In this connection I want to read just one of the many resolutions which reach me in the mail daily, because opinion in the west is very much stirred up on the subject of this combine. I am quoting from the Penticton Herald of April 2:
The Penticton Co-operative Growers at their annual meeting passed the following resolution:
Whereas the fruit industry in the province is at the present time in a precarious condition to the extent that it is almost impossible for the grower to recover a living over the cost of production, and
Whereas the cause of this condition has been shown by the Duncan commission to be the result of vicious and unprincipled methods used by the Nash-Mutual interests in selling British Columbia products, and
Whereas Commissioner Duncan in his findings recommended among other things that in future jobber-owned brokerage houses be made illegal,
Therefore be it resolved that the Penticton Cooperative Growers, in annual meeting assembled, request the Dominion government to prosecute the Nash-Mutual interests with the purpose of securing restitution of moneys unlawfully deducted, and that the necessary steps be taken by the government to have the Dominion parliament at its present session enact legislation declaring jobber-brokerage houses to be illegal, and bringing into effect other recommendations made by Commissioner Duncan in the interests of producers.
I want to pass from that to a consideration of the dumping situation. The principle of protecting a country's products from the dumping into it of similar products from another country has been adopted in many parts of the world. Australia has it; New Zealand has it; South Africa has it; the United States has it, in a very violent form. Under the 1922 tariff act of the United States, if it can be shown to the president that importations are being made which may injure an American industry, the president may declare a duty; he may even forbid entry until an investigation has been made. The United States use that dumping clause. We read in the Ottawa Journal of March 28, the following despatch from Washington:
Anti-dumping provisions of the Tariff act were applied to-day by the treasury against the importation of pig iron from the province of Ontario.
They have no compunction about using it. Eighteen years ago-under the 1907 act- Canada adopted the well known anti-dumping clause. That clause has never been repealed nor amended. I want to touch
[Mr. Stirling. 1
on this matter shortly, because I am quite sure that there is a great deal of misunderstanding throughout the country, and even possibly in the minds of some hon. members of this House, with regard to the anti-dumiping situation. The one and only dumping clause in the act respecting the Customs Tariff provided that a duty could be charged amounting to the difference between the actual selling price and the fair market value with this proviso:
Provided that the said special duty shall not exceed fifteen per cent ad valorem in any case.
As the years went on and the western Canada boxed fruit crop increased in size it became quite evident that that clause was being evaded. Furthermore, there were several years when on account of a glut in the American market, their fruit was being sold at slashed prices and when it entered Canada at those same prices, with the fifteen per cent restriction still on the statute book, the antidumping provision was perfectly useless. So as a result of representations made 'by the fruit growers in 1921 the previous administration amended the valuation clause in the Customs act-they did not touch the anti-dumping clause in the Customs Tariff 1907-so as to enable the Minister of Customs to pay attention to the cost of production as well as to the fair market value. That clause was a good one and was made use of in that fruit and vegetable season. A change of administration took place, and the present Minister of Finance (Mr. Fielding) in his budget speech of 1922 declared the government's intention to repeal the amendment to that clause in the Customs act. It was repealed, but owing to the consternation which that action caused among the fruit growers and the representations they made to the government, a couple of months later, the hon. Minister of Customs (Mr. Bureau) proposed an amendment to the Customs act which introduced clause 47A. The gist of 47A is that if dumping is taking place the Minister of Customs may, if he chooses, report the matter to the Governor in Council and the Governor in Council may, if he chooses, authorize the Minister of Customs to value such goods for duty notwithstanding any other provision of the act. That did not entirely satisfy the fruit growers, but it was certainly looked upon as better than nothing. Two years ago the Minister of Customs took a trip through western Canada and I had the pleasure of accompanying him part of the time through the valleys'of the interior of British Columbia. He saw the conditions for himself; he appeared to appreciate the situation, and the fruit growers felt
The Budget-Mr. Stirling
satisfied when he left that he would do what he could to apply a remedy. However, toward the end of last year it began to be whispered about that all was not well with the dumping provision. When I reached Ottawa I placed six questions on the order paper. The first three referred to the amount of money which had been collected in duty, and the second three asked what claims, if any, had been made for rebate, the reasons for those claims, and the amounts. The only answer vouchsafed to me was a partial answer to questions one, two and three; I received no information with respect to the latter part of the question regarding rebate. I do not think that is to be wondered at, now that the Duncan report has come out because there are several paragraphs in that report which show that a rebate of the duty was granted if it was claimed. I want to read a few extracts from it, if I may. To begin with, I give the commissioner's opinion of the situation with regard to the dumping duty. He says:
It is a common trade practice for those whose home market is well organized to "dump" supplies abroad at prices below those obtaining on the home market. The Canadian fruit and vegetable growers, whose crop is later in maturing than that of southern growers, have long suffered from American fruit and vegetables being thrown on the Canadian market in this way. To the American exporter who has already taken a profit before the Canadian supply comes in, every additional dollar received means an addition to profits. The Canadian grower on the other hand, without government protection in the nature of a dumping duty, would be unable to exist in the face of organized American competition.
That is the view of the fruit commissioner after investigating the market conditions. Then he quotes the famous anti-dumping clause from the Customs Tariff 1902 and regulations relating thereto. I notice, however, that he makes no reference whatever to this government's valuation clause in the Customs act, clause 47A. He then proceeds to give instances of evasion of the dumping provisions, and we find that in some cases dumping was actually followed by rebate. Here is a telegram from the Mutual manager at Vancouver to the Nash supervisor:
Customs dumped us on car Walla Walla barb-
That means rhubafb grown in the state of Washington.
-which cost seventy-five cents. Are you paying dump duty? We protested wildly but had to pay.
The reply to that telegram, sent by the Nash supervisor, was as follows:
Bought barb seventy-five here but not hooked to date. Suggest send particulars your claim to A. E. Burns, secretary, Western Canada Fruit Jobbers, Winnipeg, for him to fight.
Then follows a letter from the same gentleman to the Canadian manager of the Nash interests:
__Regarding the dumping duty on barb, I am
suggesting to Snow that he forward all particulars of his claim to A. E. Burns, our secretary, Winnipeg, and I am satisfied if there is any chance Burns will be able to get Snow a refund. I wish you would just call Burns up on the phone and mention the fact that Vancouver got hooked on a car and that Snow is forwarding the papers,-
And so on.
Then the commissioner points out that on that date rhubarb was being dumped into Canada at 75 cents, while the Walla Walla market price was SI. The cost of production of the British Columbia rhubarb was 90 cents. He goes on:
It appears from the above that the price of the imported rhubarb was both below the Canadian cost of production and the fair market value as sold for American consumption. In such a case it is considered that it was the duty of the local customs officer at the port of entry to apply the dumping provisions of the Customs Act both at Vancouver and Calgary. It is not known whether the duty was imposed on Carruthers' car at Calgary or remitted on Snow's at Vancouver.
Then follows some correspondence between the Nash supervisor and the Mutual manager in Vancouver, as follows:
Dear Sir,-Mr. Simington advised that Mr. A. E. Burns, our secretary at Winnipeg, will be very pleased to handle your claim for dumping duties imposed on that car of barb, and when you forward him particulars, George, I suggest that you outline that you are exclusive selling agents for the Rhubarb Association, and at the time American barb was purchased there was none available in B.C.
Mr. Burns is a very competent secretary, and I hope that you will write him giving full particulars and asking him to handle your case.
So much for rhubarb. Now let us take a look at apples.
The Nash supervisor for Alberta and British Columbia sent a circular to all the Alberta houses, as follows:
I am advised that in nearly every instance where wholesalers have been compelled to pay dumping duty on apiples that Mr. A. E. Burns has applied for refund and obtained it. I do not know of a case in Alberta where it has been applied, but seems to me some houses during last season had it applied on peaches or some other commodities, and I am satisfied if you have not obtained a refund, if you will be good enough to use our secretary, Mr. Bums, sending all particulars to him, requesting him to fight the claim for you, I am sure that he will be successful.
We contribute yearly to our Association, and I believe we have a very competent secretary, and I hope that any house having a claim will give it immediate attention by following instructions suggested above.
Then we have an instance of the dumping having been withdrawn. This is from the
The Budget-Mr. Stirling
Nash Canadian manager to the Nash supervisor:
Dear Sir,-I think some of our houses are importing American apples, and we are compelled to pay a dumping duty.
I learn from Bums to-day that he has secured a refund of the dumping duty paid by P. Bums & Company and the Macdonald-Crawford.
If there are any sales in your district with our interests, you had better have them submit claims for refund to Bums to handle.
The reply to that was:
Dear Sir,-Any of the Saskatchewan houses who paid dumping duty on American apples placed claim for refund. They have been notified by the local customs appraiser that their claims will be paid.
The commissioner proceeds:
On April 30, 1924, Mr. A. E. Burns of the Western Canada Fruit Jobbers Association, wrote the Customs and Excise Department at Ottawa, demanding remission of Dumping Duty on certain apples bought from the Yakima Fruit Growers' Association, Washington, at 80 cents f.o.b. It will be noted that Mr. Burns states in his letter that "at the time the dumping duty was applied there were no apples in stock." It is not known what is meant by this statement, for the official published figures of the Fruit Branch, Ottawa, show the following quantities of apples in storage at the points and on the dates mentioned:
Then follow the amounts: Added together, 240,000 boxes in Regina and1 British Columbia at the end of January, 1924; 141,000 boxes at the middle of February, 1924; and 99,000 boxes at the end of February. The commissioner proceeds:
The letter from Mr. Burns is as follows:
The Customs and Excise Department,
Attention Mr. Watson
Dear Sirs,-I was in Regina and Moosejaw last week and found that dumping duty had been applied on cars of apples coming into that district on February 13 and 14, some to P. Burns' Co., Ltd., others to Macdonald-Consolidated.
At the time the dumping duty was applied there were no apples in stock. Macdonald-Consolidated stated they were out of this commodity for 12 days. P. Burns & Co. had only one variety and they were splitting them up with the other four jobbers.
The application of dumping duty on shipments in such times is only unadulterated gall on the part of some official who evidently must have known theexisting conditions m these two points, and if he
had made any inquiries, he would have known that the dump was unjustified.
The above jobbers are asking for a rebate and I would be glad to hear from you at once if you are going to grant same. Otherwise we will have to circularize every member of parliament and bring this unjust application of the dumping duty to a show-down.
I attach a memo from P. Burns & Co. which youmight read and let me know if, in your opinion, this
assessment was justified.
The commissioner proceeds:
This somewhat hectoring letter of Mr. Burns was replied to by Mr. J. A. Watson, of the Customs department, on May 7, to the effect that the col-
lector of customs at Moosejaw was instructed that he might certify to refund claims of dumping duty paid on importations of apples if entered since the first of February last, and that the collector of customs at Regina would receive like instructions. It is evident that if the customs authorities acted on the assumption that there had been no British Columbia apples available since February 1, 1924, they did so without consultation with the Department of Agriculture, which had accurate information on the situation.
It appears further that early in 1924, Mr. Burns reached an understanding with Mr. T. W. Mouat, special officer, Customs department, Nelson, B.C., that the dumping duty would not be applied after March 1, 1924. What wras the information in the
possession of Mr. Mouat as to the apple situation at the time does not appear. It is evident that Mr. Mouat's information was not of the best, for on February 29, 1924, Mr. A. E. Burns circularized all members of the Western Canada Fruit Jobbers' Association as follows:
Winnipeg, February 29, 1924.
Re Dumping Duty:
The understanding with Mr. Mouat was that after March 1, the Dumping Act would not be applied The dump has not been applied to Winnipeg cars but from Regina west. Mr. Mouat intimated he was convinced B.C. apples would not stand the haul to Winnipeg, but this is wrong as a few more days transit would not count.
I am not surprised that the questions I have put on the order paper were not answered, because I can see in every case investigated where the dumping duty was applied a rebate was granted. I cannot help wondering why the duty was rebated. There must have been some reason. After the visit of the Minister of Customs to the fruit growers in British Columbia, it was understood that the government would make use of that clause, a clause they considered better than the clause of the previous administration, and yet something must have been wrong with the clause. I began to wonder whether it was possible that no action under that clause had ever been taken at all, and I made some inquiries, and I found that no order in council relating to Clause 47A had ever been issued. So the situation may perhaps have been this: Certain officials of the Customs department perfectly rightly, collected the dumping duty, but when it became evident that shippers had claimed a rebate of this dumping duty, the government must surely have considered they were not on very safe ground, for if the matter was taken into court, not having the clause in the act behind them, they would be caught napping and would get into very considerable trouble. I cannot help thinking that may have been the reason for the wholesale rebates granted of the dumping duty. It is quite incredible to me that the blame can be laid on the permanent officials of the department; they could not have taken such action as that which I have read from the
The Budget-Mr. Stirling
report without the instructions of somebody superior to them. When the budget proposals were brought down this session it was proposed by the Acting Minister of Finance to amend the old anti-dumping clause in the Customs Tariff 1907 which has never been touched yet. We do not know the reasons of the Acting Minister of Finance for that suggestion, and I myself was unable to find out what the new wording meant. It came as rather a shock to the House, and a shock to the fruit growers in the west, when six days later the minister announced the withdrawal of the proposed amendment. His explanation for taking that step was rather a curious one. He said:
In the presentation of the budget I gave notice of a certain resolution to amend the dumping clauses. Since that time I have had further consultation with the officers of the department and have reached the conclusion that the dumping clauses as now incorporated in our act are considered sufficient to properly determine the value for duty purposes. Consequently I take this opportunity of advising hon. members that when we reach the committee stage I shall withdraw that resolution.
Does that really mean that the reason for withdrawing the proposed amendment was that the officials of the Customs department had not previously given their opinion on it, and consequently it was withdrawn? I can hardly believe that was the only reason. I am inclined to think th'at certain pressure must have been brought to bear upon the government just about that time and. having rather flouted certain interests in the west with regard to the budget proposals, it now thought it advisable to just concede something, and the proposed amendment was therefore dropped.
At six o'clock the House took recess.
The House resumed at eight o'clock.
Topic: THE BUDGET
Subtopic: CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE.