Anton Bernard WESELAK

WESELAK, Anton Bernard, LL.B.

Personal Data

Springfield (Manitoba)
Birth Date
February 11, 1918
Deceased Date
January 17, 1989

Parliamentary Career

August 10, 1953 - April 12, 1957
  Springfield (Manitoba)

Most Recent Speeches (Page 5 of 8)

January 19, 1956

Mr. A. B. Weselak (Springfield):

Mr. Speaker, it is with a great deal of pleasure that I join with other hon. members of the house in congratulating the mover and seconder of the address in reply to the speech from the throne. The hon. member for Timis-kaming (Mrs. Shipley) had the signal honour of being the first woman since confederation to move the address in reply and I am sure that the women of Canada were proud of the manner in which she acquitted herself. The hon. member for Bellechasse (Mr. Laflamme) also did as well and could be considered representative of the youth of our country and his splendid speech reflected the increasing activities of the younger people of Canada in the affairs of this country which affect their present and future welfare.

This debate has progressed into its fifth day and it is almost impossible to enter the debate at this time without being repetitious. However, considering the speeches by opposition members I think one would have to go a long way to compete with them in that respect. A great deal of criticism has been levelled at the speech from the throne as containing little for the people of Canada. It is true that the speech from the throne is comparatively short, but on the other hand, as the member for

Springfield, I find a great deal in it which will affect the people of my riding and be of benefit to them.

The speech opens with a reference to our international problems. It reasserts our support of the North Atlantic Treaty Organization, of the United Nations Organization, of the Colombo plan and of the United Nations technical assistance program. With the recent change in attitude of the leaders of the communist bloc, which I do not think came as a surprise to anyone, these programs and organizations are of vital importance to us to assure our security and to provide a deterrent to aggression and communist expansion. Had we accepted the smiling diplomacy of the Russians and disposed of NATO as suggested by them, I am afraid that the consequences would be with us now and we would be reaping the harvest of our folly.

The hon. ministers of external affairs, of fisheries and of health and welfare are to be congratulated on their efforts-which in the case of the Minister of Fisheries (Mr. Sinclair) has resulted in serious and painful injury- to find some ground by which peace could be assured in this troubled world. The efforts of the Canadian delegation at the United Nations have brought honour to Canada and are a credit to her statesmanship.

The speech also indicates that the government has been at grips with the western wheat problem, and in the proposed legislation for which it seeks the approval of parliament measures will be brought forward which will alleviate and assist the wheat growers of the west in their present difficulty.

Reference has been made in this debate to the proposal by the government to pay the carrying costs of temporary wheat reserves owned by the Canadian wheat board in respect of board stocks of wheat in excess of 178 million bushels as a form of charity.

In the course of this debate statistics have been placed on the record which do indicate that the prairie farm economy in contrast with many other sectors of the country has steadily declined. The farmers of western Canada have in the past pretty well carried their own load in spite of protective devices such as tariffs and patents which have contributed so much to the development of industry and the betterment and security of labour. The advantages obtained by tariffs and patents for the other sectors of the economy have to be paid for, and are paid for by the consumers of the country. Farmers are notably large consumers of industrial products per capita, and on a per capita basis pay a substantial portion of this cost. The farmer must buy in a market geared to our high economic level, yet must sell in competition in markets where the economic level

is much lower than that of Canada. Protection by way of tariffs and patents, though they produce revenue are nothing other than a subsidy paid for by the consumers of Canada.

It might be of interest to note some of the other subsidies paid in this country. My findings show that since 1944 $2 million was paid to the maritime potato growers; $7 million to the apple growers east and west; $6 million to butter producers in Ontario and Quebec; approximately $6 million to Prince Edward Island and Nova Scotia potato growers under the prices support act.

Freight rate assistance from the prairies on feed grain for the benefit of producers and feeders from 1941 to 1954 resulted in assistance to feeders: In British Columbia

to the extent of $22,462,939.52; in Ontario, $72,191,724.89; in Quebec, $87,510,638.70; in the maritimes, $38,347,090.19; making a total of $220,512,453.30. To which should be added approximately another $14 million for 1955 making a further total of over $234 million. These are some of the subsidies paid to various sectors of the agricultural economy in an effort to raise them in some measure to our general economic level.

In addition to these agricultural subsidies, in the year 1954 alone a total of $51 million was paid in other federal subsidies. The breakdown given in a statement of national accounts of income and expenditure prepared by the dominion bureau of statistics shows that in the year 1954 $15 million was paid in gold subsidies, $11 million was paid under the Maritime Freight Rates Act, $12 million was paid on coal subventions and $13 million in miscellaneous subsidies.

I have no quarrel with the payment of the subsidies I have referred to. It is far better to temporarily assist those sectors of our economy which are temporarily depressed in this manner than it is to legislate in such a manner as to reduce the economic level of the country as a whole. In this respect our prairie farm economy has temporarily become one of the soft spots and deserves the attention and assistance which is being proposed by the government.

The principle of mutual assistance by Canadians in Canada is further exemplified by the constant efforts of our Prime Minister to finalize and complete the renewal of dominion-provincial agreements which have done so much to equitably distribute the wealth of the nation. The Winnipeg Free Press in its editorial of January 13 made no mistake when it stated:

The federal government's new tax offer to the provinces is excellent. When the history of our

The Address-Mr. Weselak times comes to be written this can be expected to rank as one of the acts of true statesmanship to the credit of Canadian Liberalism under Mr. St. Laurent's leadership. It is a major contribution to the economic and political progress of our federal system.

The revised proposals, according to the editorial, will within the general scale of federal-provincial tax dealings give Manitoba a just deal in relation to other provinces, and under the new proposals we unquestionably do get this, along with all the advantages of the existing tax rental agreements.

The construction of the trans-Canada pipe line will be welcomed by the people of Manitoba. Manitoba has been very fortunate that within the boundaries of the constituency of Springfield, which I have the honour to represent, there has been developed on the Winnipeg river 788,000 horsepower of cheap hydroelectric power. We find now we must go farther afield for power, and its production and transmission is going to be far more costly than that produced in the past. The supply of natural gas to Manitoba will provide additional source of energy which will certainly contribute to the expansion of our provincial economy.

Further amendments to the National Housing Act to make it more effective are always welcome, since any incentive to improve housing conditions in Canada will result in a healthier and happier nation. The only suggestion I have at the moment for the government, is that some study be given to reducing the income requirement for country towns, where living costs are comparatively lower. In many deserving cases, this could be lowered, instead of being set at an arbitrary figure. In these towns the local bank managers are making the advances. They are familiar with local conditions and know the circumstances of the individuals involved.

The speech from the throne indicates that parliament will be asked to increase the size of the loans to be made by the Canadian farm loan board and to amend the Farm Improvement Loans Act.

With the increase in the size of a farm now required to establish an economic farm unit, and in the amount of capital required to reasonably equip such a farm, the increased amount available certainly will be a welcomed amendment to the act. The increase in the amount of loan available will not, however, solve the problem if the loan to value ratio is by conservative appraisals brought down to a comparatively low level. In addressing the house on February 1st last year, I pointed out that there was a need for a scheme of longterm credit for the rehabilitation of young farmers and at that time made reference to the success of the work that had been done

The Address-Mr. Weselak by the administrators of the Veterans Land Act in settling veterans on farms following the last war. I believe the Canadian farm loan board could administer a program similar to that instituted for the veterans, under which supervised long-term credit loans could be made to young deserving farmers to establish them on farms, particularly in cases where ordinary commercial credit is not available, which is the case in many of the farming districts of Canada.

The Farm Improvement Loans Act has been good legislation and has done a great deal to provide farmers with low-cost credit to enable them to equip their farms with modern labour-saving equipment, which is so necessary to them to reduce their cost of production. In our area, as in others, considerable advantage has been taken of this available credit; and it has been of great assistance, particularly to those whose farming operations are in the development or expansion stage. It is therefore quite obvious that any amendment designed to improve the operation of the act cannot help but be of further benefit to those concerned.

Amendments are also proposed to the Prairie Farm Assistance Act. In our area, 1954 was the first year in which the act became generally applicable. My experience during the summer months while at home, in this respect, certainly gave me an appreciation of the difficulties encountered in the administration of this legislation. In 1954 the Manitoba government, aware of the dissatisfaction in Manitoba with regard to the operation of the act in many areas, authorized the appointment of a commission to make a study of the act itself and of alternative crop insurance schemes which might possibly be used as an alternative to the present legislation. The report was submitted to the government of Manitoba on September 9, 1955, and I would recommend it to all western members for thorough study, since it contains a wealth of information not only in regard to prairie farm assistance but also in regard to the experiences of the United States federal crop insurance corporation. The report also contains the commission's views regarding the Prairie Farm Assistance Act in Manitoba and suggested amendments to the act, which no doubt have received the consideration of the government and its officials.

In the constituency of Springfield we have the Berens River, Bloodvein, Brokenhead, Fort Alexander, Hollow Water, Little Black River, Little Grand Rapids and Poplar River Indian reserves, which comprise a substantial portion of the Indian population of Manitoba. The Fort Alexander and Broken-head reserves are located at the south end

IMr. Weselak.]

of lake Winnipeg, while the others range to the north on the east side of the lake a distance of 160 miles. The two reserves at the south are located on reasonably arable land, and I believe a great deal can be done, provided financing and guidance are made available, toward agricultural development of these reserves. I understand that preliminary surveys to this end have been made and I am sure that the interest shown in our Indian population by the Minister of Citizenship and Immigration (Mr. Pickersgill) will result in the closest co-operation between him and our newly appointed regional supervisor of Indian agencies to the advantage of the Indians of Manitoba. I am sure the proposed amendments to the Indian Act will be designed to facilitate the department's work in this connection and will be looked forward to with considerable interest.

Since my entry into this house, I have never made reference to the part the constituency of Springfield has played in the history of western Canada, nor of its importance to the economic welfare of Manitoba. Springfield borders on the province of Ontario north and south for a distance of 222 miles. On the west it is bounded north of the town of Selkirk by the east shore of lake Winnipeg, and south of the town of Selkirk it extends across the Red river to Stony Mountain and then skirts the city of Winnipeg and the town of Transcona. The constituency is representative of almost all occupational, ethnic and religious groups, who live and work amicably together for their common good.

On both sides of the Red river, extending from the city of Winnipeg to the town of Selkirk, are located mixed farms and large market gardens as well as other people located on small holdings and employed in the city nearby. This area is steeped in history, for here is located Lower Fort Garry, built 124 years ago, wholly intact and in an excellent state of preservation. It was in this area along the Red river that the early history of western Canada was enacted and where the story of Louis Riel began.

The central portion of the constituency is located in the Red river, Brokenhead and Whitemouth river valleys, and is one of the finest farming areas in western Canada. I say this despite the fact that in the past two years, owing to excessive moisture, we have had comparatively poor crops and the farmers in this area are at present hard pressed to meet their obligations and carry on their farming operations. This may seem an odd statement, but in 1954-and results will show that 1955 was not much better-the average wheat yield in the municipalities of Brokenhead was 9-5 bushels as against a long-term

The Address-Mr. Weselak

average of 19-7; of Lac du Bonnet 5 bushels as against a long-term average of 21-8; of Whitemouth, 5 bushels as against a longterm average of 16-8. One can readily see that they have been affected not only by price squeezes but also by drastic losses in production.

The eastern area of the constituency bordering the Ontario boundary and extending north between lake Winnipeg and Ontario is in the Precambrian shield. Through this area from the lake of the Woods to Fort Alexander on lake Winnipeg flows the mighty Winnipeg river, which has contributed so much to the economic development of Manitoba. It was along this river that the first discoverers of the west travelled to reach lake Winnipeg and then to travel south to where the city of Winnipeg is now located. On this river are located hydro plants generating 788,000 horsepower daily which supply the present needs of the province of Manitoba. On the river also is located the huge pulp and paper mill which provides employment for the communities of Pine Falls, Powerview and St. George and which also supplies winter employment to farmers in the area. This area also provides the finest fishing, hunting, swimming and boating within the areas of the two provincial reserves, namely, the Whiteshell and the Agazis.

Along the shore of the lake there is a great deal of fishing activity and fur farming. The mineral potential of this area has only been scratched. Gold has been mined for some time at Bissett. This area is rich in nickel, lithium, chromite, gold, copper, beryl and molybdenum. The Lithium Corporation of Canada, Falconbridge and Viola-mac are in the area doing development work and it will only be a matter of time until this area becomes a very important factor in our mineral production.

The problem of surplus wheat stocks has received in this debate a considerable amount of attention, and the opposition have made every attempt to lay the blame for this situation at the feet of the government. The minister and other speakers on the government side of the house have placed on the record facts and figures which show that in spite of ever-increasing difficulties Canada has retained and maintained the bulk of her markets. These speakers have shown that the situation is not an isolated Canadian problem but is a world problem which has developed as a result of several factors over which the government has no control. The first of these is within the country itself. It is the fact that Providence has been good to us and has given us bountiful crops which 67509-22

have resulted in greater quantities being made available for export consistently over a period of years. The second is the fact that crops throughout the world also have been good and that production as a result of subsidization by governments has had the effect of increasing production in traditionally importing countries, thus reducing their requirements and also making more wheat available for export in this country.

In an address to the Manitoba pool elevators at Winnipeg on October 28, Mr. Graham Spry, agent-general for Saskatchewan in the United Kingdom and Europe, a recognized authority on the problem, stated that the prairie wheat problem was not created in the west but is part of the world wheat situation. He went on to explain that it was not Canadian policy which had created this situation. Canadian farm policy, he explained, was stability at a price level which covered the cost of production and met fair and sensible competition. Fair and sensible competition, he said, does not exist and our Canadian wheat is being marketed in a world of production incentives and trade restrictions which have disturbed our normal markets.

In addition, the change in status of the United States from a marginal small exporter to the status of the largest wheat exporter of the world has further disrupted our trade in traditional markets. He described the Canadian wheat policy as the least artificial, the most sane in any country. These remarks were made with the thought that only a meeting of minds at the international level and a return to sane, sound and economic wheat policies throughout the world would solve this vexing problem which is facing the world today.

Previous speakers on this side of the house have placed on the record figures covering production, marketing and export which show that had we had normal production years there would have been no surplus. The solutions suggested by the opposition have been acceptance of sterling and soft currency, barter, giveaways and credit sales, and finally a more aggressive sales policy.

On the question of accepting sterling and soft currency I would refer the house first to an editorial in the Winnipeg Free Press headed, "Duping the Farmer", which reads in part as follows:

The most important of these is the one that Premier Douglas of Saskatchewan fastened on once again in a speech on Wednesday night. It is that Canada should take "payment" for wheat in foreign currencies-particularly in sterling-where sales cannot otherwise be made. This idea makes a certain superficial appeal. That is why it has been around for a long time. But in the form in

The Address-Mr. Weselak which it is usually put forward it is simply a deception a smart-aleck idea from people who ought to know better and care more about the farmer. There is of course no difficulty whatever about taking in return for wheat or anything else, sterling or any other currency. The question is what we can do with the sterling when we have it. The Canadian farmer does not want pound notes. He wants dollars or goods.

The proponents of "sterling sales" talk as if we could get goods in exchange. That is untrue- not by wish of ours, but by obvious wish of the British or anyone else, in their own interests. If, having taken sterling, we are then allowed to spend the sterling on buying goods for Canada, or on making foreign investments that appeal to Canadians, then from the point of view of the United Kingdom they might just as well have paid us in dollars in the first place.

I would refer also to a statement made in Winnipeg before the farmers' union convention by Mr. W. G. Coventry, United Kingdom trade commissioner. In the issue of the Winnipeg Free Press of December 6, 1955, there is the following report with respect to what he had to say:

In an address to the Manitoba farmers' union fifth annual convention in Winnipeg and in a later questioning period, W. G. Coventry, United Kingdom trade commissioner, explained why these much advocated policies were not economically reasonable. But the speaker did suggest two practices which he said would stimulate movement of Canadian commodities into foreign markets.

The article goes on to say:

Canada could not sell more wheat to Britain, or to other countries, by accepting sterling, Mr. Coventry said, because it was only "payment deferred". The account would have to be settled with the Bank of Canada later. "You will never get the Bank of England to allow purchase in Canada for sterling", he added. The eventual need to settle with the Bank of Canada would be "a threat hanging over its head". By the same token, no other country would pay for Canadian goods with their own currency.

Giveaway programs were all right at times, Mr. Coventry said. They were better than "destroying the produce". But the British had "a dogged pride" and would not accept a bushel of free Canadian wheat. Mr. Coventry said he did not feel barter agreements were profitable because they called for specific orders to manufacturers to produce goods, specially designed for the other country in the agreement.

With regard to credit sales, sales on credit have been made to Poland, Brazil and Yugoslavia through the medium of the export credit corporation for substantial quantities of grain, and I am sure that should credit be required by any country it will be similarly made available.

With respect to giveaways, I might say that perhaps the United States can afford this luxury but I do not believe we can. In 18 months their giveaway program has cost the United States $1,692 million. To bring this giveaway program into its proper perspective, I think we must recognize that we in Canada export approximately 75 per cent of our wheat production and consume at

home approximately 25 per cent. The United States, on the other hand, consumes within their own country approximately 80 per cent of the wheat production and exports a small surplus of 20 per cent. The United States is in much the same position as we are with our butter.

We must also recognize that in Canada any giveaway program of the scale entered into by the United States would have to be paid for by a mere 16 million people compared with the population in the United States of over 160 million. The funds available to the United States government for this purpose can be indicated by the fact that this year's budget in the United States will be in excess of $68 billion while ours is somewhere in the neighbourhood of $4 billion. '

I think these comparisons should be kept in mind when we suggest that our wheat surpluses be disposed of completely by giveaway programs. I have no objection to the giving away of wheat to countries which require it and are in need, but I do not think we should disrupt world markets by entering into a war with the United States in this respect. An example of the type of deal entered into by the United States under this program is illustrated by the fact that an agreement was entered into by the United States last October with Japan to provide Japan with $170 million worth of farm products over and above her usual imports. In the deal made with Japan the United States is to accept local currency. Thirty per cent of this local currency is to be held in Japan and used by the United States for offshore installations, military housing, exchange students and to develop United States markets in Japan. The remaining 70 per cent would be used by Japan for the erection of hydro stations, the development of agriculture and the promotion of a Japanese productivity centre. Not a cent of this money will return to the United States. It is nothing but a dead giveaway program. Similar deals have been made by the United States with Brazil, Ecuador, Colombia, Egypt, Israel and Yugoslavia. The result of the United States program has been that while her average exports before the war were roughly 56 million bushels, she now exports in excess of 300 million bushels. These deals are bound to affect and to be reflected in our Canadian exports.

What are some of the things that our government has done to meet this situation? During this parliament the Canadian government entered into an agreement with Japan. It is a reciprocal trade agreement which gave Japan certain concessions and under which Japan also undertook to purchase certain

commodities in this country. For a year or two, as the result of that agreement, we had a splendid market with Japan. We had a very good market and our exports to Japan rose to high levels. But since the United States have entered into their disposal program-and you can hardly blame Japan for this when you consider the deals I have just related-our exports with Japan have decreased. In the long run I believe Japan will be a valuable market of ours but our exports to Japan have been reduced. The Canadian wheat board has been pressing sales by inviting trade delegations from various countries with whom we deal in order to acquaint them with our method of handling growing and shipping our Canadian grain which is the best grain in the world and which has created standards which are acceptable the world over. The wheat board has also worked in our interests by appearances before official bodies in the United States to protect the interests of the Canadian grain producer. Finally, the wheat board has taken a realistic approach in the matter of grain pricing. Where necessary and where it has been advantageous they have reduced the price of grain and have refused to be panicked into a price war. I think the statement of the minister to the effect that orders are coming in at a rate exceeding that of last year certainly justifies this stand on the part of our Canadian wheat board.

The Canadian government itself has twice recently sent delegations to the United States to discuss this problem and to try to arrive at an amicable solution. I understand that a further conference is arranged for the latter part of January to discuss the problem once more. Finally, our adherence to and support of the principle of the Geneva agreement on tariffs and trade is one of the things which is doing a great deal to preserve our markets throughout the world. I feel satisfied that the wheat board and the right hon. the Minister of Trade and Commerce (Mr. Howe) have left no stone unturned to promote sales. As I said before, his statement to the effect that orders are coming in at a fairly good rate certainly seems to justify our confidence in our Canadian marketing policy.

In conclusion, Mr. Speaker, I should like to express to the right hon. the Minister of Agriculture (Mr. Gardiner) the appreciation of westerners for the investment announced last June to be made in western Canada in the amount of $650,000 for the erection of a rust research and science building on the campus of the University of Manitoba. If conditions are favourable to rust, losses on 67509-22i

The Address-Mr. McBain the prairies can exceed $1 billion in an individual crop year. The rust research laboratory in Manitoba over the years has kept pace with the appearance of new races of this scavenger. Anything that can be done to facilitate this work is a sound investment. I am sure our eminent scientists in Manitoba will welcome the building which will no doubt improve their working conditions and increase their efficiency.

Subtopic:   IS, 1956
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July 23, 1955

Mr. Weselak:

I think it should be drawn to the attention of the committee that feed grains from western Canada are brought to the lakehead under the jurisdiction of the wheat board and are rigidly inspected by the board of grain commissioners. The jurisdiction of the board of grain commissioners and the wheat board only extends to the lakehead.

I think the problem arises largely when these feed grains leave the lakehead and pass through the milling plants in the various provinces. These matters are under provincial jurisdiction, and perhaps the provincial governments should take a look at them and see if that is not the cause of some of these complaints.

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June 21, 1955

Mr. Weselak:

Mr. Chairman, I should like to join the hon. member for Provencher in congratulating the minister upon the amendments he has brought in. In eastern Manitoba we find a great difference in the districts. The levels will vary and crop conditions differ generally from section to section. The reduction of the area to six sections in the case of flooding will certainly be of assistance. The Manitoba government set up a crop insurance commission which brought in an interim report on March 25, 1955, in which they indicated that the main dissatisfaction with P.F.A.A. was as follows.

First, the payments are too small. Second, disproportionate amounts have been collected and paid out in Manitoba because this province enjoys relatively stable yields and does not, generally speaking, suffer the crop damage experienced further west.

Third, the act frequently fails to cover losses from flooding, insect damage, hail and other crop hazards which are typically local in nature. Fourth, the P.F.A.A. was designed primarily for drought, which is not Manitoba's main crop hazard. Fifth, the act is too inflexible. The 18-section block used as the basis of qualification is too large and too rigid.

Then they go on, and the twelfth item is that the act does not make any provision for land which owing to adverse spring conditions cannot be seeded.

Those were the suggestions received by this commission during its travels throughout the province. It has been suggested that there should be greater flexibility in the granting of benefits through a reduction in the size of the qualifying -block. I feel that in connection with flood damage the present provision for 6-section blocks will prove a partial answer, if not the whole answer to these complaints which were expressed by people who came before that commission. I thought in all fairness that these should be put on the record.

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May 6, 1955

Mr. Weselak:

A great deal of emphasis has been placed on some statistics in this debate in regard to questions relating to date and port of entry, and so on. I have had occasion to handle dozens of applications for citizenship for various people from various parts of the world in my constituency. In the majority of cases they do not know their port of entry or the exact date of entry and other related details; but I have always found that as long as the basic qualifications for citizenship are established the department has never refused an application on the ground that this information is not available.

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April 28, 1955

Mr. A. B. Weselak (Springfield):

Mr. Speaker, I listened with considerable interest to the remarks of the speaker who preceded me, the hon. member for Calgary North (Mr. Harkness), and particularly when he pyramided figures of wheat board costs of operation per bushel. He stated he was not too sure of some of his figures; but if he had examined the wheat board report for the crop year 1953-54 he would have found that 50433-207J

The Budget-Mr. Weselak the receipts of the board were 398,031,819 bushels. He would have found that the cost of operation, including carrying charges, terminal storage, interest and bank charges, handling stop-off and diversion charges, drying charges and administrative and general expenses totalled $35,767,299.77. It would have been a simple matter of mathematical calculation to arrive at a figure of less than nine cents a bushel as the total cost chargeable to farmers in that pool.

In entering this debate I propose to restrict my remarks in the main to aspects of the budget which relate to our international position in the matter of trade. Before doing so I should like to comment generally upon the budget as a whole and to congratulate the Minister of Finance (Mr. Harris) upon the responsible approach he has taken in preparing his first budget and the capabilities he displayed in presenting it.

The past year has seen a drop in the gross national product of 2 per cent, which has reflected itself in loss of national revenues and a resulting deficit in the past year. This drop, as has been stated, was mainly due to a poor crop in western Canada which has resulted in a slowing down of economic activities by reason of the fact that farmers curtailed purchases last year when they saw their crop deteriorate owing to the weather. To help accelerate recovery from this situation, which in the past few months has shown signs of improvement, the tax reductions in the budget are welcomed; and while their effects may not immediately be obvious they will no doubt have the effect of encouraging economic expansion and stimulating business activity in this country.

I see nothing seriously wrong with limited deficit financing in times when a lift is needed to stimulate activity and relieve unemployment. Every prudent person believes in accumulating for the time when he may be short. From 1945 to 1954 substantial surpluses had accrued, when times were buoyant. Now it is only common sense if necessary within a limited degree to budget for deficits when economic conditions warrant such action. We have heard the criticism that we are borrowing on the future. It can be just as well said that we are cashing in on the past, when surpluses were budgeted for and did accrue to the treasury.

As to the relief given, income tax reductions will provide additional purchasing power. Added stimulus will be given to corporate investment by the slight reductions in corporation taxes. The reduction of the excise tax on automobiles will leave further purchasing power available and assist the automobile industry. Reductions in tariff items on agricultural items will also reduce


The Budget-Mr. Weselak

the cost of farm operations. These concessions were well placed, and all will help the expansion of economic activity in the country and so promote employment.

In the amendment proposed by the official opposition we find the charge that the government has failed to recognize the serious position in which the Canadian farmer and other producers find themselves. I stated at the outset of my remarks that I intended to direct my remarks to our trade situation, which I presume is the item of government activity at which this charge is levelled.

In the course of this debate and others we have heard from opposition benches charges to the effect that Canada has lost her British market, and also to the effect that this government has callously ignored the difficulties of certain industries in which unemployment exists, and that it has failed to provide adequate work for these people and their employees.

The reduction of our sales to Great Britain has been the result of many factors. In the debate in reply to the speech from the throne I drew attention to the fact that the comparative prices of agricultural products laid down in England by other countries were substantially lower than prices existing in Canada for the same products. I expressed the opinion that this competition could only be met by export subsidies or substantial reduction in domestic prices.

There is however another reason for the drop in our exports to England, and this applies not only to England but to all countries with which we have trade relations. And that is the practical problem of balance of trade.

Our goods can only be paid for by buying the goods of others, in the field of international trade. The hard fact is that we either take goods in payment or cease to exist as a trading nation. We cannot eat 400 million bushels of wheat, consume $915 million worth of pulp and newsprint, or our mineral production. Unless we can dispose of this production we cannot pay the producers of these commodities and they in turn cannot pay those employed by them and those who service them and supply them with equipment and materials.

We have repeatedly heard the argument in this house "Let us bar foreign goods and make work for Canadians". This would be all very well if we were a self-sufficient nation and independent of world trade; but we are not and therefore must be realistic in our approach to the problem. And it is my observation that this government, in spite of most pressing demands from the opposition and many industries, has resisted,

in the interests of our Canadian economy, these demands for more protection which would have the effect of barring foreign imports and of increasing prices to con-sinners.

In specific cases and on particular merit, adjustments may be necessary and. advisable; but any broad blanket advocation of higher protection is certainly not in the national interest.

Particular reference in this debate has been made to the textile woollen industry and to the unemployment resulting from British competition, and the inference has been left to the effect that the government has given no consideration to this problem.

In all fairness, I believe that the record of this government in this regard should be brought to the attention of the public and in the limited time available I propose to deal with this matter.

On May 12, 1954, as a result of numerous representations from the woollen industry and those dependent upon it, the former minister of finance directed the tariff board to make a study under the Tariff Board Act of item 554b of the customs tariff, which provides for a tariff on woven fabrics composed wholly or in part of yarns of wool or hair n.o.p. a British preferential tariff of 20 per cent, and 12 cents per pound but not to exceed 50 cents per pound.

As a result of this direction, hearings were held in Ottawa and a number of plants were visited by the board and their economists. Appearing before the board were representatives of the Canadian industry, of the British wool industry, boards of trade of communities affected, agricultural associations, manufacturers, consumers and others. In all, 58 associations, companies and organizations submitted evidence or made representations.

The evidence indicates that those appearing before the board realized the seriousness of the woollen textile situation, sympathized with the workers who had lost their jobs, with the communities affected and with those who had invested their savings in the plants which have been closed. Nevertheless, it was the belief of many that the practice of helping a languishing industry by increased tariff protection, when other causes were the main contributing factors, was not sound.

In the direction to the board, in addition to requesting all relevant information concerning the woollen industry, the minister also requested all relevant information concerning as well the implications for the Canadian economy of imports of wool fabrics from the United Kingdom.

In the evidence submitted it was shown that our imports from England in 1952 were

roughly $360 million; in 1953 $453 million, and the latest information indicates that in 1954 they had dropped to $392 million. Of these amounts, in 1952 woollen textiles accounted for $29 million; in 1953 for $38 million and in 1954 to a lesser amount averaging in recent years about $33 million a year, or about 12 per cent of the total earnings from sales of British goods in Canada. Our exports to the United Kingdom fell in 1954 to $652 million from $665 million in 1953.

The board therefore had two directives: first, to determine whether tariff item 554b was the cause of the difficulty in the wool cloth industry and, secondly, to inform the government regarding the implications a tariff increase might have on our trade relations with the United Kingdom.

In the hearings before the board, the industry and its supporters including suppliers of material, technicians, labour unions and some municipal authorities, argued that the real cause of the disaster that had overtaken the industry lay in the devastating effect upon prices in Canada of competition from British producers and the increased volume of their shipments to Canada. On the other hand, opposing parties, particularly the national council of clothing manufacturers of Canada, the United Kingdom wool textile delegation, the Canadian Federation of Agriculture and the interprovincial farm union council contended that although there were other causes, the major cause of the difficulty in the industry was the declining total demand in Canada for wool cloth, and that the import of British wool cloths, as such, was not the main cause of their difficulty.

The board report discloses that since 1948 there has been a drastic decline in the total consumption in Canada of wool fabrics, a drop from 47.5 million linear yards in 1948 to an estimated 31 million in 1954. In the war years and to 1948, demand was strong and the industry thrived, but by 1949 the demand began to decrease. The outbreak of the war in Korea, however, led to increased production and prices and by March, 1951, wool prices had risen three times higher than in June, 1950. This was followed by a drop in price by September of the same year of 64 per cent. Large inventory losses were sustained, weakening the financial position of the industry. In 1952 demand dropped still further, plants were forced to shorter time and employment declined considerably. In 1953, some improvement was noted which carried into 1954.

The report then proceeds to discuss the factors which contributed to the decline in

The Budget-Mr. Weselak demand, such as changes in type of demand, production of worsteds, cloths, woollens and blends.

In their reference to the 17 closed mills, the board expressed the opinion that their closing was probably due to a combination of factors, stating that there was no doubt that the management of some of the older mills, of which there were 11 closed, were not as alert and efficient as they should have been. Old machinery had not been replaced as it depreciated; often no salesmen were employed to meet competitive markets in recent years and, finally, they had failed to adapt production to changing demand.

The findings of the board regarding wages and employment were to the effect that in the industry labour is a substantial item in the cost of production. They found that despite substantial increases since the end of the war, wages were comparatively lower than those paid in other manufacturing industries, the average wage being 111.7 cents per hour in the industry as compared with 141.7 cents per hour for manufacturing generally. To meet the problem of high labour costs, production must be efficient. Manufacturers must take advantage of latest improvement in equipment to make possible considerable reduction in labour costs. The report indicates that full advantage has not been taken by the industry of technological changes which would have a marked effect in making the industry competitive.

The brief of the Canadian Federation of Agriculture points out that productivity in Canada per man hour over the past 30 years has increased about 2 per cent per annum compound rate. On this basis, the production per man hour in the woollen industry should have reached an index of 132 in 1953 instead of 111. It is significant to note that while the productivity per man hour in the woollen industry stood at 111 in 1953, the real wage index for the industry stood at 155.

In examining the financial position of the industry, the board found that from 1939 to

1950 the industry had been profitable. In

1951 and 1952 severe losses were evident in the companies examined and it was evident that a substantial portion of the industry was in serious difficulty. The closing months of 1954, however, showed an upswing in activity and it appeared that this trend would continue.

The report discloses that approximately 1,450 workers had lost their jobs as a result of closed mills, and estimates that 2,800 had been laid off in the period 1949 to 1953, many of whom had found other employment.

After examining conditions in the industry, the board report proceeds to cite and examine

The Budget-Mr. Weselak the causes of its present difficulty and classifies them under the following headings:

1. Decline in the demand for cloth containing wool.

2. Competition from synthetic fabrics.

3. Expansion of production facilities in relation to markets.

4. Merchandising policy of the industry.

5. Competition from British wool-cloth exporters.

The board expressed the opinion that the decline in the demand for cloth containing wool had been the most important single factor contributing to the present state of the wool cloth industry, demand having dropped in 1952 by 42 per cent of the 1948 peak and risen in 1953 to a drop of 36 per cent. They attributed this drop mainly to competition from synthetic fabrics, which in many cases have replaced woollens, generally are less expensive and not subject to wide price fluctuations.

Regarding the third item, "expansion of production facilities in relation to markets", the board found that following the war, plants were in a run-down condition. Demand was still heavy, with the result that surpluses previously accumulated were used up to reequip and expand plant facilities in order to meet a market starved by war restrictions. When in 1948 demand decreased it was found that production facilities exceeded the market, competition for available markets increased, prices fell and only the most efficient producers could carry on, and some plants were compelled to close their doors, or operate on part time.

As to the styling and merchandising policy, the board report indicates that considerable criticism was levelled at the industry by manufacturers and consumers for their failure to change styles rapidly enough to meet changes in demand. Apparently, there has already been considerable improvement in the quality and style of many lines of Canadian production as a result of this experience, but markets were lost in the meantime.

Regarding merchandising, the criticism was -that the industry had failed in their promotional campaign of Canadian-produced woollen goods, particularly in making Canadian consumers aware of the quality and good -value of Canadian wool goods and in following up this campaign with a system of labelling to prevent misrepresentation. The report in all fairness indicates that until 1951 this was a minor problem, and that the Canadian manufacturer now realizes that he must ally quality production with an active sales policy if he is to hold his market.

The linal important cause of the industry's trouble, "competition from British wool fabrics", was the main reason for the inquiry since, in its final submission to the board, the wool cloth industry had maintained that, owing to price competition from the United Kingdom industry, its continued existence was in jeopardy.

Of the total decline in the market from 1948 to 1954, which is estimated to have been about 16 million yards, Canadian production was decreased by 11-5 million and British imports by 4-6 million. In all sections of the market British imports had gained ground, but not to the extent that had been generally the belief, namely, 7 per cent in blends, 10 per cent in woollens, and 23 per cent in wool worsteds. This bore out and confirmed the board's deduction that much of the present difficulty was not the result of British competition but rather owing to the general shrinkage in demands for woollen cloths.

In examining the effective rate of duty, the board found that in 1954 the percentage of value for duty was three-tenths of 1 per cent lower than 1948, despite reductions in price, which would indicate that the 50 cent maximum tariff had become the governing rate in most cases, resulting in effect in a specific duty on the commodity. In view of these and other considerations, the board arrived at the conclusion that the effective rate of duty, per se, could not be considered as a cause of the industry's present difficulty, but on the other hand they did not deny that the competitive position of the British and Canadian industry had not changed since 1948.

As a matter of fact, the report points out that Canadian labour costs are 50 per cent higher than those in the United Kingdom, putting the Canadian manufacturer at a disadvantage whioh requires him to reduce labour costs by increased use of laboursaving machines, higher work loads and more efficient planning and operations. The industry is to be commended on recent reports to the effect that cognizance has been taken of this aspect of the problem and that it has been met in many ways.

The report concludes with the observation that rising wage rates and shrinking production have combined to increase the unit costs of Canadian cloth in recent years, with the result that in spite of a corresponding rise in British costs our competitive position has deteriorated.

In summarizing their report, the board had this to say on page 47, which I think is worthy of record, and I quote:

From the board's inquiry into the state of the wool-cloth industry, the following salient facts have emerged:

1. The total demand in Canada for cloth containing wool has fallen drastically since 1948. The effects of this decline in demand, per se, appear to have been more severe on the woollen than on the worsted section of the industry.

Among the factors contributing to this shrinkage of the market have been:

(a) the rise in wool prices, 1950-51, causing later inventory losses to the industry and, by the same token, initiating consumer resistance to increasing prices of wool clothing;

(b) the growing competition of the domestic synthetic industry, which competition seems to be impinging more on woollens than on worsteds;

(c) the competition of consumer durable goods for consumers' dollars, resulting in consumers spending a decreasing proportion of their income on clothes and personal furnishings.

2. As a result of the fall in demand, the Canadian market for cloth containing wool has become increasingly competitive; moreover, in recent years British competition has been exerting a strong influence on the level of prices for wool cloths. This influence appears to be stronger in the worsted section of the market.

3. Rising wage costs and shrinking production have combined to increase the unit cost of Canadian cloth in recent years. In spite of rising British costs this is still considerably higher than that of British exporters.

4. The effective rate of duty on wool cloth has shown little variation since 1948 and, per se, cannot be considered a cause of the wool cloth industry's present malaise.

Three of the four facts above stated-the shrinkage in total demand, the downward trend of prices, and the rising costs of Canadian producers -when taken together constitute the background to the picture that presented itself as the board's inquiry progressed. They help to explain two further and resultant facts; that employment has fallen, and that some sections of the industry have been and still are in financial distress. Equally, however, they suggest at least that some mills which are responding to the challenging situation will continue to hold their own; and that among those which appear unable to do so further mortalities would seem inevitable.

Hon. members will recall that in December of 1953 Bill No. 29 passed through this house to prevent end of line dumping in Canada, particularly of textile goods. It passed against the vocal protest of some members and with considerable concern on the part of others. Many thought that this was a retrograde step in our efforts to increase our international trade upon which we are so dependent. Recognizing the fact, however, that this type of competition was almost impossible to meet and that the industry was in difficulty the bill went through and became law. The industry, however, felt this was not enough and the result was the reference I have referred to and the board's subsequent report which attributed the difficulty to internal competition in the main rather than to imports.

The Budget-Mr. Weselak

We have heard complaints in this house and in the country of United States nonadherence to the principles of GATT in its establishment of quotas and import restrictions. Usually the United States has good reason for these actions, and a great deal of consideration by their tariff authorities is given to each problem as it arises. The practice in Canada of referring these matters to the tariff board is to be commended and should be continued. Tariffs should not be imposed merely as a result of political pressures to the detriment of the country as a whole and this report is a classic example of the inadvisability of accepting the principle or theory that tariff protection is the only solution to a problem of this nature. This item is also bound by GATT and only the most serious considerations should result in its disturbance.

Hon. members may often wonder why western representatives, be they farmers, business or professional men, are and always have been advocates of low tariffs. The answer lies in the fact that we recognize our dependence on exports. We recognize the fact that this is not only a prairie problem but a national problem. We know that, if we are not able to find remunerative markets for our surplus production, the farmers' and primary producers' purchasing power is cut down. The effect in the cities, towns and villages in these communities is immediately apparent but it does not stop there; it moves to eastern Canada where much of the industry of the country is concentrated, and they too feel the pinch.

It can be said without hesitation that most of the economic difficulties experienced in this country today can be attributed to the decline last year of grain exports to England of almost $300 million and to a loss of crop value this year as a result of weather of a sum similar in amount. Our economy depends upon export of primary products and to a limited extent of raw materials and toward this end this government has done a tremendous job of saving GATT, which has served us so well in restraining other countries from indiscriminately imposing import quotas and prohibitive tariffs against entry of our products. The attitude of the United Kingdom may be gathered from a report in the Winnipeg Tribune of April 13 of this year, which states:

British Labour party leader Clement Attlee said today his party would favour Britain's re-entry into the international wheat agreement but only under certain conditions.

Mr. Attlee hinted that one of the conditions would be for the countries that sell Britain wheat to buy more goods from Britain.

The Budget-Mr. Weselak

And he is directly quoted as saying:

But we also want to sell goods. It depends on whether the people who want to sell us wheat are prepared to buy our goods.

Here we have one of the answers by a responsible statesman from the United Kingdom giving an indication of what an increase in tariff may do to our British market.

The woollen textile industry has asked the government of Canada to abandon its liberal international trade policy which it has been attempting to establish before and since the inception of GATT in 1948. They have asked that protection against British woollen cloth be increased so that British imports will be reduced, hoping that more Canadian wool cloth would be sold in Canada and less British and that more employment would be created in Canada for workers in woollen goods factories. They have asked for what appears to be a simple solution to a difficult problem.

The problem, however, is not that simple. The granting of protection, while it may have temporarily eased the difficulty, would not have provided the solution, and the report so indicates. The real problem to be faced by the industry is the decreasing demand for the product, resulting mainly from competition with synthetics and the need for increased efficiency to levels higher than those achieved in recent years.

Supposing this government had acceded to the request of the industry for a prohibitive tariff, what would have been the results? In the first place the price to the consumer would have increased with the result that there would have been a further swing to synthetics, a swing which was experienced when woollen fabrics reached their high early in 1951. Any decline in the consumption of woollen goods would affect the Canadian industry to a greater extent than it would affect imports. Earlier in my remarks I pointed out that from 1948 to 1954 the market declined by 16 million yards; of this decline the Canadian industry lost 11-5 million yards and importers 4-6 million yards. It is therefore doubtful whether an increase in tariff would help the industry. On the other hand, it might well have the effect of further reducing consumption to the extent that the industry would be in far more serious trouble.

Secondly, granting higher protection to the woollen industry would lead other industries to consider such action as a strong precedent and pressures would be exerted by many industries experiencing difficulty for further tariff protection. Canada has been a leader

in more liberal international trade policies, and any change in our position would strengthen the force in countries which seek to reverse the trend toward greater freedom of international trade.

And, finally, the problem of shortage of dollars which at present limits British purchases in this country is not an academic one, as is well illustrated by the British Labour party leader's remarks which I have just quoted. It is a cold hard fact and something which is well known by the farmers of Canada and other producers who look to the British market to sell their surplus products. A reduction in British exports to Canada as a result of higher tariffs would put into reverse a policy which aims at bringing the day nearer when the pound sterling would be freely convertible and British import restrictions removed. It might be of interest to members to know that the textile industry in England is also in difficulty. I have here a Reuters dispatch which appeared in the Winnipeg Tribune on April 22, which is headlined:

Lancashire Mills Fight to Survive.

Fewer wheels are spinning in the mill towns of Lancashire, where Britain's industrial revolution was born a century ago.

Unemployment is mounting.

Cause of the trouble is increasingly stiff competition from India and Japan, who learned many of the techniques of mechanized textile production from Lancashire.

Their goods, produced with a lower labour cost, are underselling Lancashire textiles overseas and even on the British home market.

Extended stoppages which began before Easter affected nearly 40,000 textile workers and there are widespread fears the unemployment will increase.

Many workers are leaving the industry fearful that unemployment will be chronic. The cotton board disclosed recently that in two months this year 4,000 textile workers left to find more secure jobs.

Indications are that many more plan a switch, even if it means taking lower wages.

The industry as a whole is critical of the Conservative government for not taking action on proposals by employers and trade unions to counter the effect of foreign competition.

But some relief was afforded this week in the budget which cut purchase tax on household textiles.

Walter Lee, secretary of the Oldham operative spinners' association trade union, said: "Confidence in the trade is lacking. Buyers are holding off placing orders except on a hand-to-mouth basis".

Here we have the type of criticism levelled at a Conservative government which a Conservative opposition in Canada sees fit to level at the Liberal administration.

In concluding, Mr. Speaker, I would draw the attention of the house to the closing remarks of the Canadian Federation of Agriculture contained in their brief to the tariff board, which I believe touches the root of

the problem and suggests a possible remedy. I quote now from pages 27 and 28 of the brief:

As we said in our opening remarks, we fully realize the seriousness of the present woollen textile situation. We sympathize with the distress of workers who have lost their jobs, of small towns which have felt the loss of business from unemployment and of businessmen who have invested their savings in these plants which have been closed. In spite of this we do not believe it is sound to attempt, by increased tariff protection, to restore the industry to its post-war high volume of activity.

Up to this time the usual way to help a languishing industry has been to increase its tariff protection. However, we believe that it is time a completely new approach is made to problems of this nature. We believe that where it can be shown that due to fundamental and rather rapid changes in economic conditions an important industry is in serious distress, then the government should accept some responsibility to aid the industry, and especially the employees and communities adversely affected, to reorganize on a sound basis to meet the problems of the changed situation.

There' are probably a number of ways in which this responsibility can be discharged. We will suggest one possible line of approach here.

It may well be that careful examination will show that some of the plants now closed would be able to re-establish themselves in the same towns by producing products in which they have a greater comparative advantage than in woollen cloth production.

We would point out that there are precedents for government assistance in the reorganization of industries which face fundamental and permanent changes in economic conditions. An example of one is the re-organization of the apple industry of the Annapolis valley of Nova Scotia, which we have cited.

Higher tariffs are a burden on consumers every year. Government financial assistance for reorganization on a sound economic basis need only be provided once. Such a policy we believe would be in the national interest and very directly in the interests of the employees, the employers and the towns which are presently in distress.

We put this suggestion forward for consideration believing it to be a more reasonable and sounder solution to the problem than either the proposal of higher protective tariffs or a policy of allowing the economic law of international comparative advantage to take its full toll of an ailing industry.

A lesson might possibly be taken by industry from a Chicago industrialist who appeared before the ways and means committee of the United States congress, which comment appeared in the Winnipeg Tribune on April 8, 1954, as taken from the Globe and Mail. The comment reads:

A Chicago industrialist who has found a stable market for his products against Japanese competitors who pay only one-eighth of his labour costs, Charles H. Percy, laid bare for the ways and means committee of the congress at Washington the story of his company's progress in cost-cutting, product improvement and maintenance of profits, in the face of severe competition from Germany, Japan, England, Switzerland, Austria and Belgium. In one instance his company's competitive bid on tenders open to the world for camera lenses still would have been lowest-and profitable-without the allowance made for tariff protection.

The Budget-Mr. Regier

As a manufacturer of photographic equipment, Mr. Percy's firm has had to meet all the post-war hazards to international trade in their most severe form. It has not been content with revolutionary reforms in production techniques at home. It also has engaged in a form of capital export which shares with foreign collaborators the advantages of those reforms. Annual sales of the company are in excess of $40 million-and he still wants congress to go all the way in the Eisenhower freer trade program.

The climax of Mr. Percy's statement was that these results arose directly from the influence of severe competition, and that it is doubtful whether the new techniques of his firm ever would have been developed without that spur. He now frankly welcomes the opening of the United States market to all comers in his field. If he cannot compete in a certain line, he will abandon its production and let the foreign producer have the market. He did just that in one instance, after taking a loss of a million and a quarter dollars. He holds that this course is good for his industry, for the national economy, and for the promotion of profitable foreign trade in general.

Mr. Percy's all-out advocacy of President Eisenhower's program for freer world trade is thus the result of practical experience as a successful world trader in one of the most competitive of all international industries. His story is one of the most impressive documents in the contemporary economic record. It is recommended without reservation to academic and practical economists, government planners of trade and fiscal policies and to industrialists generally. It is a complete answer to the problem of successful competition.

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