1936-03-06

[Stage Direction]
Mr. C. E. BOTHWELL (Swift Current) presented the second report of the special committee on elections and franchise acts, and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved for leave to introduce Bill No. 11, to amend the Customs Act.
Mr. BENNETT:: Explain.


Mr. ILSLEY:: There are several sections in the bill which are necessary in view of the supplementary note appended to the trade agreement with the United States. We agreed that we would make certain amendments to our Customs Act, and sections of the bill indicate the amendments to be made. Then, there are in it several other miscellaneous sections which are designed mainly to strengthen the hand of the preventive service.
Motion agreed to and bill read the first time.
Soldier Settlement



EMPLOYMENT COMMISSION


[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour) moved that the house go into committee to-morrow to consider the following proposed resolution:
That it is expedient to bring in a measure to provide for the establishment of a commission, to be known as the national employment commission, to supervise or administer the expenditure of fund's voted by parliament for unemployment relief and for providing employment, and for other purposes related thereto; and to provide for fees or compensation and for the travelling and living expenses of the commissioners, for the salaries of the secretary and other employees of the commission, and also for the travelling and living expenses of the members of a national advisory committee.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.


Hon. T. A. CRERAR (Minister of the Interior) moved:: That the orders in council made between the 1st day of January, 1935, and the 31st day of December, 1935, under the provisions of the Dominion Lands Act, chapter 113, R.S.C. 1927, and which were laid" on the table on the 10th February, 1936, be approved.
He said: By way of explanation may I say that the chapter of the Dominion Lands Act mentioned in the resolution provides that transfers of land by order in council are to be laid on the table of the house at the opening of each session of parliament. That provision was complied with on February 10. I have not examined them all, but I know they relate to the transfer of some odd parcels of land, in carrying out the agreement made with the western provinces. In some cases they relate to leases of small areas in the northwest territories used for fur farming, and that sort of thing. I believe they are all in order. The statute requires that the house formally pass a resolution, approving these orders in council, and it is now submitted.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Mr. Speaker, before the
[Mr. Xlsley.l
orders of the day are proceeded with, perhaps the Minister* of Railways will give us some idea when we may expect the annual report of the Canadian National Railways.


Hon. C. D. HOWE (Minister of Railways and Canals):: Mr. Speaker, I am told that the annual report will be in my hands towards the end of next week, and it will be tabled when received.


Richard Bedford Bennett: Thank you.
SOLDIER SETTLEMENT On the orders of the day:


Mr. A. W. NEILL (Comox-Alberni):: May I ask the Minister of the Interior (Mr. Crerar) a question? The soldier settlement amending act of 1933, which adopted the policy of what is generally known as dollar for dollar rebates on land payments, expires this month. Owing to the depression many people were not able to take advantage of it, and the soldiers are very anxious to know if the government have any intention of extending the life of the act.


Thomas Alexander Crerar: Mr. Speaker, my hon. friend was good enough to intimate to me yesterday that he was going to ask this question. In reply, I may say that it is the intention of the government to bring down legislation extending the period for at least two years- I am delighted with the reception which that announcement receives-to enable returned soldiers to take advantage of the dollar for dollar bonus policy. That has been done because crop losses, in the western provinces particularly, have been very severe and prices low. The same conditions obtain in British Columbia and other provinces, and in the opinion of the department it is only fair that a further opportunity should be given to the soldiers to take advantage of the bonus plan.
PRIVILEGE-Mr. POULIOT On the orders of the day:
Mr. JEAN -FRAN QOIS POULIOT (Temis-couata): Mr. Speaker, I rise to a question of privilege. The rights and privileges of members of this house are sacred, and I regret very much to read in the official report of the Senate the remarks that have been made in the other chamber about the work that has been done by this house. I cannot read in full the text of the speeches delivered by the leader of the government in the Senate, but he blamed this house for not passing legislation quickly enough, and not sending enough legislation forward to the Senate.

Canada-U. S. Trade Agreement


Mr. SPEAKER:: Order.


Mr. MACKENZIE KING:: I think my hon. friend knows that proceedings in another house should not be made the subject of discussion in this house. I think the hon. member is out of order, Mr. Speaker.


Mr. POULIOT:: I agree, but they did not pass the two line bill to abolish the economic council.



DOMINION FRANCHISE ACT


[Stage Direction]
Hon. FERNAND RINFRET (Secretary of State) moved the second reading of and concurrence in amendments made by the Senate to Bill No. 3, to amend the Dominion Franchise Act.
He said: I might explain in a few words, Mr. Speaker, that the changes made by the Senate in the bill to amend the Franchise Act are not very material and deal merely with its phraseology. The purpose of the bill is not changed at all. It will be remembered that the purpose of the bill was to postpone the revision of the electoral list for one year, and in the original bill passed by this house the date 1937 was substituted for 1935. The Senate have thought in their wisdom that it was better to keep to the original wording, 1935, adding the words, "except in the year one thousand nine hundred and thirty-six." They have made that change in section 20, and also suggest that it should be made in section 22 of the bill. The purpose of the bill remains exactly the same, and although the amendments are not very material I think we should accept them.
Richard Bedford Bennett: The fact is that the
Senate has rewritten the bill, and I think it more adequately expresses the will of this house than did the original bill.
Motion agreed to; amendments read the second time and concurred in.



CANADA-UNITED STATES TRADE AGREEMENT PROPOSED APPROVAL SUBJECT TO LEGISLATION MAKING PROVISIONS EFFECTIVE

[Stage Direction]
The house resumed from Thursday, March 5, consideration of the motion of Mr. Mackenzie King:
That it is expedient that parliament do approve of the trade agreement entered into at Washington on the 15th day of November, 1935, between His Majesty's government in the Dominion of Canada and the government of the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
Mr. BRUCE McNEVIN (Victoria, Ont.):: Mr. Speaker, continuing my remarks on the motion before the house, I desire to place on record the percentage of reductions in the tariff on certain Canadian primary products entering the United States market. They are as follows: Live stock, 33i to 50 per cent: grass and clover seed, 50 per cent; turnips, 50 per cent; hay, 40per cent; live poultry, 50 per cent; dressed poultry, 40 per cent; leather, 20 per cent; lumber, 50 per cent.
One of the most important items in the entire pact is the concessions granted to the live stock industry, based on the average number of cattle slaughtered each year in the United States, which gives an estimated quota of approximately 227,700 head of Canadian cattle. While I agree that a larger quota would be desirable, a breakdown of the figures gives us the following result, provided that full advantage is taken of the quota. We have three major cattle markets in the Dominion of Canada-Montreal, Toronto and Winnipeg. Divide the total quota by fifty-two, the number of weekly markets, and you get the number that may be shipped each week throughout the year from each of [DOT]these	markets.	It	means that 1,450
head of cattle may be shipped at the reduced rates to the United States from each of these three major markets throughout the entire year. I think that the average person who has a knowledge of market conditions as they affect the live stock industry must agree that during the last two or three years, with the congested condition that has affected the live stock markets of this dominion, if 1,450 head of cattle could have been lifted from each of our three major markets every week, a total of 4.350 head, it would have been of material benefit to our hard pressed live stock producers. I believe, sir, that the circumstances surrounding the cattle industry in this dominion for the last three or four years warrant some action being taken by the government to bring about a measure of relief, if possible, and I think we should be prepared to leave it to the judgment of the live stock industry of Canada to say whether or not this concession is of value to the industry.
There is one other point that I desire to emphasize, when trade declines, customs revenue declines, and then it is necessary to increase taxation or increase the debt, either of which places an additional burden on the people. I believe the increasing trade that will surely follow will relieve the Canadian taxpayer to some extent.
The reduced rates on imports have been criticized in some quarters, but they represent a measure of relief to the consumers of goods
Canada-U. S. Trade Agreement

in this dominion. There is one further point we must stress. The endorsement of a Canada-United States treaty does not weaken one thread in the bond that binds us to the mother country as the senior dominion in this commonwealth of British nations. Intraempire trade will remain the corner stone of the fiscal policy of the Liberal party, yet we must never lose sight of the importance of other potential world markets.
When I hear the right hon. leader of the opposition (Mr. Bennett) ask, "Why could we not get the full fifty per cent reduction with respect to cattle and other commodities of that nature?" I realize why for a period of five years two and a half months the government under the leadership of the right hon. gentleman failed to negotiate a treaty with the United States. The Minister of Trade and Commerce (Mr. Euler) referred to the sales resistance which existed in connection with the marketing of Canada's wheat. After hearing the remarks of some hon. members and taking into consideration the fact that this treaty was not completed prior to the present administration coming into office, I am satisfied that there existed in certain quarters, and perhaps in the fiscal policy of the opposition, a trade resistance that reacted against the best interests of the primary producers of this dominion.
In conclusion, let me say that if the present government had followed the course advocated by the official opposition, they would have betrayed the trust placed in them by the electors of this dominion on October 14 last.


Hon. W. R. MOTHERWELL (Melville):: Mr. Speaker, it is quite gratifying to me to be able to remember and to look back on the many trade benefits that flowed from the passage of the first reciprocity agreement between Canada and the United States, sometimes known as the Elgin-Marcy reciprocity treaty, which died shortly after in 1866, a fact much regretted by the people of Canada as a whole. I remember also the great depression which followed thereafter, more prolonged and deepseated than anything Canada has seen since, with the exception of the one through which we are now struggling. With these thoughts still fresh in my memory, it is with considerable pleasure that I find myself after seventy long years, rejoicing with those who do rejoice at the birth of a second reciprocity treaty between Canada and the United States. But seventy years is a long time between trade liberation drinks with next door neighbours. Now that the government has turned its hand so auspiciously to

the removing of some of these trade fetters, let those of us who are like minded in this respect encourage, yea urge them on if necessary to greater feats in this direction. Possibly this joy and gratification I am experiencing is one of the compensating benefits which sometimes come with advancing years.
When I listened to the right hon. the leader of the opposition (Mr. Bennett), who was followed by the booming support from Toronto and elsewhere, I was reminded of the fact that there was no opposition whatever to the first reciprocity treaty, which was in existence from 1854 to 1866. I have not the exact figures, but I believe in 1854 Canada was at least eighty per cent rural. At least that percentage of the population of Canada were in favour of reciprocal trade with the United States, and so far as I can find out there was really no opposition to the first agreement. Montreal, Toronto, the maritime provinces, Ontario, Quebec, all of Canada of that day, were in favour of this agreement. What has happened since then? The manufacturing industry in Canada was very primitive in 1854 but these interests have grown rapidly since then. It is quite natural that they should want to preserve Canada as a market for their manufactures by a stiff tariff which has enabled them to sell cheaper to foreigners than they do to their own people. They want it and the farmers do not want it, and there lies the difference.
After listening to our Conservative friends lauding this form of agreement with the United States for two years, I was quite anrnzed to see them loop the loop and vehemently attack this treaty. My first thought was that they had gone back on their former conversion, but when I come to think of it they never really were converted. They just wanted to give the people something that would distract their attention from their own shortcomings. I do not say that it is wrong to try to please the people, but it would have looked far more seemly if they had stayed with their new love for a little while. At least they should have supported the principle of this resolution. Surely it would not have torn their protectionist hearts asunder to have done that. They could have gone after the details as much as they liked, but they should have supported the principle. I am afraid their conversion at least was not like the conversion of Paul on the way to Damascus; possibly it more resembles Lot's wife when looking back on stricken Sodom.
I have no ill will against the Conservative party. We must have an opposition, and I should hate to see them commit political hari-

Canada-U. S. Trade Agreement
kari by opposing this trade agreement. We do not know what would follow if another opposition took their place. I see a new party over there which has not yet won its spurs; they are strange to me and I still prefer even the Tory opposition to them as an opposition. We know what the Conservatives are and stand for, while the others so far belong largely to the unknown.
I am really at a loss to know how to explain the present attitude of the Conservative party. I have had many trimmings myself in my life and I know what it is to be defeated; I know what it is now to win, and I can therefore feel magnanimous. But even at this late day I would ask the Conservatives this question:	Would it not be more
logical for them to join with the government in support of this resolution? We do not need any further majority; we have in all conscience a large enough one now. But would it not be better for the house, would it not be more consistent on their part, would it not create a better feeling throughout the country for them to join with us in supporting this resolution than to put themselves in the position of having, so to speak, looped the loop so quickly with their newly adopted baby. In fact, I think it was a kidnap which they made from the Liberal nursery; but kidnapping is not as popular as it used to be and is much more dangerous -they found it dangerous. Their movement in the direction of reciprocity, never believed in by them, was made for the same purpose for which the wonderful radio addresses were given-to please the people. Of course, there is no great harm in that, but I think that propriety would have justified them in staying with the agreement, at least to the extent of supporting the principle of this resolution.
And now a word or two with regard to some of the amazing statements of the leader of the opposition. The Minister of Finance (Mr. Dunning) disposed most successfully of the more vulnerable parts of the right hon. gentleman's speech and I will now refer to the statement he made-it will be found in Hansard-that had it not been for the tariff increases against both the United States and Great Britain in 1930 there would have been no possibility of any kind of treaty in 1935 and 1936, History does not support that statement. At no time in the history of Canada did any party' ever enter into a reciprocity agreement, either with the United States or with Great Britain, after previously running the tariff up to a sky-high point of elevation in order to use that as a bargaining feature except the Conservative party in
1930, and what it did then did not work out as anticipated. If we are to give credit to the one who put up the tariff, on the ground stated by the leader of the opposition, then we might as well say that had it not been for that robber band in the eastern land who fell upon that historic traveller on his way from Jerusalem to Jericho, there would have been no story about the Good Samaritan and therefore we should give credit to the robber. We might as well say that as to say that had it not been for the high tariff devotee and addict who was at the helm of state in Canada in 1930 there would be no reciprocal agreement to-day. Of course that is nonsense.
I rather regret the necessity of having had to add these few words to an already prolonged debate, but I felt that it was my duty to speak because of the great importance of the question. We shall have a further opportunity of dealing with the subject, but I will conclude these few remarks by again expressing my appreciation of the action of the ministry in affording me an opportunity to see this day with its evidence, as revealed in this agreement, of returning sanity' and common sense with respect to questions of trade between nations whose interests are best promoted not by the erection of high and repelling tariffs and by other trade impediments, as if trade were some evil thing to be feverishly shunned instead of a great blessing to be pursued and sought after diligently. Rather should we trade as freely as possible, especially with our adjoining neighbour, consistent with our respective mutual interests and with the public revenue requirements of our own country.


Hon. H. A. STEWART (Leeds):: I
always listen with a good deal of interest and amusement to the addresses of the hon. member for Melville (Mr. Motherwell), who has just entertained the house with a brief jocular comment upon this trade agreement. He says he rejoices that after this long lapse of time separating agreements between Canada and the United States we are now about to consummate another. I cannot help thinking that my hon. friend's rejoicing must have a tinge of regret in it, namely, that between the years 1920 and 1930 no agreement of this kind was negotiated, nor were attempts made, as far as I know, to bring one about. Then he speaks about the tariff and seems to suggest that it is a harmful influence and that the protective principle in it is wrong. Well, all I have to do, I think, is to point out to him and to the members of this house that from 1896 until 1911 the protective
Canada-U. S. Trade Agreement

principle of the tariff was maintained by the Liberal party, and that between the years 1920 and 1930 the same principle was maintained by the same party.
He also thinks that we on this side would be well advised to join with the government in supporting this agreement. I know that advice was given in the kindliest spirit, but after all we have our responsibilities. We have our duty to perform, and I am siure he will agree that this is a question upon which there may be an honest difference of opinion. And looking back again I think that, in view of what has happened, my hon. friend must regret that in 1932 when there was before this house for ratification the Canada-United Kingdom agreement, which so largely extended and developed the trade of this country, particularly in the interests of the agriculturist, which my hon. friend with such ability always espouses-I say again that perhaps when he recalls the opposition of his party, including himself, to that agreement, there is a tinge of regret in his recollection.
I shall proceed to a consideration of this agreement. The trade agreement which is the subject of this debate has been before the people of Canada for some months, but it is only since the debate began in this house thai there has been that keen, critical analysis of it, that examination of its provisions, that will enable hon. members and the people of Canada to come to a conclusion as to its merits. As good citizens we all desire to approach any proposal for the extension of the trade of Canada with sympathy and with the desire to give approval wherever such approval can be given without damage to our agricultural and industrial development. At the same time we must keep alert for the purpose of discovering and if possible avoiding errors in connection with any attempted extension of our trade. We must be sure that we are getting a fair return for any advantages which we are extending to our neighbour, no matter how good that neighbour may be or how desirable it may be to extend our trade in every direction.
The historical review of the negotiations for trade with the United States has been made from two standpoints. The Prime Minister (Mr. Mackenzie King) in his very complete exposition of this agreement, traced back the development or lack of development of trade between Canada and the United States for a period of fifty years. He came to the conclusion that on the record the Liberal party were more favourable to development of trade in this direction than the Conservative party.
fMr. Stewart.]
But the leader of the opposition (Mr. Bennett) supplemented the information given to the house by the Prime Minister and demonstrated, I believe beyond question, that the Conservative party had an equally honourable and equally favourable record in the matter of a disposition and a desire to extend our trade relations with the United States. Going back to confederation, to the declaration of the national policy, to the declarations of the Liberal leaders themselves, and looking at the matter from every standpoint, I think that honours in that direction are about even. I cannot understand how any member of the Conservative party at the present time, or any one who has been a member of it and is familiar with its traditions, familiar with its declarations of policy and the efforts it has made, can say that it has not been in favour of reciprocal trade relations with the United States.
Let us be fair about it. Both historic parties, and let me say all parties, recognize the value of trade and of markets for our products. No party has the monopoly in that respect. It would be strange indeed if any one party should have the exclusive possession of a disposition to trade, to extend our present markets and to develop new ones.
There are two great markets to which the Canadian people have always looked: one is in Great Britain and the other is in the United States. In both of those directions each of the two parties has made honest and sincere attempts to bring about favourable trade arrangements. The Liberal party endeavoured to bring about preferential trade, endeavoured to bring about a reciprocity agreement with the United States. Both parties failed, in large measure, until recently. The first outstanding success was that achieved by the late government, led by the present leader of the opposition, in the successful negotiation of the United Kingdom agreement. I say that was the first outstanding success, the first outstanding achievement in securing an extended market for Canada in the United Kingdom.
I do not desire to enlarge upon the results of the Canada-United Kingdom agreement. Any honest, fairminded citizen, looking back on conditions as they were in 1932, looking at the volume of trade at that time, and studying the statistics as they are now disclosed to us, must come to the conclusion that at a difficult time, a critical time, a time of great depression not only in Canada but all over the world, these agreements have been of significant advantage to the people of Canada. They deserved better support than they received in this house when they were before parliament

Canada-V. S. Trade Agreement
for approval, and they vindicated the faith and the vision of those who were responsible for their negotiation.
The basis of negotiations for the present agreement between Canada and the United States was prepared also by the former government. A change came about in conditions in the United States, a change, I think, of attitude of mind, a greater disposition on the part of the United States to trade more freely with Canada than she had showm during a period of ten years, particularly between 19(20 and 1930. I think we may truthfully say that that disposition to trade more generously with Canada was to a large extent due to the negotiation of the Canada-United Kingdom agreements. Be that as it may, there was undoubtedly a change in the attitude of the United States towards Canada, and, as soon as the president secured from congress authority to negotiate, the matter was taken up by the former government in earnest, a communication was presented, and from that time on negotiations proceeded. Upon the basis so laid, upon the opening thus made, this agreement-whether we agree with it in its conclusions or not-was undoubtedly founded.
There are many hon. gentlemen in this house who contend that the tariff policy of the Conservative party is one of extremely high tariffs. I am sure we have heard that throughout Canada, particularly in the last five years. If I had time I could put on Hansard a comparison and analysis of the tariff of Canada as compared with the tariffs of other countries, such as Germany, France, the United States and even Great Britain, and the tariff of Canada as compared with the tariffs of these other countries is not a high tariff. During the budget debate I hope to have an opportunity of developing this point a little further. A couple of years ago I spent some time on it, and I was pleased indeed to find, notwithstanding the allegations that the tariff policy of the Conservative party Tvas almost exclusive, that when compared with the tariffs of other countries that charge was not well founded. Undoubtedly during the depression, from 1929 to 1932 and 1934, measures were taken to increase the tariff, but the reason for these increases has been given. They were emergency measures, taken to preserve the financial integrity of the Dominion of Canada, and many who are [DOT]capable of judging the situation better than I are confident that if these measures had not been taken, disaster would have been the result.
Tariff increases have been made, and there is also a belief on the part of many hon. .members that if you increase the tariff you 12739-53
increase the cost of articles protected by the tariff. They believe on the other hand that if you would only reduce the tariff you would reduce the cost. Well, we have had a striking answer to that contention; recently in this house we had a debate on the price of agricultural implements, and during that debate the history of these prices over a period of years was reviewed. It has been shown by hon. gentlemen on the opposite side of the house that a reduction in the tariff in more than one instance has resulted in an increase in the price. They are so convinced of the soundness of their theory that tariff increases always increase prices that now they are asking for an investigation to find out how it is that a reduction in the tariff has resulted in an increased price.
On entering into these negotiations with the United States, Mr. Speaker, I think we must keep in mind that the United States has certain undoubted advantages. In the first place it has a population of 120,000,000 people. I have heard hon. gentlemen on the other side contend that the United States presented an outstanding example of the success of free trade, that in that country we had the spectacle of 120,000,000 people trading freely between themselves. In the days of prosperity this was pointed to as a vindication of the policy of free trade. But what has happened? We find that in time of depression this great mass of people suffered just as severely as those countries that were not, in that happy position. I want to point out that the United States comes very close to obtaining the advantages of both free trade and protection. It has free trade between 120,000,000 people, but around that 120,000,000 people it has the advantage of a very high tariff wall. They have the advantage of cheap mass production; they have a climate favourable to the production of nearly all their own requirements, and at any and all times they are ready with a surplus of natural and manufactured products to export into the markets of the world.
We entered the negotiations under certain restricted conditions. Congress gave the President of the United States authority to negotiate trade agreements, but with the caution usually displayed by that nation they put certain restrictions upon him lest he might go too far. They said he could reduce the tariff, which was a high tariff, by only fifty per cent, that no article on the dutiable list should be placed on the free list, and that from the nations with whom he made agreements they must receive favoured nation treatment. There was also a limit of three years placed upon the life of such agreements.

Canada-U. S. Trade Agreement


William Lyon Mackenzie King: The favoured nation treatment was domestic policy, was it not? It was not part of the statute restricting the president?


Hugh Alexander Stewart: I am not sure of that.


William Lyon Mackenzie King: I think it was
a matter of domestic policy.


Hugh Alexander Stewart: I thank my right hon.
friend; I thought that was imposed on the president by congress. However, it was there; it was one of the limitations placed upon him in his negotiations. In consideration of these facts, Mr. Speaker, I submit that we were entitled to ask for and receive from the United States the full measure of the limited concessions the president was authorized to grant. Now let us look at this agreement and see what Canada gets and what Canada gives, because that is the basis on which we must judge.


William Lyon Mackenzie King: May I interrupt for just a moment? Does my hon. friend say he thinks we ought to get all that the president could have given under the powers congress granted? That would be a fifty per cent reduction on everything.


Hugh Alexander Stewart: Yes, I would think so;
I would suggest that we should have got that. Canada gets concessions on cattle. I do not propose to deal with that matter, because there are others in the house more familiar with that trade than I am, but here is a quota which, as I understand it, limits our exports of cattle to the United States to approximately one in every hundred that are slaughtered in that country. Surely, with regard to only one per cent of their consumption, we might have expected our cattle to be allowed in free. In any case we get a reduction on cattle, to the value of 811,400,000. In connection with cream we also have a quota of 1,500,000 gallons, valued at $5,200,000. We get concessions on $2,300,000 worth of maple sugar; on seeds, $2,000,000; on other agricultural products, $4,200,000; on fish, $4,800,000; on lumber, $38,000,000; on minerals, $5,800,000; on whiskey, $82,000,000, and on miscellaneous commodities, $5,000,000, making total concessions of about $160,000,000 worth of trade. It is clear that the United States always liked our whiskey. They were short of it and needed our production, and it is possible that in any event they would have taken the quantity mentioned.
Then we get down to the items that are unchanged and upon which we get no concessions, but in respect of which a guarantee is given that there shall not be any increase in tariff during the life of the agreement.

First we have newsprint valued at $132,000,000; pulwood, $34,000,000; shingles, $20,000,000; minerals, $16,000,000; wheat, $8,400,000; fish, $4,000,000; chemicals, $8,200,000, and furs, $5,000,000, making a total of about $230,000,000. I should not like to dispute the value of having these commodities remain on the free list; undoubtedly that is an advantage. But in view of the fact that the United States had imposed a tariff on nearly all its imports, is it not fair to assume that having overlooked these items in the past they probably would have continued to allow them to remain on the free list irrespective of any agreement?
Let us see what Canada gives, as compared with what she gets. She gives concessions on oranges to the value of $21,000,000; fruits and vegetables, $11,000,000; canned meats, $3,000,000; corn, $8,000,000; other agricultural products, $4,000,000; farm implements, $40,000,000; machinery, $25,800,000; iron and steel, $15,700,000; household goods, $11,000,000; electric motors, $6,900,000; periodicals, $4,000,000, and other merchandise $16,000,000. The intermediate tariff is imposed upon textiles and clothing to the value of $24,800,000; furniture, $3,500,000; consumers' goods, $8,000,000; automobiles, $26,000,000; gasoline, $18,000.000; automobile parts, $56,000,000, and automobile engines, $11,700,000.
In connection with dairy products, in which I am particularly interested, I find that a rate of thirty-five cents per gallon still remains against Canadian cream, and the quota is limited to 1,500,000 gallons. I do not expect that this will be of very great advantage to the farmers of eastern Canada. The rate of five cents per pound on cheese is the same. When we remember that the domestic market of Canada consumes between eighty per cent and ninety per cent of these agricultural products, and that we are granting concessions upon fruits and vegetables, I think it is doubtful if there will be much advantage gained from these agreements by the farmers of eastern Canada.
The agreement has been defined as a step in the right direction. Before we make any decision I should like to know in which direction we are going. Is it a step in the direction of an adverse trade balance? If it is,, it is a step in the wrong direction. It is said that the agreement removes obstructions in channels of 'trade. Undoubtedly it removes obstructions in the channel of trade that will flow into Canada from the United States. It is said that it is an effort to destroy economic nationalism. Well, when 10,000,000 people start out to destroy the demon economic

Canada-U. S. Trade Agreement
nationalism they are undertaking a big task, and while we hope they may have some success I would be very careful about expecting too much in this direction.
The opinions of others as to the value to Canada of the trade agreement may be worth consideration. Without quoting in full I should like to refer to the comment of Professor Brebner, of Columbia university, which has already appeared on Hansard. In the United States there is a body of opinion that the agreement is perhaps more favourable to that country than it is to Canada. There is one feature of the agreement however to which I should like to refer briefly. May I draw the attention of hon. members to three articles in the agreement relating to its life, with special reference to duration and termination. Article XV is as follows:
The entire agreement shall come into force on the day of the exchange of the proclamation and ratification at Ottawa. The agreement shall remain in force until December 31, 1938, subject to the provisions of article VII, article X and article XIV.
Unless at least six months before December 31, 1938, the government of either country shall have given to the other government notice of intention to terminate the agreement on that date, the agreement shall remain in force thereafter, subject to the provisions of article VII, article X and article XIV, until six months from such time as the government of either country shall have given notice to the other government.
In other words the article states that the agreement shall remain in force for three years, and thereafter foe subject to six months' notice. Other significant articles must be read in conjunction with article XV. I shall refer first to article VII:
No prohibitions, import or customs quotas, import licences, or any other form of quantitative regulation, whether or not operated in connection with any agency of centralized control, shall be imposed by Canada on the importation or sale of any article the growth, produce or manufacture of the United States of America enumerated and described in schedule I, nor by the United States of America on the importation or sale of any article the growth, produce or manufacture of Canada enumerated and described in schedule II, except as specifically provided for in the said schedules.
Then follows the significant paragraph:
The foregoing provision shall not apply to quantitative restrictions in whatever form imposed by either country on the importation or sale of any article the growth, produce or manufacture of the other country in conjunction with governmental measures operating to regulate or control the production, market supply, or prices of like domestic articles, or tending to increase the labour costs of production of such articles. Whenever the government of either country proposes to establish or change any restriction authorized by this 12739-531
paragraph, it shall give notice thereof in writing to the other government and shall afford such other government an opportunity within thirty days after receipt of such notice to consult with it in respect of the proposed action; and if an agreement with respect thereto is not reached within thirty days following receipt of the aforesaid notice, the government which proposes to take such action shall be free to do so at any time thereafter, and the other government shall be free within fifteen days after such action is taken to terminate this agreement in its entirety on thirty days' written notice.
Article X reads:
In the event that a wide variation occurs in the rate of exchange between the currencies of Canada and the United States of America, the government of either country, if it considers the variation so substantial as to prejudice the industries or commerce of the country, shall be free to propose negotiations for the modification of this agreement; and if an agreement with respect thereto is not reached within thirty days following receipt of such proposal, the government making such proposal shall be free to terminate this agreement in its entirety on thirty days' written notice.
And article XIV;
The government of each country reserves the right to withdraw or to modify the concession granted on any article under this agreement, or to impose quantitative restrictions on any such article if, as a result of the extension of such concession to third countries, such countries obtain the major benefit of such concession and' in consequence thereof an unduly large increase in importations of such article takes place: Provided, that before the government of either country shall avail itself of the foregoing reservation, it shall give notice in writing to the other government of its intention to do so, and shall afford such other government an opportunity within thirty days after receipt of such notice to consult with it in respect of the proposed action and in respect of such compensatory modifications of the terms of the present agreement as may be appropriate; and if an agreement with respect thereto is not reached within thirty days following the receipt of the aforesaid notice, the government which proposes to take such action shall be free to do so at any time thereafter, and the other government shall be free within fifteen days after such action is taken to terminate this agreement in its entirety on thirty days' written notice.
There are three opportunities, Mr. Speaker, for the termination of this agreement, three avenues of escape, three doors of opportunity for terminating it. In view of the fact that there has been in the United States regulation and restriction under the NRA, which, although for the moment out of the picture, will probably be replaced by other legislation of the same effect, there are elements of danger and uncertainty and instability inherent in this agreement which make its termination almost probable, indeed which almost invite its termination on fifteen or thirty days' notice. I suggest that a com-
Canada-U. S. Trade Agreement

parison be made of the provisions for abrogation of this agreement with the relevant provisions of the United Kingdom agreement, which provide only for consultation.
I see that my time has almost expired, and I shall therefore summarize my objections to this agreement.
The agreement covers a long list of commodities, but on the whole, while it is broad in that respect, it is shallow in its concessions to Canada. Most of the rates of the United States tariff are still so high that little benefit will result. Many of our industrial plants will be forced to close, particularly United States branch factory plants. Unemployment with all its hardships will be increased; the investment of capital in industry in Canada will be discouraged; the home market, which absorbs from eighty to ninety per cent of our agricultural products, will be contracted because of decreased purchasing power at home; our railways will suffer decreased revenues because of the possibility of much freight coming in through ports other than our maritime ports. Let us remember this also, that when you import a ton of manufactured products from the United States or any other country our railways have just one hard of that ton, but if it is a ton of commodities manufactured in this country I am told that it represents the haulage of three or four or five tons of freight as against only one ton of a completely manufactured imported article. The development of this three or four or five tons is brought about through the assembling of raw material and everything that goes into the manufacture of the fininshed article.
In return for the concession we are granting to the United States of our intermediate tariff we should get a full fifty per cent reduction all along the line.
This agreement, I believe, will render it more difficult to renew and extend the provisions of the Canada-United Kingdom agreement. The agreement, the provisions for the termination of which I have already referred to, is limited in its life to three years, making its operation uncertain and almost inviting its termination. For these and other reasons which I propose to give more in detail when we come to deal with the different items, I shall vote against the resolution.


Mr. R. J. DEACHMAN (Huron North):: Mr. Speaker, I have listened with pleasure to my hon. friend from Leeds (Mr. Stewart). I have always liked him personally and I am not likely to change my mind after listening

to the rather effective speech which he delivered this afternoon on the wrong side of a very important question.
My hon. friend tells us that the Conservative party still has faith in protection, but faith without works is but a dead thing, and I wonder how many years they would go before their faith brought forth any fruit.
My hon. friend also tells us that the tariff does not always raise the price of a commodity, but there is a peculiar thing I might mention in this connection. I attended 175 tariff board hearings, and never once did I hear a manufacturer come before the tariff board and say: Will you please lower the tariff which I have enjoyed so that the price of the commodity I produce may be raised? Nor have I ever heard one say:	Will you
raise the tariff on the raw material which I use in order that I may get it at a lower price?
I want to suggest this to my hon. friend, who made some prophecies at the close of his address. He prophesied an increase in unemployment, a loss of revenue to the railways, and many other things. We are friends personally and I want him to invite me to his constituency for the next election. There the first thing I shall do, and I warn him now, is to look up Hansard and read the speech which he delivered this afternoon, and ask him how many of his prophecies have come true, i shall ask him at that time, when he will be prophesying some more, what is going to happen to his prophecies of 1940 or 1941, seeing that he prophesied so badly in 1936.
There is a rather peculiar mood in Toryism which I never can understand. The leaders suggest eternally upon every platform that we are always in danger when we trade with a nation larger than our own; that we are a nation of ten or eleven millions alongside a nation of 127 millions; and I often wonder how a unit of 127 millions manages to survive because it must trade with the world! Does anyone imagine that we would be better off if the United States should be towed away from its present moorings to-morrow and placed alongside the continent of Australia. I venture to say that we would lose many of the comforts and many of the enjoyments which we now have. We would lose the markets which we sorely need, and what would be a loss to Canada would certainly be Australia's gain.
Many strange doctrines have been brought forth by my hon. friends immediately to the left. One is that we have given away too much. A representative of the govern-

Canada-U. S. Trade Agreement
ment which was in power in this country for five years and -which raised the tariff as high as it could possibly be raised, announces now that it was raised for the purpose of affording an opportunity for bargaining with other nations. But when a bargain is at last consummated by a new government, he tells the house, "You have given away everything; we have nothing left to give away!" When our taxes are reduced do we consider that we are giving away something or that we are getting something? I believe I have a sounder criticism to make of my hon. friends of my own political faith, and I intend to drive that home both here and throughout the country whenever I have an opportunity. My challenge to them is that they did not give away quite enough, that many of these tariffs are now atrociously high. The tariff on agricultural implements has been reduced from 25 per cent to 12} per cent. This is half what it was under the previous government, but it is still double what it was under their government which was in power in 1929 and 1930. I should like to give particulars of some of these reductions-permit me to put on my glasses so that I can give them exactly, because many of them are very small.
On February 6, 1935, the laid down cost ol artificial silk fabrics amounted to 83d per cent. On January 1, 1936, this cost was 73 per cent, but when the Liberals went out of power it was only 37} per cent. On cotton fabrics the rate has been reduced from 48} per cent to 42} per cent, but when the Liberals left office it was only 32} per cent. On cotton towels the total duty has been reduced from 60} per cent to 53} per cent, but in September, 1930, it was only 32} per cent. The laid down cost in February, 1935, of cut tobacco was 120 per cent; in January, 1936, it was also 120 per cent, but in September, 1930, it was 1024 per cent. There is another item here of particular interest at Christmas time. Our *Conservative friends raised the duty on toys coming from the United States from 32 per cent, as it was in September, 1930, to 53} per cent in February, 1935, and the Liberals have only had the good conscience to bring it down to 42} per cent. I would be quite willing to sacrifice at least two-thirds of this duty, and in doing that I do not think we would be doing too much.
There have been some gains, small though they may be. A friend of mine purchased a sprayer the other day and I wired him to find out what his saving had been. I received a wire in reply stating that the sprayer had been laid down at Burlington with a saving of $189. I submit that my friend Paul Fisher of Burlington who purchased this sprayer at
a saving of $189 does not think that anything of his has been given away. The Liberal party leaders have allied themselves with Paul Fisher in attempting to reduce his costs and improve the quality of the fruit which he grows by giving him a sprayer at a lower price. The right hon. leader of the opposition (Mr. Bennett) and the hon. member for St, Lawrence-St. George (Mr. Cahan) ally themselves with the caterpillar and the codling, moth to destroy Paul Fisher's crop.
We have secured access to the American market for our cattle. I have a friend in my constituency who is a fairly large dealer la cattle. I had a letter from him the other day in which he says:
I have brought down from the west 400 head of cattle. We are feeding about 150 head, and with the feed so plentiful expect to have them in good shape. This U.S. deal has certainly helped us. When we go to Toronto with our cattle and the buyers turn us down, it makes them stand up and look when we have them billed to Buffalo.
I submit that by this agreement very material help is being given to our friends who are farming and who are endeavouring to make money by feeding cattle on the farms of Ontario. They now have two markets where formerly they had only one. I imagine that my hon. friend the Reconstruction party in this house, the hon. gentleman who was anxious that the farmers should have a little more, will be pleased with this one item by which we have given to the farmer a broader market and an increased opportunity to obtain higher prices.
We learn from our hon. friends on the Conservative side that we have done something deadly because we have endangered our balance of trade. I have said time and time again that more nonsense has been spoken in this house about balances of trade than about any other single matter. In regard to this I should like to point out that sometimes light does dawn on certain departments even if it does not spread to the head of the government. I have here a bulletin entitled Canada's Balance of International Payments, 1926-1932. I should like to read from the introductory paragraph as follows:
"Balance of trade" figures are frequently misinterpreted due to the persistence of an old doctrine long ago exploded that a nation's trade is in a healthy state when exports exceed imports necessitating an import of gold to make up the difference.
On the front of this pamphlet I see, " Published by authority of the Hon. H. H. Stevens, M.P., Minister of Trade and Commerce." Apparently there was not complete agreement between the Conservative party and the Reconstruction party even before they agreed
Canada-U. S. Trade Agreement


Richard Bedford Bennett: Hear, hear.


Robert John Deachman: If that be true of 11,000,000 people in Canada, how can we expect that this country is going to balance its trade with every nation with which it deals.


Richard Bedford Bennett: We do not.


Robert John Deachman: Exactly-


Richard Bedford Bennett: And never have.


Robert John Deachman: -and I will prove that the right hon. gentleman does not want to do that, that he does not believe it.


Richard Bedford Bennett: I never suggested it.


Robert John Deachman: He never suggested it? We will see what he says about it. Let me quote from Hansard of 1935. He was discussing the clearing house agreements by which some nations were able to exchange wheat, for instance, with the products of European countries, and he made this statement, at page 3576:
I heard a distinguished member of the French ministry of the day say in Geneva that they were very bad',-
Referring to clearing house agreements.

because they were the very negation of the promotion of international trade ... because the essence of international trade is not that it should be balanced but that there should be adjustments between respective countries from time to time, between A and B and C and D, a surplus here, and a deficit there.
Quite true; yet what has he been trying to do? He has been protesting time and time again that we are in danger because of our adverse balance of trade with the United States-


Richard Bedford Bennett: Hear, hear.


Robert John Deachman: -and trying to bring about arrangements whereby trade would be perfectly balanced as between these two countries, despite his assertion that the attempt to do that very thing on a large scale is the negation of trade.


Richard Bedford Bennett: Does the hon. gentleman say that I ever suggested at any time or in any place that there could be equality between the United States and Canada?


Robert John Deachman: My right hon. friend has said time and again that we could not do business with the United States because there was an adverse balance against us in our trade with that nation-that the adverse balance was too large-


Richard Bedford Bennett: Exactly.


Robert John Deachman: And that it had to be
reduced no matter what happened.

Canada-U. S. Trade Agreement


Richard Bedford Bennett: Hear, hear.


Robert John Deachman: My hon. friend has also contended that when the Conservative party came into power in 1930 their first great task was to adjust the adverse balance of trade which existed in the exchanges between Canada and the United States. We know how often that sentence has been repeated, how often it has been explained; and therefore, my hon. friend said, the tariff had to be raised. They raised it, he said, at great cost and sacrifice to preserve the national integrity of this dominion. That is the essence of his remarks. Perhaps I had better quote his exact words, as reported at page 2394 of Hansard of April 26, 1932:
For, in the end, when you have more imports than exports an adjustment has to be made to bring about a favourable balance. If there is a gap it must be bridged, and it can be bridged only with fresh capital coming to this country or by borrowing.
In other words, when there is an adverse balance between Canada and the United States settlement has to be made by borrowing; and when we ceased to borrow in the United States in 1930, the decline in the adverse balance of trade between Canada and the United States absolutely and necessarily followed, and nothing could have prevented it following, no matter what government was in power, Liberal or Conservative, Cooperative Commonwealth Federation or Social Credit. When our borrowing ceased in the United States, we had not then the means of payment; our imports from that country necessarily declined, and as a matter of course our adverse balance also declined.
And now let me show the decline in borrowings that took place. The total bond sales of the dominion in 1930, largely in the United States, amounted to $398,000,000. In 1934, according to the Monetary Times, our borrowings were $108,000,000. There was a decrease in bond sales of $290,000,000

$290,000,000 less with which to pay obligations in the United States; and as a direct consequence of that we had necessarily to reduce our imports, not because of action taken by the government but because we had not the means of paying.
I put it to hon. members on a personal basis. If any member has a salary of $5,000 and he has a capacity to borrow from his friends another $5,000, he may spend $10,000 in a year; but if his capacity to borrow is gone, he will cut expenditures and buy less. And that is what the nation did between 1930 and 1934. So much for the balance of trade.
My hon. friend makes this suggestion: the estimated loss of revenue through the agreement is $6,000,000. I am not going to dwell on that but I would point out that throughout Canadian and English history it not infrequently follows that a lowering of taxation increases revenue. We had that as far back as the days of Sir William Mulock in connection with postage, and it was repeated in the Robb budgets and in the budgets of Gladstone. In one particular instance, I may point out to the leader of the opposition as an example, the duty on blankets was doubled between 1930 and 1934, and the revenue fell off from $163,000 to $29,000. My right hon. friend raised the tariff on soups 7\ per cent, killed the imports, and we lost a revenue of $542,000. We know and realize full well that under a course of expanding trade, which the Liberals are now going to adopt, wherein we have made the first few faltering steps-and I wish they were stronger -we shall have an expansion of revenue just as we had on the previous occasion.
My hon. friend says that 82%o per cent of the value of all our agricultural production was used at home, and only 17A per cent of our agricultural production found a market abroad. My friend arrives at these statistics by taking the gross value of the agricultural production of Canada. The gross production is not the net production, because it includes the amount that is used up in the production of the net, for instance, feed for cattle and all the rest of that stuff which does not reach the market directly but enters it in the form of beef and other finished products. In that process some of these things are counted twice, and thereby he reaches a figure which is not more than one-half the total percentage of the exports of farm products.
I come now to a point upon which I wish to place some emphasis. It has been argued by almost everyone on the Conservative side of the house that this agreement will work great injury to our railways. We heard that from the hon. member for Leeds; we heard it from the leader of the opposition; we heard it from the hon. member for Danforth (Mr. Harris) and, I think, from all the others who spoke against the resolution. Now, what is the test with regard to this question? I submit that it is the test of how it works out. In 1928-29 we had heavy -imports from the United States. What was the condition of our railways at that time? They were very prosperous; they were at the highest level of employment and the highest level of earnings in their history,

Canada-U. S. Trade Agreement
barring possibly the war years. So I thought I would work out a table giving the revenue of the railways, the index of that revenue, the imports from the United States, and the index of imports from the United States. Taking the basis of 1926 as 100 I find this in seven years, covering 1922, 1926, 1928, 1929, 1930, 1933, and 1934, the three highest years of railway revenue were the three years of the highest imports from the United States; the three lowest years of railway
revenue were years of the lowest imports from the United States. I find that when the Conservative government came into power, pledged as it was to cut down imports from the United States, it brought them down, and brought them down with a crash, but it brought the index of railway earnings down from 114 in 1928-as compared with 100 in 1926-to 54 in 1933. With the permission of the house I will place this table upon Hansard:
Calendar	Revenue
years	of railways
1922		
1926		
1928		
1929		
1930		
1933		
1934		
Index of	Imports from	Index of imports fromrailway earnings	United States	United States89	$510	76100	669	100114	826	123108	894	13392	654	9754	217	3260	294	43
Figures of imports and railway earnings in millions-add 6 ciphers.
I should like hon. members to examine these figures. I think they will conclude this: that where the facts point out, as they do point out clearly, that the larger our imports from the United States the more prosperous our railways have become, then the solution of our railway problem, the solution of our traffic problem, does not lie in the restriction of imports from the United States. That I think is clear. There is no escaping the obvious fact that every time in Canadian history we have restricted imports its direct reflex has been loss of traffic to the railways. I made that remark the other day to a friend of mine upon the other side of the house- I mean upon the Liberal side of the house- and he said, "What do you expect? Is not that the natural and logical result to follow?" Not only natural and logical, but inevitable. And when this trade develops, as it will under this agreement, there is no question as to the results so far as the railways of Canada are concerned: they will move back once more to the era of prosperity.
I appeal to my Conservative friends to take the broad view of this question. My hon. friend from Leeds was worried for fear we had lost some little thing, a cent or two here and there or some trifling item in connection with this arrangement with the United States. But I want to point out that so great is the force which drives us to trade with the United States, it matters little if some of these trifling difficulties arise so long as the whole channel of trade is broadened and deepened and trade is permitted to flow. May I also point out how powerless we are to restrict it even when we try. In 1878, before the national policy

was put into force, the percentage of imports from the United States amounted to 53-1 per cent of Canadian imports, exports to the United States amounted to 35-9 of total Canadian exports, and I doubt not that at that time when they were discussing that issue they said: Let us adjust the balance of trade with the United States. What followed? In 1880, under the first shock of the national policy, trade did adjust between the United States and Canada. Forty per cent of our imports came from the United States; forty per cent of our exports went to the United States; a triumph for the national policy! It was a short lived triumph, for in 1896, after eighteen years of struggle, eighteen years of high tariffs, we were bringing in 50-8 per cent of our imports from the United States and only 34-9 per cent of our exports went to the United States. After eighteen years the national policy had failed to change by mo-re than a trivial extent the trade relationship between the two countries. Why? Simply this, that the imponderable forces which draw these nations together are far greater than the petty interferences which can be brought about by raising tariffs and striving to restrict the trade between the two nations. Since 1878 almost down to the present day we have done far too much on both sides of the house to restrict trade between the two countries. If common sense had guided us in the relations between Canada and the United States, what a different tale might have been told to-day!
I want to appeal to hon. members to look upon this issue in a broader way, not fault finding, not cavilling, not objecting here and

Canada-U. S. Trade Agreement
there to some minor item which may interfere with a small industry in a particular constituency. I quote, in closing, a statement made by Right Hon. William Ewart Gladstone with regard to the trade treaty made by the government of that day with France:
The only reason-
And this is strangely apropos.
-why we have not made bargains similar to the present in former years, was simply because we could not make them. It wras not for want of trying. For four or five years this was almost the chief business of one or more departments of the State, and yet no progress could be made. Why? Because we then set out upon a false principle,-we argued the matter as if the concessions which each party made to the other were not a benefit but an injury to itself.
Is not that characteristic of the language which we have heard in the discussion of this issue? He continued:
We have not now proceeded upon that principle. We have never pretended to France that we were going to inflict injury upon ourselves. We have simply offered France our best aid in breaking down her own vicious prohibitory system. In doing so, we may have given a greater benefit to France than to ourselves. I shall not attempt to measure the comparative good to be reaped as between one side and the other. What we have done is good-nay, doubly good; good for ourselves if France had done nothing at all, doubly good because France has done a great deal.
I repeat that last sentence with one slight modification: What we have done in regard to this agreement with the United States is good-nay, doubly good; good for ourselves if the United States had done nothing at all, because we have lowered our own tariffs; doubly good because the United States has done a great deal.


Mr. W. A. WALSH (Mount Royal):: Mr. Speaker, after listening to the former Minister of Agriculture (Mr. Motherwell) quote scripture so freely I began to wonder what was the relation between the question under discussion and the experience of Saul of Tarsus on the road to Damascus or the parable of the good Samaritan. I am afraid that my hon. friend is somewhat of a Scotsman, and the suggestion is that a Scotsman is one who is well versed in the scriptures but who nevertheless has a strong commercial instinct.
The last speaker (Mr. Deachman) referred to the "nonsense of discussing trade balances," if I understood him correctly, and then proceeded to take fifteen or twenty minutes of the time of this house to give a very considerable number of figures in connection with trade balances, which I believe very few members of this house knew anything about. If it is nonsense to discuss trade balances- and that was his opinion-I do not see why
during the last campaign the Liberal party did not make a greater effort to discuss trade balances from that point of view from platforms all over the country.
In discussing the question before the house I should like to suggest at the outset something that no doubt can be taken for granted; that is, that I find I am not in agreement with this resolution. In a very brief space of time I should like to outline why I have reached that conclusion. I do not know whether or not my reasons will have any effect on the course of this debate; nevertheless I should like to have the privilege of recording my personal views, which I believe are in harmony with those of my party.
As we have been told on many occasions the tariff serves two distinct purposes, the one to raise revenue and the other to afford protection to both industry and labour. For a moment I should like to deal with the first point, the purpose of raising revenue, and I do so in order to suggest to this house the possibility of placing more emphasis on that feature of the tariff and less on the second feature I mentioned. By reference to the publications of the Department of Trade and Commerce I find that in 1890 the total revenue of this country was 838,500,000, of which the customs tariff supplied $23,300,000. In 1913 the total revenue was 8168,600,000, to which the customs tariff contributed $111,700,000. Coming down to 1934 we notice a tremendous shrinkage in the amount of revenue raised through the customs tariff. In that year the total revenue was $324,471,270, of which the customs tariff gave only the meagre sum of $66,305,356.
I would urge, Mr. Speaker, that in future more attention be given to the possibility of raising revenue through the tariff rather than through the process of direct taxation. For my own part, and I think I speak for the majority of the citizens of this country, I believe that is a fairer method of taxation; at least it distributes the taxes equally and more equitably among the people as a whole. I would far rather go to a store and pay $30 for a suit of clothes, if I could ever raise that amount of money, than pay $28 and then have to write out a cheque for the additional amount by way of income tax at the end of the year. I also believe, naturally, that we should continue to endorse protection as a policy. Canadian labour requires protection against unfair competition from countries where the wages paid for labour are ridiculously low, and our industries also require this protection not only because of the amount of capital invested in them but also because of the number of workers employed.
Canada-U. S. Trade Agreement

Many references have been made to the history of Canadian tariffs, and particular stress has been laid on the previous reciprocity treaty that came into operation in this country on March 16, 1855. That treaty was abrogated by the United States, and if I might intrude the remark at this stage I would suggest that the same step will be taken in the near future and the United States will abrogate this treaty that I presume we are about to consummate. As I have said, the first treaty was abrogated. The reason for that action was not as suggested by a previous speaker, as is well known to all students of economic history. It was terminated because of (1) friction which resulted from the civil war in the United States; (2) retaliation for a Canadian tariff imposed in 1859, shutting out United States manufactured products.
A little later we had the consummation of confederation, which opened up a very wide market within Canada for Canadian manufactured and agricultural products. At that time, and immediately following, we also had a small but nevertheless increasing market in Great Britain. In 1878 we had brought forward in parliament by way of legislation the so called national policy. If the right hon. Prime Minister (Mr. Mackenzie King) would permit me to do so, I should like to take exception to the suggestion he made during the course of his remarks, when he said that that policy was introduced as a retaliatory policy against the United States. If the right hon. gentleman would study again Canadian economic history he would quickly appreciate that the national policy was introduced by the Conservative party not for that reason but to correct the ills which had befallen this country chiefly because of the previous administration that had been in power previous to 1878, I would quote the words of Sir Leonard Tilley who, upon presenting his budget in 1879, said that the national policy was being put into effect select for a higher rate of duty those articles which are or can be manufactured in Canada, and to have those that are neither made nor likely to be made in Canada at a lower rate." That is the reason for the national policy, and I suggest that we note the two reasons he advanced, one being that of protection and the other the possibility of financial revenue.
We also notice the trade development in Canada during succeeding years. In 1896 there was a Liberal victory at the polls. Immediately following that election the late Right Hon. W. S. Fielding was placed at the head of a commission to investigate tariff conditions in Canada. May I pay tribute 
to the then minister of finance, because I believe he was an outstanding Canadian and one to whom a prominent place will be given when the history of Canada from 1896 to the time of his death is written. As the head of the commission he made a thorough investigation, but found no reason for changing to the extent of one iota the national policy under which Canada had operated for the previous few years. He continued to govern under the same policy.
The first important change made in Canadian tariff policy was about 1907. At that time we find three columns in place of the previous two which, in turn, had replaced one column. To-day we have the British preferential. the intermediate and the general tariff. Reference has been made to the reciprocity campaign of 1911, and I am surprised that so many men otherwise endowed with good judgment should inject into a discussion of that campaign certain remarks offered as facts, but which in my estimation were somewhat distorted. One hon. member supporting the government suggested that the election in 1911 was won by the Conservative party because it played only one string of the instrument, namely the possibility of annexation to the United States. That might have been mentioned during the campaign, but I suggest emphatically that it was not the cause of the defeat of the Liberal party. My Liberal friends well and truly know the truth of my statement. Reciprocity was defeated at that time because the people believed that if such legislation became effective Canada would be prosperous for only a day, and that after the treaty had been tried and abrogated by the United States, as the previous treaty had been, the people of Canada would have to find new avenues of trade.
We have always experienced considerable difficulty in our trade relations with the United States. Trade with that country is an uncertain quantity. Down to 1920 it was more or less peaceful, but following that time it was disturbed first by the Fordney-MeCumber tariff, and then, to make matters worse, by the Hawley-Smoot tariff, the provisions of which were directed principally against our primary products of fish, cattle, lumber and agricultural products. As a result of those tariff restrictions we were forced to find markets elsewhere, and proceeded to do so. Even my Liberal friends, while in office from 1921, were forced to take cognizance of conditions actually existing and to endeavour to find avenues of trade with countries other than the United States.

Canada-U. S. Trade Agreement
In a few moments I shall quote figures to show that we have been more or less successful in seeking other markets, and that the government in office after 1930 was eminently successful in finding new avenues of trade for Canada. Those avenues were within the empire first, and then with other countries, not neglecting the United States. When we are farther removed from 1932 and when the history of that year is written I believe that standing out in prominent relief will be the trade agreement made by the present leader of the opposition (Mr. Bennett), who suggested the possibility of the conference in Ottawa, at which were effected the empire trade agreements. May I add that no more important piece of legislation has been introduced, and no legislation that gave such an immediate stimulus to trade, than the trade agreements made in Ottawa in 1932. Does any hon. member suggest that the Ottawa agreements had a disastrous effect upon Canadian trade? Let us examine the figures for the year ended March 31, 1934. I am going to examine them not from the point of view of the tremendous increase in trade between [DOT] Great Britain and Canada, but in a broader sense. I want to see if that increase in trade with the British empire, and the United Kingdom in particular, had any disastrous effect upon our trade with other nations, particularly with that of the United States.
Our greatest exports go to the United Kingdom, the United States ranking second. In 1934 the value of exports to the United States was $194,443,139, and I would remind hon. members that we had that amount of trade after the trade agreements signed in Ottawa had been in effect for a year. Does that represent an increase or a decrease in trade as compared with the previous year? It represented an increase of $51,282,000 over our trade with the United States in 1933.
Did the trade agreement of 1932 have a disastrous effect on our trade relations with other countries? Not in the least. I find that we had our greatest imports from the United States, with Great Britain ranking second. From the United States we imported $238,187,000 worth of goods, representing an increase of $5,639,000 over the previous year. Nevertheless we continued to have an unfavourable trade balance of about $44,000,000. I agree with the previous speaker in his suggestion that we should not consider trying to establish a favourable trade balance with every country with which we trade. I believe that is an economic theory with which most hon, members will agree. I must emphasize the fact, however, that it is not advantageous to have an adverse trade balance with countries
as important as the United States or Great Britain, for the simple reason that our money markets are situated in both those countries, and if our unfavourable balance in actual trade is too great it adversely affects our borrowing powers in those markets, particularly when we have to add to that unfavourable balance in actual trade the amount of money we have to pay out in interest and dividends to the New York and London markets.
I notice by reference to the statistics that Canada's external trade for the year ending March 31, 1934, was slightly over one billion dollars, an increase of 14-9 per cent, and this gave us a favourable trade balance of $218,000,000 despite an unfavourable trade balance with the United States. I must emphasize, in considering the motion before the house, that as a debtor nation Canada must maintain a favourable trade balance to facilitate the payment of our international obligations. Our Prime Minister realizes that; our Minister of Finance appreciates it; all members understand it is important, and I feel that careful study should be given to every phase, of this agreement, bearing in mind our adverse trade balance with the United States at the present time and the tremendous amount of money we must of necessity pay in interest and dividends to that country.
I should like now to make reference to one particular industry that is adversely affected by this trade agreement, and I mention this one in particular because I am familiar with it and because it exemplifies many others placed in a similar position. The duty on the product of this industry, before the signing of the present agreement, came under the general tariff, with a rate of 32J per cent. Now the products of that industry have_ a protection of only 30 per cent. The British preferential was 20 per cent, which was later reduced to 15 per cent. When we take into account the rate of wages paid in Great Britain as compared with Canada, and the lower cost of fuel and raw materials in Great Britain and some other countries, the 15 per cent and the 32J per cent represent not enough protection for that particular industry. Yet part of that protection has been removed and the result is anxiety not only on the part of those financially interested but also on the part of labourers and others actively engaged in the industry. In this particular industry the wages paid in Canada are about the same as in the United States, but our raw material costs are from forty to one hundred per cent greater in Canada, and for that reason the industry feels the effect of this new tariff arrangement. Very unfortunately the government, in the short
Canada-U. S. Trade Agreement

sightedness of their policy, lowered the tariff on the finished article of this concern and forgot to lower the tariff on the raw materials entering into its product. The result is that the industry is suffering a handicap, and it cannot face any lower duty. The duty on the raw material of this particular company is exactly the same under the general as under the intermediate tariff. With your permission, Mr. Speaker, I should like to come back to a discussion of that particular phase a little later on, and to speak of another feature at the moment.
The raw materials wdiich this company purchases wherewith to make its manufactured goods come into this country, or rather they are assessed in order to prevent them from coming in, on a specific duty basis, and not on an ad valorem basis. Let me give you an example of exactly what is happening. In previous years the raw material of this concern cost $4 a ton; to-day it is selling at $2 a ton, and the specific duty has remained exactly the same. That gives those who are manufacturing this particular material a protection, not of twenty-five per cent, but of fifty per cent, with the result that the company is charging seventy cents more for the product in Canada than is being charged for the same product in the United States. They are taking advantage of the tariff because the tariff is so arranged that the duty on the raw material is on a specific rather on an ad valorem basis. I would like to pursue that subject further a little later.
_ Coming back to the first question, I ask if it is not reasonable to expect that an intermediate tariff will be lower than a general tariff. If it is not, for what reason is there an intermediate tariff? If there is a rate in the general tariff of 324 per cent, why should we find that same rate, 32J per cent, in the intermediate tariff? We extend intermediate tariff privileges to certain countries, and they think that they are enjoying a benefit, but in reality they are not. In my estimation, Mr. Speaker, there should always be a difference between the general tariff, which should be higher, and the intermediate tariff, which should be lower. Otherwise you are going to have constant recurrence of this same trouble in industry where the raw material is assessed in one way and the finished article in another, where the raw material is protected on a basis where both the general and the intermediate tariffs are the same, and the finished article is protected on the basis of a difference between the general and the intermediate tariff. It is not fair, and I hope that the Minister of Finance will give consideration to that particular point.

_ There is another point I wanted to discuss in connection with specific duties. I do not believe in specific duties. They are handy and convenient at times, but they work out into a nefarious influence in our tariff arrangements with other countries. I refer you particularly to a certain heavy chemical, the duty being three-tenths of a cent a pound under the general and intermediate tariffs. When that tariff was instituted the chemical in question sold at $2 per 100 pounds. That represented a protection of about 25 per cent. To-day that same chemical is manufactured and sold at $1 per 100 pounds, and yet the specific duty remains exactly the same. It means that the industry is protected to the extent of fifty per cent, and I contend that that is not a fair way in which to make the tariff arrangements of this country. I would advocate doing away with these specific duties and placing the greater number of them, if not all, on an ad valorem basis.
I would also like to urge upon the attention of the house the fact that, on account of the influences that have been brought to bear from time to time, the tariff has been made into an unwieldy and peculiar proposition. Certain discrepancies we know are hidden in it. Certain primary industries that are so well protected that they are getting what I consider exorbitant prices, as compared with other countries, for the article they produce, and that in turn forces a higher price on the finished article of some other industry in this country. I would urge the Minister of Finance, when he is giving consideration to this treaty, to bear in mind such points as these, with a view to lessening the evils that may otherwise be done.
The suggestion is made in connection with this treaty that it is going to cause traffic to flow from Canada to the United States and from the United States to Canada; but I would like to ask, does it actually work out that way in practice- Is there not more theory than practice in that. Let us take an example. The tariff is lowered, but is the manufacturer of a certain line of goods going to discontinue his operations because of that. No; he is going to try to meet the competition from the United States, and if necessary, he will reduce his price. Some hon. members say that is exactly what they desire, but what happens to an industry under those circumstances. The manufacturer is intent upon maintaining the same rate of profit in his business, and in order to be able to sell at a reduced rate he endeavours to increase the efficiency of his plant. In other words, if a workman has been producing fifty articles per day in the past, in order to meet this new

Canada-U. S. Trade Agreement
arrangement he must now produce fifty-two articles so that the profits of the industry may be maintained and the United States competition met. Canadian industry is going to endeavour to keep out the products of United States industry; it is going to meet the competition and there will be no flow of trade between the United States and Canada if they can help it. The only time that a flow of trade will take place will be when one of our industries is forced to the wall. Such an occurrence will be disastrous, not only to the financial interests but also to the workingmen of this country. Every time our tariff arrangements are changed, some industry is affected. If our manufacturers are to be placed in competition with the manufacturers of outside countries, they will endeavour to meet that competition; they will attempt to meet it at the expense of our workingmen. I do not think it is fair for any government to put a manufacturing concern in the position of having to meet outside competition by taking it out of the workingmen. This is what will happen, and every hon. member realizes it.
American industry has three prices, commonly referred to as the l.c.I. price, the c.I. price, and the quantity or preferred price. If I am a small purchaser in the United States I am quoted the l.c.I. price; if I am a large purchaser I am quoted the c.I. price, but if I am an exceptionally large purchaser and happen to be in that preferred class, I get a still better price. When the American manufacturer enters into competition in a foreign market, does he quote the first price? No. Does he quote the second price? No. He quotes the third or preferred price. I maintain that industry in this country is being placed in an unfair position when it has to meet the lowest possible price American industry can quote. That is not fair or reasonable competition and we should not expect Canadian industry to have to meet it. We must realize that the finished product of one industry becomes the raw material of another. Once we begin to meddle with tariffs in the way suggested by the resolution now before this house, there will be a disastrous effect upon business. That effect will be felt in financial circles and also in the homes of the labouring class.
The Prime Minister (Mr. Mackenzie King) has suggested that "night will follow day." If he gives full effect to this treaty so soon after coming into office I am afraid that "night will follow day," not only in the industrial and commercial world but also as far as the Liberal government is concerned. What did the Liberal government do from 1921 to 1930 when they were faced' with the effects of the
Fordney-McCumber and the Hawley-Smoot tariffs. In his address to this house the Prime Minister suggested that the Liberals had done a great deal, but he gave us no example. I do not know whether the rules of the house make it necessary to accept a statement of that kind as bona fide, but I know in ordinary business such a statement would have to be followed up by one or more concrete examples before full effect would be given to it.
The Minister of Mines (Mr. Crerar) was loud in his applause the other evening when an hon. member mentioned his gratification at the clause giving S100 exemption to tourists.
I invite him or any other member of the government to go before any meeting of boot and shoe retailers or any other retail organization in this country to see if he can get the same volume of applause as he gave to the hon. member. I am not playing politics when .1 say that this provision is going to have a serious effect upon certain Canadian businesses. The business life in many of our cities and towns will be affected, and I urge the government to give very careful consideration to this provision. In the interests of the many small businesses that have been built up through the years, the government should be very careful in defining what is meant by a tourist. If this is not done, many businesses in the towns and cities not too far from the border will have to close.
In conclusion, I should like to make one further plea. It is that in the future the tariff should not be considered as a political football. Whenever a change is made in the tariff, no matter how small, a ripple of discontent and fear runs through the industrial life of this country. Tariffs should be removed from the field of politics. A competent commission should be appointed, a commission composed of real experts. With due respect to the Minister of Labour (Mr. Rogers), I contend that these experts should not be all from our universities; some of them should be men of practical experience who know how to handle this intricate problem. Such a commission should be free from political influences and be able to remodel and revise our tariff system so that the discrepancies I mentioned in the early part of my address will disappear entirely and the business men of this country may have absolute faith in any government that may be in office. I do not agree with my hon. friends to my extreme left when they say that the Liberals and Conservatives have again been riding their "old hobby horses."
Canada-V. S. Trade Agreement


Mr. DEPUTY SPEAKER:: The hon. member has spoken forty minutes.


William Allen Walsh: May I be allowed to conclude? I suggest that the Liberals and the Conservatives are speaking sincerely; we are not riding a hobby horse. The Liberals have a certain point of view on the tariff and so have the Conservatives, and we express those views sincerely. I hope therefore that the remarks I have made will be taken as a sincere expression of my own feelings in the matter. I urge again that the tariff be removed from the field of politics and placed under an adequate commission, where it will be dealt with to the satisfaction of the business man, the industrialist, the financier, the labourer, the agriculturist and every other class in the Canadian nation.
Mr. A. MacG. YOUNG (Saskatoon): I almost hesitate to attempt to add anything to this debate, which has been going on now for a considerable time. I do not flatter myself by thinking I am going to add anything of material value to the discussion we have had so far. I am inclined to think the debate has already lasted much too long, and I recognize at this very moment that I am guilty of protracting it. I must say, however, that I remarked to the chief whip that if there were any way of concluding the debate at once I for one would not stand in the way.
Before going further I want to say a word or two with regard to the observations of the hon. member who has just spoken (Mr. Walsh). He began by referring to his preference for what he called a tariff for revenue. Let me invite him to change sides; let him come over here. A tariff for revenue is not a protective tariff. It may to a slight extent be protective, but primarily it is based upon the principle of yielding revenue, and whenever a tariff becomes too high, whenever it becomes in fact a protective tariff so as to keep out imports, it ceases to be a revenue tariff. I would ask the hon. gentleman to study the difference between a revenue tariff and a protective tariff.
If he did so he would probably find his seat somewhere on this side.
The last remark of the hon. gentleman was this, that if there was one thing he would appeal to the house to do, it would be to remove the tariff from political action. If I had the responsibility of naming a tariff board to which to refer such matters, I would start with the hon. member for Huron North (Mr. Deachman); I would name Mr. E. J. Young, who formerly represented the constituency of Weyburn, and some other gentleman with views similar to the views of these two, and

then we should see whether my hon. friend would want to take the tariff out of politics and entrust it to such a board.


William Allen Walsh: Does my hon. friend not think that to choose politicians would be putting the tariff directly into politics?


Mr. YOUNG:: One of the gentlemen I have suggested is unfortunately not in the house at present.


An hon. MEMBER:: Not for long.


Alexander MacGillivray Young: Canada-U. S. Trade Agreement

to undo tlie damage our collective action has worked. We wish to break down all the artificial and excessive impediments put in the way ot world commerce, not only in our own inteiest but for the benefit of all others as well, since only by restoring the whole world can individual countries hope ... to remain economically healthy long.
The bankers in our own country have begun to take a real interest in this matter. They saw how their own situation, like that of all the people, was becoming serious. The manager of one bank said:
One of the reasons of the intensity of the depression in Canada is the high tariffs and trade restrictions throughout the world.
The manager of another of our large banks said:
The world's tariff barriers would increase until they become so provocative that a new generation would arise and knock them all down, Mr. Wilson answered William Duff, a low tariff Liberal. Liberal members of the committee applauded. Mr. Duff had asked Mr. n ilson as a banker and business man how Canada could increase her foreign trade. Mr. Wilson said there were too many tariff and other barriers against world trade. To get an increase of this trade there must be general lowering of tariff barriers.
Yet another manager of a bank said-and I want every hon. member to realize the meaning of these words:
We will get out of this depression when the governments get together and start trading again among themselves. I think it is well known that tariffs, quotas and heaven knows what, have prevented world trade.


Richard Bedford Bennett: It is "heaven knows what" that is the trouble.


Mr. JAQUES:: May I ask the hon. member to explain how it is that Great Britain, when completely free trade, was the first country in the world to feel the depression, ten years before we did, and how, under a system of protection

Mr. \OUNG: Mr. Speaker, I am afraid I have not enough time. I cannot hear my hon. friend anyhow.


An hon. MEMBER:: You never can.
Mr. 10UNG: If I were to digress to a discussion of the matter of free trade in Great Britain it would take too much time.


Norman Jaques: The hon. member is the one who has just referred to Great Britain.
I asked him a plain question.


Walter Edward Foster: The hon. member for
Saskatoon has the floor unless he permits the hon. member to ask a question.


Alexander MacGillivray Young: I did not hear the hon. member's question. Anyhow my time is too

limited. I want to come a little closer to my hon. friends the Conservatives and see what they said.
Mr. Henry, when he was a good Conservative premier of Ontario, made a speech at tlie opening of the Woodbine bridge in Toronto. Perhaps the bridge, with its provisions for two-way traffic, suggested the matter of trade to him, because he made some statements that have been made frequently in the west. He said:
If Canada is to sell to the other parts of empire, Canada must be prepared to lower the barriers of protection. If the imperial conference at Ottawa proceeds on a basis of give and take, then it will achieve results. If not, then the gathering of the empire representatives around the conference table will be abortive. We must throw overboard many of our old beliefs.
The Right Hon. Arthur Meighen said, in a speecli at St. Catharines:
A compact of nations to lower tariffs is part of a logical solution for the depression.
Then my right hon. friend the leader of the opposition said this in 1932:
For we must commonly agree that there can be no continued sale without purchase; that if we expect to market our goods in the United Kingdom we must expect to purchase goods from the United Kingdom.
Our present Prime Minister, quoting these words, said:
There at last we have a straightforward admission from the government that exports are paid for by imports. And what is true of trade between the United Kingdom and Canada is equally true of trade between other parts of the world and this country.
Canon Co>dy, now president of the university of Toronto, a lifelong Conservative, and once a minister in a Conservative government, said:
The British peoples do not desire or mean to pursue a policy of economic isolation, but they are in a mood at the moment to remember the family first. When these family claims and inter-relations are secured there will still be ample scope for the friendliest relations with other countries and particularly with this great country-*
He was spealdng in the United Stateson the basis of give and take. Can you ever get a satisfactory arrangement that is not based on give and take? It can't be all take and no give. No country can carry on business under those conditions.
And then he went on to say:
I entirely agree with what His Excellency mi T;onaId Lmdsay has said'. Ultimately there will have to be an adjustment of ideas, in my humble opinion, on the whole question of tariffs, throughout the world, if the world is to regain the prosperity for which it hopes.
At first we all want to sell as much as we can abroad and buy as little as we can abroad, but that program in the long run can never be carried out. Commerce involves mutuality.

Canada-U. S. Trade Agreement
We all -want more international trade. Yet in fact we put barriers in the way and then wonder why there is not so much international trade as we wish to have.
I have not time, Mr. Speaker, to give many more quotations. I have cited sufficient to show that in the last five or six years not only politicians, or statesmen if you will, but bankers, business men and others, have been proclaiming that the only way to begin to solve our economic difficulties is by again starting to establish international trade. I have quoted from Conservative speakers in their lucid moments, when they are opening bridges and the like. They will then say what they really know and believe, that only by reducing these tariff barriers and other restrictions are we going to begin once more to have international trade.
What is the very basis of this reciprocity pact? There is nothing very strange or wonderful about it. It is simply making a deal with another country, that they shall take some goods from us and we shall take some goods from them, the one in payment of the other. And because some hon. gentlemen opposite have tried to say that these accounts may not exactly balance we are told that therefore the proper thing to do is to keep on strangling trade.
I was surprised at the hon. member for St. Lawrence-St. George (Mr. Cahan) the other night. First let me say that the right hon. leader of the opposition attempted to chide the right hon. Prime Minister of Canada for not having made this agreement between 1921 and 1930, but later the hon. member for St. Lawrcnce-St. George said that he was not going to do anything of the kind because he recognized that the government in power in the United States at that time would not deal with the Liberal government or any other government; consequently he told the Prime Minister not to offer any apology. That was different indeed from what was said by my right hon. friend the leader of the opposition. But the hon. member for St. Lawrence-St. George went on to say more, dealing with the policy of the Conservative party when they were in power. At page 800 of Hansard the hon. member said:
It is further suggested by one hon. member who preceded me that we were in favour of high taxation and that the late government had increased taxation and the rates of duties on imports. We did. By various ways, which if you like you may describe as subterfuges, we did decrease the importations from the United States, and in doing so we believed that we were salving and saving the financial stability and the whole financial structure of Canada. In the forty minutes allotted to one it is impossible to give details, but I am fully convinced of the fact.
Then the Prime Minister asked:
Would that be equally true of imports from other countries as well?
The hon. member for St. Lawrence-St. George replied:
We were anxious to take imports from any country that would trade with us, but the United States would not trade with us.
Have hon. members ever heard a statement delivered by any hon. member in this chamber which said more clearly and emphatically that the Conservative party did not want to trade with the United States than the statement made by the hon. member for St. Lawrence-St. George, who says that they tried even by subterfuge to keep out goods coming from the United States? Am I supposed to believe this was the party that sincerely went to that country to try to bring about a reciprocity pact? I will tell you, Mr. Speaker, what took place. Those negotiations were carried on just prior to an election. That was the dummy that was to be dangled before the eyes of the electors of the Dominion of Canada by the Conservative party, to see whether perchance they could not get some votes.
Then I want to go a little further. The other day the Prime Minister asked the leader of the opposition why he did not conclude an agreement if the negotiations had proceeded to the point at which the agreement was ready for signature. What was the reply? The right hon. gentleman said that he preferred his country to office and power. Did you, sir, ever consider the meaning of that statement? The right hon. gentleman must have believed the people of this country would support a reciprocity pact; otherwise the statement means nothing. The further inference is that if he brought in such a pact the people would vote for him and he would be in power. He said that he preferred to stand by his country; in other words he was afraid to trust the judgment of the Canadian people. Let me say to the right hon. gentleman, however, that even if this pact had been negotiated and placed before the people and approved, as it will be approved by them, that was only one element that had to be considered in that election. Even had the right hon. gentleman negotiated this reciprocity pact the Conservative party would not have been returned to power; there were so many other factors operating against that party that this one act, even if it had been consummated, would not have been sufficient to return them to power. I want every hon. gentleman to remember that statement of the right hon. gentleman who must have thought the people would approve a reciprocity pact.

Post Office Act

We have heard many speakers during the debate, and I have in mind particularly the hon. member for Davenport (Mr. MacNicol), who spoke of the tariff of the Right Hon. R. B. Bennett. I wondered whether he was drawing a distinction between the tariff of the Right Hon. R. B. Bennett and the tariff of the Conservative party, when he repeated his 'leader's name time and time again. Then the hon. member went on to say that nine Conservative members had been returned from the city of Toronto and a few others from nearby centres. I interjected the remark that if the hon. member would take a look around the house he would find out exactly what the people of Canada thought of the actions of the government led by the present leader of the opposition. The hon. member for Davenport was trying to show that the high tariff of the previous government, the highest tariff ever known in Canada, together with the manipulation of exchange, the dumping duties and various other restrictions, may have brought some immediate advantage to some of the manufacturers of Canada, but there is one factor of which the hon. gentleman has never thought. He has never given any consideration to the interests of the consumers of Canada. Unless we turn the whole table around and look after the consumers, we shall never reach a basis on which prosperity will be established in Canada.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



POST OFFICE ACT

[Stage Direction]
On the order:
Second reading of Bill No. 8, to amend the Post Office Act.-Mr. Boulanger.
Walter Edward Foster: Before the bill is read a second time it is my duty to call the attention of the hon. member to the fact that I think this bill is not in order, as it is a money bill.
Mr. OSCAR L. BOULANGER (Bellechasse): Mr. Speaker, I am sorry to interrupt you, but the accused claims the right to be heard before sentence is passed.


Walter Edward Foster: Does the hon. member wish to speak to a point of order?


Mr. BOULANGER:: I should like to know what the point of order is.


Richard Bedford Bennett: Mr. Speaker, I was about to rise to a point of order. This bill con-

templates an appropriation of public moneys, and therefore it is beyond the province of a private member to introduce it.


Walter Edward Foster: Do any other hon. members wish to speak to the point of order?


Hon. FERNAND RINFRET (Secretary of State):: I understand that when a point of order is raised by an hon. member it may be debated, but when Mr. Speaker renders a decision on his own initiative, I do not believe it is in conformity with usages to discuss it.


Richard Bedford Bennett: Mr. Speaker did not rule.


Louis Édouard Fernand Rinfret: I have nothing to say about the bill.


Walter Edward Foster: I invited hon. members to discuss it, because the other day I had some doubts. Since then I have looked into the matter and now I have no doubts about it, but before giving my decision I should like hon. members to express their views.


Joseph Oscar Lefebre Boulanger: On the point of order, I understand that objection is made to the bill because it is alleged that it calls for an expenditure of public moneys, thereby involving a procedure which is not within the rights of a private member. I submit respectfully that this bill does not call for a fresh expenditure of money, but calls simply for a new method of expending money which has already been voted.
The object of the bill is to replace the sweat shop and cutthroat competition system existing of awarding mail contracts by a more reasonable and more logical system based upon mileage and a flat rate. It might be that the average remuneration of mail contractors under the proposed system would be a little higher than the average remuneration under the present system, but I submit respectfully that there is no evidence of that and, further, that the system proposed by the bill is so simple and so easy of application that it will result in a saving to the government. The saving in the application of the new system will compensate for any increase, if there is any, in the average rate of remuneration of mail contractors.
May I cite a precedent, Mr. Speaker, for your consideration. In 1929 an amendment was moved in the house by the Hon. Mr. Guthrie. The hon. member's amendment did not have quite the same phraseology as has the bill now before us, but the object was the same, and it was not ruled out of order. It was discussed during two sittings of the house. That amendment was moved on April 16, 1929, and is found at page 1616 of

Post Office Act
Hansard. On motion of the late Hon. J. A. Robb, the then Minister of Finance, that the house go into committee of supply, Hon. Hugh Guthrie, the then member for South Wellington, moved the following amendment:
That all the words after the word "that" in the motion he struck out and the following substituted therefor:
"In the opinion of this house the present system of awarding contracts for the delivery of rural mail by tender has proved unfair, burdensome and unsatisfactory, and that such rural mail carriers should be appointed by the civil service commission upon a permanent basis with a definite rate of pay, based upon mileage and the physical conditions of the territory involved', having regard to the amount paid to the other servants of the government for similar employment."
That amendment was discussed during two sittings of the house, and I suggest that the object behind it is exactly the same as that behind the bill standing in my name. I repeat that the bill does not call for an expenditure of additional money which would have to be voted, but provides simply a new method or a new way of expending money which has already been voted for the payment of rural mail contractors.


Hon. J. C. ELLIOTT (Postmaster General):: Mr. Speaker, I do not propose to discuss the point of order further than to deal with the statement made by the hon. member for Bellechasse (Mr. Boulanger) that there is no evidence that this bill involves an increase in the expenditures for the transportation of mail. First I would ask hon. members to consider the object of the bill. It states that it is "to properly remunerate the mail carriers." Its object is to give higher pay to those hauling mail by doing away with the present system.
I do not propose to discuss the relative merits of tender and flat rate payments, because at this point I do not think those questions arise. On the point of order, namely as to whether the bill would have the effect of increasing the amount of money to be paid, I have obtained from officials of the department an estimate of the increase in the cost. According to figures furnished by them the present cost of mail transportation is about $6,000,000 per year, or an average of about eleven cents per mile. My information is that if the provisions of the bill were adopted the minimum price mentioned in the bill-


Joseph Oscar Lefebre Boulanger: I wish to raise a point of order. The minister is discussing the merits of the bill, something which he has no right to do on the point of order which has been raised. The point of order is this: 12739-54i
Is the bill in accordance with the rules of the house. I would point out the minister is discussing the merits of the bill, and that he has no right to do so.


Richard Bedford Bennett: No, no.


Louis Édouard Fernand Rinfret: I do not think the point of order is well taken. The minister is trying to show that the bill would have the effect of increasing expenditures, and that is the very' essence of the first point of order raised.


Mr. LAPOINTE (Quebec East):: Surely.


Walter Edward Foster: The minister has the right to raise the point he has raised, and to make the explanation he is now making.


John Campbell Elliott: My information is that an increase to the minimum rate mentioned in the bill would mean an increase of 810,668,000 per year over the S6,000,000 that we now pay.


Richard Bedford Bennett: What is the figure?


John Campbell Elliott: We now pay
86,000,000, and I am told that an increase to thirty-five cents a mile for the transportation of all the mail would mean an increase of $10,668,000. To-day the total revenue of the Post Office Department is about $36,000,-
000.	Therefore the change would bring about an increase to the extent of nearly a third. To increase it to seventy cents per mile would increase the amount by over $27,000,000. That is all I wish to say,


Mr. J. S. WOODSWORTII (Winnipeg North Centre):: Mr. Speaker, I should like to make our position clear. We are absolutely opposed to the bill, but we believe it is the right of hon. members in this house to present motions of general importance and couched in general terms, and we feel that to have such motions refused is an infringement on the privileges of the house. We do not think it is proper to refuse such motions simply on the ground that in some remote way they may or may not involve some increased public expenditure. I take it that we are simply discussing a principle of policy-


Richard Bedford Bennett: This is a bill.


James Shaver Woodsworth: Although I am not in favour of the bill I think wo should safeguard private members' resolutions.


Richard Bedford Bennett: Mr. Speaker, I spoke briefly before, but I should like to say something further.


Walter Edward Foster: Proceed.
Post Office Act


Richard Bedford Bennett: This is a bill, not a resolution. A resolution offering an amendment to a motion to go into supply might obviously be in order and a bill would not be in order, for reasons which need not be mentioned. Paragraph 549 of Beauchesne's Parliamentary Rules and Forms reads as follows :-
549. All bills providing for the payment of 'salaries or for any expenditure whatever out of the public funds of the dominion must be first considered as resolutions in committee of the whole. And all such resolutions necessary to the introduction of a bill must first obtain the recommendation of the governor general. .It often happens that bills are introduced with certain clauses providing for salaries or other charges on the public revenue, and in that case the bill may be introduced directly on motion, while the clauses in question (which should be distinguished by italics or brackets), are considered in the shape of resolutions in committee on the bill. But this can only be done when the money clauses are merely a part of the bill. Whenever the main object of a bill is the payment of public money, it must directly originate in committee^ of the whole. The rule also applies to releasing or compounding any sum of money due to the crown and to the imposition of any state tax upon the people, but not to pecuniary penalties necessary to the operation of a bill.
That is a quotation from paragraphs 502, 503 and following of Bourinot.
The preceding paragraphs are in much the same terms, and paragraph 791 gives effect to that principle. I was anxious to hear what the Postmaster General (Mr. Elliott) had to say as to what was involved, and apparently it means an imposition of an additional tax upon the people of Canada of approximately $10,000,000, which is a very large sum of money, and when he made that statement it did seem to me that it was conclusive of the matter. One might well be in favour of the principle of the measure, but it would have to be one that emanated from the government as a matter of governmental policy. I think the hon. member for Winnipeg North Centre (Mr. Woods-worth) must agree that there is a vast distinction between a resolution which merely expresses a pious hope that something may be done and a bill which, when enacted, becomes part of the statute law of the country. There is a clear distinction made in the books, and that is the reason I raise the point.


Walter Edward Foster: Does any other hon.
member wish to speak to the point of order?


Mr. T. A. THOMPSON (Lanark):: I
understand, Mr. Speaker, that we are not allowed to discuss the provisions of the bill and can speak only to the point of order. I have nothing further to say on the point of

order, but I heartily agree with the provisions of the bill, and when it does come up I shall support it.


Walter Edward Foster: This bill provides that
that Postmaster General may award contracts for the transportation of mail; that no contract for an amount exceeding $1,000 per annum may be awarded without the approval of the governor in council, and that the contractors shall be paid according to a fixed rate between thirty-five cents and seventy cents per mile per day unless otherwise authorized by the governor in council.
Moreover, the sponsor states in the explanatory notes that it is sought by this bill to "allow the Postmaster General to properly remunerate the mail carriers who perform the important function of transporting the mail of Canada."
In the session of 1029 Mr. Guthrie moved as an amendment to the motion for committee of supply that rural mail carriers should be appointed by the civil service commission upon a permanent basis with a definite rate of pay based upon mileage and the physical conditions of the territory involved, having regard to the amount paid to other civil servants for similar employment. This was in order because it was not a bill; it was a proposed resolution drafted in general terms which had no immediate effect and would have had to be followed by a bill amending the Post Office Act. But a bill like this one, authorizing the Postmaster General to enter into contracts for carrying the mail involves the appropriation of public revenue and must be recommended by the governor general and originate in a committee of the whole specially set up for that purpose. A resolution must first be submitted which, under standing order 60, cannot be considered on the day it is moved but must then be adjourned to a future sitting. A bill founded on that resolution is then introduced. Such measures are always sponsored in our house by ministers of the crown.
This bill does not follow these requirements, which are obligatory under the British North America Act, the standing orders and our practice, and I am bound therefore to rule it out of order.



CIVIL SERVICE ACT

[Stage Direction]
Mr. OSCAR L. BOULANGER (Belle-chasse) moved the second reading of Bill No. 9. to amend the Civil Service Act (vacancies, outside service, priority to returned soldiers).
Richard Bedford Bennett: Explain.

Civil Service Act


Joseph Oscar Lefebre Boulanger: Mr. Speaker, this bill is an amalgamation of two bills which have already been before the house. Sections 3 and 4 of the present bill contain the objectives of the bill which I myself presented in 1931, and sections 2, 5, 6 and following sections contain the objectives of the bill that was presented to the house by Mr. Gagnon, the former member for Dorchester, during the last day's of the session of 1931, and again in 1932. In 1931 Mr. Gagnon's bill was not discussed, but it was discussed at some length in the 1932 session and was finally given its second reading and referred to a special committee of the house. As to my own bill it received first and second readings, was discussed at three or four sittings of the house, and finally was killed in committee on the motion of Mr. Bell, then member for St. Antoine, that the committee rise.
It would not be correct for me to say that the two bills were received with unanimous approval by the house, but they had quite a number of supporters, and with the permission of the house I shall quote from the debate that took place when the bills were under discussion, as it will save my making arguments of my own. Referring to the preference given to returned soldiers and to regulation No. 11 of the civil service commission the Hon. Charles Stewart, then member for West Edmonton, said, as reported at page 1199 of Hansard of 1931:
As I understand the bill, and I hope I am correct, it does not attempt to interfere with the preference granted to Canadian soldiers. But we are more than twelve years-
It is seventeen or eighteen years now,
-away from the war, and I think it can be said without fear of contradiction that the Canadian government, quite irrespective of party, has given preference to British soldiers and soldiers of the empire which are not duplicated in any other dominion or in any other part of the empire. To say now that a British soldier who has come to Canada within the last three years shall have the same preference as a Canadian soldier hardly seems fair. Mark you, I am not desirous of taking away the preference from the Canadian soldier; I am very much in favour of it, but to say that a British soldier who has resided in England since the end of the war and who has come to Canada within the last three years shall enjoy the same preference _ as the Canadian soldier, both as against civilians in an application for a civil service position, is I think going a considerable distance. I do believe the preference should be retained' in its entirety as far as the Canadian soldier is concerned, but I do not think it should go beyond the provision suggested in this bill 'by my hon. friend, namely that recipients of this preference shall have resided in Canada for five years.
I pause here to say that in 1932 the Civil Service Act was amended to make the residence requirement five years instead of three, as was proposed in my own bill at the time, before anyone could be appointed to a position in the civil service. The Hon. Mr. Stewart continued:
That seems to me an eminently fair proposal. Our own Canadian soldiers have had that preference since 1918, as was pointed out by my hon. friend, and I think the time has come when young civilians growing up in the country have a right to some consideration over those who have come to Canada and taken up their residence among us but have not been here for five years.
That is my position in regard to this bill. I do want to see that preference retained as far as the Canadian soldier is concerned; a right which he has enjoyed since 1918, but it seems to me we are over-generous in our treatment of the men who have come among us within the last few years in giving them a preference over our young civilians who have grown up in the country.
I should like to quote what was said by another good friend of mine who is no longer in the house. Mr. Duguay, the former member for Lake St. John, is reported at page 1201 of Hansard of 1931 as follows:
If all the Canadian veterans had work, I readily would understand that the bill of the hon. member for Bellechasse would be unnecessary. However, there are too many of them unemployed and needing the assistance of the government. I think that we should all favour this measure; for my part I shall give it my entire support.
I should like to quote what was said by my member in the House of Commons, the hon. member for Quebec South (Mr. Power), Minister of Pensions and National Health. I might tell you, Mr. Speaker, that I always vote for the minister. When my bill was under discussion before, a point was raised by Mr. Geary, the former Minister of Justice. My bill asked that the veterans' preference should be restricted to Canadian veterans and Mr. Geary pointed out that that might result in an injustice being done. He said that a number of citizens of Great Britain, for instance, were living in Canada at the time of the declaration of war. Many of them enlisted in the Canadian forces and he contended that an injustice would be done to those who had not resided the necessary five years in Canada prior to enlistment. Although these men were not Canadian nationals they enlisted in the Canadian army. I saw the force of his argument; I realized that my bill was not drafted correctly, and as a good elector I called for the assistance of my member. I asked the Minister of Pensions and National Health to draft an amendment, and section 3 of the present bill is the amendment which he drafted to the 1931 bill.
Civil Service Act


Ernest Lapointe: He acted as legal adviser.


Joseph Oscar Lefebre Boulanger: He acted as my private adviser, as all members of parliament should act towards their electors. This is what the minister said, as reported on page 1763 of Hansard of May 19, 1931:
I believe a number of the members of this house will agree with me that, whatever patriotic motives we may have had at that time in inserting such a provision,-
He was referring to the veterans' preference in the Civil Service Act.
-it is no longer necessary that we should give a preference to those who served in the allied forces. Let me give an example which, while it may be personal, I believe will apply to other members of this house who served overseas. I have a son of seventeen. In another year or two he will be eligible to enter the civil service of Canada. I hope and pray he will never desire to do so, but the fact is that he will in due course become eligible. Should he desire to enter the civil service he will be obliged to submit to a preference in favour of a Portuguese or a French Senegalese or some other soldier who at some time or other served in the allied forces. This seems to me absolutely ridiculous. There is no reason why the children of Canadian returned soldiers should be obliged to give preference to someone who served in any one of the allied forces.
An hon. Member: In the foreign legion.
Mr. Power: Yes, in the foreign legion. But I am giving examples of armies from which it would be very difficult for us to obtain the real military record-armies of Montenegrins, of Serbians and of every nation on earth.
An hon. Member: Russians.
Mr. Power: Such men may come to Canada and, provided they have the residential qualifications, having become British subjects perhaps only two or three years ago, just long enough to make them Canadian nationals, may have the preference over children of returned Canadian soldiers. I submit that the act as originally drawn, in section 29, subsection 4. should be changed; and if this bill is allowed to go into committee I propose to submit an amendment which will eliminate the preference given to members of the allied forces.
That amendment is section 3 of the present bill. The minister continues at page 2690, as follows:
When this bill was last before the house, I gave notice of an amendment which I proposed to move. It will be found in Hansard of May 19. The object of the amendment was *while preserving to Canadian soldiers and to those who had served in the Canadian army or in the army of the British Empire the returned soldiers' preference, to exclude those who served in the armies of the allies and who had come to Canada after the date of the passing of the act. It was the purpose also to exclude those who served in the armies of the empire other than the Canadian army who may have come to Canada after the passing of the act. That is to say, anyone who is living in Canada prior to the passing of this act and who had served in any of the forces of the empire, either naval or military, still

keeps the preference which was accorded to him by the Civil Service Act of 1919. Any who come in the future however will be excluded from that preference. To my mind the suggestion is broad enough; as a matter of fact a great many people have told me that perhaps it is too broad. At any rate however it amply preserves all the rights and privileges of people who at the present time are citizens of Canada and who fought the battles of the empire. On the other hand it enables young Canadians if they so desire to qualify for service in the civil service of Canada and not to be excluded from entering that service by being brought face to face with a preference in favour of persons who by no right or privilege which we can grant them should be allowed a preference over our own people.
Those were the opinions in favour of the bill which were expressed at that time. We desire to restrict the preference given by section 29 of the Civil Service Act to veterans who enlisted in the Canadian army. I think that is only right. I hope that at least this part of the bill will have the support of the leader of the opposition (Mr. Bennett). It is a good "Canada first" policy. After this bill had received its first reading I received a telegram which I should like to read in order to show that Canadian veterans are not opposed to the principles embodied in this bill. The telegram reads:
Your bill re Canadian ex-service men long overdue. Reference to Welland canal will prove your contention. Congratulations on your stand.
N. McCrae,
Ex-member

First contingent.
In order to illustrate, not my argument but the arguments of others which I have read already, I should divulge to the house the situation at the Welland canal. I have in my hand sessional paper No. 428 tabled during last session. This shows the names, occupations and salaries of the persons employed as of June 5, 1935, by the government of Canada on the Welland canal. It gives also the country of origin of each of these persons, and how long they had been residing in Canada, when they entered the public service. I have made an addition and have found that at that date there were 511 persons employed by the government of Canada on the Welland canal. Out of this grand total of 511 there were 245 persons who had not been born in Canada, but I do not want to leave the house under a false impression. Not all of these 245 had recently come to Canada when they entered the public service on the Welland canal; a great number of them had been here ten, twenty and even thirty years. But out of the 245 I find that there were fifty-eight who had not resided ten years in Canada when they entered the service of the country, and sixteen had resided less than five years when

Civil Service Act
they obtained employment on the canal. There are a few extreme cases to which I would call attention. There is, for instance, the case of a man who came from Italy and got a job on the canal after having resided in Canada seven years, and it is stated on the return that he is an overseas man. He received the preference provided for in the Civil Service Act, in regard to men who had served in the allied armies. He had served with the Italian army; he came to Canada and resided here the necessary five years, and then he claimed his preference as a veteran of one of the allied armies.


Richard Bedford Bennett: What was his occupation?


Joseph Oscar Lefebre Boulanger: He was a linesman at a salary of 81,020 a year. I do not believe Mr. Mussolini would give, to a returned Canadian soldier, a preference in the civil service of Italy. There is another one employed as lockmaster at a salary of 81,920 a year. He came from Newfoundland and had been residing two months in Canada when he got the job. He is also a returned man. Newfoundland is not very far from Canada and we should maintain amicable relations with our friends there. But I ask you, Mr. Speaker, whether the government of Newfoundland gives to returned Canadian soldiers a preference in the civil service of Newfoundland.


Mr. HEAPS:: Was that a civil service job?


Joseph Oscar Lefebre Boulanger: Of course; they are paid by the government of Canada.


Abraham Albert Heaps: What was the position?


Joseph Oscar Lefebre Boulanger: I said lockmaster.


Abraham Albert Heaps: Does that come under the civil service?


Joseph Oscar Lefebre Boulanger: Yes. You cannot
sweep around the parliament buildings without going through the commission first.


Jean-François Pouliot: Being a lockmaster is a key job.


Joseph Oscar Lefebre Boulanger: There is another Italian employed as linesman. He resided nine years in Canada and he was an ex-service man. He got a job at 81,020 a year. Another man is employed as labour foreman of the first class; he gets 81,920. He came from England and had. been residing in Canada four months when he got the job. He is not an ex-service man. As regards the preference to returned Canadian soldiers, perhaps I have said enough.
Now I will turn to section 4 which suggests an amendment to section 33 of the Civil Service Act. We wish to oblige the civil service commission to go before the governor
in council, that is, before the government, whenever they desire to be exempted from the necessity of requiring of any applicant for a position in the civil service a residence of five years in the country. The law as it stands since it was amended in 1932, requires that an applicant must have resided five years in Canada; but under the Civil Service Act there was passed regulation No. 11, which will be found on the page reserved for explanatory notes; it appears in connection with section 4. The commission passed this regulation:
In cases where, after due publicity, the commission has been unable to secure an adequately qualified applicant with the necessary five years' residence in Canada, persons may be admitted to examination despite the fact that they have not resided in Canada for five years, provided they are otherwise qualified under the law and regulations.
This is a blanket regulation which was authorized by an order in council passed in 1922. The order in council was in very broad and general terms; it still applies and is the authority under which the civil service commission passed the regulation I have just read. With the permission of the house I will read this order in council passed in 1922. It is P.C. 2415, dated November 24, 1922:
The committee of the privy council have had before them a report dated September 26, 1922, from the Secretary of State, submitting the following from the civil service commission:
Section 41(1) of the Civil Service Act provides that, "No person shall, without the authority of the governor in council, be admitted to any examination unless he is a natural born or naturalized British subject and also has been a resident of Canada for at least three years."
As I have pointed out, it is now five years.
In connection with local competitions for the filling of positions outside of Ottawa-
I wish to call attention to this.
-it is frequently found that the only qualified candidate has not resided in Canada for the full term of three years. In each case of this nature it has been found necessary to make a report to the governor in council, requesting authority to waive the clause regarding residence. The civil service commission is of the opinion that delays-
They are against delays, though it takes them six and sometimes perhaps twelve months to fill very minor positions.
-in making appointments in local competitions would be considerably lessened if, where the only available candidate qualified for the duties of the position has not resided in Canada for the full term of three years but is otherwise qualified under the Civil Service Act as to British citizenship, he may be declared eligible for appointment to the civil service without an individual report to the governor in council in each case. The civil service commission therefore recommends that
Civil Service Act

in local competitions, after due publicity, where the only qualified candidate does not conform to the regulation as to residence in Canada but is otherwise eligible under the provisions of the Civil Service Act, such candidates may be declared eligible for permanent appointment in the civil service.
The committee concur in the foregoing recommendation and submit the same for approval.
We propose to do away with this blanket order in council and regulation of the civil service commission. We want the old order of things restored; we want the civil service commission, in any case where they desire to override the Civil Service Act, to come before the cabinet and state their reasons. We claim that it is giving too much power to the commission to give them authority in broad general terms like that to do whatever they like as respects the residence of applicants for a position in the civil service. The proposal seems to be logical enough and does not need any explanation. I might say that under this order in council which I have read and under regulation No. 11 the civil service commission, for example, appointed as prison guards in Canadian penitentiaries, twenty or twenty-five persons who had not the necessary qualification as to residence. It seems to me that it would have been quite easy in Canada to find prison guards. This job does not require any special qualifications.


Mr. STIRLING:: Does it not?


Joseph Oscar Lefebre Boulanger: It is necessary only to be strong and intelligent, and, generally speaking, all Canadians have those qualifications. It was not necessary to go to Ebgland or to go outside Canada to find guards for our penitentiaries.


Mr. MacINNIS:: Are prison guards at the present time under the Civil Service Act?


Joseph Oscar Lefebre Boulanger: Yes, they are.


Angus MacInnis: I do not think they are.
I think an act was passed a year or so ago taking them out of the Civil Service Act.


Joseph Oscar Lefebre Boulanger: I beg pardon. I
did not know that, but that does not detract anything from my argument. At the time of their appointment they were under the civil service commission; they were appointed by that commission under the blanket authority which was given to it by the order in council passed on November 24, 1922, which I have just read. I might add that the government is very often an offender.


Abraham Albert Heaps: Not the present one!


An hon. MEMBER:: Worse.
Hr. Boulanger.]


Joseph Oscar Lefebre Boulanger: The old government. The government often disregards the provisions of the Civil Service Act. Every year when we read the estimates we find a vote to appoint so and so or such and such a class of employees "notwithstanding anything in the Civil Service Act." I remember that in 1931 the late government, through a vote in the estimates, appointed J. L. A. Tanguay, an election organizer, to be a clerk, grade 4, in the Department of Justice, and they also in the same manner appointed as an inspector of weights and measures a man named Hyppolite Couture, who had been dismissed for cause and therefore was not eligible under the Civil Service Act. They found out that he was not eligible, so they appointed him by a vote in the estimates.
This year I open the estimates and I find this, at page 6:
To provide for temporary clerical work in connection with the transfer and registration of bonds, etc., and the flotation of loans and authority for these purposes, to employ a temporary staff, fix their rates of remuneration and otherwise wholly regulate their services without reference to and notwithstanding anything m the Civil Service Act
That is under Finance, I suppose. And I find this at page 55, under the External Affairs department:
Washington-
Representation, including salaries and" allowances for minister plenipotentiary, secretaries and staff; notwithstanding anything to the contrary m the Civil Service Act, or any of its amendments.
Paris-
Representation, including salaries and allowances for minister plenipotentiary, secretaries and staff, notwithstanding anything to the contrary in the Civil Service Act, or any of its amendments.
Tokyo

Representation, including salaries and allowances for minister plenipotentiary, secretaries and staff, notwithstanding anything to the contrary in the Civil Service Act, or any of its amendments.
It is not as bad, though, as what was done in 1931. At page 61, under national revenue department, I find this:
Salaries and contingent expenses of the several ports of the dominion, including pay for overtime of officers, notwithstanding anything in the Civil Service Act, and temporary buildings and rentals.
Mr. Speaker, we see items of a similar kind every year in the estimates.
I come to the second part of the bill; it is Mr. Gagnon's bill, which was discussed extensively in 1932. One part of it is for the purpose of excluding the outside service of Ottawa from the jurisdiction of the civil service commission, and the other part is

Civil Service Act
for the purpose of giving more power to the government, to the ministers of the crown and to parliament over the civil service and over appointments and promotions of civil servants. There is also a provision giving more power to the government as regards technical appointments. I will do as I did in connection with the first part of the bill;
I will read the opinions of those of my colleagues who were favourable to the bill. First, I will read what Mr. Gagnon said when he introduced the bill for the first time in 1931. I have not the page number, but it is in Hansard of 1931. Mr. Gagnon, then member for Dorchester, said:
The bill which I have the honour to sponsor speaks for itself; it needs no explanatory remarks. I feel however it is my duty to the house to say that I have studied the various questions involved, free from party prejudices and without the exaggerated zeal of a would-be reformer, but with a true desire to interpret the wishes of numerous people in Canada as well as a great number of the members of this house, who contend that the Civil Service Act ought never to have been made to apply to the outside service, and that in the public interest reforms are urgently needed. Long before I had the honour of being a member of this house, I had heard eloquent members of parliament denounce the Civil Service Act of 1919 as being inconsistent with the elementary principles of responsible government. I have read the voluminous report of the Malcolm committee which was appointed by this house, in 1923, and have studied the valuable recommendations made by the committee that was appointed by the Senate in 1924. A good deal of evidence was adduced before the special committee appointed by this house in 1923. The deputy ministers of all departments appeared before the committee and made valuable suggestions. Amendments were contemplated, but no serious action has been taken. I venture to say that miblic sentiment in my province is strongly in favour of removing the outside service from the jurisdiction of the Civil Service Act. The people realize that the civil service commissioners, whatever may be their qualifications, cannot find the best possible candidates for all positions. It is indeed amazing to expect the same three men to find the best possible candidates for positions as varied, for instance, as a caretaker in the Port of Vancouver, a customs agent in G-aspe, a director of expositions in London, England, and a postmaster in the district of the Yukon. It is amazing that the government of the day must rely entirely on these three men, who therefore must be practically encyclopedists of science to determine the qualifications required for such diversified positions.
As one may easily imagine, a great many mistakes have been made. The civil service commissioners cannot act alone. They have to ask for the assistance of employees of the departments, and in many instances appointments have been made by an employee of the department.
I might say, almost all the cases that I know.
On the other hand the Civil Service Act prevents the ministers and deputy ministers from making appointments. The situation indeed is intolerable and ridiculous. This Civil Service Act subjects parliament to the authority of a kind of bureaucracy, which Lord Hewart of Bury, Lord Chief Justice of England, has happily called the New Despotism.
And in 1932, when Mr. Gagnon presented his bill in the house, he said about the same thing, so I need not quote him, but I should like to quote Doctor Grant, as he was quoted by Mr. Gagnon in 1932. I understand that Doctor Grant was the principal of Upper Canada College, Toronto, and at page 353 of Hansard for 1932 he is quoted by Mr. Gagnon as follows:
The whole idea of having three men to do such an executive job w-as wrong from the first. A commission is an admirable body to investigate and report; in an executive, unity of command is necessary. If the Canadian Pacific Railway ever wishes to go into bankruptcy, it could hardly find a better way than to put its general managership into commission and to give any two commissioners power to overrule the third. Any old timer who remembers Sir William Van Horne will think with joy of the language that artist in profanity would have used to describe such a suggestion.


James Shaver Woodsworth: My hon. friend is not quoting Doctor Grant as being in favour of doing away with the civil service commission? It is a mere reorganization he has in mind, is it not?


Joseph Oscar Lefebre Boulanger: No; I am quoting Doctor Grant on the principle that the administrative and executive functions should be separate, and to show that the civil service commission would be in its proper place for the purpose of examining, grading and classifying employees, but that the executive function should be in the hands of the government, in the hands of ministers responsible to the house and to the country. I wish now to quote the opinion of Mr. Bourassa, whose absence we regret very much.


Richard Bedford Bennett: The time to do that was last October.


Joseph Oscar Lefebre Boulanger: I am serious in saying that. It is no fault of mine that he is not here, but the people have spoken. At page 464 of Hansard for 1932 Mr. Bourassa said:
From the purely administrative point of view my opinion is that much more authority and freedom of action should be left to the permanent heads of departments, not to the ministers. I think ministers temselves are much too bothered with questions of patronage as it is. They should have enough confidence in their deputy ministers and the heads of the
Civil Service Act

various branches of their departments to rely upon them in all that concerns promotions and appointments from a list prepared by the civil service commission, based on the technical nerits of the candidates.
I wish now to quote the remarks of Mr. Peck, member at that time for Peterborough, which occur at page 540 of Hansard for 1932:
I do not think the member for the district in which an appointment is to be made should be entirely ignored. After all, the member should have some say as to who should be appointed. He is as a rule a person of reasonable intelligence, and more than that, he is the choice of the people of the district. Surely, therefore, he should have some voice in the selection of those who are to carry on the business of the government in the riding that he represents. The inside service is not under consideration in this connection at all, but when there is a vacancy in the outside service, what happens at the present time?
What Mr. Peck said is very true.
There is a perfunctory kind of examination; some representative of the department concerned. I suppose, goes down to the district, probably knowing nothing of it or of the candidates, and after making a few cursory inquiries goes back and reports to the civil service commission that such and such a person is the one he thinks should be appointed to the position. He has not the means of knowledge _ *which are open to the member for the district, because generally the member has been brought up in that district and is very well acquainted with the people who are likely to be applicants. So I submit that the committee should consider this question; that after a list of eligible candidates has been prepared for the commission it should be submitted to the member for the district, or at least the first three or four names on the list, so that the member may express his opinion as to the merits of the candidates. In that way we would avoid having someone appointed who is not really under all the circumstances the most suitable man for the position. I think the member can be relied upon to select a suitable candidate. He is responsible to the people he represents, and I am sure he can be relied upon to decide on the basis of merit.
Now I should like to quote the present right hon. leader of the opposition (Mr. Bennett).


Ernest Lapointe: That is better; all the others have been defeated.


Joseph Oscar Lefebre Boulanger: I want to quote a gentleman who has not been defeated, the right hon. leader of the opposition, who was then Prime Minister. He placed the matter in its proper light and perspective. Of course those opposed to the bill said, "You want to do away with the merit system," and the then Prime Minister replied, "No, the merit system is not in question. The question is who shall determine merit." That is exactly the object of the bill. We do not want to

do away with the merit system, we want the civil service commission to examine, grade and classify the candidates and then report to the ministers of the departments concerned. We want merit to be determined by the commission, but we want the appointment, which is the executive end of the matter, done by the government. At pages 541 and 542 of Hansard for 1932 the Prime Minister of that day said:
During the last fifteen months I have had occasion to examine the operations of the statute, and I think perhaps this house is overlooking the fact that after we concede the merit system is the proper system, the next question is: Who is to determine merit? That is w-here the difficulty has arisen, and' it is a real difficulty._
It must be apparent therefore that something must be done by which the merits of contending applicants may be decided by proper methods.... It is for that reason the government has concluded it owres a duty to the merit system to see that the factors which determine merit are factors not under the control of a hidden hand which operates through an official drawing an insignificant compensation, and with power to determine the life or death, officially, of applicants for positions. It is for that reason the government asks that this bill be referred to a committee so that these matters may be considered.
I think this year we shall have less difficulty in having this bill adopted.


Ernest Lapointe: Was that Mr. Gagnon's bill?


Joseph Oscar Lefebre Boulanger: Yes, it was. We have the support of the leader of the opposition, and I am sure we shall have the support of the Prime Minister, because I am fighting for the supremacy of parliament.


Richard Bedford Bennett: I am sure the hon. member cannot have my support.


Walter Edward Foster: The hour for the consideration of private and public bills having expired, the house will revert to consideration of the trade treaty.



CANADA-UNITED STATES TRADE AGREEMENT PROPOSED APPROVAL SUBJECT TO LEGISLATION MAKING PROVISIONS EFFECTIVE

[Stage Direction]
The house resumed consideration of the motion of Mr. Mackenzie King.
Alexander MacGillivray Young: Mr. Speaker, shortly before recess an hon. member in the far corner asked a question which at that time was quite inaudible. Since then I have found that he asked why it was that Great Britain, a free trade country, was the first to feel the repercussions of the depression. His question contains a premise which is quite inaccurate

Canada-U. S. Trade Agreement
Instead of being the first to feel the repercussions of the depression, Great Britain was the last. More than that, Great Britain departed less from the free trade principle than did the other great trading nations, and all through the depression suffered less than did the other countries of the world.
Before recess I was dealing with what had been said by some hon. gentlemen opposite, and in particular I was referring to the remarks of the hon. member for Davenport (Mr. MacNicol). He is very much concerned about some of our industries that he thinks will be adversely affected by the removal or reduction of tariffs between Canada and the United States. I remarked that he had stated to the house that if we wanted to know what some parts of this country thought about the great increases that had taken place in the tariff structure during the last five years we had simply to take note of the fact that nine Conservative members had been returned from Toronto and others from other industrial centres near by. He failed to look around the House of Commons and to see what the people of Canada thought about those increases in tariffs; he failed to recognize that Canadian consumers have a real interest in tariff structure.
All through the discussion hon. members opposite have been attempting to say that as a result of wider and freer trade some workmen are going to lose their jobs. Hon. gentlemen who use that argument have failed to recognize the fact that when imports have been greatest unemployment has been at its lowest point. That has been the case in all countries, and will continue to be so. I have been surprised to note that on all occasions when increased trade with the United States is suggested, hon. members opposite immediately get out the old flag and wave it in the breeze. I say that if they must use arguments of that kind, their arguments cannot be sound.
The world has gone mad with economic nationalism. This afternoon I quoted representative authorities from different countries of the world. I picked out only a few citations, but I have scores of them in which I read that the world will never be right again until we are prepared to support international trade on a wide scale. To-day in the United States there is a government prepared to deal with Canada. The leader of the opposition (Mr. Bennett) began dealing with that government, and went so far as to get some kind of understanding, just sufficient to use as a dummy to hang before the eyes of the electorate in an attempt to lead them to the conclusion that if the Conservative party were returned to power it w'ould require only one short step
to effect consummation of the agreement. But what do we find? Do we find hon. members opposite supporting the pact which they allege they framed? No, they do not; there are objections from all comers. As I stated before recess, we are thankful that the leader of the Liberal party had the support of Canadian people to an extent greater than that enjoyed by any former Prime Minister. He has gone to Washington and in a short time has consummated that pact. Is it perfect? I think not. I support the agreement, for what reasons? I support it because the principle behind it is that of providing greater facilities and more opportunity for international trade between Canada and the United States. I say that principle is sound. What is my objection to the agreement? My objection is that it does not go nearly far enough.


Mr. MacNICOL:: It does not provide enough jobs.


Alexander MacGillivray Young: I was gratified to hear in the speech of the Prime Minister (Mr. Mackenzie King) the statement that this is only a beginning, and that he hoped the present agreement would so commend itself to both countries that very soon there would be extensions of it. Let me say to the Prime Minister and the Minister of Finance (Mr. Dunning) that I am disappointed to find that in the agreement agricultural implements do not enjoy as low a tariff as they did under the famous May day budget of 1930. I suggest to the government that we should not be content until we go at least as far as the May day budget went in connection with agricultural implements. A few nights ago there was a discussion in this chamber concerning the increase of prices on agricultural implements. This afternoon the hon. member for Leeds (Mr. Stewart) said that the increased price was the result of the lowering of the tariffs. I wonder if he believes that. I wonder if any member of the Conservative party believes it. I wonder if anybody believes it. The reason is, I think, quite different from the one suggested. If it is true that because of a reduction of tariff rates prices are increased, then why do we hear the arguments of hon. members opposite with regard to the reciprocity pact with the United States? They know perfectly well there is nothing in that suggestion.
What about automobiles? They now enjoy the intermediate tariff, yes. Have we gone far enough? I suggest that the Minister of Finance should look into the tariffs on automobiles, because the Canadian people have suffered long and severely the increased costs



S60 COMMONS

[Stage Direction]
Canada-U. S. Trade Agreement
of cars purchased in Canada, a condition which must not be permitted longer to continue.
The agreement is good in that it is a beginning on the right path, and I trust that not only Canada and the United States but all countries of the world may get away from that intense economic nationalism which has prevailed. Some hon. members opposite have been wondering what was going to happen to the intermediate tariff. Their suggestion has been that if they knew what the Minister of Finance intended to do with the intermediate tariff they might vote for the agreement. I recognize that there may not be the same proportion between the various items under the intermediate tariff as there is under the general tariff, but if that is so my suggestion would be, not to correct this by an increase in the intermediate tariff, but that items in the general tariff be reduced so that those who might suffer slightly under the intermediate tariff in the agreement may obtain a relief through a reduction in the general tariff.
The Minister of Trade and Commerce (Mr. Euler) asked the leader of the opposition a very pertinent question, namely, whether the right hon. gentleman opposite had suggested to the President of the United States that he would conclude an agreement provided the president would reduce the tariff in the United States to the full fifty per cent. Hon. members who were present will recollect that the right hon. gentleman did not give a direct reply. I have listened for several days to hon. members opposite jumping from pillar to post. They are not quite sure whether they should or should not support the pact.
Grote Stirling: Yes they are.


Mr. SPENCE:: You are doing the jumping.


Alexander MacGillivray Young: The hon. member will get a chance to vote on the agreement, but he has not spoken on it. I have listened day after day, and I noticed that they were not quite sure whether they would support the pact. Some were saying: "This is our baby, but since the other side has brought it into being and given it life, we do not think we can support it." I wonder where the hon. member for Qu'Appelle (Mr. Perley) will stand.


Mr. PERLEY (Qu'Appelle):: He will let you know after a while.


Alexander MacGillivray Young: Where will he stand on the agreement when at least some of our primary products-not sufficient, but some-will gain

freer access to the United States? Where will the hon. member for Brandon (Mr. Beaubier) stand? It is true that we are bringing goods into this country, but unless we recognize the principle that imports are paid for by exports, there could be no international trade.
Canada is behind the agreement; our people realize that it is in the interests of the consumers, and that it will bring benefits to many of our producers. If I felt that in future trade agreements we would go no farther than we have gone in this, I would not be satisfied, but I believe this is only a beginning. The government have demonstrated that they wish to trade with all other countries who are willing to trade with us on a reasonable and fair basis. This development of trade will bring comfort to many people in Canada who have been suffering m the last five years under exorbitant tariff and other restrictions greater than had been known previously. Those people will be greatly relieved to know that at last we are on the right road, and that we have in power a government which believes in international trade.
The debate has served this purpose if it has served no other. It shows this:	My
friends opposite really do not believe in international trade; that is the trouble. But hon. gentlemen on this side, members of the Liberal party, believe in freer intercourse in trade, and what can we expect from that freer intercourse? First, it will help the producer and the consumer. Next, it will help our railways. We hear a great deal about our tremendous railway problem, but hon. gentlemen opposite always put the cart before the horse when they discuss that problem. Unless we increase the business of Canada we shall never solve our railway problem. The best and the only way to solve our railway problem is to increase the volume of business done in this country, and then the railway problem will become a thing of the past. I support this bill whole-heartedly, not because it is perfect but because it is a step in the right direction, and I trust, Mr. Speaker, that we shall take many other steps of the same kind in the same direction, to free the channels of trade and let Canada return once more to that prosperity which she enjoyed, under a Liberal regime, from 1921 to 1930.


Mr. H. J. BARBER (Fraser Valley):: Mr. Speaker, I do not think the country or the house is so very much interested in the history of what has been termed reciprocity nor do I think it is particularly interested in

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who inaugurated the agreement which we have before us to-day. They are interested rather in just what it means to Canada.
Some hon. gentlemen opposite have intimated that it is just too bad the opposition are prolonging this debate, but if they will check up Hansard they will find quite a number of speeches similar to that delivered by the hon. gentleman who has just taken his seat (Mr. Young), who has taken up a good deal of the time of the house but has not really discussed the items contained in this trade agreement.
I believe, as an hon. gentleman stated today, that the opposition play a part, and a very important one, in government. I have been in the house for ten years; I sat on both sides of it, and I always felt, when I was in opposition, that I was representing the people of a section of Canada, and that I was here to consider legislation and to help in solving the problems that come before us from time to time. Occupying a seat in the opposition to-day does not prevent me from supporting any measure which I think is likely to aid in solving any of thn difficult problems with which we are faced, and if this trade agreement would solve any of our problems, our unemployment, financial or other problems, I would support it wholeheartedly. I believe it is the duty of the opposition, not only to support good legislation, but to point out weaknesses in the legislation that is brought down in this house. I believe it is my duty, and I think it is the duty of every hon. member, to study and discuss this agreement. I have gone over the schedules carefully, but I must admit that it is impossible for any one member to decide whether this agreement is going to prove in the best interests of Canada as a whole. A member may know how it will affect his own particular part of the country, but I doubt whether any one member knows how it is going to affect every part of Canada from the Atlantic to the Pacific.
We have heard during the debate from members from different parts of this great country, discussing the details of this agreement and how it is going to affect their respective districts, and from that information the government will perhaps be able to size up the situation and correct the agreement in its details where that appears to be in the best interests of Canada. I think I am safe in saying that no member of this house is perfectly satisfied with the agreement as it stands. The previous speaker expressed himself in that sense. A number of hon. gentlemen opposite are dissatisfied with some of the items and with some of the changes that have been made in our tariff schedules by the agreement.
I said a moment ago that from the discussion that is taking place we can get a general picture of how this agreement is likely to affect the country as a whole. I listened with great interest last evening to the speech of the hon. member for Royal (Mr. Brooks), who made it quite plain that this agreement would not help his section of the country; that it would not assist those fishermen in depressed circumstances who go down to the sea in ships, nor would it help the fruit and vegetable growers of that part of Canada. I also listened with interest to speakers from Ontario who pointed out the bad effects this agreement would have on certain branches of agriculture and also on the large manufacturing centres, where they expected the unemployment would be intensified rather than alleviated by this agreement. We have also heard from the members from western Canada, from the prairie provinces, who have made it plain that they endorse that part of the agreement which lowers the tariff on the implements of production. But we had in this house the other evening a debate on a resolution which I think made it clear that lowering the tariff does not necessarily lower the price of agricultural implements.
I wish, as one of the representatives from the great province of British Columbia, and in particular of that portion known as the lower mainland of that province, to take a few minutes to-night, to show how this agreement will affect the district which I have the honour to represent. We have there, in spite of what the hon. member for Peel (Mr. Gray-don) has said, perhaps one of the richest agricultural districts in the whole Dominion of Canada, comprising the dairy industry and all that goes with it; the poultry industry, perhaps the largest poultry plants in this dominion, and a large section that is devoted to production of fruit. In addition to agriculture, very large logging and lumbering operations are carried on in that district known as the lower mainland, there is also considerable mining development. So it is perhaps a typical district, and one which one would expect would be deeply interested in this agreement, not only because of the diversity of occupation that is carried on within its boundaries, but from the fact that it lies right up against the great state of Washington to the south and very close to the state of Oregon. The states of Washington and Oregon produce commodities similar to those produced in that particular part of British Colum-

Canada-U. S. Trade Agreement
bia. It will thus be realized that anything which tends to reduce the tariff or in some cases to increase it, affects that particular part of the province. The states of Washington and Oregon have advantages over us, one of them being their climate. Their crops ripen earlier, this constituting a problem which we have to face.
I think the practical test of this agreement is: What do we get for what we give? I am going to consider it from that angle and as it affects that particular part of the country. What do we get? We get reductions in the tariff on cattle, on lumber and on whiskey. But there are limitations to these concessions. There is a quota on cattle and there is a quota on lumber. I believe the United States would have given us reductions on whiskey no matter what we did. The concessions granted in connection with cattle and lumber undoubtedly will be beneficial to these industries in British Columbia. I welcome anything that will help to restore the lumber and cattle markets which were lost under a previous Liberal government.
The United States tariff on beef cattle is reduced from three to two cents a pound for cattle weighing 700 pounds or over. But there is a quota limiting our sales to less than they were in 1929. In 1929, under the Fordney-McCumber tariff our cattle exports amounted to 247,000 head. Under this agreement our sales are limited to 155,799 head. So we are worse off than we were in 1929. On the other hand, on beef cattle entering this country, we are granting a reduction in the tariff of from three to two cents per pound. The tariff on sheep and lambs entering Canada has been reduced from S3 to S2 per head. The rate on live hogs has been reduced from three cents to one and a quarter cents per pound. We have reduced the Canadian tariff on fresh meats, beef, veal, lamb and mutton, from eight cents to six cents per pound. There has been a fifty per cent reduction on fresh pork, the rate being reduced from five cents to 2i cents per pound. Under this agreement bacon, hams and shoulders enter this country under a rate of 1J cents per pound instead of five cents per pound as was the case previously. By these items we will pay the price for the concessions which are granted in connection with cattle of 700 pounds and over.
What do the Americans say about this agreement? This has been quoted before, but I think it is worth while quoting again. Mr. Henry Wallace, Secretary of Agriculture, speaking at Chicago on December 10, last, is reported as follows:

It was his considered judgment that American agriculture gains from the Canadian reciprocal trade treaty so far outweigh the losses that the net advantage to our agriculture as a whole is very much worth while; that Canadian concessions on meats and meat products duties will open the way for our farmers to get back a bigger share of the British pork market. The new agreement will permit American pork to go to Canada to replace Canadian pork exported to Great Britain, thus, in effect, permitting increased exports of American pork to Great Britain.
The government has boasted that the dairy industry is receiving great benefits from this agreement. The American tariff on cream is reduced from fifty-six cents to thirty-five cents a gallon, but there is a quota provision. Under the Fordney-McCumber tariff it was twenty cents a gallon and in 1929 it was thirty cents a gallon, so we are worse off to-day than we were in 1929. The duty on milk has not been touched at all. The tariff on American butter coming into this country is reduced by two cents per pound. Nothing whatever has been done for the Canadian dairy industry.
Now, what about the reduction on lumber? Under this pact wTe are receiving a reduction of fifty per cent. While the charge against our lumber has been reduced to $2 per thousand feet, we are again met with a quota. The combined quota on Douglas fir and western hemlock is 250,000,000 board feet. Items 503 and 504 of our tariff permit similar lumber to enter Canada from the United States duty free. This reduction will help the lumber industry in our province and I heartily support anything that will tend to restore the American market for our lumber, a market which we lost in 1930 and in the years prior to that.
The Ottawa agreements have been assailed in this debate, but I want to remind the house that those agreements saved the lumber industry of this country. That industry in British Columbia wants once more to enter the markets of the United States, but it does not want to sacrifice for that concession the markets which it secured under the empire agreements. I think the lumber people are inclined to be alarmed at the continual sniping at those agreements by the Liberal party. Only the other evening the hon. member for Selkirk (Mr. Thorson) was reported on page 638 of Hansard, as follows:
The Liberal party was returned to power by a tremendous majority. The voice of the people spoke with no uncertain sound. That voice expressed discontent with existing conditions and with the policy of the previous administration. If there was any mandate at all in that vote of the Canadian people it was most emphatically a mandate that there should be substantial tariff reductions.

Canada-U. S. Trade Agreement
The hon. member is also reported on page 637 as follows:
During the course of this debate mention has been made of the Ottawa agreements. I express the hope that never again will this country make an agreement along the lines and principles of the Ottawa agreements. I regard them as a dangerous step in the direction of economic imperialism.
What was the mandate of the Canadian people? As was pointed out in an earlier debate in the house, the mandate which the Liberal party received was received from thirty-five per cent of the people entitled to vote in the last elections. Does the hon. member consider that a mandate to destroy the empire agreements? There is to-day on the order paper a resolution moved by a Liberal member proposing that the trade agreements with the united kingdom be revoked. I say that the lumber people have a perfect right to be somewhat alarmed at this continual sniping by the Liberal party at these empire agreements.
Let us consider lumber under the Ottawa agreements. I have before me three tables giving the figures of lumber shipments from the Pacific coast for the last six and a half years; one table. Pacific coast to the world; another table, Pacific coast to the United Kingdom; and a third table, Pacific coast to Australia. These figures represent board feet and are from the Pacific lumber inspection bureau. I will not quote them in full, but as figures set forth, more plainly than hours of argument could, precisely what the Ottawa agreements did in the way of finding a market for this product of our province, I will give the figures for 1929 and 1934.
In 1929 British Columbia shipped to the world 399,000,000 feet; in 1934, two years after the agreements came into force, we shipped 830,000.000 feet. British Columbia increased' her shipments to the united, kingdom during the same period from 69 000,000 feet in 1929 to 455,000,000 feet in 1934, and she increased her shipments to Australia from 41,000.000 feet in 1929 to
128.000,000 feet in 1934. The result of the preference can be seen by a comparison of shipments from Washington and Oregon to the United Kingdom and Australia. During the same period, while our shipments increased enormously, shipments from the United States decreased correspondingly. For instance, in 1929 Washington shipped to the United Kingdom 196.000,000 feet, and in 1934 this was reduced to 28,000,000 feet. Oregon's shipments were reduced from 88.000,000 feet in 1929 to 8,000,000 feet in 1934.
These figures show what happened to the lumber trade of Washington and Oregon,
which did not have the Ottawa agreements to support them. It is well to remember that the Ottawa agreements were negotiated by the Bennett government and that when they were in this house for consideration they were opposed by every Liberal who then occupied a seat in the opposition. Let me put in concrete form what the Ottawa agreements did for the country at that time. In 1924 Canada held fifth place as an exporter to the united' kingdom. In 1930 we lost- so much of this business that she dropped to eleventh place. She slipped to twelfth place in 1931, jumped to fourth in 1932, the year the agreements were signed, and climbed to third place the next year. By the end of 1934 Canada took second place in the British market, headed only by the United States. That tells the story of the Ottawa agreements.
As I said at the beginning, there are in this agreement some good features and some that are not so good. This one and perhaps the one in regard to live stock will be appreciated by the people of British Columbia. But what price have we paid for what we have received? I have before me the opinion of Mr. Wallace, in a United Press dispatch from Washington dated November 19, which states:
In an official statement Secretary of State Henry A. Wallace said the treaty would benefit "the whole of agriculture" and predicted recovery of most of the $35,000,000 decline in United' States agricultural exports to Canada during the past five years. During that time, he said, exports to Canada of American farm products, upon which duty reductions are secured in the treaty, declined from $50,000,000 for the year ending March 31,	1930, to
$15,000,000 during the year ended March 31, 1935. Wallace cited the reductions granted to Canada on a quota limit of beef, cattle, calves and dairy cows and added:
"There are a few farm groups which will fear they are being hurt by the new agreement. but actually in those cases the tariff reductions are moderate, and in addition there are quota restrictions of such a nature that imports from Canada cannot affect the American price structure by more than 1 per cent. Both countries have made tariff concessions in order to increase the volume of trade between them. Canada has agreed to reduce import duties on a long list of American farm products, reductions ranging from 25 per cent on certain fruits and vegetables to 100 per cent on potatoes. The United States has agreed to reduce duties on seventeen Canadian farm products, and to bind the present rates by three others."
According to this statement Mr. Wallace is of opinion that the concessions given by Canada are quite valuable, and I notice he mentions potatoes. Under this agreement which we have before us-it has already been mentioned in this debate-potatoes are admitted free into Canada, while those of us
Canada-U. S. Trade Agreement

on the lower mainland of British Columbia, if we wish to export table potatoes to the United States, must meet a tariff of 815 a ton. I am told by producers in British Columbia that if this item is not restored to the general tariff rate, with the better climatic conditions in the great states to the south the producers of Washington and Oregon will be able to flood that part of Canada with potatoes at such a reduced price as to be less than the cost of producing in that section.
Another item in which we are very much interested, particularly in my district, is hay. In the duty on hay coming into Canada from the United States, we find a reduction of from 85 a ton to $1.75 a ton, while the duty on hay going into the United States is reduced from So to $3. I want to picture this to you, Mr. Speaker: This is a district lying close to a great state in the south producing an abundance of hay. I recall the time when hay was 83 a ton in the Canadian tariff. The Americans had a surplus and they established a selling agency in Vancouver. There was a string of trucks passing across the line, down through the lower mainland of the province, to Vancouver, passing by farmers' fields in which were piled tons upon tons of hay that they could not sell. The government five years ago raised that tariff to $5 and gave the farmers protection. What are those farmers to do now that the tariff is reduced to $1.75? The Americans under this agreement did not give us even the fifty per cent reduction; they reduced their duty to $3. The farmers of the lower mainland of British Columbia are much concerned over this item and some others as well.
What about the poultry industry? I have under my hand extracts, letters and telegrams, which I am not going to unload on Hansard.
I will say simply this, that there is a fear on the part of this industry in British Columbia that American eggs will enter in greater quantities, resulting in lower prices to the producer as a consequence of the reduction in duty from ten cents to five cents a dozen and the removal of the dumping duty. This is a serious matter to the poultry farmers in my part of the country. It means that protection from the dumping of American surplus eggs into Canada has been removed. I think there are some members in the house to-day who were here prior to 1930. They will recall the problem which faced the government of the day because of the large importations of eggs from the United States. In 1930, the last year of the low tariff, 3,000,000 dozen eggs were dumped into this country from the United States, with the result that this demoralized the Canadian market at certain seasons of the year. In 1934 importations

were reduced to 115,000 dozen. In 1934-1935 importations amounted to the paltry sum of approximately 817,000.
The poultry industry has had to overcome many difficulties in our province. One has been the price of feed, when we have had to compete with eggs marketed particularly during the summer season from other parts of Canada. With the protection that was afforded under the previous rate of ten cents-the total protection with the dumping duty amounted to about thirteen cents-they were able to stand the storm of the depression. Under the new arrangement, as I have pointed out, they will be called upon to face serious competition from the south.
Another product of the poultry industry is baby chicks. We have perhaps some of the largest plants producing baby chicks in the Dominion of Canada. One of the producers in my district has already this year received orders for 50,000 chicks. They have produced a very high laying strain in our part of the country. It will perhaps be recalled that hens from British Columbia secured world championships for a number of years. These producers went to a great deal of expense and much time and trouble to develop these high-producing flocks from which they market the baby chicks. Now, under this trade agreement we find that the protection which was afforded them during the last five years has been almost completely removed. The dumping duty is removed. One man writes informing me that in order to give protection that would put them on an equal basis with American producers it would be necessary that they should have a specific duty of at least seven to eight cents on each chick. They ask: What is a protection of twenty per cent against chicks imported from the great plants of California and Oregon? If they are laid down at the border at five cents apiece there is no protection.
Another industry which I mentioned was that of fruit growing. In this connection I want to refer particularly to what we call soft fruits. This is an important industry in the district which I have the honour to represent. Of one variety of fruit alone, namely strawberries, somewhere about 3,000,000 pounds were produced last year in the lower mainland of British Columbia. They were sold in carlots, in less than carlots, locally, and a large quantity was exported in processed form. Last year British Columbia shipped 153 cars of soft fruits out of the province, and in addition 700 tons of processed fruits were exported. The terms of this agreement provide for reductions in both the tariff and

Canada-U. S. Trade Agreement
the dumping duty. On vegetables the tariff was reduced from thirty to fifteen per cent, on fruits from twenty to fifteen per cent. Dumping duties are reduced by about one-fifth.
Take rhubarb for example. On rhubarb there is during the shipping season a reduction of 33y per cent. That is the reduction in the protection which was afforded that particular industry in 1935. On raspberries we have a reduction in protection of forty per cent. On strawberries the reduction is forty-four per cent; on prunes the reduction in total protection is thirty-three per cent; on pears, sixteen per cent; on apples, 28 J per cent. The protection on celery during the shipping season is reduced by sixty-one per cent. On asparagus we have a reduction of thirty per cent in the protection; and I can saloly say that asparagus growing is an industry that has grown up under protection; a large amount of money has been invested in it, and if it is not afforded proper protection it will be wiped out. As to the harm that this agreement will do to the fruit and vegetable industry, I might quote from my hon. friend the member for Yale (Mr. Stirling), when he said the other night, that the harm would be considerably lessened if the government would use the power they have, if they would use that power in full, and if they would use it in time.
I have undertaken in a few minutes tonight to point out to the government what in this agreement I consider is not in the best interests of the people of the particular part of the country from which I come. I should like to suggest to the Minister of Finance (Mr. Dunning), as he has said that he has power to raise the intermediate tariff, that he exercise that power with regard to many of these agriculture items. They have been brought to the notice of the government during the last few days by members of this house. I should like to suggest that, for instance, in the case of potatoes the tariff be restored under the intermediate schedule; that the tariff on eggs be restored, also, if possible, that on baby chicks. As to fruit, as the member for Yale as well as I have said, the situation depends a great deal upon the production in those states to the south. If they have over-production; if they have a surplus which they want to dump some where, it will be necessary that we should have the very fullest protection, and that it should be applied in time. During my experience as representative of the district I have found that the difficulty, in dealing with matters pertaining to the application of 12739-55
dumping duties, has been to get them applied in time to give us proper protection during the shipping season.
I am sure that there are on the other side of the house members who are not exactly satisfied with every item contained in these schedules. I suggest to them that they, along with us of the opposition, urge upon the government the necessity of restoring this protection to these particular items which are so important to the agriculturists of this country.


Mr. W. M. RYAN (St. John-AJbert):: Mr. Speaker, I was very much impressed with the striking point emphasized by the right hon. Prime Minister (Mr. Mackenzie King) in his address on this resolution. At page 503 of Hansard the right hon. gentleman said:
Let me stress this point-I have overlooked it up to the moment, but I want to emphasize it now. This government came back with a mandate from the people of Canada to put through a reciprocal agreement at the earliest possible moment. So far as asking the approval of this house is concerned, I regard that in some respects as an almost unnecessary step; the country itself has given so overwhelming an expression of approval of its confidence in a reciprocal agreement with the United States to be negotiated by a Liberal administration.
Agreeing so thoroughly with that view and believing as I did that this resolution was before the house bearing the approval of the people, I had not planned to participate in this debate. Within the last few days, however, what might be called challenges were thrown across the floor of the house by hon. members opposite. I think it was the hon. member for Danforth (Mr. Harris) who said, "Stand up. you maritimers, and express yourselves." That is why I have risen in my place here to-night. I am a maritimer representing the constituency of St. John-Albert, which includes the city of Saint John and boasts of the finest natural, year-round port in the Dominion of Canada. With all due respect to the other ports, we in the city of Saint John are modest when we make that statement, and we are prepared to stand by it.
This gives me an opportunity, Mr. Speaker, to extend my most sincere congratulations to the right hon. Prime Minister upon having so successfully negotiated this agreement, and I want to tell him that I feel I am expressing the opinion of the people of the maritime provinces when I say that we are unanimously behind the agreement. Two of the greatest handicaps we have had to combat since the days of confederation have been discrimination in freight rates and in-



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ability to find a market for our natural products. I am happy to say here that, thanks to a Liberal government presided over by the present Prime Minister, the question of freight rates was partly solved by the introduction into this house of the Maritimes Freight Rates Act, and to-day we must again extend our thanks to the same government, presided over by the same able leader, for assisting us in solving our other difficulty of finding markets.
In 1927 parliament appointed a commission to inquire into the difficulties of the maritime provinces. That commission is now known as the Duncan commission. It was an able body of men, presided over by Sir Andrew Rae Duncan, an eminent British statesman. That commission did its work and reported to this house. I have before me a copy of that report to which I intend to refer, because it is essential to the argument I have to present for the consideration of hon. members. May I say, however, that if hon. members will read the report they will find that this commission spent a great deal of its time in trying to solve the question of our freight rates, as well as in trying to develop some ways and means to help us in finding markets for our natural products. At page 31 of the report we have a reference to the maritime provinces with regard to primary industries. I want to bring these facts before the house so that hon. members may realize and understand that to-day we are faced with the problem of finding suitable markets for our products, but that problem has been solved to some extent and I am satisfied that when this agreement passes the house, the problem will be completely solved. At page 31 of the report of the commission I find the following:
Forest production for the year 1924 was thirty-five per cent of the total production of New Brunswick, seven per cent of that of Nova Scotia and four per cent of that of Prince Edward Island. Apart from the production of firewood, ties, rails, poles, posts, etc., for which no definite figures are available, the lumber industry consists, first, of the manufacture from raw materials produced by operations in the woods, of dressed lumber, or board measure lumber, laths and shingles, and, second, the manufacture of pulp and paper, an industry of comparatively recent development. The latter includes three forms of industrial activity: the operations in the forests with pulpwood as the product, the manufacture of pulp, and the manufacture of paper. The value of the output of lumber, laths and shingles manufactured in the maritime provinces 1924 was approximately $18,000,000, or over twelve per cent of the total value of such output in all Canada.... Fourteen pulp and paper mills operated in the maritime provinces in 1924. The average number of persons 
employed in the production of pulp was 15,000, and the capital invested in pulp mills and buildings was over $30,000,000.
The commission also dealt with the question of our fisheries, to which I should like to refer also:
The average yearly value of the catch in the maritime provinces during the five years from 1920 to 1924 inclusive, was approximately $16,000,000, or over thirty-six per cent of Canada's total catch during that period. During the year ending March 31, 1925, the capital invested in the maritime provinces in equipment for fishing, such as boats, nets, traps, and general gear, was over $12,000,000, or fifty-two per cent of the total capital invested in Canada in such equipment. The capital invested in factories and curing establishments was $5,500,000, or thirty per cent of the total amount invested in all Canada in such establishments. Thus the total investment in the fishing industry of the maritime provinces in primary operations and manufacturing was over $17,500,000, or forty per cent of the total Canadian investment in the fishing industry.
I refer to these facts because the commission found it necessary to bring before the house the proposition that the maritime provinces were concerned in the marketing development of their primary industries.
The agreement introduced by the Prime Minister contains certain provisions which are bound to prove advantageous to Canadian primary producers, and therefore must be highly beneficial to the maritime provinces. Can the agreement help the maritime provinces? If one examines the items in the schedule one would conclude that any man coming from the maritimes who did not rise in this house and support the agreement would not be true to his constituents.
I should like to quote no less an authority than Sir Thomas White, a former Minister of Finance and one who is by no means a Liberal. His opinions, however, are valued highly in regard to all matters affecting finance. After he had examined the trade agreement Sir Thomas expressed the following opinion:
The lowering of United' States tariff barriers on lumber, fish, agricultural products and other commodities should prove of material advantage to Canadian primary producers.
In this connection I shall quote, further, from an editorial which appears in the Saint John Daily Telegraph-Journal, one of the leading newspapers in the maritime provinces. It is an independent journal, and one which so far as I know has no political leanings.


Mr. BROOKS:: Oh, oh.


William Michael Ryan: The hon. member laughs; probably he is in the know, but I can tell him-


Alfred Johnson Brooks: I think everybody knows.

Canada-U. S. Trade Agreement


William Michael Ryan: I am prepared to let him express his opinion, if he can speak as to the political bias of this paper. However I say that it is an independent paper, and in its issue of November 18, 1933, I find the following comment:
With reciprocity between Canada and the United States having practically unanimous support in this country, it carries an increased importance over that of any similar proposal in the past. There will be objections raised in many quarters to reductions in duties on various commodities effected, but so far as the maritime provinces are concerned, our real concern lies in the benefits which may accrue to those interested in primary products. With the wiping out of many maritime industries during the last sixty years, we may be pardoned if our symnathy wdth some manufacturing concerns has been somewhat lessened.
I shall now turn to a discussion of some of the items in the agreement. Speaking generally, I say that it is greatly to the advantage of the people in the maritimes. First, let us consider the situation with regard to lumber. Shortly after the federal elections I was deluged with requests from lumbermen in the maritime provinces urging me to take up with the government the matter of having United States customs duties reduced on lumber. I am sure similar requests came to the Prime Minister, because attached to the correspondence I received tvere copies of letters addressed to him. May I say to the hon. gentleman who refused to give me names last night that I can give them to him tonight, but shall be content by saying that the letters come from reputable lumbermen. They ask that the duty on lumber be cut at least in half. These representations were made to the Prime Minister, and that is exactly what they got. I say that any man from the maritime provinces could be accused of base ingratitude if he did not stand in his place and support the agreement, if for no reason other than the support it gives to the lumber industry.


Alfred Johnson Brooks: Is lumber in quantities being shipped to the United States?


William Michael Ryan: I would reply to the hon. member for Royal by stating that I have not the statistics before me, but I can assure him that just as soon as the agreement is fully ratified plenty of lumber will be shipped to the United States.
May I say that down in the maritime provinces we regard the report of the Duncan commission as more or less our magna charta. While I do not think it was within their powers to make representations as to the negotiation of treaties, by suggestion or inference the Duncan commission did make
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such recommendations. Quoting from page 32 of the commission's report, which is available at the distribution office of the House of Commons, I find the following:
On the question of markets, witnesses who appeared before us from New Brunswick expressed the unanimous opinion that a trade treaty with the United States in respect of forest products would greatly benefit industry in the maritime provinces and result in extensive development.
The report states further:
The request made in this connection was supported by the Premier of New Brunswick on behalf of the province.
At that time the premier was the Hon. J. B. M. Baxter. He was a Conservative premier, and is now Chief Justice of New Brunswick. Sitting in the legislature at that time was the hon. member for Royal, who spoke last night in this chamber, and who applauded the premier when he appeared before the Duncan commission and made these representations. Now the hon. member appears in the House of Commons and listens to the leader of the opposition, the hon. member for Calgary West (Mr. Bennett) oppose the agreement. We find the hon. member for Royal following the lead of his right hon. leader. Well, he may try to ride two horses, but when he goes back to New Brunswick I can assure him he had better not make the speech he made in this chamber last night for the benefit of hon. members assembled here in Ottawa.
. I now discuss the item of fish, one which is of prime importance to the people in the maritime provinces. In checking the schedule I find that the rate on halibut is reduced from two cents to one cent per pound, the rate on salmon from two to one and one-half cents per pound, and the rate on smoked herring from one and one-quarter cents to five-eighths cent per pound. There is the added assurance that lobsters and shell fish shall be kept on the free list for at least three years. These are matters of tremendous importance to the people in the maritimes. We in New Brunswick are deeply interested in the shipment of smoked herring, and the salmon industry, too, is of great importance.
Referring again to the Duncan report I find that the commission touched upon the question of finding markets for fish, and at page 33 of their report they state:
,, We shall deal with some other aspects of the fishing industry later.
Though in the case of fish, particularly cured hsh, we had considerable evidence to show the possib'hty of very greatly extending the market within Canada, representations were made to us, .as in the case of forest products, upon the desirability of a trade agreement with the United States.
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That is the report of the Duncan commission, and I want to add that it is my belief that the introduction of this trade agreement is an implementing to some extent of the report of the Duncan commission, and I commend the right hon. the Prime Minister for the splendid work he has done in negotiating this agreement.
I could go on all down the line and speak of the benefits that will accrue to the maritime provinces from this agreement. The duty on seed potatoes, for instance, from March to November, has been cut from seventy-five to forty cents per hundredweight, and while there is a quota of 780,000 bushels, that is three times the amount of the current exportation, as was pointed out by the Prime Minister himself. The duty on turnips has been reduced from twenty-five cents to 121 cents per hundredweight, and the duty on maple sugar from six to four cents per pound. In that one item alone of maple sugar I can see tremendous possibilities for my own province of New Brunswick.
It is only recently that the Telegraph-Journal, the paper which I mentioned a moment ago, had a leading editorial urging the people of New Brunswick to take advantage of the opportunity afforded by the trade agreement. There is no question that this agreement contains provisions which are of great advantage to the people of the maritime provinces. Some may say: Well, you did not get all you wanted or all you asked for. But, Mr. Speaker, this world is so constituted that we shall never get all we want, and I think the leader of the opposition (Mr. Bennett) realizes that to-day. But is there any reason why any member from the maritime provinces, at any rate, should vote on the floor of the house against this agreement which means so much to the people of the maritimes?
The hon. member for Royal (Mr. Brooks) quoted last night from two. newspapers published in Carleton county, New Brunswick, and read a letter from a gentleman who lives in that county. The tenor of those reports in the papers was that the potato industry would be injured as a result of putting American potatoes on the free list, but I would remind the house that those editorials, coming fro-m Conservative newspapers, were more or less inspired, and that the gentleman who was referred to last night was the editor of one of those newspapers and Conservative organizer for the county.


Alfred Johnson Brooks: I want to correct the hon. gentleman. One of those newspapers is a strong Liberal paper.


Frederick George Sanderson: Order. The hon. member is not permitted to ask questions without the permission of the hon. member who has the floor.


Mr. LAWSON:: Mr. Speaker, the hon.
member was not asking a question-


Frederick George Sanderson: Is 'the hon. member speaking to a point of order?


James Earl Lawson: Yes. I wish to point out to you, sir, on a point of order, that the hon. member for Royal was not asking a question. The hon. member who has the floor had made the statement that a certain newspaper was a Conservative newspaper, and 'the hon. member for Royal rose to say that that was a mistake, as I submit he has a right to do.


Frederick George Sanderson: The point of order is well taken.


William Michael Ryan: I would say to the hon. member for Royal that I have reference to Mr. Hatfield whose name was quoted here last night. Turning back to the question of potatoes, which seems to agitate the mind of my hon. friend-


Mr. LENNARD:: And some others too.


Mr. RIAN:: Well, if those hon. gentlemen would take the trouble to check the statistics they would find that nothing has happened yet under this agreement to injure the potato industry of this country, because in the month of January of this year there was shipped into Canada only 381 hundredweight of American potatoes as compared with 202 hundredweight in 1935, or in other words an importation of the value of S600 for the whole dominion.


Frank Exton Lennard: But what is going to happen in 1936?


William Michael Ryan: I have just given the importations for January, 1936. I have made a further check on the potatoes coming in within the last two months; I find that nothing but cull potatoes have been coming in, and I believe there is a sinister motive behind that importation. The speeches we have heard from the Conservative side of the house on the question of potatoes dealt only in generalities. They have produced no facts and figures to show that the potato industry will be injured as a result of American potatoes being put on the free list. It is all right to talk generalities, but let them give us the facts. I am giving the facts because the figures I have given came from the Department of National Revenue in Ottawa only a short time ago. I do say this, however, that within the next few months American potatoes will no doubt come in as they did in the past,

Canada-U. S. Trade Agreement
at a time when we have no potatoes to compete with them. In June, 1935, for instance, 57,466 hundredweight of American potatoes were shipped into Canada, and in July, 15,870 hundredweight. But as soon as our own potatoes were available and we were able to compete, shipments from the United States fell off. We need have no fear that the Canadian potato producer will not be able to meet the competition of American producers at all times because we grow a superior potato.
In conclusion, I would just say that it almost takes one's breath away to hear our friends opposite expressing fears for the success of our great national ports, when we remember the experience we have had in the last five years, with trade restrictions such as they have been, and the business of our ports falling off alarmingly. I repeat, it almost takes one's breath away to find these new champions springing now to the rescue of our national ports.
I have before me some statistics supplied by the Department of Trade and Commerce. They show that in 1929, the last full year in which the Liberal party was in power, inward shipments of sea-going vessels arriving at St. John amounted to $15,691,713, whereas in 1934, the last full year in which the Conservative parly was in power, those shipments had dropped to $8,113,477. The figures for 1929 show that goods exported from St. John were valued at $55,861,050, whereas in 1934 they dropped to $33,209,104. It may be said that values do not offer a true criterion by which to make comparisons; that the true test is tonnage. In order to be absolutely fair, I shall give the figures in tons. The official figures show that in 1929 the amount of freight imported through Saint John totalled 387,050 tons, whereas in 1934 the figure had dropped to 350.854 tons. Exports amounted to 1,075,765 tons in 1929, whereas in 1934 only 515,164 tons were exported. These figures show how shipping fell off at the port of Saint John due to the trade agreements negotiated by the last government. The records of other ports will show a somewhat similar condition.
When the late government introduced a tariff measure affecting Cuban sugar, the government of Cuba retaliated and raised their tariff against our potatoes. This meant the loss of the sale of some 3,000,000 bushels of potatoes per annum. When we were making these potato shipments to Cuba there were something like four ships leaving Saint John every week for that country. Employment was given to the dock workers and our railways were assisted by the traffic. After the tariff on Cuban sugar had been raised by the
leader of the opposition (Mr. Bennett) we had scarcely one boat sailing from Saint John. When hon. friends opposite set themselves up as the champions of the ports, I want to tell them that we would rather leave our fate in the hands of the government presiding over affairs to-day. It will be the salvation of our ports when this agreement is put into effect and there will be further benefits when the trade agreement with Japan is in force. Other agreements are to be negotiated which will open up the markets of the world and our ports will have the advantage of increased traffic.
I am proud to record my vote in the house in support of this measure. This will be my first vote on a major measure in this chamber and I am thankful to know it will be for an agreement between Canada and the United States which means so much to our maritime provinces.


Ernest Edward Perley: Mr. Speaker, we have heard quite a number of speeches on this agreement, some of them very interesting and all of them varied in character. Just before six o'clock the hon. member for Saskatoon (Mr. Young) said that he thought sufficient members had been heard from. I do not believe he can criticize the Conservatives from Saskatchwan for prolonging this debate. I think I should have the privilege of making a few observations and I can promise the hon. member that there will be only one Conservative voice from that province.
Much has been said about international trading and we have been accused of pursuing a policy of economic imperialism. This matter has been viewed also from the standpoint of domestic markets. I am not going to discuss this matter from any of those different angles, but I shall refer briefly to international trading. I admit that international trade is a splendid thing, but I would remind hon. members that when the government headed by the leader of the opposition (Mr. Bennett) came into power in 1930, Canada was in eleventh or twelfth position as far as international trade was concerned. When that government left office the position of Canada had been materially improved because of the policies pursued, this country being then in either fifth or sixth position.
Many hon. members have discussed this matter from a local viewpoint, and this is quite natural as they are interested in how this agreement may affect the part of the country they happen to represent. I am also going to deal with the question from that standpoint. The right hon. leader of the

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opposition has reviewed the history of reciprocal trade or reciprocity since confederation and the Prime Minister (Mr. Mackenzie King) also made a careful review of the policy of reciprocity. I have nothing to say in that regard other than to remind the house that when Sir John A. Macdonald introduced his national policy in 1878 he announced that it provided for free trade with the United States on a large number of articles. As was made quite clear by the leader of the opposition, since that time the Conservative party has always been ready to negotiate with the United States agreements along reciprocal lines as long as they were fair and equitable and did not sacrifice the interests of the Canadian people.
I should like to review briefly what has taken place in the United States with respect to tariffs. I mention first the Wilson-Underwood tariff which was in effect from 1913 to 1921. This tariff made substantial reductions in the duty on a considerable number of articles. I hold in my hand a list of forty odd primary products that were affected. All grades of cattle, hogs, sheep were allowed free entry under that tariff. All kinds of meat products such as beef, fresh and frozen, pork, fresh and frozen, and salted pork, were all free. Dairy products were free with the exception of butter on which was a duty of 2J cents per pound. Then followed a long list of grains and seeds which were all free. We next had the Ford-ney-McCumber tariff which was introduced in 1922 and which commenced an era of protection in the United States. Heavy rates of duty were imposed upon certain Canadian farm products and the result was a great reduction in the sales of these articles in the United States. That tariff was in force until 1930 when the Hawley-Smoot tariff came into effect. No matter what the Prime Minister said with respect to wider markets and freer trade, he was powerless to prevent the increase in tariffs from going into effect in the United States.
Then we had in June, 1930, the Hawley-Smoot tariff which completely closed the door against the entry of Canada's primary products into that country. Those were the words used by the Prime Minister when discussing that tariff; he said that it completely closed the door. But he made no protest. The statement he made at that time has already been put on Hansard during this debate. I could give the list of some forty primary products with the duties which the Hawley-Smoot tariff imposed-and they are very considerable-but I will not take time to go into the details. Suffice it to say that fMr. E. E. Perley.]
that tariff placed heavy duties on cattle, poultry, fruits, vegetables, grains of all kinds, pork and pork products, and dairy products generally. The real effect of the Hawley-Smoot tariff was not felt in Canada until after the change of government in 1930, when it turned back to the Canadian market a great flow of our primary products that had been going into the United States prior to the coming into effect of that tariff.
Then we come to the United Kingdom agreements consummated in 1932. The Bennett government negotiated these agreements, which turned into the United Kingdom a considerable volume of trade that had formerly been going into the United States. I think it is important to point out that by 1934 we had witnessed the result of the United Kingdom agreement. It was the turning point; it was the turning point so far as the President of the United States and their government were concerned; it brought them to the position in which they were prepared to negotiate a reciprocal trade arrangement with Canada. I think that is important.
It is not necessary for me now to review the negotiations leading up to the signing of this agreement. That ground has been so thoroughly covered by the Prime Minister and the leader of the opposition that I do not deem it necessary to comment upon it. What is the effect of a reduction in duties? I think the house will agree with me that a reduction in duties has really two effects, the first being an increase in the volume of imports-at least that should be the first effect-and then the displacement of home labour by foreign or outside labour. And here I want to be fair. I think the government speakers could have taken advantage of an argument with respect to these two effects, though I have not heard it mentioned. However, I will state it. In a fair trade agreement these effects would be counterbalanced by provisions for greater exports which in turn would absorb the labour disturbed by imports. That is a fair conclusion. But can one find in this agreement provisions that make for that counterbalancing effect? I cannot.
This agreement, like all others, is in some respects good and in other respects bad. I will refer briefly to certain products in which Saskatchewan is more or less interested. The question of potatoes has been mentioned on both sides. We do not export potatoes from Saskatchewan to any great extent; very few, if any, are exported. But if it were possible, under this or any other agreement, for eastern Canada and the maritimes to sell their potatoes

Canada-U. S. Trade Agreement
to our good friends to the south, we might be induced in the west to grow potatoes and ship them to Ontario and Quebec, so that these two central provinces might know what real potatoes are. I have not had a real potato since coming to Ottawa; I say that with all due respect to my good friend from Toronto, and I have told him so. Conservative members from Manitoba and Saskatchewan are going to bring their own potatoes here and have a few baked in the restaurant.
I come now to dairy products. This is important. I have searched the agreement and cannot find in it very much for the dairy producer in Canada. There is no lowering of duty on milk, milk powder, butter or cheese. It is true there is a reduction on cream from fifty-six cents to thirty-five cents a gallon, but there is a quota of 1,500,000 gallons which is only half the amount of cream exported to the United States in 1929, prior to the Hawley-Smoot tariff coming into effect. It may be urged that we in the prairies do not export cream or milk. That is quite true. We cannot make cheese advantageously on account of the distances between farms; they make cheese in eastern Canada. They can export cream and milk from eastern Canada to the states immediately to the south, but we cannot do that in Saskatchewan. But I will say for the benefit of hon. members that in Saskatchewan, Manitoba and Alberta we can make butter second to none produced in any part of this country; and if an arrangement could be made whereby the maritimes and eastern Canada could obtain a market to the south for their dairy products we could supply the east with the best butter produced in Canada. I have under my hand some figures showing the number of prizes taken in 1935 at the Canadian National Exhibition in Toronto. The three prairie provinces secured 1,406 prizes and Ontario and Quebec together secured 174. That was for butter alone.
I should like to put on the record figures to show the exports of butter and dairy products from Canada to the United States in 1929; that is, before the Hawley-Smoot tariff took effect. In that year we exported 3,750,000 gallons of sweet milk; 1,000,000 pounds of milk powder; 2,833,000 gallons of cream; 7,411,000 pounds of cheese; 231,000 pounds of butter, and the same year we exported 7,213,700 pounds of bacon and 240,000 head of cattle. I think that shows the importance of the dairy industry. And there is in this agreement, other than what relates to cream, nothing that will help us to sell a pound of dairy products in the country to the south.
Let us take cattle. The reduction is one cent per pound on cattle over 700 pounds.
I admit that is beneficial. The farmers of western Canada were very glad to see it. But I think we might have had the full cent and a half, representing the fifty per cent which the United States president could have given. However I do not think the item will be of any benefit; owing to the quota we shall not ship very many more than we did in 1935, before this agreement came into effect. The decrease which has already occurred in the price, with the increased freight rate, more than counterbalances the one cent per pound reduction in duty. I have on my desk letters which I have received from Saskatchewan farmers who were shippers of cattle and who expected to ship more, but when they compare prices they dare not take a chance. Here, again, we have a quota. Cattle have been spoken about so much during the debate that I almost hesitate to mention the matter. But the quota, which will be in the neighbourhood of 230,000 head, is equal only to the average of what we shipped in the years 1927, 1928 and 1929. I want to draw attention to the fact that there is no reduction for the class from 175 to 700 pounds which is commonly spoken of as stockers and feeders. Also, the restriction surrounding the exportation of the milch cow is such that I do not think the farmers will take advantage of it because, as I understand the situation, there has to be a clear bill of health as far as tuberculosis is concerned for at least a year before the cow is exported.
At this point I want to reply to a statement made this afternoon by the hon. member for Huron North (Mr. Deachman) with respect to this one cent per pound on cattle. I may say that it is rather an advantage for us to have the hon. gentleman in parliament when he speaks for himself, because we know that in the last parliament he had a mouthpiece in the person of Mr. Young, the then member for Weyburn. I believe Mr. Young put forth free trade views even better than the hon. gentleman can. The hon. member made the statement this afternoon that the one cent per pound arrangement was very favourably received by cattlemen or certain friends of his in Ontario. He said that he had a friend in Ontario who had so much feed last fall that he bought and brought down 400 head of western cattle; that he put 150 head in the feed lot, and when he shipped the finished cattle to Toronto, if the price did not suit he could then bill them through to Buffalo.
Now, why did he not tell the whole story? He said how pleased his friend was when he found that he had the advantage of shipping them to Buffalo at a cent a pound reduction in duty. Well, this is the story as he should



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have told it. He said that he got these cattle from western Canada. Last fall the prairie farmers, the farmers out in Saskatchewan, were short of feed. We know how the calamity that occurred there last year affected our crops. Many of them had to sacrifice their cattle. Not having the feed, they could not properly finish their cattle to take advantage of the one cent per pound reduction in duty by shipping them to the south. I may say that these must have been a class of cattle which were feeders or stockers; they certainly were not fit for the market or they would not have gone into the feed lot in Ontario. They would be in a class not included under this agreement. If all grades of cattle had been included, they would have gone to St. Paul or some other point south from Saskatchewan. However, they came down to Ontario, and he got cheap freight; when they go into the feed lot they enjoy the cheap freight and a through billing. What he really was doing was exploiting the poor western farmer again. That is just what happened. I should like my hon. friend to make that speech out in Saskatchewan and tell the farmers there how, owing to this agreement, they were able to do that with western cattle.
I ask hon. members opposite:	What is
there in this agreement, when you boil it down that is of any value to cattlemen, and what is there in it for the grain grower? Is there included in the agreement any grain that will go into the United States or that we can ship under a lower rate of duty? And how about the dairy producer? These, I think, are all questions that should have been answered.
Much has been said about lumber. I am all in favour of a reduction that gives an entry into the United States for lumber. One of the members from British Columbia has elaborated to-night on that; it has meant certain benefits from a reduction in the duty; but I want to point out that already I have received protests from farmers in Saskatchewan owing to the fact that since the first of the year there has been an increase of $2 per thousand feet on lumber. The farmers out there are not receiving this very kindly. During the last five or six years they have not been able to buy lumber to repair their houses, their barns, their granaries and so on, owing to the calamity they have met in the loss of crops. They are in a similar position as regards lumber as they are in regard to machinery; the old machines are worn out and they have to buy new. And now, since the first of the year, they are faced with an increase of S2 per thousand feet of lumber, 
and they are also faced with a considerable increase in the price of machinery.
The reduction of duty on implements is from twenty-five per cent to 12i per cent. When first the news came out, it was heralded as a great accomplishment on the part of the present government. The farmers received it very kindly because they expected to get their implements cheaper to the extent of at least twelve per cent of duty. But when the prices came out on February 1 and they found there was an increase from $2 to about S40 per implement, as the case might be, this was not very favourably received. Protests have been coming in, as we know; I have them before me, along with quotations from the western press to the effect that the farmers have protested. We know what has taken place in this house in the last two days, that a committee has been appointed to investigate this increase.
The fact remains, no matter how much we hear about free trade and about what lower tariffs will do, that when, on different occasions, we have had reductions in the tariff on implements in Canada, every time this has meant an increase in price, and that when we have had increases in the tariff, this has meant a reduction in the price. That is something I cannot figure out, and it has not been figured out by any of the members opposite. There is a joker somewhere. But I would remind this house that when the leader of the opposition was in power and we raised the duty on agricultural implements coming into Canada, he made the manufacturers put their name on the dotted line that there would not be any increase, and if the present Prime Minister had had the courage to talk to the manufacturers in Canada there is no doubt that there would not have been the increase now that they have lowered the duty.
Alexander MacGillivray Young: Is my hon. friend in favour of taking the whole duty off agricultural implements?


Ernest Edward Perley: Well, if it will work the way it has worked during the last four years, that when the duty was increased we had lower prices and when the duty was taken off we had increased prices,
I would say no, for that one particular item.


Mr. KINLEY:: What difference does the price make if you do not pay for your goods?


Ernest Edward Perley: Well, I think the implement manufacturers have been pretty well paid in the past. If they got

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half of what 'they sold their implements for they would have been pretty well paid. However, that is the fact, and we shall see what will happen when we have the investigation. I am just as anxious to know as is any other member of this house. I am sure that the farmers of the west want to know, and if we can do so we should solve this problem of why these prices have gone up when the duty has 'been lowered.
I have tried to cover most of our primary products in a fair way and to point out the advantages, but there are one or two distinct disadvantages as well. Reference has been made already to the reduction in duty on pork and pork products, a reduction from five cents to lj cents in some grades and from five cents to three cents in other grades.
I should like to tell the house what the secretary of 'the United States Department of Agriculture thinks about this item of pork products. He stated:

there would be a wide market in Canada for United States pork. He could see Canadian pork going to Great Britain and United States pork taking its place in Canada.
I have before me the figures with regard to exports of pork from Canada and imports of pork from the United States. In the last five years we imported from the United States 33.309,509 pounds and exported to that country 15,827,800 pounds. For the last three years or so exports and imports have practically balanced, but during that period we have had a very considerable increase in our exports of pork products to the united kingdom under the Ottawa agreements, under which we have a quota of 280,000.000 pounds of bacon. In the first year during which the agreements were in operation we secured in the united 'kingdom a market for some
43,000,000 pounds of bacon. In the second year we exported about 60,000,000 pounds and last year we exported over 80,000,000 pounds. I would remind the house of the statement made by Mr. McLean of Canada Packers, before the price spreads committee, that during the first year the agreements were in operation they meant 826,000,000 to the hog producers of Canada. In that year our exports amounted to only 43,000.000 pounds, so that on a similar basis that market must have been worth from $35,000,000 to $40,000,000 last year. Compare what the Ottawa agreements meant to the hog producers with the statement made by the hon. member for Portage la Prairie (Mr. Leader) the other night, that this agreement would mean $18,000,000 to the cattle growers of Canada. It must be remembered that in making that statement the hon. member assumed that all 'the cattle produced in
Canada during the year would reap the benefit of the $9 per head, which was the figure he used. That, of course, would be utterly impossible, but even if it were not, when these two advantages are weighed I think everyone will agree that the balance is in favour of retaining the hog market.
Now I should like to quote one or two opinions in connection with this agreement. This afternoon the hon. member for Saskatoon (Mr. Young) also quoted the opinions of various people. First, I should like to quote a gentleman whose opinion I know the government will not hesitate a moment in accepting. I refer to a statement made by Grant Dexter, which appeared in the Regina Leader-Post in January of this year:
The United States treaty has undermined the foundations upon which the Ottawa treaties were built.
I think that is something important which should be remembered. The other opinion I wish to mention is that of the President of the United States, contained in an address to the American Farm Bureau at Chicago on December 9, 1935, appearing in the Duluth Herald of the same date:
Agriculture, far from being crucified by this agreement, as some have told you, actually gains from it. We export more agricultural products to Canada than we have imported from her. We shall continue to do so, for the very simple reason that the United States, with its larger area of agricultural lands, its more varied climate and its vastly greater population produces far more of most agricultural products, includin'"1 animal products, vegetables and fruits, than does Canada. In the case of the few reductions that have been made, quota limitations are set on the amount that may be brought in at the lower rates.
That is an important statement, and we should keep it in mind. Then the president continued:
On the other side of the picture we believe, and most unbiased men believe, that the general increase in our trade with Canada, including the exports of our factories, will so add to the purchasing power of hundreds of thousands of wage earners that they will be able to spend far more than they do to-day for the products of our own farms, our own forests and our own fisheries. Greater trade is merely another word for more production and more employment. The proof of this particular pudding is in the eating, the best way to judge the new accord is to observe how it works out.
That is certainly good advice.
It will be impossible for me to conclude my remarks to-night, Mr. Speaker, so I will move the adjournment of the debate.
Motion agreed to and debate adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Questions
[Stage Direction]
Monday, March 9, 1936