March 16, 1928 (16th Parliament, 2nd Session)

CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

Apparently there is a reduction of 24 per cent on that, although my view is, on consulting the former tariff, that cotton yarns exceeding 20's and not exceeding 40's came in free. The minister tells me that the old rates were 15, 224 and 25 per cent, and the new rates proposed are 124, 15 and 224 per cent. Apparently on that item there is a 24 per cent reduction.
Then item 522b, which is the large item, covers " cotton yarns exceeding 40's, single," on which the new rates proposed are 74, 10 and 15 per cent, while the former rate was free, free, free. The importations under item 522b are so far beyond the importations under the other items that one must conclude that there has been an increase in the protection afforded under these three items. I do not think there is any doubt about it; you can prove it to a mathematical nicety; you can demonstrate it absolutely. I think we may take it for granted that the object of the minister in granting increased tariff protection under these three items was, as he said last night, to give the manufacturers of cotton yarns some of the protection which the cotton trade enjoys. That, he says, was the government's reason for making these changes. I do not take issue with him on that point. I think it is a proper principle, and I hope he will continue to follow that principle in regard to the other items in the tariff schedules. He has already adopted the protective principle in regard to cotton yarns so that the manufacturers of these yarns in Canada may have some benefit from tariff protection, and he is giving this protection, he says, in order that the other manufacturers of cotton will not hog all the advantage of the tariff. I think we now understand the situation in regard to these three items. It is clear that an actual tariff increase is taking place. I hope my hon. friends from Manitoba and Saskatchewan who sit on the other side of the house, and who are pronounced free-traders in their views, will realize the full meaning of the tariff changes in respect to these three items, and that is increased protection to give the producers of cotton yarns some benefit of the tariff.
I listened with great pleasure to the explanation volunteered last night by the Minister of Railways (Mr. Dunning). He realizes full well, perhaps better than any other member of this house, that these three items involve increased protection, and that it becomes necessary for him to offer some explanation to his people in Saskatchewan. Accordingly he enters upon a thoroughly ingenious and artificial argument, endeavouring to show that there is some distinction between manufacturer's items and consumer's items in the present tariff. After labouring considerably with his argument, he announced that the consumer would be benefited because the duty on the thread manufactured from these yams was reduced in the present proposals of the government. Now, how does that work out? Cotton yarns up to 40 and finer are now subject to a duty, when im-

Ways and Means-Customs Tariff
ported from Great Britain, of 74 per cent; up to the present time they have come in free. In the manufacture of thread these yams constitute 40 per cent of the cost. There is an increase in the protection of 74 per cent on 40 per cent of that thread, which, according to my calculation, is exactly 3 per cent increase on the thread. Then we turn to the subsequent item in the tariff and find that the government has reduced the duty on the thread by 21 per cent, with the net result that the consumer of thread will have to pay one-half of one per cent more in duty than he did the day before this tariff was brought down to the house. If there is anything wrong in my figures or in my argument or in my presentation of this matter to the attention of the government and the Minister of Finance, let the minister correct me now. Let me repeat. The duty on the raw cotton imported-and it is a large item of $2,500,000 -is increased by a stroke of the pen from free to 74 per cent. From that raw material is manufactured the cotton thread. Seven and a half per cent increased duty on the raw material, and the raw material representing 40 per cent of the finished product, a reduction of 24 per cent of the duty on the thread, leaves a net increase of duty to the consumers of this country of one-half of one per cent. If I am wrong I shall be glad to be corrected now.
I point this out again for the benefit of my hon. friend the Minister of Immigration and Colonization (Mr. Forke) and his colleagues from the province of Manitoba, and for the benefit of hon. gentlemen from the province of Saskatchewan who give to this government a slavish support on trade and fiscal matters. The truth is, this proposal has not been clearly laid before parliament. The government is not making readjustments upon any principle whatever. The criticism levelled against us that in one comer of the house we discuss this as a higher tariff and in the other as a lower tariff has some justification in fact. It is a tariff proposed I believe, simply with the idea of helping a particular industry here, or a particular industry there, upon no fiscal principle whatever, and at the same time intended to hoodwink that large body of supporters of the present government who live in the prairie provinces.
There is no doubt from the discussion last night, in fact we learned it from the lips of the Finance Minister himself, that this change in regard to item 522b was made at the instance of a single cotton company in this country. He says so. The Wabasso Company made the application. He stated

last night that that was the only company that he knew-[DOT]

Topic:   WAYS AND MEANS
Subtopic:   CUSTOMS TARIFF, 1927, AMENDMENT
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