of the fact that the Canadian government attempts to attach considerable political importance to it in order to hide its faulty workmanship.
In the course of this debate many supporters of the new trade agreement were very much concerned with obtaining the highest possible price for goods produced in their part of the country, and they were equally concerned with paying the lowest possible price for goods purchased in any other part of the country. I do not think this attitude is in the best interests of Canada. According to the Canada Year Book for 1936, there were in Canada 25,491 establishments, employing 582,874 persons, paying out in wages $590,-
326,000, and producing goods to the net value of $1,302,179,000. About 63 per cent of these workers are dependent on industries that pay about 61 per cent of the total wages and salaries and produce over 51 per cent of the net value of the manufacturing production in Canada. Also dependent on these industries for at least part of their employment are hundreds of engineers, doctors, lawyers, employees of telegraph and telephone companies, railway companies, steamship companies, and those engaged in wholesale or retail distribution.

Canada-United States Trade Agreement
Since 1935 this government has been engaged in the policy of reducing tariff protection and granting concessions in such a haphazard manner that the industrialists of this country have not been able to make any plans for the future, and this lack of confidence is reflected in the employment problem. Judging from the fruits of the trade agreements made by this government during the past four years, I think it would be better occupied in devoting more time and energy to developing the internal trade of Canada, equalizing freight rates, and inducing Canadians to buy Canadian coal, Canadian oil, Canadian farm products, and Canadian manufactured products, thus building up a stable market which the government can control, and which will provide greater purchasing power and a higher standard of living, as well as more employment for Canadian workers.
Mr. IV. J. WARD (Dauphin): Mr. Speaker, it was not my intention until a very few days ago to take part in this debate, but believing as I do that this trade treaty is by all odds the most important item to come before parliament this session, if not the most important piece of legislation that has been presented to the Canadian people in this generation, and in view of the attitude of a number of members of the official opposition, including their leader, during the last few weeks, I felt that I owed it to my constituents and to the people of Canada as a whole to express my opinions in respect to this allimportant piece of legislation.
I notice that the hon. leader of the opposition (Mr. Manion) is following well in the footsteps of his predecessor in the number of speeches he is making inside and outside of this house. In his address in Toronto the other day he referred to this government as being a reactionary government. When I think of the opposition to this treaty by the official Conservative party in this house I cannot but feel that they oppose it because the government is too progressive-because we are having too much free trade, they think; because of the government's introduction of penitentiary reform; because of the government's home improvement plan; because of its youth training projects; because of its prairie farm rehabilitation, and because of its various acts with respect to housing and other measures to assist the municipalities. I cannot but think that their opposition was from no other point of view than that the government has been too progressive.
I am going to pay to two or three members of the official opposition the compliment of referring for a few moments to their addresses. I took some notes while the hon. member

for Hamilton East (Mr. Brown) was speaking. One of the things he said was that thousands of men had been thrown out of employment in Hamilton as a result of the 1935 trade treaty-because, in other words, this government had lowered the tariffs on manufactured goods. He went on to say that industries would be put out of business in the city of Hamilton because of the present treaty.
I can only reply that an industry or industries which cannot succeed under the terms of this treaty, substantial though the reductions are that it makes in the duties, is much too expensive a luxury for this country to afford. I say further that an industry that cannot thrive under the duties prevailing in this country at the present time, ranging as they do from 7) to 30 per cent, is certainly too expensive for the country, and their failure must be due to incompetence or to the fact that the industry is not indigenous to the country. I would remind the house that two years ago the Right Hon. R. B. Bennett, speaking in this house, stated that there were numerous industries in Canada which should never have been allowed to establish here, that they were not indigenous to the country and had become a very real problem because of the amount of protection they required to enable them to continue to exist.
The hon. member for Hamilton East went on to say that the city of Hamilton paid in wages and salaries $40,000,000 annually. That is a very substantial sum, and we are all proud that the city of Hamilton does provide, through the medium of its industries, that amount of wages and salaries for our Canadian people. But I would remind the hon. member that the little province of Manitoba, which was formerly regarded as the postage stamp province of this dominion, produced from its farms alone from 1926 to 1930 an average yearly production of farm products amounting in value to $622,565,000. After all, therefore, the city of Hamilton, with its $40,000,000 is a very small item in the vast aggregate production of this country. *
The hon. member also told us that word had come from the west that the west had been sold down the river by this treaty. I would suggest to the hon. member that he remain in his own little back yard because all the information I receive from the west is that they are hoping that nothing will happen to this trade treaty but that it may be given an opportunity to work out fully our economic salvation, and retrieve the lost trade of this country.
Canada-United States Trade Agreement
The hon. gentleman also spoke of two companies manufacturing washing machines in the city of Hamilton which were put out of business by the 1935 agreement. I can say only this: If there is one item in the domestic trade of Canada where the racket of protection reached a higher degree in the last few years than any other, it was the washing machine manufacturers. I would remind the house that, through the reduction in duties on washing machines which was effected by this government, the price of power machines has been reduced from twenty to forty per cent; and I can assure you, Mr. Speaker, that throughout the length and breadth of this country the housewives who were previously unable to purchase power machines will thank this government for having reduced the cost of those articles.
I intend to pay the hon. member for Waterloo South (Mr. Homuth) the compliment of a reference to his remarks. He also spoke of the industrial workers, and he told the house that forty per cent of Canada's total trade resulted from the Canadian manufacturing interests. He may have made that statement innocently; he may not have known the facts. The facts are that less than twenty-four per cent of the production of this country originates in the secondary industries. I have secured figures as to the number of people engaged in these industries, ranging from the manufacture of needles and pins to the making of locomotives. What do they amount to? From the boy who sweeps the floor to the manager of the factory, they number just 16-1 per cent of all the workers of this country. The total population dependent upon the secondary or manufacturing industries is just 1,771,000. Contrast this with agriculture, in which 3,261,000 are engaged, while in the related natural industries we have actively engaged something over 3,000,000 people. May I refer here to a pamphlet issued by one of the large Canadian grain firms, a concern not interested in the political effects of the tariff policies of any government. The writer points out that there is no hope of restoring the solvency of agriculture in this country until we secure a definite governmental policy in the direction of lower tariffs. I could give a lot more figures, but I do not intend to weary the house, and there are other matters with which I should like to deal. But I should like the hon. members for St. Paul's (Mr. Ross) and Waterloo South to realize that only sixteen per cent of the people of Canada are engaged in the secondary industries of this
country, and that only twenty-four per cent of the total wealth production in Canada comes from manufacturing interests.

Full View