1937-03-18

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Second report of the standing committee on banking and commerce.-Mr. Moore.


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Bill No. 66, for the relief of Gretna Golden Laird1 Rankin.-Mr. Jacobs.
Bill No. 67, for the relief of Frank Horace Wood.-Mr. Sinclair.
Bill No. 68, for the relief of Edith Mary Bowers-Hill O'Hagan.-Mr. Jacobs.
Bill No. 69, for the relief of Isobel Jean Herbert Fleming Johnson.-Mr. White.
Bill No. 70, for the relief Emilie Letsch Rutishauser.-Mr. MacMillan.
Bill No. 71, for the relief of Miriam Silver-man.-Mr. Jacobs.
Bill No. 72, for the relief of Alice Mary Hickman Ings.-Mr. Jacobs.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. GARIEPY:: What measure is the government taking to prevent a person who happens to be a member of the legislative council of the province of Quebec, or a minister of the crown for such province, with or without portfolio, or with or without emoluments of office, from holding a seat in the senate?


Mr. RINFRET:: No measures.


EASTEND, SASK., POST OFFICE
Mr. COLDWELL:: 1.	Has the Post Office Department purchased the Royal Bank building at Eastend, Saskatchewan, for post office purposes?
2.	If so, what price has been paid or agreed to be paid for the said building?


Mr. CARDIN:: 1.	No.
2.	Answered' by No. 1.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. PINARD:: What amount of extra moneys has been paid by the Government Printing Bureau for overtime during the year 1936-37?


PORT ALBERNI, B.C., ASSEMBLY DOCK
Mr. MacNEIL:: 1.	What was the total revenue secured in
respect of the government assembly dock at Port Alberni, British Columbia:	(a) during
the fiscal year 1935-1936;	(b) during the
period of April 1 to December 31, 1936?
2.	What was the cost of maintenance and
interest charges in respect of the government assembly dock at Port Alberni:	(a) during
the fiscal year 1935-1936; (b) from April 1 to December 31, 1936?
3.	What proportion of the revenue from this dock was secured from the Alberni Pacific Lumber Company during the periods referred to above?


PRINTING OF ELECTORAL LISTS
Mr. FERLAND:: 1.	What was the cost of printing the electoral lists which were used in the general elections of 1930?
2.	What is the approximate expense incurred by the King's Printer for the printing of the electoral lists which were used in the federal elections of 1935?



BUSINESS OF THE HOUSE


Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, there is a notice of motion in Votes and Proceedings, in the name of the Prime Minister (Mr. Mackenzie King), concerning the Easter adjournment. Many hon. members have expressed the desire to know how long the adjournment will be in order that they may make arrangements accordingly. As the notice of motion Indicates, it is proposed that when this house adjourns on Thursday, 25th March, it stand adjourned until Tuesday, 30th March, next. This would involve an adjournment from

Washington State. Salmon Tax
Thursday night until the Tuesday after Blaster; the house would not sit on Friday or Monday, so that only two sitting days would be lost. With the consent of the house I would move accordingly.


Right Hon.   S@: Mr. Speaker, hon. members on this side of the house are quite willing to fall in line with any suggestion the government may put forward with regard to the few days of recess at Easter. I must say, however, that many hon. members feel it would have been just as well to take only Friday, in addition to the ordinary week-end, and to proceed with business on Monday as usual. They hold that view because we are all most anxious to have sufficient time properly to discuss matters, and still make it possible to prorogue early enough to permit of the necessary arrangements being made with respect to the coronation. But, as I said to the minister privately, whatever the government desires to do in the matter will be satisfactory to us.


Ernest Lapointe: Of course if it is the general wish of the house that we sit on Monday I shall be pleased to amend the motion accordingly, and have only Friday taken off the ordinary sitting time.


Some hon. MEMBERS:: Agreed.


Ernest Lapointe: Very well; I move, therefore:
That when this house adjourns on Thursday, 25th March, it stand adjourned until Monday, 29th March next.


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Motion agreed to.

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On the orders of the day:
Mr. T. L. CHURCH (Broadview):: Mr. Speaker, may I ask the Minister of National Revenue (Mr. Ilsley) a question based upon a press dispatch from Ottawa appearing in the Evening Telegram of Toronto, March 17. It is to the effect that Mr. E. D. Lennie, of Ottawa, chief inspector of the Department of National Revenue, has been appointed to the long-vacant office of collector of customs at Toronto, over all the Toronto staff.


Hon. J. L. ILSLEY (Minister of National Revenue):: The answer is no.


Thomas Langton Church: I object to all these people being brought from all over Canada to Toronto.
31111-119}



WASHINGTON STATE SALMON TAX

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On the orders of the day:
Mr. THOMAS REID (New Westminster):: Mr. Speaker, according to a press dispatch appearing in the Vancouver Province it appears a bill has been passed in the state of Washington, placing what is designated as a privilege tax of five cents per fish on all spring salmon entering that area. As Canadian fishermen sell a considerable portion of their spring salmon catch south of the border, the five cent tax it is feared will operate as a tariff against this trade. I wonder whether the minister has any information on the matter, and if so would he be good enough to inform the house what representations if any have been made to the United States authorities protesting against the proposed imposition of any such tax?
Hon. ,T. E. MICHAUD (Minister of Fisheries) : Mr. Speaker, in reply to the question of the hon. member for New Westminster (Mr. Reid) may I say that we have information that a bill was passed by the Washington state legislature on the twelfth instant, under which a privilege tax is to be imposed on all salmon irrespective of where they are caught. Details of the bill have not been received up to the moment. The United States tariff governs conditions under which fish may be imported into the United States, and so far as imports of salmon from British Columbia are concerned it would not appear likely that the proposed tax would apply, unless they were processed within the state and the tax were in the form of a process tax. The matter is now being closely followed.



VETERANS' ASSISTANCE COMMISSION


[Stage Direction]
On the orders of the day:
Mr. J. II. BLACKMORE (Lethbridge): Mr. Speaker, before the orders of the day are called I should like to ask the Minister of Pensions (Mr. Power) this question: In view of the great amount of suffering and consequent hopelessness, despair and even bitterness which are developing among many returned men in far too many portions of Canada, does the minister propose to bring down at an early date recommendations based upon the interim report of the veterans' assistance commission recently tabled in the house? If so, does the minister feel free to give the house any assurance that there will be in his proposal substantial hope of relief for distressed returned men?
C.N.R.-Refunding
Hon. C. G. POWER (Minister of Pensions and National Health):: Mr. Speaker, the hon. member was courteous enough to give me notification of this question. The matter he brings to the attention of the government is one involving a question of government policy, and I fear that whether I answered in the affirmative or in the negative he would not be satisfied. I will say to him, however, that as soon as the estimates of the Department of Pensions and National Health are considered I shall do my utmost to answer the question he has put to me and in a manner which will be satisfactory to the Canadian people.



CANADIAN NATIONAL RAILWAYS


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Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, before the orders of the day are proceeded with may I say that last night unfortunately among the measures to be considered to-day we omitted to mention the financial resolution preceding the introduction of the usual bill to provide for the finances of the Canadian National Railways. I am asking the house to permit us to take the resolution now, in order that the bill in question, which is the usual one dealing with Canadian National Railways finances, may be referred to the special committee on railways and shipping and the work of the house thus expedited. Needless to say, if there is any objection from any quarter, in view of the fact that the item was not named last night, we will not proceed with it.
Mr. LAWSON:: Is any part of the amount a new issue, or is it all refunding?


Mr. DUNNING:: The amount is stated in the resolution. It refers to "maturing financial obligations, and to authorize the guarantee of securities."


James Earl Lawson: That is new?


Charles Avery Dunning: It ties in with the budget of the railways with respect to new expenditures, that budget already being before the proper committee.


Sir GEORGE PERLEY:: Does the minister propose to deal with the subject exactly as it was dealt with last year?


Charles Avery Dunning: Yes, exactly.


Ernest Edward Perley: That is to say, that without discussion here it will go to the committee, the house having the right to discuss it as it pleases after it is returned?


Charles Avery Dunning: Correct.
[Mr. Blackmore.l
Mr. DUNNING moved that the house go into committee to consider the following proposed resolution:
That it is expedient to bring in a measure to authorize the provision of moneys to meet expenditures made and indebtedness incurred by the Canadian National Railways Company during the calendar year 1937, to provide for the refunding of certain maturing financial obligations and to authorize the guarantee of securities to be issued by the said company to an aggregate amount of $30,721,700.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 73, respecting the Canadian National Railways and to authorize the provision of moneys to meet certain expenditures made and indebtedness incurred during the calendar year 1937.
Motion agreed to and bill read the first time.


Mr. SPEAKER:: When shall the bill be read a second time?


Charles Avery Dunning: With the consent of the
house, I would move the second reading at this time and also that the bill be referred immediately to the railways and shipping committee.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the committee on railways and shipping.


[Stage Direction]
The house resumed from Wednesday, March 17. consideration of the motion of Mr. Dunning for committee of ways and means, and the proposed amendment thereto, of Mr. Perley (Qu'Appelle).
Mr. T. F. DONNELLY (Wood Mountain):: Mr. Speaker, just before the house adjourned yesterday I had dealt with the policy of the Conservative government in connection with the sale of wheat during their term of office. Previous to that I had dealt with the policy of the Liberal government prior to the last election. I dealt also with some of the suggestions put forward by hon. members of the Cooperative Commonwealth Federation as to what the policy of the government should be in the marketing of wheat. Many criticisms have been made of the actions of the present board, one being that our wheat was put up

Wheat Board-Mr. Donnelly
at fire sale prices. I dealt partly with that criticism and for a few moments I intend to discuss more fully this so-called fire sale of our wheat.
The hon. member for Qu'Appelle (Mr. Per-ley) referred to a letter given to Mr. Lamont by the head of our wheat board when he was going over to England. It was a very fine letter and I recommend its being read by every hon. member. It is to be found on page 145 of the evidence given before the special committee on the marketing of wheat Which sat in 1936. It must be remembered that our wheat was not considered in a favourable light in England and that we had lost much of our market for wheat in that country. Yesterday I referred to the fact that we had lost many of the markets for our wheat, especially the market in England. The letter to which I refer was written by Mr. Murray and given to Mr. Lamont before he went to England in an endeavour to get back our market for wheat. I should like to read one or two paragraphs from that letter, as follows:
It is the desire of the board to permanently regain for Canadian wheat a full share of the import requirements of wheat in the British Isles and elsewhere. It is recognized by the board that a proper price relationship with other wheats must be maintained. With the good will of millers and consumers we feel that a better share of the available markets can be obtained for Canadian wheat.
I do not see anything wrong with that section; that is just what we were after. I continue:
You are authorized to assure the millers that in the event of their increasing the percentage of Manitobas in their flour blends that the policy of the board will be consistently that of making Canadian wheat available at fair competitive values. It is recognized by the board that the millers require, and must be given, assurance that when they do revert to the use of greater quantities of Canadian wheat in their flour blends that sufficient Canadian wheat will be constantly available to enable them to maintain the standard of the product supplied to their clientele of bakers and that no attempt will be made to hold them up in obtaining the needed supplies. The fixed minimum price paid producers by the board does not necessarily bear relationship to the board's selling price. Particular emphasis should be laid on regaining, through the British millers, the good will of the bakers for the use of a flour containing increased volume of Canadian wheat.
That is the very thing we were after. We wanted to get back the English market for our wheat which we had lost and which we had been losing for the past two or three years. The letter continues:
A fair premium should be considered what the millers of the world will pay for Canadian
wheat, based on its season-to-season value compared with other wheats, and allowing for the free use of Canadian wheat in volume.
The principal reason the board are sending you to England is to cultivate the cooperation and good will of British millers towards the use of Canadian wheat.
I think anyone who reads that letter must come to the conclusion that that was the very thing that needed to be done. Under the conditions that existed then, I think the letter was well prepared and very well written. There is no suggestion in it that our wheat was going to be sold at prices which were not competitive with other world prices. We did regain our markets and we did sell our wheat. There is no doubt that this letter written to Mr. Lamont, and the other letter sent to the British millers, which will be found in the same place in the evidence, indicating to them that we were intending to compete with other wheats of the world, and that we would do everything we possibly could to see that they got our wheat at fair competitive prices, did much to get back for us the market in the British Isles which we had lost.
Another criticism in connection with this matter has to do with the amount of money which the western farmers are said to have lost because of the fact that the price of wheat went up last year. I listened to the hon. member for Rosetown-Biggar (Mr. Cold-well) sav that he had told people last year that the price of wheat was going up to S1.25-at all events he said it was reported in the press and that the report was correct. I wish I could have been sure that the price was going up to S1.25 last year; had I known that I would have made some money. The hon. member for Qu'Appelle says:	"They
were so certain in Winnipeg that the price of wheat would go up that you did not even have to put up any hedges; the banks allowed you to buy wheat without having any money at all. Just think of having an opportunity like that knowing that the price of wheat was going up and knowing that you could get all the money you wanted for nothing. Why, a man could be a millionaire-that is, a man who had brains enough to get into this house should have been a millionaire. I should like to ask the hon. member for Qu'Appelle how much money he made. Surely he made a lot. I am not much impressed with the remarks of a man who relies on the course of the markets, whether the stock market or the wheat market, for his political arguments. How can he tell what is going to happen? I wish someone could tell me what the price of wheat will be next fall.


Mr. ROSS (Moose Jaw):: Or to-morrow.

Wheat Board.-Mr. Donnelly


Thomas F. Donnelly: Yes, or to-morrow. I should like to get into the market if I could tell what the price of wheat will be next October. I wonder whether those who prophesy these prices are ready to back their opinion with their money.


Charles Avery Dunning: Or with their wheat.


Thomas F. Donnelly: If they are not, I do not think much of their predictions. There is one sure way for a man to show that he is sure of a thing, and that is by spending his-money to prove it. As the saying is, if our foresight were only as good as our hindsight, we would be all right. A lot of us would like to be in that position.
I should like to say a word or two with regard to a criticism made by the horn, member for Rosetown-Biggar. He said yesterday:
Mr. James R. Murray had lost the confidence of the great mass of the producers in western Canada. They did not feel like delivering to a board headed by Mr. Murray.
All I want to say in that regard is that any man who sat on the committee last year and listened to Mr. James Murray giving evidence must have been convinced, if he knew anything about the grain trade, that Mr. Murray knew his business, that he was a capable man and that he was the right man to do the job that he was doing.


Charles Avery Dunning: And an honest public servant.


Thomas F. Donnelly: Not only that, but a man who had. supported the wheat pool policy- who was one of the first to advocate it and still supports it.


Mr. GARDINER:: And drafted the contract.


Thomas F. Donnelly: If we had had a man like Mr. James Murray at the head of the wheat pools when they were started, it is my firm belief that they would be operating successfully yet. What was wrong with our pools was that we did not have at the head of them a man who knew his business, who knew how to carry them on. That is why they went broke; that is why they are in the position they are in to-day. If there is any truth at all in the suggestion that Mr. Murray has lost the confidence of the producers, it must be because there are cheap politicians going around among the farmers and abusing Murray, saying that he does not understand his job and is trying to work against their interests.
The hon. member for Rosetown-Biggar, speaking here yesterday, referring to the Tur-geon commission, also said:
The government, I think, made a grave error when they appointed Colonel Ralston as counsel for that commission.
fMr. J. G. Ross.l
I am not going to say anything about the compensation that is paid Colonel Ralston, but I will say that I sat for three years on the committee which investigated the mixing of wheat, and I know we tried to get the services of a counsel to write amendments to the grain act: we had the greatest trouble in obtaining one who understood the grain act and the wheat business well enough to rewrite the statute in its present form. We practically had to dictate the terms which our counsel was required to write into the act, and to amend and reamend the draft in order to get it right. I repeat that it is one of the hardest things imaginable to find an unattached lawyer who is fully conversant with the workings of the act. We could, I suppose, have got lawyers who were tied up with the Winnipeg Grain Exchange, but what a howl would have gone up from western Canada if we had asked them to assist us. It would have been said, "We know now what we are going to get; we shall get a report in favour of the grain exchange."
'Another point to be borne in mind is that wheat marketing is a national problem, not one confined to western Canada. Only last year the leader of the opposition (Mr. Bennett) said in the committee that the greatest problem with which we had to deal was that of marketing wheat, that it was as important as our railway problem. I remember remarking at the time that I thought the growing of wheat was just as great a problem as the marketing of it. But I agree that marketing is of national importance; and we wanted to engage someone in whom eastern as well as western Canada would have confidence. That can be said of Colonel Ralston. He is an able man; he knows wheat, and he knows the grain act as well as any man in eastern Canada. I was astonished at the knowledge he displayed both of the law and of the handling of wheat.
Having dealt with some past criticisms. I will refer briefly to what happened at the las* session of the house. At that time the leader of the opposition criticized the chairman of the wheat board and laid certain charges against him. The government saw fit to appoint a special committee to deal with those charges and also to study the best ways of marketing wheat. That committee sat and looked into the various charges that were made against the head of the wheat board. After the hearing of witnesses a report was drawn up with reference to those charges. I remember that the adoption of that report was moved by the man who made the charges, namely, the leader of the opposition, so that he must have been satisfied that his accusations against Mr. Murray had not been proved.

Wheat Board-Mr. Leader
With regard to the marketing of wheat, we as a committee did not feel that we were in a position to investigate and bring in a report as to the best method. We came to that decision for several reasons. We could not go to England, to Australia, to the Argentine and elsewhere to examine the systems in operation there and decide whether they were applicable to our Canadian situation. Another reason was found in the constitution of the committee. Some of its members, being Liberals, believed in the Liberal policy of marketing wheat: "Let the world know we have wheat to sell at a fair price." Others, who belonged to the Conservative party, apparently thought the best way to sell was: " Set a price and make the world pay that price before they can get our wheat." Also on the committee were some of our Cooperative Commonwealth Federation friends, who suggested, " Let us take over all elevators and boats and the marketing of our wheat all over the world, and let us have our agents who will carry on that marketing business." I presume it would be a socialistic form of marketing wheat. There were those who believed in a one hundred per cent pool, those who believed in a compulsory pool, and those who believed in the open marketing of wheat. With all these divergent views it was impossible for us to come to a definite decision, and we therefore suggested that a royal commission should be appointed to look into the whole matter, and advised the government accordingly. A commission was then appointed, in the person of Mr. Justice Turgeon, and the investigation is still in progress. I held, and I am still of the opinion, that the government made a mistake when it altered the marketing of wheat in the absence of a report from that commission. I submit that the board should have been allowed to function until such time as the commission brought in its report. I do not think that the price of wheat should have been raised until that time. The minimum payment, or whatever you choose to call it, was 874 cents and it should have remained at that level until the submission of the report by the royal commission. I do not believe that the marketing of wheat as it was carried on under that board should have been changed in any respect until the commission gave its report. I may be wrong, but that is the view I expressed at home before coming here and it is the view I hold now.
The amendment which has been moved" to the motion before the house expresses regret that the government rendered the Canadian Wheat Board Act of 1935 inoperative in its application to the 1936 wheat crop. So far as that is concerned, I suggest that the
wheat board was not altogether inactive; at any rate its inactivity with regard to the 1936 crop helped the farmers of the west. It helped in the marketing of the 1936 crop because when the crop began to come on the market the wheat board did not press for sale of the old crop which it had on its hands. In that way it kept the 1936 crop from becoming a burden on the market and forcing prices down. For a considerable time the wheat board refrained from selling wheat and therefore did help in the marketing of the 1936 crop.
If I were in the house-I do not expect to be here when the vote is taken-I should feel obliged to vote for the amendment. I will saj' this, however. As far as this motion is concerned, it does not represent, to me at any rate, a loss of confidence in the government. I still have confidence in the government and I believe that it will do what is right with lespect to many other matters. This particular question may be one of the things in respect to which I differ from the government, but that is to be expected in human affairs. People are apt to differ in many ways but in this respect only do I differ from the government so far as its wheat policy is concerned.
M r. HARR\ LEADER (Portage la Prairie): In rising to speak to the question before the house I intend to be as brief as possible having regard to the importance of the subject. By way of introduction I may observe that I have been a producer of wheat all my life and therefore I should know something about the production end of the business. And having operated a public elevator and bought and sold wheat in the grain trade I think I should know something of the selling end of it. In addition to that I was selected as a member of the special committee last year which inquired into the marketing of wheat. But what is of more importance to me is that this is a vital question to my constituents.
I believe it was the Minister of Agriculture (Mr. Gardiner) who pointed out yesterday that there had been altogether too much politics in connection with the markets ing of wheat. With that statement I heartily agree. Wheat is the most important food of all the nations of the world and is the very lifeblood of the farmers of western Canada. It seems to me therefore that we should get away from the political aspect in the marketing of wheat and try to get together to see if we cannot decide on a policjf which will be in the interests not only of the wheat producers but of all the people of Canada. I regret therefore that there is a political side to this great question.


IS94 COMMONS
[Stage Direction]
Wheat Board-Mr. Leader
I suggest however that politics is not altogether confined to one party; I believe we have it more or less in all parties. In my opinion the Conservatives have seized upon this opportunity to make political capital out of the wheat question and they must be content if we judge them by their actions when they had responsibility. It is quite easy to offer criticism when you have no responsibility, and that is what has been done by my genial friend for whom I have much respect, the hon. member for Qu'-Appelle (Mr. Perley).
Politicians have the inclination when they have not the opportunity, and very often when they have the opportunity they have not the inclination. When I was out on the farm a few years ago I wondered why our government had not made an attempt to get our money on a parity with the English pound. Britain was our market; that was where we had to sell our products; and in 1932 when the price of wheat reached the lowest point on the Liverpool market in over 400 years; and when it was selling in Fort William at a little over 38 cents per bushel, we were selling that wheat in the markets of Great Britain when the English pound was worth only $3.60 compared with a normal value of almost $5-$4.86 and a fraction to be exact. That was a serious handicap and the result was a very small price for our farm products. It struck me at that time that something should be done, and I remember picking up our family bible, which was the Winnipeg Free Press, in which I noticed on the financial page a double column article giving a speech made by Senator Sharpe in the Senate of Canada. The remarks reported in that article were made by a supporter of the then Conservative government, and they were interesting to me because it is so unusual for the supporter of a government to criticize the powers that be. I should like to read an extract from Senator Sharpe's speech. It will be found in the debates of the senate of November 24, 1932 at page 178:
I cannot believe that the Prime Minister understands the real condition of the people. Our farmers are facing ruin because of the disparity between buying and selling prices. The British pound is now at $3.60, a discount of 25 per cent.	If we went off the gold
standard and brought our currency to the level of the British pound the result undoubtedly would be an increase of from 12 cents to 15 cents a bushel in the price of wheat; we should get $20 more for a 1,200 pound steer, and butter, cheese, eggs, pork and all other farm products would command higher figures. Virtually all our important competitors in agricultural products throughout the world, except the United States, have gone off the gold standard.

I believe it was the following year that President Roosevelt of the United States decided to desert the gold standard, and thereby Canada's money was brought to a parity with the British pound. But it was only through the action of the President of the United States that this came about. Judging by events taking place at that time, if the Conservative party were in power in Canada at the present time the British pound would still be worth only $3.60 to the Canadian producer.
Senator Sharpe went on to say:
If we were tied up to the British pound-
Mr. DEPUTY SPEAKER:: I must remind the hon. member that it is not permitted to quote here a speech made in another house.


Mr. LEADER:: Well, I shall abide by the
rules, but I am sorry, because it is very interesting.


Mr. STEVENS:: Quote the Free Press.


Mr. DOUGLAS:: Was it not made outside
of the senate?


Harry Leader: With this reference I will
conclude. Senator Sharpe declared, according to the Free Press report, that $125,000,000 was lost to the producers in Canada in 1932 in selling their products on the British market on account of the difference in exchange.
I am sorry that the leader of the opposition (Mr. Bennett) is not in his seat to-day; he was prime minister at the time. I am sure he would agree it is a fair statement that he did not place our money on a par with the British pound because he thought it would ruin Canada's credit, and as usual the farmers of western Canada paid the price.
I want to compare the actions of the former wheat board under Mr. McFarland with the actions under the present manager, Mr. Murray. Mr. McFarland's policy was to stabilize the market, to hold for a higher price. I cannot understand his attitude in view of the experience we had under the pooling system, because that is exactly what the pool did, and it proved disastrous. Our customers were not going to pay any more than they had to, and to hold a gun to the head of our best customer, demanding a higher price, was a disastrous policy. That, however, is exactly what the pool did, and Mr. McFarland, after all that experience, adopted the same policy. When Mr. Murray was made manager of the wheat board he adopted the opposite policy; he assured our customers that there was Canadian wheat for sale every day at the market price. Thus he won their confidence. Between the two I have no hesitation in saying that Mr. Murray's policy is the better.

Wheat Board-Mr. Leader
The fact that he sold that huge surplus is the greatest factor in the better price prevailing at the present time. There are other factors I know, but buyers know that Canada has got rid of that huge surplus and it will not come into competition with the crop that we hope to produce this year.
It seems to me that the present wheat board is going out of business. I can come to no other conclusion. But the farmers of western Canada are not going to give up the fight they have made for twenty-five years for a better marketing policy, and if this wheat board goes out of business something else will have to take its place. I made that statement in Winnipeg this year at the annual meeting of the pool elevator companies of Manitoba. They asked me to say something and I did so very hesitantly, because at that time the government was not in very good repute with the Manitoba pool elevator companies. I spoke of course without assuming any responsibility except for myself. I said that I believed the government's action was wrong, that I felt that the wheat board was going out of business and that we should rebuild on the foundations of the old wheat pool another selling agency. I told them that we have in Canada two farmer organizations dealing in wheat, the pool elevator companies and the United Grain Growers' Grain Company. The latter company, although owned by the farmers, is a commercial institution pure and simple, yet it is regarded by the people of eastern Canada as a farmers' organization; therefore they say to us: You people in western Canada do not know what you want; you have got two farmer organizations out there and cannot agree among yourselves; there is cutthroat competition. And it is the truth. I suggested that the United Grain Growers' Grain Company and the western pool elevator companies get together and prove to eastern Canada and to ourselves that we have a policy, that we can cooperate to sell our products on the world markets, assuring our customers that we have a good product for sale and are willing to sell it at the market price. I took the same attitude at the convention of the United Farmers of Manitoba at Neepawa. I told them the same story and I am telling it to the house to-day, because I want the house to know that I am consistent. At their annual meeting held in Calgary on January 20 the United Farmers of Alberta instructed their executive to study the possibility of a merger between the pool elevator system and the Grain Growers' Grain Company.
There has been a good deal said in regard to resolutions passed at meetings of farmers
in the west. Some of the resolutions referred to were stereotyped, some were different, some could not be vouched for, others were suspicious, and they were rather up in the air in general. But I hold in my hand a resolution passed at the convention of the United Farmers of Manitoba at Neepawa last fall, which I should like to read to the house:
Wheat marketing: In considering the matter of wheat marketing we discover a very wide spread for opportunity to market western wheat under a dominion grain board. This view, which prevailed almost if not quite unanimously among our delegates, is expressed in the following resolution:
Whereas the opinion prevails almost universally among producers of grain that the operations of a grain board in Canada may prove in future of very great practical value;
And whereas we are convinced that the grain board should operate regardless of the market price of wheat;
Therefore the United Farmers of Manitoba puts itself on record as urging that the wheat board set up last year be retained in operation, that it function independently of the figure at which the market price stands, and that thus there be secured to the farmers the privilege of placing their wheat with the board at any time.
That is the resolution passed by men and women who are engaged in this business of producing wheat. I was present at the convention and I voted for the resolution.
The government must take full responsibility for their action in changing the Canadian Wheat Board Act. They did not consult me, therefore I have to make my stand clear. I intend to support the amendment proposed by the hon. member for Qu'Appelle. The amendment is regarded by some as a vote of want of confidence in the government. I do not regard it as such. I still have confidence in the government, but I do not believe in the course they took in regard to this measure. I do not believe it was justified; I do not believe it was in the best interests of my constituents, and Mr. Speaker, my constituents come first.


Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, as I understand the question as it has been placed before the house by a member of the official opposition, the hon. member for Qu'Appelle (Mr. Perley), the action of the government is being criticized because it is said to be legally unsound. The right hon. leader of the opposition (Mr. Bennett), who I suppose speaks for the opposition, concluded his remarks with this statement, appearing at page 1870 of Hansard:
The real issue is whether hon. members are prepared to stand in their places and say that they approve of the executive making a statute inoperative when there is no power or authority so to do.
Wheat Board-Mr. Tucker

I presume we may take it that the right hon. gentleman was speaking of the true intent of this motion, so in effect he said that anyone who voted for this motion would be declaring that the government acted illegally in the course it took; that it is not a question of whether the government's action was right or wrong or whether or not it was justified. The straight charge is made that the government had no power to do what it did, and this parliament is asked to criticize the government for that reason.


Charles Avery Dunning: That is right.


Walter Adam Tucker: If that is the issue upon which we must vote, every hon. member should carefully consider the situation, and I have endeavoured to do so. I must admit that when I heard the first report of the government's action I was inclined to take the position that the government had no legal power to do what they did. As a matter of fact, Mr. Speaker, even to-day I am inclined to doubt whether they had such legal power, but I am prepared to take this position: I recognize that in this house we have in the person of the right hon. leader of the opposition a lawyer of very high standing in this country, and that his opinion is entitled to a great deal of consideration and respect. I also realize, however, that advising the government we have a lawyer of equal standing in the country whose opinion is entitled to the same consideration and respect. I refer to the Minister of Justice (Mr. Lapointe), and I take it that he advised the government in this matter. I have no doubt that the government would not have taken this action if they had not been advised by the Minister of Justice and the law officers of the crown that they had a legal right to do so.
Faced with that situation, with the leader of the opposition giving it as his opinion that the government had no legal right to take that action, and with the opinion which I must assume has been given by the Minister of Justice that the government had a legal right to take the course that was taken, what am I -to do, as an ordinary and rather young member of the legal profession sitting in this house? I must bear in mind the debates which took place in connection with the so-called new deal legislation of the last administration, which I followed closely. At that time the present right hon. leader of the opposition was positive that the legislation he was introducing was intra vires of this parliament and so would receive the approval of the judicial committee of the privy council. At the same time the present Minister of Justice was very doubtful whether

those acts were within the power of this parliament. What was the opinion of the highest judicial authority in the British Empire? Right along in its decisions as to whether those acts were intra vires or not it upheld the opinion of the Minister of Justice as against that of the right hon. leader of the opposition. How does that affect me in judging which opinion, in the present case, is likely to be upheld by the highest court of this empire? I must say that under the circumstances I am forced to take the position that, until something different has been proved, I can follow the opinion of the Minister of Justice with more confidence than that of the leader of the opposition.
But there is something else I think should be mentioned as well. We know that the wheat pool of western Canada has become a powerful organization, retaining some of the best lawyers in the west. We know that the suggestion was made at once tliat the government had no legal power to pass the order in council in question. I confidently expected that if the wheat pool held that opinion they would immediately challenge the action of the government in the courts, as they had a right to do. They could have brought an action or made application for a mandamus forcing the wheat board to accept wheat as they alleged it was required to do under the wheat board act. I waited, confidently expecting the pool to back up their statements by an action to test the validity of their opinion. After all, Mr. Speaker, we who are lawyers are hesitant about being over sure as to the interpretation of a statute. We are inclined to let the courts express opinions rather than state our own with too much certainty ahead of time and1, as I say, I confidently expected that the position of the government would be challenged in the courts at once. I waited day after day and week after week, but when the most powerful organization in western Canada which was vitally interested in the matter, did not see fit to resort to the courts I must confess in all sincerity that I began to have doubts as to the soundness of my own opinion that the government had acted without legal authority.
That is my position. At the time the government made this decision I thought they had acted without legal authority, as the leader of the opposition said. When no action was taken by the wheat pool I began to have my doubts. Then when I -thought the situation over and considered the history of the two men whose opinions I should value, I had further doubts, so that I am in this position: I am asked

Wheat Board-Mr. Tucker
by the official opposition to vote against the government because they did something without legal authority, illegally, but to-day the whole matter is in doubt. No one can say with any assurance that the action was legal or illegal, so in effect the official opposition want the members of this house to vote against the government before they have proved their case.
That is the legal point of view, and 1 think that is a fair attitude to take. If they want us to find the government guilty, let them prove their case. Unsupported statements are not sufficient before a court of law, and they should not be sufficient before this parliament. That is the bare legal ground, and the right hon. leader of the opposition has placed the matter on that ground. I do not think that is altogether sufficient for this house, however, and for a few moments I should like to refer to the effect of this amendment. What was the proper thing for the government to do last fall. Well, the question may be considered from many angles, but this was my attitude: Having set up a royal commission to investigate the whole question I felt that the government should not have made any change in the operation of the act until that commission had reported. But there was another point to be considered. Every farmer in western Canada, especially those who believed in cooperation, wanted to see the wheat board get a fair chance. Would the wheat board have had a fair chance if the initial price had been set at 874 cents a bushel? I noticed that the hon. gentleman who introduced this amendment did not mention what initial price he would have liked the government to set. I take it that he would have liked the government to continue the wheat board, setting the initial price at 87J cents. He has not said differently; the official opposition have not said differently, so I take it that is their attitude.
What would have been the effect if that had been done? Well, the other night the Minister of Agriculture (Mr. Gardiner) in effect said this: Considering the attitude of those who believed in the wheat board and who wanted it to have a fair trial, we realized that if we had continued the wheat board as in the previous year and set a price of 874 cents, very few people would have delivered wheat to the board. There is no doubt about that being correct, because the price on the open market was very much higher than 874 cents. Very few people would have delivered to the wheat board. The expenses of running the wheat board would have come out of the small amount of wheat delivered to
it. Those who wished to destroy the board would have been able to come to parliament the following session and say the people in western Canada do not want the wheat board because they did not deliver to it, and therefore we should do away with it. The question is this: Who is the greater friend of the wheat board, the man who is ready to give it a chance or the man who pretends to give it a chance, under conditions that he knows will cause it to be destroyed? That is something for the people of Canada to consider.
We have to be fair about this matter. I heard someone say-not loudly, but I was just able to hear it-


Ernest Edward Perley: I will say it loudly.


Walter Adam Tucker: I hoped the hon. member would.


Ernest Edward Perley: In setting a ninety cent conditional figure a situation was created under which absolutely no wheat would be delivered to the board. They had no opportunity, even if they so desired.


Walter Adam Tucker: That is just my point. The government prevented a situation developing whereby the farmers would have had the right to deliver to the wheat board, knowing that they would not do so as would have been the case if the price were left at the old figure of 874 cents. Very few would have done it. The figures were given by the Minister of Agriculture. In the time they could have delivered to the wheat board,
38.000.000 bushels were marketed and only
600,000	bushels were actually delivered to the board.
Then we have the proof from the people who should know most about it, namely the wheat pools themselves. What is their opinion about it? I should like to place it before the house, because we want to be fair. This is the considered statement of the executives of the three Canadian wheat pools, as issued on July 6. Here is what they said:
If the minimum price for wheat is set below the futures market price, the Canadian wheat board might be crippled, if not destroyed-
Is that what my hon. friend wants?
-as farmers after the experience of the present crop year would be reluctant to deliver their wheat to the board if they could secure a higher price on the open market.
That is the opinion of the wheat pool officials themselves. They believed that if the government had permitted delivery to the wheat board at an initial price of 874 cents it might have destroyed the wheat
Wheat Board-Mr. Tucker

board. Will anybody stand here and vote for that sort of thing, while pretending he is supporting the wheat board and the wheat board idea?
But I am asked, " What attitude did you take in the country "? My answer is that I tried to take the attitude in the country that I thought was the right one. The proper idea, it seemed to me, should be for the present to continue the wheat board in operation. The only chance in the world it had to get a fair trial was to set its price sufficiently high that the farmer would feel able to deliver to it. I advocated that the initial price should be $1.01, which was slightly under the existing market price at that time. I figured that on that basis .the farmer would deliver in reasonable quantities to the wheat board, and in that way the board would be given a fair chance. Again, on that basis, it seemed to me, the government would not stand to lose much. I hoped the government would take that attitude, and made representations accordingly. They decided, however, not to take that stand-and mind you, Mr. Speaker, if they did not see fit to set the price high enough to give the wheat board a chance, it was better to take the attitude they did take. Anybody who says he prefers to see the wheat board continue, while setting a price of 87J cents, is voting for something which in the words of the wheat pool officials themselves, might have killed the wheat board. I tried to take a consistent attitude. I said the price should be set high enough so that the wheat board should have a chance, and made representations accordingly. Wheu the government decided it would not do that I expressed my disappointment. If that is a crime, if it is a crime to say one is disappointed in the attitude of a government on a specific question, then I am guilty of it. But-


Charles Avery Dunning: That is a virtue.


Walter Adam Tucker: Probably I have been guilty of it more than once. However, to say that I am disappointed in some action of the government, and to say it not only to the country but on the floor of the house, is entirely different from saying that I am going to vote lack of confidence in the government. Ever since there has been a Liberal government in Canada and ever since I have taken an interest in public affairs, I would have liked to see those Liberal governments cut the tariff to a point a good deal lower than it was at the moment. But government in Canada is a matter of compromise. Just because it does not go as far as one would like to see it go. should one throw out people who are going farthest in your direction in order 
to bring in others who will not go any distance in your direction? That is the question one must answer.


Mr. THORSON:: Or will go in the wrong direction.


Walter Adam Tucker: Yes. The hon. member is certainly not referring to the Liberal party when he makes that observation.


Ernest Edward Perley: He would not admit it if he were.


Walter Adam Tucker: In regard to the attitude taken that we might have lost some money, may I say, in passing, and by way of putting myself on record, that I think no harm would have been done by setting the price at $1.01. That is only my opinion. In justice to the western farmers I feel a reasonable price should be fixed or ensured for our wheat production. It is my view that when western Canada has come through such hard times and has suffered a succession of crop failures or poor crops that last year the government might very well have set an initial price at $1.01, so that those farmers who wished so to do could have delivered to the wheat board and obtained some benefit from any subsequent rise in price.
In that connection however there is something I should like to draw to the attention of hon. members. There seems to be the idea that if the wheat board had been permitted to operate, the grain exchange or the grain dealers would not have got the wheat delivered to the wheat board. May I invite your attention, Mr. Speaker, to the fact that one of the first things Mr. McFarland did, as head of the wheat authority set up by the last administration, was to force the pools to close their direct selling agencies in Europe and to deal through that very grain exchange, through the established selling agencies. And so last year, had the wheat board been taking the delivery of wheat from the 1936 crop, under the specific direction of the last parliament in the wheat board act, that wheat would have had to be sold through established channels to the grain trader members of the grain exchange, and the grain exchange would have got just as much of it as it has already got. That is something which should not be overlooked.
Then, suppose wheat had been delivered to the wheat board: under that condition they would have had to turn round and sell it on the grain exchange through established channels. What would have been the effect? They were supposed to sell their wheat in an orderly fashion. The members of the grain exchange would have been able to buy it up

Wheat Board-Mr. Tucker
and if they had thereby gambled successfully they would have made their half million dollars which the leader of the opposition mentioned the other day. The only thing was that it would have gone from the farmer to the wheat board and from it to the grain exchange, instead of direct from the farmer to the grain exchange. Is that something to raise an issue about? Is there much difference in that? I am asking hon. members that question.
Then, there is the question whether or not the farmers of western Canada, the primary producers, are entitled to some consideration under our present economic set-up. The hon. member for Moose Jaw (Mr. Ross) gives it as his opinion that the farmers in western [DOT]Canada are entitled to no subsidy, no protection. nothing of that sort. I would say to him that if it were within the realm of prac-ical politics to do away with tariffs and subsidies, then the wheat farmer of western Canada would have to take his chance with the Test and would be willing to do so. But who in parliament will say that to-day that is within the realm of practical politics? Who will stand in his place and say there is any chance of our doing away with tariffs, within the lifetime of any hon. member? We know "that a certain measure of protection for the secondary industries of this country is a permanent part of our fiscal set-up. It has not been quite so high under the Liberals as :it has been under the Tories, thank goodness. I pointed out recently that in 1931 in one year the tariff subsidies had cost the provinces of Manitoba, Saskatchewan and Alberta a total of $54,925,000. If that should be taken as a normal year, in six years the cost to the three prairie provinces of tariff subsidies to protect our secondary industries would total $329,552,000. Through failure to place our money on the same basis as Australia during those years the prairie provinces lost another $229,000,000 in the selling price of their wheat alone, so that the total loss to western Canada under these items was $558,000,000. Then somebody says that the western farmer is not entitled to a fixed price ifor his wheat, sufficient to ensure him a fair standard of living which might cost the government half a million, a million or even ten million dollars. That is the situation as it appears to a lot of people in western Canada and as it appears to myself. I say: Go as far as you can in lowering tariffs, go as far as our party is willing to go-goodness knows I should like to see them go farther than they have gone yet-and when you have gone that [DOT]far, in justice to those who are engaged in
our primary industries, give them some compensation for the loss they suffer because of that tariff policy. That is only just.
We are asked to vote non-confidence in the government. Is it better for the farmers to have wheat selling at $1.31 with marketing machinery not quite as perfect as it might be, than to have the price forced down to 50 cents per bushel through your trade policies and have the most wonderful marketing machinery that could be devised by the mind of man? We are asked to vote non-confidence in this Liberal government, but what is the record? I predicted in 1930 at more than one of the election campaign meetings that if the Tory government got into power and carried out its tariff policies, there would be reprisals, quotas and so on on the part of countries with which we refused to trade. I told my listeners that as a natural result wheat would pile up in this country until the price dropped to 25 cents a bushel. I was fortunate, or perhaps lucky, in 1935 when I again made a prediction that has already almost come true that if the Liberal party came into power and the tariff was lowered so that we could sell our wheat in the markets of the world, inside of two years wheat would be back to $1.25 per bushel. What does the record show?
In 1926 there was grown in this country
407.000.	000 bushels of wheat, in round figures. In 1927 the crop totalled 479,000.000 bushels and in 1928, 566,000,000 bushels. What was the carry-over after such large crops? On July 31, 1929, the carry-over was only 104,-
383,000	bushels. In 1929 the crop totalled
304.520,000	bushels. In four years while the Liberals were in office there was a crop of
1.758.000.	000 bushels. The carry-over on July 31. 1930, was just 111,094.000 bushels. What is the history of the time the Conservative government was in power? We find that in 1931 the crop totalled 321,000.000 bushels, in round figures. In 1932 it totalled 443,000,000 bushels; in 1933, 281,000,000 bushels, and in 1934, 275,000.000 bushels. In other words, in 1931 to 1934 inclusive the total crop of wheat amounted to 1,322.000,000 bushels. Even with those comparatively small crops the carryover had increased to 203,000,000 bushels as at July 31. 1935. During these four years of Conservative administration there was 449,000,000 bushels less wheat grown in this country than the four years of Liberal administration, but the carry-over had increased by
92.000.	000 bushels. Can anyone say that there is nothing in trade policies? What was the result? Prices responded accordingly. If enormous carry-overs are built up in this country, the inevitable result is that prices
Wheat Board-Mr. Tucker

go down. When your trade policy is such that you can get rid of that carry-over and continue to show signs of getting rid of it year after year, prices go up.
This brings me to the last step. Is it not better for the farmers of this country when they do grow a crop to be able to get well over a dollar a bushel than to have a perfect wheat board operating and get only 35 or 40 cents a bushel? We have to get down to fundamentals. What is the situation? When the government announced its policy last year I suggested to some members of the wheat pool directorate that the pool was set up to carry on cooperative marketing. I told them that in the past they had been hampered due to the fact that when they wanted to make an initial payment they had to go to the banks to borrow the money and the banks insisted that they hedge their wheat. The purpose they had in mind, that of orderly marketing, was thus defeated. I told them that with the policy of this government of guaranteeing 874 cents a bushel they could establish at once a voluntary pool and offer the farmers 80 cents a bushel as an initial payment. I -told them they would not need to hedge their wheat, that they could once more get their pool going and if it was destined to be the success it should be, if they had confidence in it themselves now was the time to start it under such favourable circumstances, they would then have one year of successful marketing operations to take before the Turgeon grain commission.


Charles Avery Dunning: They were guaranteed against loss.


Walter Adam Tucker: As the Minister of Finance (Mr. Dunning) says, they were guaranteed against loss. That was a golden opportunity for the wheat pools of this country if they had seen their way clear to take advantage of it. With all due deference to eastern members, I must say that I have more confidence in western people when it comes to handling our wheat. It is their own work and they should know it intimately. I feel they are better able to do that than any grain board which might be appointed by the government. After all a grain board appointed by the national government would have to consider questions affecting eastern Canada as well as western Canada. It seems to me that we should try to handle our own business as much as possible. People might be placed upon that wheat board who would not be satisfactory to western Canada. I suggested that under the pool system they could see to it that the men they wanted were appointed.

They could appoint whom they liked and they would thereby have control over their own business. They had their opportunity. That was laid before the wheat pools and their first answer was that they did not have time to set it in motion. There might have been something in that argument; it is unfortunate that the decision of the government was not made sooner. However on the basis of the government's decision, the other grain handling concerns in western Canada said to anybody who wanted to deliver wheat to them, " We will give you an advance of 80 cents per bushel on your wheat." I think the wheat pools should have been able to do just the same as these other grain marketing organizations. They are just as well organized and just as ably managed. But they also gave another reason. They said in effect, " We have been fighting for a wheat board, and if we start a voluntary pool going again it will be more or less an admission that we do not stand firmly for a wheat board." In that regard, I think, the executive of the wheat pool did not represent the real wishes of their people. Their members believe in cooperative marketing, not in state socialism. That is where this house is perhaps split. Do you believe in cooperation, in people handling their own business, or do you believe in placing it in the hands of the government and asking them to handle it for you? That is the situation.
I may have disagreed with things the government did at the time. But while I might disagree for the moment with some step that was taken, I believe they are moving in the right direction. I believe that there is a great opportunity, upon the basis of the policy the government have pursued so far, of setting cooperation in motion again. I hope the government will again guarantee a price during the coming crop year, so that the pool will have another opportunity to commence again the pooling of wheat and that the policy will be announced at an early enough date that it, will not have to be said again that there is not time to get it in motion to handle this year's crop.
In conclusion, I am inclined perhaps more than some other members are to speak out, to criticize, when I do not agree with something. But there is this to be remembered. A man may give his whole life to the service of the people; he may be right ninety-nine times out of one hundred, but let him make one mistake and people will sometimes pay more attention to the one mistake than to the ninety-nine times he was right. That is a tendency which has caused many people to refuse to have anything to do with public life. This I bear

Wheat Board-Mr. Dunning
in mind when considering the attitude I should take towards the present government: while there are certain directions in which I should like them to go further than they have; while sometimes I have not agreed with all they have done, I think they are moving a good deal further in the direction I would have them go than would conceivably be the case with the official opposition that moved this amendment, and so I have no hesitation in saying that I intend to vote against the amendment and to vote confidence in the present Liberal government.
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, I do not wish to impede the passing of the motion that you, Mr. Speaker, do leave the chair; therefore I shall be brief. I am anxious to get along with the business of the ways and means committee. My task is rendered easier by the remarks of the hon. member for Rosthem (Mr. Tucker) to which we have just listened, because he developed a number of the points which I had it in mind to make.
First, I should like to point out that the address of the leader of the opposition (Mr. Bennett) on the amendment the other day did not call in question in the slightest degree the wisdom of the government's policy; it merely called in question the legality of the government's action. As to that legality, the hon. member for Rosthern has developed the obvious legal answer. I can only say on behalf of the government that in legal matters we are and must be guided by the opinion of the Minister of Justice (Mr. Lapointe) and the law officers of the crown, and with respect to the legality of the course taken there is no doubt whatever in the mind either of the Minister of Justice or of the law officers. I know, of course, that the leader of the opposition dealt with the legality, leaving it to his colleague the hon. member for Qu'Appelle (Mr. Perley) to speak with respect to the advisability. The reason is apparent. The leader of a great national party could not make an address having to do with the affairs of merely a section of the country from the standpoint of the advisability of the policy. He had to approach it on some broad, national ground, and the only such ground available to him was that of legality. However, he left the hon. member for Qu'Appelle and others quite free to develop their own sectional arguments with respect to the advisability of the policy followed, and of course the gentlemen concerned have done so.
I am not going to evade in the slightest degree the question of the soundness of the policy followed by the government; I am prepared to meet the issue of the soundness

of the policy at the time it was determined. In saying that, Mr. Speaker, I feel conscious of my limitations. I am not a wheat expert like the hon. member for Rosetown-Biggar (Mr. Coldwell) and some of the other hon. members who have spoken. I have only been dealing with wheat, growing it, buying it and selling it long enough to be sure of one thing, and that is that the man who projects his course upon an opinion as to what the price of wheat will be three months ahead is headed for disaster. It is easy to come into this house now and say how sure we were six months ago of what was going to happen in the wheat markets of the world to-day. I wonder whether the hon. member for Rosetown-Biggar would not help those of us who have an interest in wheat by telling us what the market is going to be three months hence. If he and the hon. member for Qu'Appelle-[DOT] who, I think, has some claim to knowledge with respect to the marketing of wheat, because he has been engaged in it as a farmer and to some extent as a merchant over a long period of years-were so wise last fall, will they not be good enough to tell us poor ignoramuses now what the price of wheat is going to be three months hence, six months hence? Is it going up or is it going down?


Ernest Edward Perley: Mr. Speaker, will the minister permit me-?


Charles Avery Dunning: Why, surely. If I can get an answer to that question, it will mean a lot.


Ernest Edward Perley: If the evidence now were as plain that the price is going up as it was in July last that it was going up, I should be glad to give the minister the advice at once.


Charles Avery Dunning: Surely that is begging the question.


Mr. ROWE (Dufferin):: Not so far off.


Charles Avery Dunning: This is a continuous problem.


Percy John Rowe: So was that.


Charles Avery Dunning: Along the line of the argument advanced by my hon. friend-if his line of policy is to be followed-someone will have to predict what is going to be done three months hence. It is not sufficient merely to take action when the evidence is plain. You are not in this business for one day or one week. What faced the government of Canada last fall was that it was in the wheat business to a greater extent than any other organization in the world had ever been. Joseph in Egypt was a piker compared with the government of Canada. We

Wheat Board-Mr. Dunning
had a very great volume of wheat, and who owned it? The people of Canada. They had taken delivery of it. They had paid a price for it, a price which was greater than the price which up to that time they had been able to obtain in the markets of the world when they went to sell it. The people of Canada were holding the bag for the farmers of western Canada. I am not quarrelling with the policy in that regard. In a national crisis such as was involved in relation to the wheat business it was necessary for this nation to take some action with regard to a national asset of such tremendous importance. But the people owned that wheat-nearly 300,000,000 bushels of it, as the hon. member for Qu'Appelle indicated. There are two peculiar things about wheat. One is that wheat is ripening somewhere in the world all the time. The second is that the wheat that you did not eat last year you cannot, increasing your consumption, eat this year. With respect to some commodities a decrease in consumption during a period is followed' by increased consumptive demand at some later period. It is not true of wheat. That people were deprived of wheat or did not eat it a year ago does not mean that they will eat twice or one and a half times as much this year. These are two important facts to bear in mind in connection with wheat.
The government had this enormous liability. It had another problem-which brings me to my second point. Another crop was coming along in western Canada, a crop which at that time and until its disposal was owned by the individual fanner producing it. It was in the highest national interest that the individual farmer who owned the growing crop of 1936 should be put in a position to get the best possible price for it. Who was the greatest competitor with that growing crop? The government of Canada, owning the vast quantity of wheat to which I have made reference. In the light of those circumstances what was the best policy to follow? To make provision for further increasing the load of wheat carried by the government, or so to handle that load as to give the farmers of western Canada the maximum possible opportunity of disposing of their new crop? The course the government took involved two or three major advantages of a national character, and some considerable advantages to the farmers of western Canada. I will deal with the latter first.
What was the advantage to the farmer of western Canada? First, the announcement of the government policy rendered utterly impossible bear raiding during the process of

rush marketing. There was no possibility ol organized bear speculation forcing down the price of wheat for the farmer's new crop. Why? Because the world had notice that the government of Canada was prepared to take delivery at any time the price was forced down to ninety cents. That was a degree of protection which the farmers of western Canada have never enjoyed during all the period of their marketing-never in the world. In consequence, for the first time during a period of free marketing, there was no attempt at a bear raid during the time of rush marketing of the 1936 crop. That was one advantage reaped by the farmers of western Canada. As the Minister of Agriculture (Mr. Gardiner) reminds me, the development of bear raiding was already apparent before we took action. It was plain to be seen.
What was the second point? The greatest competitor of the farmer of western Canada in the marketing of his 1936 crop was the wheat board holding these hundreds of millions of bushels of old wheat. Always in the past the size of the carry-over from the preceding crop has had a bearish price influence upon the new crop-always. The larger the carryover of old wheat the more likelihood is there of successful bear raids on the price of new wheat. What happened? By the development of the government's policy, for the first time in the history of open market wheat trading, there was from the farmer's point of view no carry-over in competition with the marketing of his new wheat. Why was that? It was because the wheat board did not sell any old wheat in competition with the rush marketing by the farmer of wheat of the new crop. The government continued to hold back, as it had been holding back for years; it kept out of the farmer's way and left him a free rein to sell his 1936 crop without the bearish influence of any carry-over from the old year.
That, I believe, was a major service rendered by the people of all Canada to the people of western Canada, and the only reason that there is criticism to-day is that the gentlemen who are criticizing now have the advantage of hindsight, which, of course, in argument is converted into foresight. The price of wheat has gone up. It has gone up very largely because of the steady, persistent selling policy adopted as a result of this government's wheat policy. It has gone up largely by reason-


Some hon. MEMBERS:: Oh, oh.


Charles Avery Dunning: I should like to answer
the question but I cannot hear it.

Wheat Board-Mr. Dunning


An hon. MEMBER:: What put the price
down?


Charles Avery Dunning: The hon. member for Rosthern (Mr. Tucker) gave us several very sound reasons why the price went down in previous years, but I do not intend to be diverted from 1936 into previous years. I am discussing the amendment now before the house, which relates to the government's policy with respect to the marketing of wheat in 1936 as set forth in the order in council. In addition, we performed, by reason of this policy, a further great service to the farmers of western Canada, and without injuring the national well-being in so doing. The hon. member for Rosthern touched on it. For the first time in the history of marketing in western Canada cooperative marketing on the pool plan was made possible, insured against any loss on the part of the pools. Think what that means. We are all aware of the great disaster which overtook the pool marketing organizations in consequence of having made during one year a larger initial payment than they were afterwards able to realize from the wheat. We know that the provinces concerned, which undertook a part of the load resulting from that occurrence, became financially embarrassed. We know that subsequently the former government of Canada had to come to the rescue, and we know that because of that the tremendous load of wheat developed.
Now in 1936 for the first time the wheat pool could have said to all farmers, "Deliver your wheat to the pool; you will get 87i cents as an initial payment and whatever else we may make out of the wheat as a result of its disposal in due course." I am not criticizing the pools for not taking that step; that is their business. Nor am I foolish enough to overlook the fact that they are one of the greatest business organizations in Canada, one of the most powerful in point of size of assets and control of volume of commodity-because it has been said repeatedly that the wheat pools control normally forty-seven per cent of the wheat. See what an opportunity was given by the government of Canada to the cooperative organization controlling forty-seven per cent of the wheat to operate a pool and make an initial payment without any fear of loss in so doing, because the government would come in and take delivery of the wheat at 871 cents. Why that was not done remains a matter of policy with the pools themselves; they had a perfect right to make a decision. But I have a perfect right to point out that the policy of the government would have enabled the wheat
pools to give to all of their customers all of the advantage, if any, which has come about by the increased price of wheat since that time and without any risk of loss to the pools, for the first time in the history of cooperative marketing in the west.


Ernest Edward Perley: When was
that offer made to the pools on the part of the government?


Charles Avery Dunning: No offer was made; the order in council itself constituted the offer.


Ernest Edward Perley: What was the date of it?


Charles Avery Dunning: August 28, I believe. But it does not matter what the date was, the effect is just the same. Prior to that date every farmer marketing his wheat had a right to market with the board at 87J cents initial payment. The extent to which he did so prior to that date was indicated by the Minister of Agriculture. There were 38,000,000 marketed and 600,000 delivered to the wheat board. Those figures constitute in my opinion the main reason why the pool organization decided not to continue, not to go ahead as a pooling organization on the same basis. I am not questioning their wisdom; that is an internal matter for themselves; but I do point out that they are very powerful organizations. If anything in Canada can be described as a truly big interest, then the western cooperative marketing organization engaged in the marketing of wheat can truly be described as a big interest-and I am not using that term in any critical or disrespectful sense. The wheat pools, with their expert knowledge gained by experience in this business, aided as they might have been by the advance knowledge of the hon. member for Rosetown-Biggar and the hon. member for Qu'Appelle, have some responsibilities. The government of Canada have many other responsibilities besides wheat. The cooperative organizations are organized specifically to deal with this problem, and when the government of Canada by order in council under the wheat board act, lays down a policy saying to these organizations: "Go out and market your wheat cooperatively; make an initial payment of 87i cents a bushel, being insured against loss by the fact that the government of Canada will take delivery at that figure," it seems to me that the people of Canada are supporting in a very fair way the cooperative marketing of wheat in western Canada.
I think there is nothing further I wish to say, except that, as one who believes in cooperative marketing and not state socialism,



Wheat Board,-Mr. Dunning
I believe that the government of Canada on behalf of the people of Canada should extend to wheat growers or anyone else the maximum assistance in the way of promoting self-help on the part of those directly interested. I believe that the order in council of last August was truly cooperative in the spirit of what I have just said. It represented a degree of cooperation on the part of the people of the whole of Canada with those who are joined together in an effort to market a commodity, and I doubt very much if we whose hearts are in the life of western Canada shall make any progress by attempting to follow the line of state socialism, by attempting to dragoon the whole of Canada into applying the principles of state socialism to the marketing of our chief product; because quite obviously if we insist on support for that we must be content to move in the direction of state socialism in the marketing of many other commodities as well as wheat. I believe that governmental assistance in the marketing of all these commodities can best be given by helping those who are engaged in the cooperative marketing of their own products to help themselves.


Mr. W. G. WEIR (Macdonald):: I am one of those who rather appreciate the amendment moved by the hon. member for Qu'Appelle (Mr. Perley). I say so for this reason-and I offer this as a criticism of the government: I do not think the story of the reasons for the action that was taken last fall with respect to wheat board legislation was sufficiently told. The debate on this amendment will do a good deal towards clarifying the situation with regard to the action taken when the government declared its wheat board policy of last year. This I think will be appreciated not only by hon. members of this house but by all who are particularly interested in the problem as far as western Canada is concerned.
I think it will be readily apparent now, '.f it was not before, that there is a wide diversity of opinion, not only in western Canada but throughout the whole dominion, as to the best policy for marketing wheat. During the past twenty odd years we have had in reality three different marketing systems. First we had the war-time wheat board, which was really set up for the purpose of keeping the price of wheat down. I think the opportunities and accomplishments of that board, under circumstances which were unique, have led a good many people to think that the same things can be done by a wheat board under very different circumstances. Many people to-day having those results in mind, think of another wheat board as being able to accomplish similar results.

Following that wheat board we had the voluntary pool. When the government of Canada and the provincial governments failed to implement the legislation creating the wheat board, farmer organizations in the three western provinces set about establishing a voluntary wheat pool. In that they were reasonably successful. It was followed a few years later by an attempt to create a one hundred per cent pool owned and controlled by the farmers' organizations. That attempt was not successful. Then we have had the open market system, sometimes called the speculative market, in which the grain is moved into the different positions by open market trading. May I digress for a moment with respect to the so-called speculative marketing of wheat? I cannot for the life of me see how we can get away from it. When you look at the market page of any newspaper you find quotations for products throughout the world, reflected in markets in different places. They have to come to some point where a price is established. Even last year when the crop which is at present being marketed was in its growing season Mr. McFarland made a forecast as to what in his judgment that crop would amount to. I am not going to argue whether his judgment was right or wrong, but in that sense he speculated as to the prospects of the crop. Unfortunately he was in error.
Crop prospects throughout the world, particularly with respect to wheat, have a definite effect on the prevailing price. When the different markets of the world have an opportunity of forming a judgment with respect to the conditions and requirements of the world these judgments converge in some quarter, and the recognized place is the Liverpool market. We have had argument as to whether a wheat board under government control, or the pool, farmer-owned and farmer-controlled if you like, is the more desirable to establish in this country. As far as I am concerned I subscribe to the policy of the farmers owning and controlling their own marketing organization, and I think our western Canadian farmers have an opportunity to establish for themselves a very creditable marketing organization. The only difference I see is that probably a government wheat board backed by the resources of the state might be stronger financially than would the farmers with their own resources alone. But in that regard there is the possibility that the government could assist to some extent a cooperative grain marketing organization.
The hon. member for Qu'Appelle undoubtedly had something in view in moving this amendment, and no doubt it was that the

Wheat Board-Mr. Weir
prices of wheat andi other grains have improved considerably since the beginning of the crop season. I am wondering where my hon. friend and those associated1 with him, particularly the hon. member for Rosetown-Biggar (Mr. Coldwell), were in 1932. Were they shedding the same crocodile tears at that time when the price was ranging in the neighbourhood of 30 cents a bushel? That is when something should have been said by way of protest, and an attempt made to establish a reasonable price. Here I wish to make a further observation with respect to government policy at that time. The government in its wisdom decided to adopt the policy of sound money, and I agree with the argument of previous speakers this afternoon that that policy had a decided influence on the prices received for the primary products of this country, particularly those sold on the English market.
I think all of us are inclined to reflect the opinions expressed in our home districts and communities, and give a good deal of thought to the observations that come to us from time to time. I am one of those who were obliged to attend one of the so-calledl pool protest meetings last year. But before I touch on that I should like to make one other observation. No doubt the policy of a government where a democracy is working properly should reflect in legislation what are the desires and wishes of the people. I do not mean that as supposed leaders of public thought we should not use every possible opportunity to guide that thought; but when we go home we listen to the observations and representations made by various individuals and organizations with respect to different questions. In regard to the marketing of wheat we find perhaps as many differences of opinion throughout the length and breadth of this country as there are upon any other question.
As I said a moment ago, I attended one of these wheat pool protest meetings, and this afternoon I intend to take here exactly the same position I took there.
_ May I go back just one step? This meeting I suppose was similar to those attended by other hon. gentlemen, protesting against the government's action in passing the order in council which prohibited the wheat boards accepting wheat unless the price dropped below 90 cents per bushel. But may I tell you, Mr. Speaker, that in 1930, a few days after I accepted the nomination as candidate for the constituency of Macdonald, and when the wheat pool was probably at the height of its power, I attended a meeting in my
home town attended by some four or five hundred people who were there to protest against the payments that the pool were making and to protest also against being tied to their contracts and forced to deliver further wheat to the pool organization.
In my district, as in other districts, opportunity was afforded to the growers to organize a one hundred per cent pool. That proposal was turned down. An attempt was made to establish a poultry marketing organization in western Canada, and it will be remembered that these same people turned that down very decidedly. So I think you will agree, Mr. Speaker, that sometimes because of the many divergencies of opinion it is very difficult to know exactly what is in the minds of people who are carrying on an agitation to promote certain marketing policies or, as a matter of fact, policies of any kind. Sometimes it is impossible to get enough of these people to put their names on the dotted line to bring about the desired result.
With regard to last year's crop, undoubtedly the early prospects were reasonably good. That mu9t have been recognized by those who travelled through the west, particularly through the northern sections of Manitoba. Even Mr. McFarland, who is undoubtedly a man of considerable experience in the grain business, realized that fact. The observations I am about to make have been made before, but perhaps it will do no harm to repeat them. The government made no change in the marketing policy of the board during the first twenty-seven days of this marketing season; in other words the board was free to accept wheat at the initial payment of 87^ cents a bushel. During that period, with a guaranteed price of 87J cents and an opportunity provided to deliver to the board and to participate in any increased price, the board received only one and a half per cent of the deliveries made.
Going a step further and referring to the crop of 1935-36, when the price of wheat was above the board's price only forty-seven per cent of the elevator deliveries were sold to the board; but when the price fell below the board's price sales to the board increased to one hundred and forty per cent of the deliveries to the elevators. I submit, Mr. Speaker, that when a board is so uncertain what its deliveries and what its opportunities for selling that wheat will be, its opportunity to accomplish results that might be comparable with those obtained through open market operations or otherwise, is certainly very limited.
I have not been in this house very long Mr. Speaker, I admit, but I have been here long enough to learn to recognize the realities
i906
Wheat Board-Mr. Weir

of a situation. Hon. members opposite, particularly my hon. friend from Qu'Appelle (Mr. Perley) and my hon. friend from Rosetown-Biggar (Mr. Coldwell), if they realize anything at all must appreciate that there is a very decided difference of opinion on the question of the government's being in the grain business at all. Undoubtedly that difference of opinion is reflected in this house, as well as throughout the entire dominion. What I wish to point out to my hon. friends, the reality which I should like them to face, is this: Even supposing it was possible to secure the support of every member from the four western provinces for a government wheat board, you would have only seventy-one members out of a house of two hundred and forty-five members. To me that is the practical side of the situation. I do not say that you would be able to get the support of every western member for such a proposal, but even if you could get all the members from the four western provinces to support a measure providing for the marketing of wheat through a government board you would have only the number I have indicated. That to me is the crux of the situation, and I can quite appreciate the position in which the government found themselves last fall when they attempted to deal with this matter.
If we are to adopt a policy of state assistance in the marketing of wheat I should like to ask my hon. friend who proposed this amendment how we can refuse the same assistance in the marketing of fish, live stock, lumber and other primary products that are sold on the markets of the world. So I say that if we are going to give assistance in the marketing of wheat we should consider all the factors involved, and particularly what the consequences may be in connection with the marketing of other commodities. Many hon. members of this house from eastern Canada have protested strongly against the prices being received for fish, dairy products and other commodities, and they have said very unkind things to me at least, and I am sure to other hon. gentlemen, with respect to the action of the government in regard to wheat.
There is another point that I think is of sufficient importance to be referred to at this time. Since 1930 this country has been accumulating large surpluses of wheat. At the same time we were coaxing and begging European countries to purchase additional quantities of Canadian wheat. Many protests have come to the government against their action in interfering, as the buyers claimed, with the normal flow of wheat; in other words, the buyers did not think they

were being given the chance to buy Canadian wheat at a price that had any relation to open market competition. This year, when the condition is completely reversed and there is a possibility of greatly increased prices, I think that having in mind the desirability of selling our wheat in the export market, the government of necessity must take notice of that sentiment that exists abroad. They are in a very much better position to say to the European buyer, who, after all, is the most important factor in our established price structure, that with prices increasing the government has nothing whatever to do with the situation, and that they are buying their wheat in open competition on the same basis as all other buyers.
I believe we cannot emphasize too strongly the fact that Canada must maintain the goodwill of those who are purchasing wheat. Any action, particularly on the part of the government, which would in any way cause ill feeling and react to the detriment of this country, or any action by the government to maintain prices higher than they should be, would be a dangerous policy for us to follow.
Some hon. members have gone so far in their accusations as to say that the present chairman of the wheat board was a grain exchange man. It has been my privilege to know Mr. Murray for a considerable time. I believe I do not overstate it when I say that he was one of the men who many years ago recognized the possibility of pool marketing methods. He was one of the men who promoted in its early stages the pool idea among farmer organizations. He was one of those who helped to draft the first contract and, as I recall it, even went so far as to prepare the agreement used in the initial stages by the pools in their dealings with the elevator companies, whereby the elevator companies would handle pool grain on the specific basis set out in that agreement. For these reasons I submit that the reflections on Mr. Murray's ability and character have not been to the good; certainly they have not been fair to him. I suggest, on the other hand, that the house must recognize that Mr. Murray has done a good job in marketing wheat. Through his operations he has relieved the market of the surplus standing over, one which undoubtedly would have had a bad effect on the price for this year's crop.
When he took over in his official capacity the board held 298,000,000 bushels of wheat. He received a further 48,000,000 bushels, which meant that he had to handle over 346,000,000 bushels. That being so, and with a crop to be marketed, if he could get into a position

Wheat Board-Mr. Weir
where the carryover or surplus at the end of this crop year was down to reasonable proportions, a good deal of the credit must be due to his activities.
Many hon. members have criticized the actions of the government, and have suggested that it could have foretold what the price trend was going to be for this season's crop. May I place this observation before them: Even as late as the end of June Mr. McFarland made a forecast. At that time the size of our crop was by no means known-at least not definitely. Of course it was known that the United States crop had been somewhat damaged. May I point out, as was done this afternoon by the Minister of Finance, that we cannot limit our operations to a month-to-month policy or, if you like, to a three-month policy. There has to be a long range view taken of the situation. Had there been a normal crop in the United States last year, and a reasonable crop in Canada, one can readily appreciate the different circumstances that would have existed.
Through the board, I believe the government has recognized the position of the wheat farmers. We must give them credit for their action in at least this one respect, that they refrained from selling while the delivery season was at its height, thus leaving the market wide open for the farmers and giving them an opportunity to sell without government wheat board competition and as well with a guaranteed price of 87i cents per bushel. One cannot help smiling at the reflections made by hon. gentlemen opposite and at their claims that everybody could have been sure that the price of wheat was going to go up. I had no such assurance personally, and I gave no advice. But with the sure knowledge these hon. gentlemen now claim to have had, certainly they could have made good fellows of themselves if they had gone out and urged their friends to hold their wheat, and buy futures. That might have been a good way of definitely guaranteeing re-election. However, if the price had gone the other way the results might not have been so good.
Turning to the amendment of the hon. member for Qu'Appelle (Mr. Perley) I note that he was careful to draft it in a cute manner. It is in these words:
This house regrets that the government rendered the Canadian Wheat Board Act, 1935, inoperative in its application to the 1936 *wheat crop.
In other words, he has attempted to limit the discussion to that particular phase of the question. He knows it is a want of confidence
motion, and that those who support it declare themselves to be totally lacking in confidence in the policies of the government. May I say to him that I, too, regretted the action which the government took last year. I thought they had made a mistake. At the same time I am not prepared to say that to date all the government's policies have been wrong. His proposal is undoubtedly designed to place western members on the spot. In confining his amendment to one specific question he is attempting to limit discussion to that one phase of government policy.
I shall not attempt to say anything on the constitutional issue raised by the right hon. the leader of the opposition (Mr. Bennett). I believe his observations were effectively met this afternoon by the hon. member for Rosthem (Mr. Tucker). His explanation has been the clearest that has been given so far, and I, for one, am grateful for the contribution he has made.
As I have said, I regretted the action of the board at the time, but I must say that I am grateful to the hon. member for Qu'Appelle for moving the amendment, for by so doing he has forced, if you like, or has obliged, if you care to use that word, some ministers and some hon. members to come forward and tell their stories.


Ernest Edward Perley: They have not told it all, though.


William Gilbert Weir: I say again I had hoped that the wheat board would operate, but the difficulty which presented itself in connection with establishing a price was one of the important factors which had to be taken into account. It is all very well for some hon. members to argue that a price should have been set sufficiently high to ensure that a considerable quantity of grain would be delivered to the board. May I say in that regard that if I understand anything about the marketing of grain and the establishing of a price, it would be necessary to do it at the beginning of a crop year. No one can deny that an initial payment of 87i cents per bushel at the beginning of last year's season would have been considered a reasonable price at that time. I do not believe even the wheat pools, had they been functioning as formerly, would have set a higher initial payment. I doubt if many people in Canada were disposed seriously to urge the government to set a higher price at a point higher than 874 cents per bushel, having regard to the future and the possibility of the state being obliged to make contributions if there were losses.
Wheat Board-Mr. Weir

I regret the action which the government took at that time. I think they made a political blunder so far as western Canada is concerned. At the time I thought it was an error, but I recognized the facts of the situation. I say to the hon. member for Qu'Appelle (Mr. Perley) who moved this amendment that the majority of the people in this country are not very sympathetic toward the government being in the grain business. That being so, all the strength that hon. members opposite can muster will not be sufficient. When the government of Canada goes into the wheat marketing business, it has to take into consideration the viewpoints of different parts of the country. If western Canada can claim the support of only 71 members out of 245, there is a situation which ought to be faced.
I am one of those who appreciate what the hon. member (Mr. Perley) has done. He knows perfectly well that his amendment is a want of confidence motion. Had he not made it a want of confidence motion as applied to the entire policy of the government I should have been inclined to support him. I would not trade the wheat marketing policy of this government for the wheat marketing policy of its predecessors in office.


Mr. C. R. McINTOSH (North Battleford):: Mr. Speaker, I should like to place a few words on record in regard to the stand I took in my own riding with reference to the continuation of the Canadian wheat board. The amendment before the house reads:
This house regrets that the government rendered the Canadian Wheat Board Act, 1935, inoperative in its application to the 1936 wheat crop.
The hon. member for Qu'Appelle (Mr. Perley) who moved that amendment put the word "regrets" in it, but I doubt very much whether his regrets are as substantial as he would like to make them appear.


Ernest Edward Perley: Speak for
yourself.


Cameron Ross McIntosh: I'm doing that. It has been said that some men are born great, that others aspire to greatness while others have greatness thrust upon them. I should like to parody these statements and say that some men are born destructive, others aspire to destruction while others have the methods and policies of destruction thrust upon them. As I read this amendment, it is purely destructive. I think the one outstanding idea in the back of the head of the hon. member who moved the amendment was to divide the western members of this house on this wheat board

issue-divide and destroy. The hon. member is actually attempting to destroy the influence of the Liberal party in western Canada. His desire to put me on the spot does not make a bit of difference to me. I rather like to think that a member of the Conservative party thinks he can put me on the spot, and then gives me an opportunity to prove that he cannot.
I have no hesitation in saying that this amendment is a motion of want of confidence in everything the government has done since it came into office and in every policy and principle sponsored and accepted by the Liberal party. I feel sure that when this amendment is put to a vote it will not command any support worth speaking of on this side of the house.


Mr. McIVOR:: Or on this side.


Cameron Ross McIntosh: There is no doubt that the vote will be overwhelmingly against the motion.
I was surprised the other day to hear the right hon. leader of the opposition (Mr. Bennett) say that he opposed the policy of this government on the wheat board and supported this want of confidence motion. He argued that what had been done was unconstitutional and illegal. That does not come with very good grace from the leader of the party which opposed a report brought down in 1928 and again in 1929 by the industrial and international relations committee dealing with a matter of great social importance; that is, insurance against unemployment, sickness and invalidity. The view of the committee was that they should take the advice of the law officers of the crown in drawing up their report, and their final report was that this measure could be worked out only by following along the orbit of provincial jurisdiction. Hon. members of the Conservative party got up in this house and staged a debate opposing the report of the committee. They said the report was not sound, that the jurisdiction rested with the federal parliament.
But they did not stop at that. When they were in power between 1930 and 1935 they enacted legislation which in effect announced to the country that the federal jurisdiction was sufficient. Their position in this respect has been rendered untenable by the decision of the privy council, which has recently declared this legislation to be ultra vires. We are now back to where we were in 1928 and 1929. Eight or nine years have been thus wasted in inaugurating necessary

Wheat Board-Mr. McIntosh
social legislation, and I place the responsibility where it in a great degree belongs-on the present opposition in this House of Commons.
When that was their stand a few years ago in connection with social legislation of outstanding national importance, what must we say to them to-day when they tell us that the stand taken by this government on the wheat board is unconstitutional? Since the Conservative party and its leader were wrong before, I d>o not think we can go far astray if we conclude that they are wrong again. The stand which this government has taken is legal and constitutional-not illegal and unconstitutional as hon. members say. We have the opinion of the law officers of the crown, and not to follow out that opinion is only an excuse for delay and inactivity. It is said that for every action there is an equal and opposite reaction. There has been no equal and opposite reaction in a judicial way, in a constitutional way or in a legal way to the action taken by the government. That being the case up to the present time, I think I am on sound ground when I say that there is not much to the argument of the leader of the opposition that the stand of the government was unconstitutional. Yesterday the hon.* member for Lethbridge (Mr. Blackmore) in discussing this question, made a few statements to which I should like to draw attention. He said:
We are, and we always have been, in competition with the world.
I think he is correct in that statement. I do not think there is any doubt but that the world is the ultimate economic and industrial reality and that a country which does not fit its policies into the world as a whole will certainly not go very far in the race, nationally or internationally. The same applies to a party. If-and this statement cannot be challenged-the world in an economic and an industrial sense is ultimately a single reality, then to be effective a party's policies must be in accord as far as possible with that world entity or reality. To the degree in which that principle is carried out the policies of any party will be efficient and successful. I believe the Liberal party has always tried to recognize that objective, that its outlook is for world trade linked with national business established on a sound and progressive basis.
A little later the hon. member said:
Other nations are protecting their industries by means of tariffs, quotas, subsidies, marketing boards and the like. All this is largely a development of the last twenty years.
So far as Canada is concerned, it has not been a development of the last twenty years. Our protective policies have been a development of the years since 1878. When in that year the people pronounced upon economic policies they pronounced in favour of high protection, and they have had just what they asked for, ever since that time. We talk a lot about freer trade and free trade. Yet even in 1930, when in western Canada the leader of the opposition (Mr. Bennett) courageously told the people that if he were returned to power he would raise protection to a high level, thousands upon thousands of votes in every constituency in Saskatchewan and throughout the west were cast in support of that policy-which would almost lead me to the conclusion that if we are to have progressive trade policies the people themselves will have to take a more determined stand. As I have pointed out, protectionism has been a development not merely of the past twenty years but of the much longer period since confederation.
The hon. member for Lethbridge comes practically to the conclusion that since we have high protection in Canada-the Liberal party is trying to pare it down, but it is more easily raised than reduced-we should accept the other alternative of setting to work to nationalize the marketing of every primary product and adopting a system of state socialism. As far as I am concerned I could not accept a policy of that kind. Neither can the Liberal party.


Mr. BLACKMORE:: Mr. Speaker, I never said at any time that we should have state socialism, nor have I advocated any such thing. The hon. member is giving his own conclusions, not mine.


Cameron Ross McIntosh: I am very happy to hear that, and I accept the hon. member's explanation. It was high tariffs instead.


James Earl Lawson: It is not an explanation; it is a straight denial.


Cameron Ross McIntosh: All right. The hon. member went on to state that we had a price spreads inquiry from which, he inferred, practically no results flowed. I would draw his attention to the fact that, outside of the publicity which the inquiry gave to social and industrial conditions in Canada, it resulted in the passing of the Trade and Industry Commission Act, which was declared intra vires by the privy council.


Joseph Thorarinn Thorson: Only in part.


Cameron Ross McIntosh: Well, if only in part,
it would go to show that the investigation was along the right lines, and that we might
Wheat Board-Mr. McIntosh

well add to that power of investigation and regulation, as we are doing in amending the Combines Investigation Act.
The hon. member further says:
Canada has all too recklessly left her primary producers to look after themselves.
Is not self-preservation the first law of nature? My own opinion is that when it comes down to a vote on fiscal, industrial and financial policies, if the primary producers go wrong and vote for a protective policy, what can you do for them? Nothing. It is hard to assist a class of people who say one thing to-day and perhaps the opposite to-morrow.


Thomas Clement (Tommy) Douglas: Vote for a free trade government !


Cameron Ross McIntosh: You mean freer trade.
The primary producers of this country must take a definite stand against high protection, and not do what has been done too often before in the last seventy years. They must nail their colours to the mast and say that they want more free trade, more exchange of commodities, and a policy in harmony with the fact that after all the world is the final economic entity that must be reckoned with.
I now pass on for a few moments to some statements made by the hon. member for Rosetown-Biggar (Mr. Coldwell). At page 1879 of Hansard he stated that-
Liberal candidates in Saskatchewan did tell the producers of w-estern Canada that the wheat hoard system of marketing would not be endangered by the return of a Liberal government. That, I believe, all members of this house from western Canada will recollect.
As one member, I do not recollect it because I did not say it. I put my confidence in the Liberal party, its leaders and the people. I was satisfied that if the people returned the Liberal party to power without it having made too many promises or indefinite statements, the right type of policy, financial and industrial, would be inaugurated and a new era for the industrialist, the producer and consumer would result.
The hon. member made another statement which I should like to contradict. He said:
... I stated over and over again that in my opinion steps should be taken by any government elected to open up the channels of trade, and that any steps taken in the opposite direction would have dire results upon our political economy.
I have always understood that the group to which the hon. member for Rosetown-Biggar belongs is opposed to free and freer trade. They believe in policies of self-sufficiency, of narrow nationalism and state socialism, and they are absolutely opposed to international trade. I had to meet that issue

in my own riding in 1935; I demolished those who took the opposite viewpoint, and I am ready to do it again.


Thomas Clement (Tommy) Douglas: Will the hon. member give his authority for stating that the group to which we belong is opposed to international trade? That is, will he quote the statement from our platform?


Cameron Ross McIntosh: It is not necessary. It
is plastered all over your platform and characteristic of all your public utterances.


Thomas Clement (Tommy) Douglas: Over what?


Percy John Rowe: He is trying to
plaster it now.


Cameron Ross McIntosh: It is not necessary-the job is complete. I want to hurry on. I am astonished at the temerity of the hon. member in coming into this house and making assertions of that kind, when every member of his incoherent group, himself included, made statements of policy of a direct opposite nature. Further, the hon. member says:
To my mind the preelection speeches of some at least of our prominent Liberal membere u'ere interpreted as promising a fire sale policy for Canadian wheat should a Liberal government be returned to power.
There was no suggestion whatever of anything in the nature of a fire sale of wheat so far as the North Battleford constituency was concerned'. The people of that constituency knew precisely what legislation had been enacted and1 they inferred that the legislation setting up a wheat board meant that the board would continue. But as to any suggestion of a fire sale policy, I say emphatically that no such thing was discussed in my riding. There was nothing of that kind suggested in connection with the sale of wheat, and therefore this statement of the hon. member for Rosetown-Biggar is at variance with the facts.


An hon. MEMBER:: As regards your constituency.


Cameron Ross McIntosh: That applies to the whole of western Canada.


Thomas Clement (Tommy) Douglas: You cannot speak for all western Canada.


Cameron Ross McIntosh: I can speak as well as you can and perhaps a little better. The hon. gentleman makes this further statement:
To-day hon. members from western Canada sitting on the opposite side of the house have an opportunity of registering in this house the protests they made last August and September.
There is not very much in an argument of that kind. There is absolutely no reason why a member of parliament may not take a

Wheat Board-Mr. McIntosh
definite stand on any matter of government policy in his own riding without regarding it as incumbent upon him to come to Ottawa and re-hash the whole thing over again. I say, Mr. Speaker, there is no gumption in an argument of that kind ; and if the hon. member for Rosetown-Biggar (Mr. Coldwell) tries to put me on the spot in that regard he is simply wasting his breath because I am delighted to stand here and answer him in his own coin. But if it comes to a question of any member's attitude on matters of policy, I can go back a little in history and tell the house what my stand has been on some important matters. I do not know where the hon. member for Rosetown-Biggar stood in 1917 on one particular question, but I can assure him that at that time I opposed the iniquitous War-Time Elections Act. I opposed' national conscription, and was practically alone in my opposition to it in Saskatchewan. As a newspaperman I stood alone.


Mr. SPENCE:: Are you proud of it?


Cameron Ross McIntosh: Yes, I am; conscription was not necessary. Again, when the party opposite put through the gerrymander in Saskatchewan in 1933 I was the first member to go home and tell my people what had been done, and took a definite stand in my own riding in opposition to such a policy. With regard to the action of the government last summer, I should like to tell the house exactly what my position was at that particular time. When the government made its decision my own opinion was that they had made a great mistake, though I admit that the opposite view may, in time turn out to be a short range view and that from a long range point of view the decision of the government may' prove to be the correct one. At any rate when the government made their decision- and they had a perfect right to decide the matter, for the people sent them here for that purpose-as the member for the North. Battle-ford constituency I took the stand that as an emergency measure the wheat board should have been allowed to function for another year. I took the view that it should function as an emergency board, not as a permanent institution. Before the government made their decision there came to my office in North Battleford a telegram from the pool organization at Regina, as follows:
Regina, Sask,
Aug. 20, 1936.
C. R. McIntosh, M.P.
North Battleford, Sask.
Press dispatches in Leader Post this morning state that federal government has decided to allow minimum wheat price paid by wheat board to remain at 87i cents basis one Northern
Fort William according to report from well informed quarters. Dispatch ends quote Western Liberal members appear to be satisfied with the continuation of the old minimum price unquote. Our organization vitally interested amount initial payment and believe that should be set in relation to production cost which is substantially higher than amount indicated. Our board would appreciate your reaction on this statement.
Sask. Co-Op. Wheat Producers Ltd.
I have been in business in North Battleford for twenty-five years, and altogether apart from politics I have always supported the pool. As a public man, though not as a politician, I stood by them, and throughout that period of twenty-five years I have come in contact with the leading grain growers of the province as well as the leading officials of the pool. Our relations have been quite friendly and indeed we have been co-partners in the upbuilding of the province. So that the stand I took on this occasion was nothing new; in fact, I could not follow any other course and be consistent with my past action. If I had done anything else it would have been opposing the pool to no good purpose, and therefore when this telegram came I wired back-


An hon. MEMBER:: What are you quoting from?


Cameron Ross McIntosh: I am quoting from a copy of my own newspaper, the North Battleford News; of course it cannot be contradicted. The telegram I sent in reply reads:
North Battleford, Sask.
August 20, 1936.
Sask. Co-Op. Wheat Producers Ltd.
Regina, Sask.
Wire fixed minimum wheat price received. Nothing final heard regarding decision federal government fix minimum price 874 cents bushel. Am Western Liberal member and represent large farming population but do not "appear" nor am I satisfied with continuation old minimum price. Agree with your organization fixed minimum price should be higher and that an initial payment certainly should be set, possessing fair and definite relationship with cost of production. Production costs higher in north. Take stand fixed minimum should run from dollar ten to dollar fifteen cents bushel thus assuring farmers satisfactory initial payment.
Cameron McIntosh.
That was one step I took; I should like to put another on record. After that telegram had been dispatched, the decision of the government being far from satisfactory, a large mass meeting was held in North Battleford. It was quite spontaneous, for I saw no large bills advertising the meeting; the only bills I came across were very small ones of the dodger size.	[DOT]


An hon. MEMBER:: Printed in your office?
Wheat Board-Mr. McIntosh


Cameron Ross McIntosh: No, in my opponent's office. About four hundred persons, farmers and business men, attended the meeting, and the chairman was Mr. W. A. Campbell, manager of the Western Groceries.
It is only fair to say that that audience was made up of Liberals, Conservatives and those who supported policies of socialism and other isms of that kind. After the matter was discussed the meeting decided to put a resolution before the gathering and have it accepted. That resolution was unanimously, passed, handed to me and I wired it as quickly as possible to Hon. J. G. Gardiner, the Minister of Agriculture, coupling with it the following words:
Public meeting farmers and business men held here Saturday strongly protested government's announced wheat policy tantamount destruction wheat board because of failure to establish fixed minimum price guaranteeing cost production plus fair profit. Preferred treatment manufacturers compared with shabby consideration given agriculturists has aroused much resentment and bitter opposition. Personally consider government emergency policy far from satisfactory and would therefore respectfully urge immediate and serious consideration same.
Then the resolution follows:
Resolution unanimously endorsed by gathering approximately four hundred as follows:
"This meeting protests the action of the dominion government in discontinuing operation of the wheat board by leaving a stop loss price of 87 j cent per bushel basis No. 1 northern Fort William and prohibiting delivery to the board unless market closes at 90 cents per bushel or less.
"Therefore be it resolved that this meeting demand the federal government authorize wheat board to announce immediately a minimum price of $1.15 basis 1 northern Fort William, and further that this wheat board establish its own sales agencies with a view to marketing wheat direct to final purchasers, and further that this meeting requests C. R. McIntosh, M.P. to present this resolution and opinions expressed at this meeting to the government, using his influence to have same accepted by the government.
That was signed by myself.
That was the stand I took in my own constituency on that question. And my stand in that regard was nothing new, nothing strange. I have already said that for the twenty-four years preceding that date I had always done my best to support the pool when it could be done, not that I accepted their policies a hundred per cent but because as a business organization backed by the farmers it was desirable to give them support and strengthen their hands in the solution of the many problems confronting them.


Ernest Edward Perley: Would the
hon. member mind putting on record the answer he received to that wire?


Cameron Ross McIntosh: I have not the answer here, but it was that the government would give the matter its consideration, as asked by the meeting. I take it for granted that that is all that could be expected as an immediate answer to any such wire.
Before and after that meeting resolutions came in from all over the riding. I shall just mention a few that came, I shall not read them. They came from wheat pool committees at Maymont; Ruddell; Radisson; R.R. 2, North Battleford; Hafford; Brada; Redfield; K eat ley; Krydor; Mullinger; Paradise Hill; Struan; Rabbit Lake; Belbutte; Bapaume; Bolney; Hatherleigh; St. Walburg; Cleeves; Whitkow; Medstead and Langham, and from the Radisson town council, the North Battleford board of trade, Rural Municipality No. 407 Round Hill, a public meeting in the town of Radisson, North Battleford rural municipality No. 437, Spiritwood rural municipality, Hamlin district farmers, Maymont district farmers, Borden district farmers, a mass meeting of Krydor farmers and Douglas rural municipality.
These are practically all the resolutions I received on the decision of the government. After the mass meeting in North Battleford and after the stand I took in my constituency, and after these resolutions were received, the farmers in the riding took it for granted that all was done that could be done, and since that time I have heard of very little opposition in that constituency. Everything done was done above-board, was reported in the press, and my own stand as a member was given to the people in such a way that I do not think there was much doubt as to where I stood in the entire matter.
In closing, you may ask what is to be my stand on the amendment before the house? It can be readily understood from what I have said. My stand will be to oppose the want of confidence resolution and to support the Prime Minister of this country and every member of the cabinet, and especially the Minister of Agriculture in his arduous duties, and to uphold the policy of the Liberal party as a policy which in the long run and even now must work out beneficially to the whole nation. The improvement in exports and imports, the prosperity which is evident on all sides, and the new encouragement that is being given to the people everywhere is 1 think complete proof that the trade and agricultural policies of the government are in

Wheat Board-Division
line with its traditional policy of freer trade, getting into all the markets of the world and thereby giving the rank and file of this country purchasing power which is sure to bring
prosperity.


James Earl Lawson: I was paired with the hon. member for Lambton West (Mr. Gray). Had I voted I would have voted in favour of the amendment.
Motion (Mr. Dunning) agreed to and the house went into committee of ways and means, Mr. Sanderson in the chair.
At six o'clock the committee took recess.

(The list of pairs is furnished by the chief whips.)
Messrs:
1914	COMMONS
Canada-United, Kingdom Trade Agreement
After Recess
The committee resumed at eight o'clock.


CANADA-UNITED KINGDOM TRADE AGREEMENT
Frederick George Sanderson: Schedule IV.
Customs tariff-229. Soap, common or laundry: rate of duty, 50 cents per 100 pounds.


Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-230. Castile soap: rate of duty, free.
Charles Avery Dunning: Binding free entry; no change.


[Stage Direction]
Item agreed to.
Customs tariff-232. Glue, liquid, powdered or sheet, and gelatine, n.o.p.: rate of duty, 17£ per cent and 2 cents per pound.
Charles Avery Dunning: Present rate bound; no change.


[Stage Direction]
Item agreed to.
Customs tariff-232c. Gelatine, edible: rate of duty, 10 per cent.
Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-ex 232d. Mucilage and adhesive paste: rate of duty, 15 per cent and li cents per pound.
Charles Avery Dunning: Reduction in rate.


Mr. STEWART:: What is the reduction?


Charles Avery Dunning: It was a combination rate previously, 17J per cent as against Great Britain, plus 2 cents per pound. Under the amendment it will be 15 per cent and 1J cents per pound.


Hugh Alexander Stewart: A very slight reduction.


[Stage Direction]
Item agreed to.
Customs tariff-234. Perfumery, including toilet preparations, non-alcoholic, viz., hair oils, tooth and other powders and washes, pomatums, pastes and all other perfumed preparations, n.o.p., used for the hair, mouth or skin: rate of duty, 15 per cent.
Charles Avery Dunning: A reduction in rate.


Hugh Alexander Stewart: What was the former rate?


Charles Avery Dunning: Twenty per cent.


[Stage Direction]
Item agreed to.
Customs tariff-236. Surgical dressings, antiseptic or aseptic, including absorbent cotton, lint, lamb's wool, tow, jute, oakum, woven fabric of cotton weighing not more than seven and one-half pounds per one hundred square yards, whether imported singly or in combination one with another, but not stitched or [Mr. I.awson.}
otherwise manufactured; surgical trusses and suspensory bandages of all kinds; sanitary napkins, spinal braces and abdominal supports: rate of duty, 10 per cent.
Hugh Alexander Stewart: Is that a reduction?


Charles Avery Dunning: There is a reduction in the rate on surgical dressings. Prior to the agreement it was 12J per cent, and it is being made 10 per cent.


Hugh Alexander Stewart: What were the importations last year from Great Britain?


Charles Avery Dunning: From the United Kingdom, $230,000 worth out of a total import value of $268,000.


[Stage Direction]
Item agreed to.
Customs tariff-238a. Manufactures of celluloid, or of which celluloid is the component of chief value, n.o.p.: rate of duty, 10 per cent.
Charles Avery Dunning: There is a reduction in the rate. Before the agreement the rate was 15 per cent and it is being reduced to 10 per cent. The total imports were valued at $389,000, of which only $21,000 came from the United Kingdom. It is felt that this is a field into which the United Kingdom may enter.


[Stage Direction]
Item agreed to.
Customs tariff-240. Ultramarine blue, dry or in pulp; whiting or whitening; Paris white and gilders' whiting; blanc fixe; satin white: rate of duty, free.
Charles Avery Dunning: No change; binding free entry.


[Stage Direction]
Item agreed to.
Customs tariff-241a. Litharge, other than for battery purposes: rate of duty, free.
Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-242. Dry red lead; orange mineral; antimony oxide, titanium oxide, and zinc oxide such as zinc white and lithopone; white pigments containing not less than 14 per cent by weight of titanium dioxide: rate of duty, free.
Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-243. Dry white lead: rate of duty, 15 per cent.
Charles Avery Dunning: There is a reduction in rate. Prior to the agreement, the rate as against Great Britain was 20 per cent and it is being reduced to 15 per cent. The imports were quite small, being valued at only $1,071 from all countries. The imports from the United Kingdom were very small.

Canada-United Kingdom Trade Agreement


Mr. HEAPS:: I have noticed the reductions being made and I was glad to hear the minister say that in some cases they were very substantial as compared with the agreement of 1932. Could the minister give us the rates in effect when he introduced his budget in 1930? It may be a little difficult to make comparisons as between 1930, 1932 and 1937, as I understand that since 1930 certain items have been split up. I voted against the agreements of 1932 for the same reason that hon. members of the Liberal party voted against them. I felt that as between those agreements and the tariff which the Minister of Finance made effective by his budget of 1930, there was a great increase in the tariff rates. I was just wondering how much greater our tariff is at the present time than it was when the minister introduced what has commonly been called the Dunning budget, increasing the preference to Great Britain.


Charles Avery Dunning: It is difficult to generalize, and it is particularly difficult to give a comparison of the rates affecting the different items. Since 1930 there have been between 400 and 500 additions to or alterations in the items in the tariff. I can tell my hon. friend that in connection with many items the rates provided for in the present agreement are below what was being charged on United States goods under the budget of May 1, 1930. However, that would be an inaccurate generalization if it were taken to be true all through. There are cases where it does not apply. While I think a great deal of the budget of 1930 and its proposals applied to conditions prevailing at that time, I would not say that in connection with every item I would be inclined to do the same thing in view of the conditions which apply in 1937. I have tried to view the matter objectively and deal specifically with each item in accordance with the conditions that prevail to-day, having regard to our trade situation.
My hon. friend must remember that in 1930 the United States came under our general tariff, whereas under the agreement of a year ago it automatically came under our intermediate tariff with respect to all its exports to this country. That is a consideration which must enter in relation to the tariff schedules we are now discussing, particularly in relation to the marginal aspects of the matter as between the British rate on the one hand, and the intermediate rate on the other. I can only suggest to my hon. friend that if on a particular item he is interested in knowing what the rate was in 1930, in some of my notes where the items are comparable in language and incidence to the item
of 1930 I have the information, and shall be glad to give it when I have it. But there has been so complete a recasting of many of the items themselves, that comparison is impossible.


Hugh Alexander Stewart: The hon.. member for
Winnipeg North (Mr. Heaps) has addressed to the minister a question which calls for a statement in addition to that which the minister has made. On the part of many hon. members there is an assumption that since 1930 the tariff has been raised all round the board. It was undoubtedly raised in 1930 and in 1931 in some instances, but as the minister says, a general statement like that cannot apply to the whole tariff, and I think he will agree with me that a very large number of items have been reduced since 1930 and a good many placed on the free list. I do not remember in which year the budget effected this change, but I know that a large number of items, particularly those coming from Great Britain, were placed on the free list. So, as the minister says, it is difficult to make a general statement applicable to the tariff as a whole: there have been increases and there have been reductions; items have been broken up and redistributed; some have been raised and some have been lowered. I think the minister will agree that that is a fair statement.


Abraham Albert Heaps: I think the minister's statement is eminently fair. I did not and could not expect him to have under his hand at the moment information about all the items to which I have referred. But as regards the larger items which Great Britain exports to Canada it is quite possible that the minister may have the information I have requested. What I have in mind at the moment is the textile schedules.


Charles Avery Dunning: When we come to them.


Abraham Albert Heaps: When we come to them I hope the minister will be able to give the information to the house. A few moments ago the minister suggested that the British preference has been considerably reduced through the United States coming under the intermediate tariff.


Charles Avery Dunning: Well, that depends on what I may call the datum point. The degree of British preference was reduced, of course, immediately the United States came under the intermediate tariff, but only by comparison with the degree of preference which existed immediately prior to that time. It would be equally difficult to make comparisons of the degree of preference in 1930 with the degree of preference to-day, for the reasons I have indicated.
1916	COMMONS
Canada-United Kingdom Trade Agreement


Abraham Albert Heaps: That may be true, which shows how difficult it is to generalize on this question.


Charles Avery Dunning: That is right.


Abraham Albert Heaps: But I am under the impression, perhaps wrongly, that the preferences granted under the 1930 budget are probably greater than those granted at the present time, for the possible reason that the intermediate tariff to-day is applicable to goods that are coming in from the United States.


Charles Avery Dunning: But my hon. friend must recognize, of course, that between 1930 and 1935 the intermediate tariff was raised. That is, the intermediate tariff of 1930 applicable to intermediate countries as at that time is not the intermediate of to-day. In many cases the intermediate was increased in 1931. As the hon. member for Leeds said with reference to the tariff generally, and his remarks in that regard apply with greater force to the intermediate than, certainly, to the British rates, and very probably with as great force to the intermediate as to the general tariffs of 1931 and 1932, it is awfully difficult; I doubt if months of study could reveal exactly the situation throughout the whole tariff, and what applies to one item cannot possibly apply to another.
With respect to the item now before us, for instance, I may point out that the rate of 20 per cent which we are now reducing to 15 per cent has been 20 per cent against Great Britain since 1906. I have the information and therefore I can give it on this item. But to say that because this is so with respect to this item, the same thing applies throughout the whole tariff, would not, as the hon. member for Leeds says, be accurate.


Hugh Alexander Stewart: I think the minister did not desire to leave the impression that the intermediate tariff had been increased all along the fine since 1930.


Charles Avery Dunning: No, no.


Hugh Alexander Stewart: There have been reductions as well as increases.


Charles Avery Dunning: Yes, but^-


[Stage Direction]
Item agreed to.
Customs tariff-244. White lead ground in oil: rate of duty, 20 per cent.
Charles Avery Dunning: A reduction in rate, Mr. Chairman. The rate on this item as against Great Britain has been 30 per cent since 1906, and the proposal before us is to reduce that rate to 20 per cent.


Hugh Alexander Stewart: What are the imports?


Charles Avery Dunning: Imports 16,710 pounds, of which 15,000 pounds came from the United Kingdom. We have a tremendous production in Canada, the last figures of which, I believe, are 9,400,000 pounds.


John Gordon Ross: Have we exports?


Charles Avery Dunning: No export figures. They are included in the figures given for the previous item, which were $14,000 worth, 2,228 hundredweights of exports, chiefly to the United Kingdom.


[Stage Direction]
Item agreed to.
Customs tariff-245. Ochres, oehrey earths, siennas and umbers: rate of duty, 5 per cent.
Charles Avery Dunning: No change.


Some hon. MEMBERS:: Carried.


Hugh Alexander Stewart: Do not try to rush us on this side, and we shall get along a little faster. Do not call "carried" before the Chairman announces the number of the item. Will the minister tell us what the present rate is, and what is the reduction?


Charles Avery Dunning: Under 245 there is no change.


Hugh Alexander Stewart: What are the imports and exports?


Charles Avery Dunning: Ochres, oehrey earths, siennas and umbers, $54,000 of imports, principally from the United States. Our exports do not accurately reflect this item. "Mineral pigments, iron oxides, ochres etc." is the description in the trade of Canada for the exports: they amounted to $111,000, some of which went to the United Kingdom. There is a two-way trade in these commodities.


[Stage Direction]
Item agreed to.
Customs tariff-246. Oxides, fireproofs, rough stuff, fillers, laundry blueing, and colours, dry, n.o.p.: rate of duty 12i per cent.
Charles Avery Dunning: This is a reduction in rate. The existing rate is 15 per cent, which is being reduced to 12^ per cent. Here again, the hon. member for Winnipeg North will be interested to learn, the rate has been 15 per cent since 1906. Our imports total 6,458,000 pounds, $616,000 in value; from the United Kingdom, 1,204,000 pounds, valued at $170,000. Our exports-again that general item of "mineral pigments, iron oxides, ochres etc." covers it-were 39,009 hundredweights, valued at $111,000, of which only S10,000 worth went to the United Kingdom.


[Stage Direction]
Item agreed to.

Canada-United, Kingdom Trade Agreement
Customs tariff-246b.	Stains and oxides,
valued at not less than 20 cents per pound, for use exclusively as colouring, constituents in the manufacture of vitreous enamels and pottery glazes; and liquid gold paint, for use exclusively in the manufacture of tableware of china, porcelain or semi-porcelain: rate of duty, free.
Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-247.	Liquid fillers, anticorrosive and anti-fouling paints, and ground and liquid paints, n.o.p.: rate of duty, 17J per cent.
Charles Avery Dunning: A reduction in rate, Mr. Chairman. The existing rate of 20 per cent, as will be noticed in the sheet, is reduced to 17J per cent. The 20 per cent rate has existed since 1926. Our imports from the United Kingdom last year were 27,000 gallons, valued at $38,000. Our exports are included in the general item. We exported 571,000 gallons, on which 301,000 went to the United Kingdom.


Mr. STIRLING:: Is there any Canadian production?


Charles Avery Dunning: The latest figures are for 1934. I can give each item but the quantity is large.


Grote Stirling: Considerable quantities?


Charles Avery Dunning: Yes. It amounts to seventeen or eighteen millions.


Ernest Edward Perley: Do we import any from the United States?


Charles Avery Dunning: We imported 106,000
gallons valued at $172,000.


[Stage Direction]
Item agreed to.
Customs tariff-ex 247, 247a. Artists' and school childrens' colours; fitted boxes containing the same; artists' brushes; pastels, of a value of one cent per stick or over; artists' canvas, coated and prepared for oil painting: rate of duty, free.
Hugh Alexander Stewart: This would appear to be a subdivision of the other item.


Charles Avery Dunning: It is a rewording of two items. In giving the figure of between sixteen and seventeen millions of Canadian domestic production I was including all of the production comprised within these three items of tariff description. The item with regard to artists' colours, et cetera, is intended to take that portion out of the general item and reduce the rate.
In tariff item 247a the rates of duty are free, 27i and 30 per cent. This item was inserted in the budget of 1935 to provide free entry under the British preferential tariff for artists'
and school childrens' colours, artists' brushes, pastels and canvas. As it has stood in the tariff, the item defined artists' and school childrens' colours as being in tubes, cakes, pans, and vials, and during the negotiations last summer it was represented by the British government that this reference in the wording to method of packing or nature of container was having the effect of excluding from the tariff item considerable quantities of artists' colours. Presumably when the rate was inserted in 1935 the intention was to permit the entry of artists' colours, and the government feels the wording then introduced regarding the nature of the container was meant to be descriptive rather than restrictive. In order that the presumed original intention may operate in administration, opportunity is being taken of the present negotiations to reword the item, leaving out the restrictive words regarding the style of package. This item i3 therefore one of seven in this agreement which bind or freeze an existing rate on United Kingdom goods and incidentally enlarged the scope of the item, to this extent reducing the rate of duty on the part of the commodities affected.


Grote Stirling: What has happened to the duty?


Charles Avery Dunning: It was carrying twenty per cent. Of course, it was scattered through the tariff. The qualification in the old item as to the nature of the container determined what particular tariff item it would fall into, because of the contents in the container plus the container. I am informed that most of those which could not get in under the item of 1935 earned twenty per cent.


Grote Stirling: Now all are free.


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: What were the imports last year?


Charles Avery Dunning: There was $88,000 worth of imports of which $67,000 came from the United Kingdom, and in addition there was $17,000 worth of artists' brushes, of which $9,700 came from the United Kingdom. There was $2,386 worth of artists' canvas, of which $2,200 came from the United Kingdom.


Hugh Alexander Stewart: Some of that would come in free under the item and some would bear a duty?


Charles Avery Dunning: I should say that between 80 and 90 per cent would come in free.


[Stage Direction]
Item agreed to.
1918	COMMONS
Canada-United Kingdom Trade Agreement
Customs tariff-248.	Paints and colours,
ground in spirits, and all spirit varnishes and lacquers: rate of duty, 75 cents per gallon.
Charles Avery Dunning: There is a reduction in rate.


John Gordon Ross: What are the imports and' exports?


Charles Avery Dunning: The imparts of lacquers were 14,544 gallons, valued at 846,000, of which 1,352 gallons came from the United Kingdom, valued at $4,500. The rest came from the United States. We were also large exporters of varnish, which in the exiport classification includes this item of lacquers. I suppose the description is really the same. We exported 17,700 gallons or slightly more than our total imports, and our exports were valued at $23,000. Some went to the United Kingdom; practically all of it went to different countries of the British commonwealth.


[Stage Direction]
Item agreed to.
Customs tariff-249.	Varnishes, lacquers,
japans, japan dryers, liquid dryers, and oil finish, n.o.p.: rate of duty, 15 cents per gallon and 10 per cent.
Charles Avery Dunning: This is a reduction in rate. Perhaps it will serve the purpose of the committee if where there is a reduction in rate I give information with respect to imports and production without being asked. The existing rates are twenty cents a gallon under all tariffs plus an ad valorem of fifteen per cent in the case of Great Britain. The reduction is from twenty cents a gallon to fifteen cents specific, and from fifteen per cent ad valorem to ten per cent on the ad valorem incidence of the item. Last year we imported 90.000 gallons, valued at $174,000, of which 83,000 gallons came from the United States and 5,800 gallons from the United Kingdom.


John Gordon Ross: Is there the same reason in each case for the ad valorem and specific?


Charles Avery Dunning: Yes. The variation in value of these commodities would render either one of the forms of duty alone very variable in incidence as applied to different articles. The combination does have an equalizing tendency with respect to different values of commodities comprised within the item.


Hugh Alexander Stewart: Do we export goods of
this class?


Charles Avery Dunning: They are included in the varnish figure.


[Stage Direction]
Item agreed to.

Customs tariff-250. Paris green, dry: rate of duty, free.
Charles Avery Dunning: We imported from the United Kingdom 33,500 pounds valued at $5,500. The present rate from the United Kingdom is five per cent, which has been unchanged since 1906, and the item is made free from' Great Britain under the agreement.


Ernest Edward Perley: As the whole importation is from Great Britain, this Would be a very good test case to show whether the consumer gets any benefit from the reduction in rate.


Grote Stirling: Is there any Canadian production?


Charles Avery Dunning: It is not separately
recorded; there are not three concerns manufacturing it. As my hon. friend knows, unless three concerns are manufacturing, the bureau of statistics does not keep any record. It is manufactured in Canada, however.


Ernest Edward Perley: As the whole import is from the United Kingdom I wonder if the minister does not consider it rather curious that we should be taking off this five per cent unless it will give some benefit to our own people. Evidently it will not help the British exporter.


Charles Avery Dunning: Well, it is one of those
things that helped me a great deal in asking for continued free entry into the British market for Canadian goods. There are many such items as to which I could not advance very strong arguments against lowering the duty when asked to do so. Some of them are veiy much a matter of good will.


Ernest Edward Perley: One of the many concessions the minister was forced to make.


Charles Avery Dunning: I would not say "forced" to make. There was not any force, but I did evince a willingness to consider what was in the interests of the British so far as it did not, in my judgment, conflict with the interests of Canadian producers and consumers.


Ernest Edward Perley: Strongly urged,
may we say.


Charles Avery Dunning: I do not remember strong urging on paris green. It is not a pleasant subject.


James Earl Lawson: What puzzles me is why
they should want a reduction, even on the basis of good will. If they have the market and have the business, any tariff on it would surely be a matter of revenue for Canada. Apparently it is purely a tariff for revenue.

Canada-United Kingdom Trade Agreement


Charles Avery Dunning: The intermediate tariff
is 7i per cent; their margin was only 2| per cent from the intermediate.


James Earl Lawson: But I understood the minister to say that all our importations came from Great Britain.


Charles Avery Dunning: Yes, with a margin of 2| per cent. With their generally rising costs of production in all lines, there was a disposition on their part to ask for an increase in margin wherever it could be arranged, and this was one of the cases.


Mr. KINLEY:: How many pounds were
imported?


Charles Avery Dunning: 33,510 pounds.


John Gordon Ross: As the hon.
member for Argenteuil (Sir George Perley) said, this is a good chance to find out whether or not the consumer gets the benefit. If he does not get the benefit during the next year, I suggest that the minister reduce the other rate to free in order that the consumer shall get the benefit. This article is important to agriculture in this country; it is used in primary production. My hon. friends on the other side always think of the producer, seldom of the consumer.


Some hon. MEMBERS:: Oh, oh.


John Gordon Ross: My hon. friends
a moment ago asked:	What advantage are
the producers of Great Britain going to get? Why can they not think once in a while of the Canadian consumer?


Grote Stirling: That is exactly whom
we are thinking of.


James Earl Lawson: My hon. friend from Moose Jaw is very unfair in his statement. We do consider the consumer, so much so that I venture to suggest that it is possible that we see far enough ahead now to know that there will not be any reduction in prices to the consumer. The minister told the whole story of that a moment ago, when he told us that costs of production and prices in England are increasing.


Charles Avery Dunning: Generally.


James Earl Lawson: Generally costs are increasing-the wage scale and other factors. The net result is going to be that the government of Canada is going to lose its former revenue on this item. I am not criticizing them for doing so; I simply want to make it plain that they are giving up this revenue and there will be no reduction in price to the consumer; the difference will go to the British 31111-121
producer. In return, if the minister adopts the suggestion of my hon. friend-which of course he cannot do-


John Gordon Ross: Oh, yes, he can.


James Earl Lawson: -to reduce the intermediate tariff to free, he has got to maintain a certain spread-


Charles Avery Dunning: No.


James Earl Lawson: Is this not one of those items? At any rate, if he makes the intermediate tariff free next year he defeats the very purpose he has in mind in reducing the British preferential this year. The reason he is reducing it this year, on his own statement, is for the purpose of good will, to put the other chap with whom he was negotiating -not bargaining-in a good humour. Therefore if he follows the suggestion of my hon. friendi and makes the intermediate tariff free next year, he defeats the whole purpose he has in mind in negotiating the trade agreement.


Charles Avery Dunning: It is rather a small matter we are talking about, because the total revenue on the basis of last year's imports would' be about $250. I do not attach very great importance to it either way.


[Stage Direction]
Item agreed to.
Customs tariff-252.	Shoe-blacking, shoemakers' ink, shoe, harness and leather dressing, and knife or other polish or composition, n.o.p.: rate of duty, 12J per cent.
Charles Avery Dunning: A reduction in rate. Shoeblacking, at present 15 per cent in the tariff, is reduced to 12| per cent. This is an item which has stood at 15 per cent since 1906. Our total imports come chiefly from the United Kingdom, $278,000 worth out of a total of $373,000 imported. In addition, there is a sub-item of polish or composition n.o.p.- $125,000 worth out of $163,000 of imports came from the United States. Our exports, none. Our total production in 1934 was $1,663,000.


[Stage Direction]
Item agreed to.
Customs tariff-254. Gums, viz: Australian, copal, damar, elemi, kaurie, mastic, sandarac, Senegal, tragacanth, gedda, and barberry; gum chicle or sappato gum, crude; lac, crude, seed, button, stick and shell; ambergris; Pontianac: rate of duty, free.
Charles Avery Dunning: No change.


[Stage Direction]
Item agreed to.
Customs tariff-256. Printing ink: rate of duty, 12i per cent.
Charles Avery Dunning: No change. Present rate bound. .	....


[Stage Direction]
Item agreed to.
[Stage Direction]
1920	COMMONS
Canada-United. Kingdom Trade Agreement
Customs tariff-259a. Sesame seed oil, crude: rate of duty, free.
Charles Avery Dunning: No change.
Item agreed' to.
Customs tariff-264.	Essential oils, n.o.p.,
including bay oil, otto of limes, and peppermint oil: rate of duty, free.


Charles Avery Dunning: No change. Free entry bound.


[Stage Direction]
Item agreed to.
Customs tariff-ex 265a. Halibut liver oil, crude or refined: rate of duty, free.
Charles Avery Dunning: A reduction in rate on halibut liver oil, crude or refined. The rate of duty at present applying against Great Britain is 124 per cent. It is proposed to make this item free. Our imports were 20,400 gallons last year, valued at $27,800. Of this amount 12,600 gallons came from the United States and only 200 gallons from the United Kingdom. I am afraid I have not accurate export statistics relating to halibut liver oil, we have not that separate.


Ernest Edward Perley: Do we manufacture any in Canada?


Charles Avery Dunning: Yes, there is manufacture in Canada and we export considerable, but the figures I now give include other fish oils as well as halibut liver oil; 1,243,000 gallons, valued at $302,800. The United Kingdom was our best customer, taking 584,000 gallons, valued at $129,000.


Grote Stirling: In view of the very considerable Canadian production, is not the cut from 124 per cent to free very considerable?


Charles Avery Dunning: We are large exporters and very small importers from the United Kingdom.


Thomas Reid: Has the minister any information as to whether halibut liver oil from Canada enters Great Britain free? I think there are only three countries in the world that manufacture halibut liver oil. It is becoming quite an industry in Canada, and due to the severe competition from Japan, which is now entering the market, it is worth watching.


Charles Avery Dunning: That is just the point. Our halibut liver oil does enter Great Britain free, and I was anxious to preserve that free entry.


Grote Stirling: The minister has not the figures for halibut liver oil separate?


Charles Avery Dunning: No, the export figures
are under the general heading, "other fish oils." We have never had a separate item before for halibut liver oil.


Mr. TOLMIE:: Could the minister give us the amount of whale oil exported


Charles Avery Dunning: I am afraid that is also included in the total I gave for "other fish oils."


[Stage Direction]
Item agreed to.
Customs tariff-265b. Cod liver oil, crude or refined: rate of duty, free.
Item agreed to.
Customs tariff-276b.	Cotton seed and
crude cotton seed oil, when imported by manufacturers of cotton seed meal and refined cotton seed oil, for use exclusively in the manufacture of such commodities, in their own factories: rate of duty, free.
Charles Avery Dunning: No change.


Mr. HARRIS:: What were the imports?


Charles Avery Dunning: Imports of cotton seed and crude cotton seed oil for the manufacture of meal, and refined oil imports, amounted to $1,476,000, of which $1,438,000 came from the United Kingdom and $30,000 from China. We have no production in Canada. [DOT]


Joseph Henry Harris: How many pounds?


Charles Avery Dunning: I am sorry I have not the figure in pounds. I can get that and give it to my hon. friend later on. It will be in the trade statistics.


Joseph Henry Harris: Never mind; I have it here.
I should like to make a few observations with regard to cotton seed oil, Mr. Chairman. I am sure the minister will agree that while it comes here from the United Kingdom the points of origin are Egypt and India, so when we consider this item in terms of trade perhaps we would be justified in short-circuiting England, Ireland and Scotland and getting right back to the point of origin, which in the main is India. Last year we imported from India goods to the value of $8,245,194.


Charles Avery Dunning: From India direct?


Joseph Henry Harris: Yes.


Charles Avery Dunning: That is not affected by this item.


Joseph Henry Harris: Let me get back to the point I was trying to make. If one should suggest any measure of consideration for the producers of animal oils and fats in Canada, in view of this tremendous importation of cotton seed oil, which in this one division

Canada-United, Kingdom Trade Agreement
amounts to 25,597,600 pounds-and the minister knows there are two other divisions- the thought would immediately come to one: Well, but we must not disturb our trade with the country originally producing the cotton seed. That country is principally India, and to a lesser degree China.
As I started to say a moment ago, we imported from India $8,245,000 worth of goods and exported $2,473,000 worth. Does the importation of this huge amount of cotton seed oil or other products of the cotton seed help the agricultural Englishman, Irishman, Scotsman or Welshman, or does it not rather help our friends in India, who grow the cotton? Our friends overseas, who the other evening were called sharp traders or shrewd traders or something like that, are the people who sit in their offices and pull the strings, bring the seed from India to England, press it and send the resultant oil to Canada to the extent of some 25,000,000 pounds. Does that trade actually help our fellow Englishman, Irishman or Scotsman, as the case may be, the individual agricultural worker or artisan, or does it rather help those large organizations who handle this business? That is the point I want to make, in order that in considering this item hon. members of the committee may start with the essentials and give some thought to the man who originally produces the material.
When this seed gets to England it produces fifteen per cent cotton seed oil, forty-five per cent mill feed which is fed to cattle and hogs in England, twenty-nine per cent hulls and five per cent cotton linters. The oil is shipped to Canada. It is a neutral oil, limpid and wholesome looking, which is treated with hydrogen gas to bring it to a consistency that will enable it to compete with a similar product which might be made in Canada from commodities we in this country should be able to produce.
I should like the committee to bear with me for five or ten minutes while I deal with the products I have in mind. We produce animal oils and fats in Canada, and we could produce a great deal more. I have an idea in the back of my mind that the white race needs animal fats. I have another idea in the back of my mind that in the years to come it will be proved that while the peoples of India and Africa, where the largest proportion of oils of this kind come from, may be able to live on vegetable oils, we in this country will be much better off if we stick to the product which a kind providence has given us in abundance in our own country for the strengthening of the white race as against the other races. We require a certain amount of fat to sustain life. I should like to read into
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the record various opinions by medical men as to the amount of fat required by a human being in order to sustain himself. First I quote from a book published by Robert Hutchison, M.D., Edinburgh, F.R.C.P., physician to the London hospital and also to the children's hospital '' London, England; author and lecturer on medical subjects, entitled Food and the Principle of Dietetics. He says that the maximum which a human can consume each day is 150 grammes of fat. This can be absorbed daily without much difficulty, but with most persons anything above 100 grammes in winter or less than 100 grammes in summer would be apt to produce disorders of digestion. Many authorities, however, recommend that the daily ration of fat should not fall below 75 grammes.
McLester, the American author, in his book Nutrition and Diet in Health and Disease, quotes the eminent German authority Voit as prescribing 56 grammes or approximately two ounces of fat daily. Samson, another eminent and widely quoted United States authority, estimates that the human system consumes 100 grammes per day, or three and a half ounces. For easy figuring, and in order that members of this committee may understand the foundation I want to lay for my argument, suppose we make the daily average 100 grammes or 700 grammes per week. At 28i grammes to the ounce, that means approximately 25 ounces per week or, roughly, a pound and a half. One pound of that may be considered as being made up of straight fat, such as butter, oils and so on, and we may say that the other half pound is assimilated during the week in the consumption of pies, pastry, fried foods and so on. So we will say one pound of straight fat per person per week is required as a maximum. At fifty weeks in the year that would be fifty pounds per year per person. Ten million of our people using fifty pounds per year each, means that the Dominion of Canada requires
500.000.	000 pounds of fat in order to sustain
and maintain her people. I make this statement, that we Canadian people and particularly the agriculturists-and to them I address these	remarks-can produce in Canada
500.000.	000 pounds of fat each and every year to sustain our own people.
For fifteen years I have sat in the house and have heard the agriculturists talk-mostly about wheat, of course-and have heard them say that they are the backbone of the nation. If that be the fact, then the challenge I put up to the agricultural industry is this: If you are the backbone of Canadian industry and of Canada itself, then produce sufficient

Canada-United Kingdom Trade Agreement
fats in Canada to sustain and maintain our people. Five hundred million pounds are required. I am not going to stress butter.


Charles Avery Dunning: Do I understand the hon. member to say we need 500,000,000 pounds exclusive of butter?


Joseph Henry Harris: No, inclusive-all fats. The dining room of the cow is where the butter fat comes from. When you slaughter her, you render her down and get another kind of fat. That fat is animal fat, like the fat which comes from the suet of a steer. It is all animal fat. True, it is only three or four per cent out of the milk from the cow, but nevertheless I maintain that that is animal fat, and for all practical purposes is part and parcel of the fat requirements of Canada.
The dietitians from whose records I have quoted certainly say that butter fat is a good fat for this or any other people, and to a great degree is preferable to many of the vegetable fats which are coming into this country in increasing amounts. While I am discussing this subject I should like one of the pages in the chamber to pass this document to the Minister of Finance. It shows that a baking company uses nothing else but one hundred per cent butter in its baking. Then, so long as the minister and I are on the same ground, that butter is an animal fat-


Charles Avery Dunning: I did not say that.


Joseph Henry Harris: I did not wish to get into a butter discussion to-night. Let me say briefly that we can produce 2-50,000,000 pounds of creamery butter per year.


Charles Avery Dunning: 250,000,000 pounds?


Joseph Henry Harris: Yes, I believe that is about correct.


John Gordon Ross: It used to be about 280,000,000.


Joseph Henry Harris: It is 250,292,677 pounds, to be exact. Over and above that, we produce on the farms of Canada, a considerable quantity of dairy butter. In round figures the butter produced on the farms, and perhaps consumed there to a large degree, amounts to 100,000,000 pounds. I shall not quibble over a million or two, because there will be some left over when I have finished what I have to say. There we have accounted for 250,000,000, plus 100,000,000 pounds, or a total of 350.000,000; and we are looking for
500,000,000.


Charles Avery Dunning: There is the bacon to come.
[Mr. Harris.j


Joseph Henry Harris: The bacon is coming. We will bring home the bacon, although we must say that in this project we do not seem to have much success. Before we reach the bacon let us deal with beef.
In the abattoirs under government inspection in Canada, we slaughtered in the year 1935 832,540 beef cattle, averaging 1,100 or 1,200 pounds in weight. In the farming centres, beef rings, small slaughter houses and uninspected institutions throughout the length and breadth of Canada we have a figure equal to that, making a grand total in the year 1935 of 2,035,698 head slaughtered in Canada. It is on record that each and every head of beef averaging 1,100 pounds will yield an average of 45 pounds of edible fat or tallow. Over and above that, in the inspected abattoirs we slaughter 589,066 calves and veal, and 897,314 head of sheep and lambs. The total of sheep and lambs slaughtered throughout Canada in uninspected and inspected abattoirs is 1,696,061. If we add the calves, the veal, the sheep, and the lambs we have another figure of about 2,000,000. Each lamb, calf or sheep will average five pounds of edible tallow or fat. You have 45 pounds from beef, and 5 pounds from sheep, lambs and calves, making a total of 50 pounds. Then, 50 pounds for
2.000.	000 head of stock gives a total of 100,000,000 pounds of edible fat. If we add that
100.000.	000 pounds to the 100,000,000 pounds of dairy butter and the 250,000,000 pounds of creamery butter, we now have a total of 450,000,000 pounds.
As the minister has said, we have not touched the bacon, or brought home the bacon. Only 50,000,000 pounds more is required to make up the total, and we have all the hogs to deal with. In the inspected abattoirs we slaughter 2,969,987 hogs, and adding the figure from the uninspected institutions we get a total slaughter of 5,415,289, or as is commonly said 6,000,000 hogs per year. A slaughtered hog produces 15 pounds of edible fat. With 6,000,000 hogs at 15 pounds each we have a total of 90,000,000 pounds. In our computation we already have 450,000,000 pounds if we add that 90.000,000 it will bring our total up to 540,000,000 pounds of edible fat available in Canada to-day to supply the requirements of the Canadian people. The amount required, according to the best authorities in dietetics, is barely 500,000,000 pounds. Therefore I make the statement that we can supply the edible fat requirements of our Canadian people.
I say at once that if your tastes demand vegetable oils of some kind or another, or cotton seed oil, and if you want to pay for them, by all means have them. If we take

Canada-United. Kingdom Trade Agreement
the figures the minister gave a minute ago we find that we imported last year 25,000,000 pounds of cotton seed oil, at a cost of $1,476,823, averaging about 5-7 cents per pound.


Charles Avery Dunning: But that is not edible purposes.


Joseph Henry Harris: Thank you, sir.


Charles Avery Dunning: I call the hon. member's attention to the wording of the item: "When imported by manufacturers of cotton seed meal and refined cotton seed oil, for use exclusively in the manufacture of such commodities."


Joseph Henry Harris: Yes, "refined cotton seed oil"; let me finish my sentence. The average cost was less than six cents per pound. All right. Now, the minister has said that it is not imported for food, that it is inedible. I do not think he meant to say that.


Charles Avery Dunning: I just quoted the item.


Joseph Henry Harris: But he knows, I know, and parliament should know that these products come into Canada and are indexed in this blue book as "not for food," when actually they are "for food." When those oils arrive here they are refined and sold throughout the length and breadth of this country as food. These statistics are compiled year after year and the Canadian people are hoodwinked into believing that these products are not being used for food. When you slaughter beef cattle you insist upon government inspection in the abattoirs, but on the other hand you permit tank steamer loads of these commodities to come into this country, labelled as being "not for food purposes," shipped without any inspection or control, and refined and sold as food to the tune of 103,000,000 pounds last year. That is what is going on.


Mr. GOLDING:: How much was made in 1934?


Joseph Henry Harris: Roughly about 82,000,000 pounds, and about 56,000,000 pounds in 1933. Back in the oleomargarine days when the Liberal party was in power the manufacture amounted to only 4,475,000 pounds. A cry went up to high heaven against these importations. Not only were the importations stopped, but the product could not be made in Canada. Since I have been in this house, that figure of 4,475,000 pounds has increased until in 1935 it reached 103,000,000 pounds. A good deal is going to be said about this before we are much older. The Minister of Finance must be made to feel that something should be done about it.
I want to make this point abundantly clear. Away back in the oleomargarine days when the manufacture amounted to only 4,475,000 pounds, a conference was held in Ottawa on May 30, 1923. The present Prime Minister (Mr. Mackenzie King) was in the chair, and among those present were the Hon. G. P. Graham, the Minister of Justice (Mr. Lapointe), the late Mr. Robb, the hon. member for Melville (Mr. Motherwell), Mr. Stewart and other hon. members. In order to save time I shall not give the prefixes and affixes to the names of all these gentlemen. The conference was considering this item,


Charles Avery Dunning: Oleo.


Joseph Henry Harris: Oleomargarine. It was decided to stop the blending of our animal fats with the vegetable fats from other countries in order to make oleomargarine. The figures I have given refer only to vegetable oils, such as cotton seed oil, and yet only thirteen short years ago the government of that day prohibited the use of Canadian materials in manufacturing this particular product.
While we are bringing in these large quantities of cotton seed oil, we are shipping out of this country quantities of butter and fats of all kinds. It is only a few years ago that provision was made for a bonus on the export of butter to the extent of $100,000. Yet we let this other oil come in free of duty. I ask hon. members to note the geography of this country. We are bounded on the south for 3,000 miles by a country with a population of well over 100,000,000. Hon. members will ask themselves, as I have asked myself: What are they doing? There is an administration in power in Washington which some people consider as being akin to the administration in power here. Even though the party in power in the United States do not like to be called protectionists, they realized the menace to their home industry and- they passed certain measures to the detriment of Canada. Our economic and industrial situation is similar to theirs. Their markets are our markets. Ever since Chicago has been a city it has been the fat market of the north American continent. It bears the same relation to Toronto as it does to New York.
What has the United States done during the last few years in connection with this tremendous flood of oils coming into their country? On June 21, 1936, they put an excise duty of three cents per pound against Canadian animal oils and fats. I wish the minister would use some of the good will which he radiates when dealing with these
1924	COMMONS
Canada-United, Kingdom Trade Agreement
items in an effort to bring about some reciprocal treatment on the part of Washington. As I say, on June 21, 1936, the United States Congress passed what is known as the Bailey amendment. That amendment provided for a duty-I must not call it a duty; it was an excise duty-upon animal oils and fats. Democrat governments do not place duties upon commodities, they place excise duties against them. If hon. members can tell the difference between the two I wish they would let me know. Excise duties are provided for when the Democrats are in charge, and when the Republicans are in power tariff duties are provided for. In this case the excise duty was three cents per pound on animal products. There was already one-half cent per pound duty, so this made the total rate 34 cents and 44 cents per pound average on vegetable oils. In addition they passed section 702, which provided for a processing tax of 3 cents per pound on certain fats, and 44 cents per pound on the other group of fats. The result was that the commodities which we are now discussing were faced with a tax of 34 cents per pound in one case, 44 cents per pound in another: It was 5 cents per pound on cocoa-nut oil, which I shall deal with later, and 4 cents on peanut oil-I shall leave that until later.-when entering the United States from the countries to which I have just referred. They slowed down the importation into the United States of these products. They shut off Canada's normal exports of 30 to 50 million pounds of animal fats into the United States. They slowed down the imports from the world of a billion pounds of vegetable oils. Yet these world sources of supply have free access into Canada, with the result that we are finding the Canadian market demoralized, and before we are twelve months older the fat production of the farmers of Canada will have been so disastrously affected that something will have to be done. For the moment, due to the world armament situation and the fact that these fats produce from 10 to 13 per cent glycerine-and the glycerine market jumped from 6 cents eight or nine months ago to 22 cents in New York to-day- and there is 10 per cent glycerol in these products-there has been a world market firming of the price.


Charles Avery Dunning: Of all of them?


Joseph Henry Harris: Except butter.


Charles Avery Dunning: Yes, except butter.


Joseph Henry Harris: And as I pointed out during the few remarks I had the pleasure of making in a previous debate, when this artificial stimulus which has been given to these

markets and affects them to-day starts to fade, what are we in Canada, an agricultural country, going to do about it? That is the position in which we find ourselves as regards this item. Seeing that we buy, as we do from India, one of the countries of origin, $8,900,000 worth of products and sell them only $2,000,000 worth, and recalling that the balance of trade with Egypt, the other producer of cotton seed in the hull, is against us, if some little thing were done to help the Canadian producer of fat products you would not be hampering freer trade. As long as you give a preference to the Englishman-and he is the man you are thinking about when you are dealing with this schedule-he is satisfied.
When this 10 per cent preference was provided, these goods were being treated in Germany, Denmark, France and the Netherlands, more particularly, but that preference diverted the trade to England, with the result that a normal pressing of only 1,300,000 long tons per year jumped to a volume last year of pressed nuts and seeds of all kinds of 1,870.000 long tons. The Englishman, then, is satisfied. As he expressed it to me during a conversation in 1932:	Give us a preference and we will get the trade. England is a workshop; the Englishman knows how to handle trade. Perhaps you and I, sitting in this house, think we are helping the English artisan or farmer. If I could think of a better word than manipulator I would use it; I would not want such an expression to go to my English friends overseas, but the man who operates that English plant by machinery employs but few men and handles millions of pounds of raw materials provided by the colonies.
Some of my friends ask:	Who in Canada
imports all this oil? Ninety per cent of it is imported by just five firms. I am going to mention their names. I realize that they are not here to protect themselves, but every word I say will be a word of congratulation and commendation for their conduct of their business. They know how to run their business, and if I commend and congratulate them I should not be condemned for mentioning their names.
Swift and Company. I do not need to say anything about where they come from or who they are. They are a very efficient organization.
Lever Brothers. A sizable portion of their business is the manufacturing and selling of edible oils to the trade. They have connections in England. They are a great credit to Canada, and an efficient organization if there

Canada-United Kingdom Trade Agreement
ever was one. We are glad to have them here. So we have one controlled in the United States and one in England.
Next, Proctor and Gamble, Hamilton "Crisco"-controlled, operated and run from Cincinnati. If you want to sell them anything, go down to Cincinnati as I have done. They are a high-class United States concern and deserve a lot of credit.
Then there is the Palmolive Company, promoters of that schoolgirl complexion you hear so much about, the Canadian organization being a branch of the United States organization.
There are four of the firms, and to what extent they are Canadian you and I may judge, but 1 say they are well organized, well run and efficient organizations, giving a great deal of work to our Canadian people, and we are glad to have them here.
Incidentally, if I may be permitted to interject a personal note-I have nothing whatever to do with any packing house, and at no time in my career have I had a dollar in one. Because my name happens to be Joe Harris I hope I shall not be confused with the Harris Abattoir Company. They are a great firm and a credit to Canada, and I know the men in charge, but I have nothing whatever to do with the organization, and never had. So any remarks I may make in this house are not coloured or influenced by the people with whom I have the pleasure of doing business, but are made primarily on behalf of the Canadian agriculturist. By making a speech of this sort on behalf of our agriculturists I take some risk of not being reelected in a city constituency. If I was speaking with sole regard to my position as representative of a city constituency, they might want cheap oil so that the poor people could get cheaper products with which to maintain themselves.
Fifth, Canada Packers. Canada Packers is a great credit to Canada. It is a wonderful thing that Canadians have built up such an organization as this to process products produced by our people on behalf of our people. Criticize them as you will; I still say they are a great credit to Canada.
This little group of five firms imports
25.000.	000 pounds of cotton seed oil and
60.000.	000 pounds of palm oil, and so on all down the line, and I venture the opinion that by April 1 of this year there will have been imported into this country 250,000,000 pounds of these products. The minister says, mark you, they are not for food; but I venture the opinion that 125,000,000 pounds are brought in for no other purpose but to be refined and made into products that will be sold in Canada for food, and sold, as I said a while ago, with
very little inspection by the Minister of Agriculture, who 1 observe has retired one seat further back. He knew about this situation last May. He has known about it for some years. But he is so wheat-tweet-tweet-minded that I am afraid he cannot get a little oil into his system. I recommend that he get a little into his system.


Charles Avery Dunning: Vegetable oil?


Joseph Henry Harris: I recommend some good stearine. This is a serious problem for Canada. The price structure alone is something that we should give consideration to. If you take this 25,000,000 pounds of cotton seed oil and turn it into a product that can be used, say for shortening, do you not replace butter? You say you do not replace butter, you do not replace lard, you do not replace beef dripping. I say that you do replace these commodities. I sent a little clipping to the minister. Here is a baker in Hamilton using 100 per cent butter for his shortening-


Charles Avery Dunning: And is sufficiently unique to boast about it.


Joseph Henry Harris: That is right; that is important. I appreciate that, coming from the minister; and perhaps there is some line of argument in the back of his mind right now. Perhaps he would suggest that more should be done in the direction of producing our own Canadian products. But I say that we have to face the situation where we have
25,000,000 pounds of cotton seed oil coming in at 5-7 cents per pound, and we have to ask ourselves this question: How is the man who is collecting milk from cows yielding Zi per cent butter fat to compete with a product of that kind? That product is dumped on the St. Lawrence river from a tank freighter through a six inch pipe line and it competes with the products of 40,000 dairy farmers in Saskatchewan. That is the unhappy position in which providence has placed us; and providence will say to you if you ask him about it, "God helps those who help themselves." I say that the time has come for us to help ourselves in this particular problem.
The minister closed his speech the other night with a reference to the consumer. If something is being done, either by a processing tax or by an excise tax or by a duty to help out the situation, I can imagine my hon. friend opposite-I have forgotten his constituency, but he knows whom I mean-saying that the cost to the consumer is going to rise. Cotton seed oil was the first product to be denatured of its odour and peculiar taste and made into a limpid, odourless, tasteless, one hundred per cent oil. This was accomplished in 1887 by the Wesson process, which
1926	COMMONS
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was finally perfected about 1900. While in New York a few days ago I took the liberty of asking for some invoices in connection with this product. Mark you, it pays an excise duty of 3 cents per pound when the commodity enters -the United States. The information I got was with respect to the Ward Baking Company, a reliable concern, operating at 67th and LaSalle streets, Chicago, Illinois-this happens to be a Chicago invoice. These people bought from the Wesson oil concern nineteen drums and thirteen drums, a total of 11,621 pounds at 11J cents per pound, valued at $1,365.47.


Charles Avery Dunning: Is that the refined
product?


Joseph Henry Harris: Yes, vegetable oil product. Again, the Ward Baking Company for their New York factory bought from Best Foods Incorporated, twenty-seven drums of vegetable compound No. 1, 10,910 pounds, at 11| cents per pound, or $1,281.93. Mark this carefully. In the body of the invoice there appear the following words:
This invoice includes processing tax as levied under section GO21-
In that case the tax is under the Bailey amendment. I quote from the invoice:
This invoice includes processing tax as levied under section 602i of the Revenue Act of 1934. Should this tax be held invalid and unconstitutional and should it be recovered by or refunded to us by the United States of America or any collector of internal revenue, we agree to return such tax to you less a proportionate amount of expense that may be necessary in connection with the collection of such tax from the government, upon your agreement to repay same to us should we be legally required to repay same to the government or anyone else legally entitled thereto.
That is to say, they would give the tax back to the customer if the judgment were reversed. What is the result? Let us suppose the baker secured the 3 cent rebate, by straight processing of their own domestic product. Deduct from 11 j cents that 3 cents, and the cost to the baker is 8J cents. On January 27 some shortening was bought for the same purpose from our friends, Proctor & Gamble of Hamilton. I might say that I had photostats taken of the New York and Chicago invoices. On February 12, from the Proctor & Gamble company one tierce of Primex vegetable shortening was bought. I have here a certified true copy of the sale of this tierce of vegetable oil shortening bought from that company on February 12, 1937. How much do you suppose was paid for it? Did we in Canada pay 8| cents, which our friends in the United States were willing to accept if they got a rebate, or,

if they paid the three cents to their government, 11J cents per pound? Was that what we Canadians paid? No. This man paid 13 cents per pound. We pay 13 cents in Canada. I make no charge against them. Anyone in business gets, I suppose, all he can. And what is "all he can get" in Canada, as a rule? About the same price as in the United States?


An hon. MEMBER:: Plus the tariff.


Joseph Henry Harris: Minus the tariff in this United States case, my friend. Canada Packers on the same day sold one tierce of vegetable oil shortening. I have here a certified true copy of invoice for tierce of vegetable oil shortening bought from Canada Packers Limited, February 12, 1937. The price is lli cents, quite close to the American level. But the United States has sense enough to try to protect its domestic production of fats of all kinds, for over there they impose an excise duty that will help them to produce in their own country the major portion of their own fat requirements. So I appeal to the Minister of Finance. He will probably be going to England and sitting in at a conference. We do not want to make this a political question in any sense of the word- I do not say to get a laugh from my friends opposite-


Charles Avery Dunning: I really hope not.-


Joseph Henry Harris: I am quite sincere in that. I have had many conversations with certain members of the government and I challenge any member of this government or any official in any department or anybody in any place where I have spoken, to point to any remarks I have made on this subject that had any political flavour. If they can I should like to know about them and I will answer for them. I have not that in my mind at all. If I had, as I said a moment ago, if I was thinking of my own constituency perhaps I would not be talking at this particular time.
I started out to say to the minister that he still has time. Speaking in the budget debate I said to him as kindly as I could that in the back end of his budget speech there is this short statement: "I have in mind some amendments which might be brought down during the committee of ways and means." If it is not -possible for him to bring them down in the committee of ways and means I hope he will pursue the matter further and see if something cannot be done when he is overseas this summer. England is willing

I do not quote very often, but "Barkis is willin'." But Barkis

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needed a little coaxing, and the minister is the man, with good will blossoming out all over him, to go and do the coaxing. If she is not willing-


John Gordon Ross: We will send you, Joel


Joseph Henry Harris: -I think the minister can get her in the humour. I give him that much credit. I hope he will, because she will still make just as much money out of it, and we shall not be in the unhappy position of competing against sources of origin with which it is very difficult for us in this hemisphere to compete.
The minister has all the figures in mind.
I cited the last time I spoke the 7,800.000 pound cargo brought to this country by the steamer Swartzemmer unloaded in September, which cleared the customs on the basis of 2-7 cents a pound. I admit there are other costs on top of that. But try and visualize the production of animal fats of any kind in this country at 2-7 cents a pound. Do hon. members want to sell their steers, the fat portion after being dressed, at 2-7 cents a pound?


John Gordon Ross: For years we thought ourselves lucky to get that.


Joseph Henry Harris: Can you refine it for that price? If you cannot what are you going to do about it?


John Gordon Ross: We have been doing without it the last few years.


Hugh Alexander Stewart: And kicking all the time.


Joseph Henry Harris: If you bind this item for another three years you are going to do without it still more, for look at the increasing inroads they are making, from 119,000,000 pounds three years ago to 156,000,000, then 191,000,000, and for this year we are now in,
234,000,000 pounds. Bind it for another three years and see what you are going to do without. They can produce it over there is India, in Ceylon, in the Straits Settlements and in Nigeria-why? Because nature is kind to them. Nature houses the tree without a barn; but you have to have a barn for your cows and a pigsty for your hogs.


Frederick George Sanderson: I am sorry to have to interrupt the hon. member but he has spoken more than forty minutes.


Joseph Henry Harris: Perhaps I may be allowed to finish my sentence. These other countries have cocoanuts or copra, yielding 63 per cent fat; the palm, the inner kernel 43 per cent fat, and' the meaty outside 60 per cent fat; and the peanut, 43 per cent fat; while your
cow in Saskatchewan yields only 3^ per cent fat from her milk, and from her weight of beef on the hoof 50 pounds in 1,100 pounds, or 2J per cent. Three and a half per cent against 40, 50, 60 and as high as 70 per cent -and what chance have you got?


Charles Avery Dunning: First I want to congratulate the hon. member for Danforth (Mr. Harris) on his excellent presentation of a case which he has presented) to me previously. It is always worth while to hear a man talk who knows his own business thoroughly and can explain it.


Joseph Henry Harris: Will the minister permit me? If he will just take out that word "own" business-say the business.


Charles Avery Dunning: I always understood my hon. friend to be engaged generally in the business which he has been discussing.


Joseph Henry Harris: Well, to a degree, probably 5 or 10 per cent.


Charles Avery Dunning: I did not mean to imply that my hon. friend's argument was one of self-interest, and I am sorry if I gave that impression. But that he is a specialist in connection with this class of business he has demonstrated. I was really paying him a compliment. I also accept what he said as to the non-political nature of his remarks.


William Gilbert Weir: Do not be so sure of that.


Charles Avery Dunning: Well, I may tell my hon. friends behind me that I am sure of it because the party to which the hon. member for Danforth belongs was in power for five years, during the whole of which time these vegetable oils from the British Empire remained free. I am quite sure-my hon. friend will correct me if I am wrong-that he made the same kind of speech in committee of ways and means back in 1932 as he made to-day. I hope he is not going to fall from grace by saying this is the first time.


Joseph Henry Harris: I do not like to interrupt, but if the minister will permit me, he knows and I know that this matter was not brought to a head until the United States took certain action in June, 1936.


Charles Avery Dunning: But the imports of vegetable oils into Canada were very considerable.


Joseph Henry Harris: And I made a speech on it.


Charles Avery Dunning: As far as the competitive effect on Canadian animal fats is concerned that effect has been present for some time, although the increased* imports in recent years indicate that if there is any effect, that effect has increased. I admit that in the short time I have been Minister of Finance I have had a
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great deal of difficulty with animal fats. My hon. friend and other hon. members of the house and some people outside who are interested] have done a pretty fair job in organizing public opinion with respect to their views on the matter. I am not blaming them for it; that is their right, but I do feel a little concerned over the fact that this sort of thing starts and becomes such an. enormous problem overnight soon after a Liberal government comes into office. That is the only political word I intend to say; from now on I want to talk about the facts as I know them.
The animal fat producers of Canada, not including the dairy people, made representations to me something over a year ago with respect to the action of the United States in barring exports of animal fats from Canada to that country, the action not being directed against Canada particularly but being taken for the reasons indicated by the hon. member for Danforth. In that connection my attention was directed by my hon. friend from Danforth to Canadian consumption of products of this kind and to the increasing competition of vegetable oils. I think I am correct in saying that at that time my hon. friend was engaged in making a detailed study of the effects of those importations, the results of which he has given to the committee tonight. I want to emphasize, however, that at that time there was in my mind no idea at all of the competition of these vegetable oils with our dairy products, and I do not think my hon. friend had then reached the conclusion that they were at all a serious competitor with dairy products.
Well, I went to England to negotiate this treaty. Obviously the British people were interested in continuing free entry into Canada of a commodity such as this which, from their point of view, was an important export commodity. The fact that they import the raw material from India or Egypt does not lessen their desire to obtain a market for the refined product they derive from that material, and I did not offer any great difficulty in agreeing to continue free entry of these vegetable oils, not merely those included under this item but also those dealt with in the three or four succeeding items.
It is a little difficult to generalize about them, but I am sure my hon. friend will admit that some are positively not edible and cannot be refined to make them edible. My hon. friend spoke of the Wesson process in connection with cotton seed oil, but the Wesson process is not equally effective with respect to some of the other vegetable oils which are imported in large volume, and which by no stretch of the imagination can be said to

come into competition with dairy products, though of course all these importations are in greater or lesser degree in competition with animal fats as distinguished from dairy products. I drew then, and I still draw a distinction between the product of the cow while she is living and the product of the cow after she is dead. The dairy product is distinguished in all our minds, I am quite sure, from the product of the beast after it has been killed.


Mr. ROWE (Dufferin-Simcoe):: The fat is a factor whether the animal is dead or giving milk.


Charles Avery Dunning: Undoubtedly it is a factor, but I think my hon. friend from Dufferin-Simcoe will admit that in this connection our dairy products are of more importance to us than the animal fat residue of the beast after it is killed.


William Earl Rowe: I am not so sure about that.


Charles Avery Dunning: I hold that view very strongly, because fifty pounds is the beginning and the end of it as far as the animal fat content is concerned, while on the other hand during the productive life of the animal she produces three and a half pounds of butter fat per hundred pounds of milk.


Joseph Henry Harris: The lady has a brother, sir.


Charles Avery Dunning: Certainly; some ladies
have brothers, but in any case the brother does not produce milk or butter fat. However that may be, after I returned last fall my hon. friend brought a delegation to see me on this question. And lo and behold, for the first time there appeared as part of that delegation representatives of the National Dairy Council of Canada, who wanted me to consider the relationship of this question to dairy products and butter. That was the first occasion on which the question of a tariff on vegetable oils had been related to the butter argument. Up to that time, as my hon. friend will agree, I had discouraged a reference to the tariff board. On that delegation, as I say, there were the dairy people and some of the packers. You see, of course, it depends entirely upon what class of business the packers are in, as to the stand they take in this connection. Naturally there were not on the delegation headed by my hon. friend from Danforth representatives of the packers who were importing this material.


Joseph Henry Harris: Not headed by me, but by a gentleman from Montreal. I trailed along.


Charles Avery Dunning: Well, yes; the hand was the hand of Jacob, but the voice was the voice of Esau. Naturally none of the packers

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named by my hon. friend as importers of vegetable oils were represented on that delegation, but several other packers were. Apparently it does not depend on whether or not you are a packer; it depends on what kind of packer you are and just what sort of business you are in whether you are on the side of the question represented by my hon. friend from Davenport and those with him, or on the other side. As usual, it depends very largely on whose ox is gored.


Mr. NEILL:: Were any representations made by the pilchard oil industry? That would be in competition also.


Charles Avery Dunning: I cannot recollect any
at the moment, though there may have been some a year ago. I have received thousands of communications in this connection, of course. At any rate, after I had listened to the story of this large and, may I say, influential delegation, including as it did representatives of the National Dairy Council of Canada, I said, "Well, gentlemen, you will get a reference to the tariff board."
I am inclined to think that my hon. friend from Danforth and those associated with him may feel that I was scarcely frank with them in agreeing to that reference to the tariff board when on behalf of the government of Canada I had already undertaken with the government of Great Britain that free entry of these oils from Great Britain should be continued. I now make the explanation, and I hope an apology will not be necessary. It was not possible for me as a minister of the crown, knowing what I knew, to communicate that information at that time to interested parties who were waiting on me in connection with the matter. My hon. friend may ask: Well, if you had already made an arrangement with Great Britain why did you give us the reference to the tariff board? The answer is that I thought the reference to the tariff board would bring out all the information.
I may point out also that what we are considering here to-night involves not only free entry under the British column, but also a ten per cent duty against intermediate countries. There is nothing in the agreement to prevent us from increasing the intermediate and general rates at any future time if in the judgment of the parliament of Canada that should be a desirable thing to do. For that reason I thought the people interested had the right to a reference to the tariff board, and they got it. However, I could not communicate to them at that time, as I say, that the British agreement contemplated a continuance of free entry.


Hugh Alexander Stewart: Could the minister tell
us, just to illuminate the discussion, what proportion of the imports comes in under this item, and what proportion under the intermediate rates?


Charles Avery Dunning: I will have to give it
under each item separately, and I shall do it later. I could not even approximate it at this time. I may say, however, that at present the imports are unimportant from intermediate countries, because prior to 1932 these oils were Tree wherever they came from. In 1932 British oils were left free, and hon. members opposite imposed a duty of ten per cent against all other countries.


Joseph Henry Harris: At the request of Great
Britain.


Charles Avery Dunning: Possibly at the request
of Great Britain; I do not know. I have no knowledge of what effect an increase in the intermediate duty might or might not have. That is one of the points on which I thought possibly we might get information from an examination by the tariff board.
My point in telling this history I am now about to make. It became public, of course, that the Minister of Finance had granted a reference to the tariff board with respect to vegetable oils coming into Canada. The board gave it wide publicity, and invited the public and those particularly interested to come to give evidence. What resulted? I will tell the committee, just to show that there is another side to this question. No less than sixty members of this house-more than sixty-wrote me protesting against any idea of putting a duty on these imported vegetable oils, and conveying to me resolutions by the hundreds from all the bakers in their constituencies, from all the laundry people in their constituencies, and from others interested in the use of this commodity. I repeat, there were no less than sixty members, regardless of .party. In fact, I believe there are members in the committee to-night who will remember communicating to me the most violent kinds of protests from people in their constituencies engaged in these different classes of business who claimed they would be ruined if a duty were put on vegetable oils, as was proposed by the applicants in the hearing before the tariff board.
I thought a storm had been raised. I have no doubt the hon. member will reply, and probably accurately, that this was the result of propaganda from those interested in keeping oils free of duty on entering Canada. But I assure him I doubt very much if there is a
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baker from Sydney to Vancouver who did not address a letter to me, in addition to those I received from members of the house who wrote me about the matter.


Mr. BAKER:: I did not write you, honourable sir.


Grote Stirling: Nor did I.


Charles Avery Dunning: My hon. friend is an exception; I think he must have been away on a holiday. Then, there were not only bakers but-	[DOT]


John Gordon Ross: Half-bakers.


Charles Avery Dunning: -users of soap, soap powders and that sort of thing, who wrote me. Quite a number of people keeping stores and interested in the sale of packaged shortening, wrote protesting. The hon. member for Danforth, and those who believe with him, got busy. They saw the result of propaganda, and evidently thought it would be well to try it. Since they started I have been in receipt of literally hundreds of communications from dairy organizations from one end of Canada to the other who are inclined to think the hon. member is right, and that unless something can be done to stop vegetable oil coming in some horrible end awaits the dairy cow, that it will put the Canadian cow out of business.
There the situation stands. There the issue is joined between those who are using the commodity and who believe they will be seriously injured if a duty is put against it, and, on the other side, those producers who have been convinced by the hon.. member for Danforth and those associated with him that unless a duty is put against the commodity their interests will be prejudicially affected.
May I express my own views in the matter, so far as they have gone? In doing so I do not wish to prejudice the report from the tariff board which I hope to receive, but which I am assured by the chairman will not, due to the complexity of the question and the voluminous nature of the evidence both pro and con, be presented for some time. Speaking subject to that qualification, my own view is that it is conceivable that the growing importance of vegetable oils may have effects which even up to now could not be foreseen. The hon. member for Danforth has mentioned one factor which has a bearing in the opposite direction, namely, the factor of increased prices for vegetable oils in countries which are arming. That increase comes about because of the glycerine content contained in them. That may have -what might be described as a mitigating effect upon their competitive relation to our Canadian production of animal

fats. I am not yet prepared to admit, I am not yet convinced, and have not had the evidence to satisfy me, that the present importation of vegetable oils is at all a serious competitor of the Canadian dairy cow in her productive capacity. I am willing to admit they compete with her after she is dead, but I have yet to be shown that they are a serious competitor with her so long as she is alive. However, as the hon. member for Danforth knows, I am willing to be convinced.
Now, have I said sufficient, together with the informative address of the hon. member for Danforth, to show the committee what a difficult and complex question this is, and that it will repay close and unprejudiced examination by producers and consumers in Canada, because obviously to a very large measure it affects both classes?
I was a little amused, may I say, to get from some twenty members of the house, and from others outside the house-letters on both sides of the question. When the bakers and laundrymen were busy, I got rather warm letters from them telling me that on no account must a duty be put on these articles. Then later, when the dairy associations and others got busy, I got further letters, including those from the same twenty members, telling me that a duty must be put on these articles-all of which leads me to think that there is quite a number of members in the house who require to balance themselves very carefully as between producers and consumers, in regard to this particular item.


Ernest Lapointe: You are not keeping any secrets.


Charles Avery Dunning: No, I am not keeping
any secrets at all. But let me assure everybody that nobody will ever know the names of those members. I wished to give the information only in order to illustrate to the committee the difficulty of reaching a fair conclusion in a complex matter. I do not recognize necessarily that it is a tariff problem, but rather that it is an economic problem affecting our welfare.


Percy John Rowe: I do not intend to speak at length. As the Minister of Finance has said, we have had a most excellent explanation of the issue by the person who understands it possibly better than any other hon. member. In making that statement I do not reflect at all upon the Minister of Finance. I am not surprised he has not yet made up his mind what he would do, especially after receiving recommendations from twenty hon. members whose names he will not reveal, who have advised him both ways.

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Ernest Lapointe: Is the
hon. member one of them?


Percy John Rowe: No. I can say to the Minister of Justice that purposely I have been rather quiet this session, but at least I have not yet said yes and no to the same issue. I do not propose to add anything to the exhaustive explanation of the hon. member for Danforth, but as one interested in the live stock industry and in Canadian agriculture I do say that the Minister of Finance might say to me even more than to the hon. member for Danforth that I am speaking about my own business. I know he did not mean it in that sense, as he explained. The hon. members of this committee who should be the most concerned about this item are those who are themselves interested in or are the representatives of agriculture. I do not care whether they come from the far west or the extreme east; if they represent agriculture in this parliament it behooves them to consider what is involved in this issue. I do not propose to interject what might be termed a political slant, but if the next three years reveal a development similar to that which has taken place in the last three, it will strike almost a death blow to Canadian agriculture. I think the Minister of Finance will agree with me when I say that.


Charles Avery Dunning: I would not go that far.


Percy John Rowe: If the minister will not go that far, will he say that there will be no bad effect if our importations increase in the next three years as they have increased in the last three?


Charles Avery Dunning: My hon. friend is referring to edible oil. I do not think either he or I can make a positive statement at this time as to what is edible and what is not.


Percy John Rowe: I quite agree. With the lack of inspection which we have had in this country, neither you, Mr. Chairman, the hon. member for Danforth, nor myself could state to what extent these oils are edible or not. As one who knows something about the cost of producing animal fats and oils, I can say that they are very costly to produce. Every hon. member within sound of my voice will agree with me when I say that what this country needs more than anything else to make agriculture profitable, to ensure the stability of agriculture, to keep the land in western Canada from drifting away and to keep the land in eastern Canada fertile enough, is increased live stock production. I am not going to impose on hon. members a repetition of the remarks I have made on
other occasions. At different times I have attempted to convince my hon. friends from western Canada of the necessity of reasonable protection for the live stock industry of this dominion, in order that there may be more of a balance between the grain growers and the live stock producers.
When, the hon. member for Danforth and the Minister of Finance were speaking I attempted to figure out the cost of producing animal oils and1 fats. Perhaps I could put it this way. I attempted to figure out how much of the surplus products of this country would be consumed in the production of animal fats and oils. The hon. member for Danforth suggests, and I have reason to believe he is not far astray, that upwards of half of the vegetable oils being imported into Canada are edible. The Minister of Finance admits that whether or not they are edible, whether or not they are substitutes for butter fats, whether or not they are used only by soap manufacturers and so forth, they (io take the place of animal oils and fats which might be produced' in this country. It would take 150,000,000 bushels of the best hard wheat of Canada to produce the animal oils and fats to the equivalent of the vegetable oils being brought into this country.
This is a very important issue, and as a representative of an agricultural district and as a farmer I want to urge upon the Minister of Finance that he give it his most careful consideration because it is a dangerous issue. I can imagine that in three years time we may be bringing into this country considerably more of these products than we are bringing in to-day. We have increased our importations every year for the last three years. Mr. Chairman, before you more or less relinquished your political leanings, when you belonged more or less to one side of this house, you and I differed with reference to the necessity for protection for our live stock products. May I point out to you that prior to 1930 we were importing an enormous quantity of live stock products. Between 1920 and 1930 we saw an unbalancing of the agricultural production of this country. In 1920 or 1921 we were exporting more nearly the same quantities of live stock products and wheat than we have ever done since.
The live stock industry of Canada is undoubtedly the basis of Canadian agriculture. For many years this industry has produced even more than the grain growing industry, despite the millions of bushels of grain which have been grown in western Canada. In 1920 we exported from this country $77,000,000 worth of animal products. The government of that day, still clinging to the idea of freer
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trade, refused to raise the tariff when animal products began to come into this country. In 1930 we imported into Canada 44,000,000 pounds of meat and 55,000,000 pounds of butter. As an hon. member beside me points out, these commodities were being imported into an agricultural country.


Charles Avery Dunning: You are starting something now.


Percy John Rowe: If the Minister of Finance lets this go for three years he may be starting something.


Charles Avery Dunning: You will be starting the old tariff argument.


Percy John Rowe: I do not see that the tariff argument should confuse my hon. friend very much.


Charles Avery Dunning: It does not.


Percy John Rowe: I can remember how he came to this house more or less a free trader, and he now adopts many of the policies and principles that the Conservative party put into effect.


Charles Avery Dunning: I ask my hon. friend to take my word for it that I never was a free trader; I am just as much a free trader to-day as I ever was.


Percy John Rowe: Then when my hon. friend came to this house he certainly misrepresented his position. We certainly had the understanding that he was a free trader. However, I do not wish to confuse the issue by interjecting tariff matters. I hope the Minister of Finance will give me credit for being sincere in this matter.


Charles Avery Dunning: Do not speak for me,
though.


Percy John Rowe: I have not in the past and I do not expect I shall in the future. But tariffs are necessarily involved in this issue and I do not see why my hon. friends should hold up their hands in holy horror because mention is made of the tariff policy of this country. No party has condemned it more when in opposition and practised it more when in power than the Liberal party. This policy has become the policy of both parties to a great extent. I want to point out that at a time in 1930 when our grain elevators were filled with unsold wheat we were importing into this country vegetable products to the equivalent of 25,000,000 bushels of our wheat, in the form of animal fats and oils. Every farmer within sound of my voice knows that you cannot produce animal fats and oils with timothy hay; every farmer in the house knows that you have to feed costly grains. It 
is true that our farmers have struggled along for several years; it is true that between 1930 and 1935 there was a world depression; the farmers of this country have struggled through all these years. And now, when there is an opportunity for some improvement in live stock products, the farmer, with grain prices as they are, can scarcely make it pay to produce animal fats and oils; he would be better off to sell his hard grain. I again point out that in the production of animal fats and oils, live stock products, dairy butter if you will, lies the hope for the future of Canadian agriculture. There is not one capable business man in this house who will not have the reasons immediately in mind. I do urge upon the minister to think of these articles as an agricultural product. We are importing now the equivalent to the production of 150,000,000 bushels of grain if it was converted into animal products sufficient to produce the equivalent in oils and fats.


John Gordon Ross: Is that in oils?


Percy John Rowe: In fats and oils.


An hon. MEMBER:: How many pounds of animal fats would 150,000,000 bushels of wheat produce?


Percy John Rowe: I am speaking of the amount of animal fats which is gained as a by-product from the production of that amount of grain. I understand the Minister of Finance figured on the production of the total pounds. I am talking of fats and oils that are taken from the production we might have in this country.


Charles Avery Dunning: Let me get this clear, please. Does my hon. friend mean that if we fed 150,000,000 bushels of wheat we should thereby produce enough cattle at the rate of 50 pounds of fat per head to equal the imports of vegetable oils?


Percy John Rowe: It would amount to more than that on that basis. I was taking it on the hog production.


Charles Avery Dunning: My hon. friend will of course see what a fallacious basis that is.


Percy John Rowe: I might point out that we have lost markets overseas which we should have saved and developed. I do not blame it all on one government; I have criticized in this house both governments for their neglect of markets overseas. In 1920 we sold more bacon than we have ever sold since. Not even with the imperial trade agreements, of which my party is proud, have we recovered in the British market the bacon trade we had in 1920. I wish to emphasize that the vegetable oils we are importing are

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replacing to a great extent the oils and fats whose production through the live stock industry means a great deal in the stabilization of Canadian agricultural prosperity. I do not wish to derive any political advantage from this issue. I know that my friends to my right thought we overemphasized the importance of the importation in 1930 of New Zealand butter; the ex-Minister of Agriculture (Mr. Motherwell) humorously remarked on different occasions that his government slipped out of power on New Zealand butter. I think it is only fair for me to say that I do not wish this government to slip out of power on vegetable oil, but-[DOT]


An hon. MEMBER:: You want to slip in on it.


Percy John Rowe: -I do urge the minister to keep an eye on the benefits which might be reaped by the Canadian agriculturist at a time when he needs them most. To my friends in western Canada may I say that we cannot produce animal fats and oils, whether in Saskatchewan or in Ontario, without consuming a great deal of hard grain which on many occasions is difficult to dispose of. I think there is 'here a very close relationship which should be carefully considered by the government of the day. I feel that I should express to the Minister of Finance my views as a farmer, and not wishing to delay the committee further I urge upon him the most careful consideration of this matter before he disposes of an issue which to my mind is vitally correlated with the future security of agriculture. The live stock industry is the basis of agriculture in Canada, as in every other country in the world.


Ernest Edward Perley: Does it make any difference from what country cotton seed comes out of which this oil is produced in Great Britain? That is to say, are all importations of cotton seed oil from Great Britain made free under this agreement?


Charles Avery Dunning: Continued free.


Ernest Edward Perley: Are they continued free under this agreement no matter from what country the cotton seed itself comes?


Charles Avery Dunning: Of course it makes no difference in what British country they originate. With respect to the importation of the seed itself into Great Britain from foreign countries, it would have to conform to the 50 per cent content provision of the agreement.


Ernest Edward Perley: Is any inquiry made as to the source from which this cotton seed comes?


Charles Avery Dunning: The hon. member for Danforth (Mr. Harris) was quite right. It is principally India, and to some extent Egypt. I made some reference in the budget speech to our situation as regards India. While the privilege of the British rates in this agreement automatically extend to all countries of the British commonwealth, as my right hon. friend will remember, there is under the law power in the government by order in council to withdraw that privilege from any British country which does not reciprocate on a fair basis by way of trade agreement with Canada. As my right hon. friend knows, no government of Canada in recent years has been able to make a trade agreement with India, and as the hon. member for Danforth pointed out, the balance of trade between Canada and India is very heavily in favour of India-made up largely of tea and rice, and to some extent of many other commodities. It is the desire of this government, as I believe it was of the previous one, to reach a trade agreement with India; and in that regard one does not forget, of course, the power which the government has to withdraw from India or from any other British country the privilege of British preferential rates unless it is possible to reach a fair trade agreement with her. I am not now issuing any warning or anything of that nature to India, but it is well that we should see facts.


Ernest Edward Perley: Unless India reciprocates in a way that is satisfactory to this country, the government would have the power to withdraw this privilege with reference to their cotton seedi; is that right?


Charles Avery Dunning: My right hon. friend will understand that in the case of cotton seed, which comes from India to England and is there processed, the situation of that product for content purposes would be affected by any action which we might take vis a vis India.


Grote Stirling: Is the main reason why these empire products come to Canada via Great Britain that they should be processed there?


Charles Avery Dunning: Well, they are the greatest processors of all.


Grote Stirling: That is the main reason they come via Great Britain?


Charles Avery Dunning: Oh, yes, practically the only reason. As my hon. friend knows, England is the great gathering and distributing centre, particularly for these tropical products in which she has specialized for so
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many years. There is no doubt that vegetable oils are supplied by Great Britain to most of the world, she being the country importing the seeds or nuts, as the case may be, and the pressing being done there for many countries, even outside of the British Empire, because they were first in the field, first saw the possibilities of it, and are in addition, of course, the great merchants of the world.


Ernest Edward Perley: This is in no sense a political question. This item was made free by the Conservative government under the agreement in 1932, and now it is proposed to continue that free entry for another three years. As a matter of fact, though, the situation has changed tremendously. The minister himself has referred to the fact that the import of these oils has increased- from year to year during the last four or five years. He says we could not help that. The Minister of Agriculture (Mr. Gardiner) yesterday or the day before told us that providence was with the government and that he would rather have it with them than against them. In this particular instance providence has been against the government, for during their term of office the importations of this oil have increased by leaps and bounds.
I represent an agricultural and dairy constituency, and I can assure the committee that no better herds are to be found anywhere in Canada than those in Argenteuil, so this is a matter that greatly affects the dairy people of that district. I have listened attentively to what has been said to-night, and though I .rave never given the subject much consideration before, I must say that I am impressed yy the argument put forward by the hon. member for Danforth. I believe the minister nimself is impressed by it. As a matter of fact this is a question of the utmost importance to the agricultural and dairy people of Canada and I urge the minister to consider it as carefully as possible, to go into it more fully, and let the tariff board make its report on this phase of the matter as well as on the importations under the intermediate and general tariff. Let the board make a full report on the question.
Under present conditions, though we want to trade with our friends in India, if they do not reciprocate in a way that is satisfactory to the government I suggest that we might very well consider the desirability, almost the necessity, of taking action under the powers which this government has to stop these vast imports of cotton seed oil made from cotton seed coming from India or any other country that does not reciprocate with us. I under-

stand that Canada will be bound for three years under this agreement. That cannot be helped; but I take it there will remain a residue of power in the government to take some action, not to prohibit import of these oils but to limit it to a reasonable quantity so that our agriculturists and dairy farmers may have a better chance to sell their products in Canada.


Charles Avery Dunning: We are now really discussing cotton seed and crude cotton seed for the manufacture of meal and refined oil. That particular product does originate in India and comes via the United Kingdom. But the difficulty to which my hon. friend from Danforth refers is only to a small degree created by imports of cotton seed oil. The total imports of cotton seed oil last year were less than a million and a half dollars. I am coming more and more to the view that the separation of edible and non-edible oils in a proper manner might go a long way towards the solution of the problem. I will not debate this question further because it is under investigation, and the tariff board reference covers all aspects of the question.


Ernest Edward Perley: No objection has yet been taken to the importation of nonedible oils except those that can be refined into edible oils.


Richard Langton Baker: Could there not be one rate for edible oils and another for non-edible oils?


Hugh Alexander Stewart: I am sure that everyone who has discussed the matter approaches it from the same standpoint, namely, the necessity and desirability of doing what we can to assist agriculture in Canada. We all know that during the last six or seven years agriculture has been passing through one of its most serious phases, and whether you consider it from the standpoint of the grain producer or the live stock producer or from any other point of view that is true. It has been necessary to give bonuses and to impose duties with a view to protecting agricultural products, and the argument that is made by the hon. member for Danforth, who has presented the case to-night, is along that line. There is no doubt that conditions have changed with respect to the importation of these commodities in the last few years. As I understand it, these products were free from Great Britain; they have always been free, there being no tariff against them. But the imports from any source were insignificant until within the last three or four years. There cannot be any question that the quantity of these oils imported has become a factor

Canada-United, Kingdom Trade Agreement
in connection with agricultural production. They are taking the place of animal fats, and that is in a measure beyond what could have been anticipated.
The minister has stated.' his position quite frankly. An agreement has been entered into covering a period of four years, but there is in that agreement a provision, article 16, which I think the minister and the government might make use of. It reads:
In the event of circumstances arising which in the judgment of the government of the United Kingdom or of the government of Canada, as the case may be, necessitate a variation in the terms of this agreement, the proposal to vary those terms shall be the subject of consultation between the two governments.
That is an elastic provision, and as the minister knows, since the agreements were first negotiated, advantage has been taken of it and concessions have been made in both directions. I suggest that when the facts are known in connection with the matter under investigation by the tariff board an opportunity will be afforded the minister to take the matter up in the light of the information he has, and to make representations under this article. We may talk about the agricultural industry, but after all dairying has been over the years the backbone of that industry, and the dairy cow needs all the help she can get, dead or alive. I am sure the minister appreciates the importance of this and. will give it the consideration it deserves in the light of the expansion of the competition of these oils with dairy products and animal fats. I hope he will deem it necessary to take action with a view to reducing this competition, which has not been foreseen, but which is growing and is likely to become quite serious. After all, the minister must be able to find a way out.


Mr. SENN:: I am sorry I was not in the house earlier in the evening when the hon. member for Danforth began his discussion of the question. I did hear him, however, the other night when he referred to the subject in his speech on the budget, and I am sure that anyone who heard or read that speech could not help feeling something of the seriousness >f this menace-shall I say?-to our agriculture.
The value of these trade agreements lies largely in the benefits which they have brought and will continue to bring to the live stock and dairy industry of Canada. I doubt whether the government would have gone as far as they have by way of concessions to the British people in our markets if it had not been for the advantages we received in the entry of our dairy and hog and cattle products
into the British market. Therefore it seems too bad that this item has been left unchanged. The minister in his explanation to-night said that when the agreement was made he did not anticipate that the entry of these vegetable oils into Canada would have any effect whatever upon the dairy industry, but I think he and the committee will agree that when 103,000,000 pounds of edible fat and1 shortening is imported into Canada during the year, or made in Canada from imported oils, it must to a certain extent displace some kind of animal fat produced in Canada.


Charles Avery Dunning: Not necessarily. I cannot go that far.


Mark Cecil Senn: Well, the greater part must displace some kind of animal fat.


Charles Avery Dunning: To clarify my point, I call attention to this fact: There is no question that animal fat shortening cannot be packaged and sold retail because it lacks keeping qualities. I am advised that a large business has been developed in packaged shortening, with vegetable oil as its base, which will keep on the store shelves. That is the point I had in mind when I said that there are some factors which require to be examined' in regard to competitive effects before I would accept the large figures my hon. friend mentioned.


Mark Cecil Senn: I agree with what the minister has said regarding the keeping qualities of vegetable oil shortenings in packages. I admit that lard and shortenings of that kind probably will not keep as well as vegetable oil products, but before vegetable oils were in common use in this country the only alternative the Canadian housewife and people had was animal fat for shortening and similar uses. So I think my contention is fairly sound that these vegetable oils which are being brought in do to a certain extent displace the products of the Canadian dairy farm and live stock industry.
The dairy industry is a very important one for Canada. It brings larger returns to agriculture than any other branch of animal husbandry. The unfortunate thing is that we have a small exportable surplus. That small surplus of -milk or milk products is the dominant factor in determining the price of dairy products in Canada. If our dairy products and animal fats are to continue to be displaced in larger and larger amounts as time goes on, the result will be that we shall have a larger exportable surplus to go on the British market or wherever we can sell it.
We have heard from different parts of the house during the budget debate, and I have heard hon. members on both sides -make the

1936	COMMONS
Canada-United Kingdom Trade Agreement
statement in other places, particularly in some of the committees of which I happen to be a member, that the agricultural industry as a whole is not in a good position. The prices Obtained are in many cases not commensurate with the cost of production. The dairy farmers, many of them, are not enjoying the prosperity they should. So when their production comes in competition with a cheaper class of product such as vegetable oil, the tendency is to keep the prices of dairy products down below what they would otherwise be.
I know that it is impossible at the present time for the minister to make any change in the present agreement, but I think he should seriously consider, and that he will have to consider seriously within the next year or two, the proposition made by the hon. member for Leeds (Mr. Stewart) that this matter should be brought to the attention of the British government and some concession be arranged.


Mr. GRAYDON:: I think I should not let this item pass without making a few remarks on the importance of the issue at stake. Those of us who were born and raised on dairy farms in Ontario, as I am proud to say I was myself, cannot but be seized of the importance of a matter so far-reaching in its effects as the item now under discussion. When one calculates that in a riding such as I represent, the county of Peel, for the last recorded year the production of milk reached the enormous total of 87,000,000 pounds, one gets some conception of the importance of this item to the dairy industry. Those of us who were conversant with the issue prior to 1930 when large importations of butter from New Zealand found their way into the markets of Canada, know full well the effect which that had upon the dairying industry here.
In the part of Ontario from which I come, the whole milk industry is the most important branch. We provide a large proportion of the milk for the great metropolitan market of Toronto. One of the major problems, and one which is most pressing with the farmers in that riding, is that of surplus milk. There is scarcely a milk association meeting anywhere in the neighbourhood of Toronto or any of the large urban centres where this question of surplus milk does not arise year after year. One of the reasons why there is a surplus of milk is that the farmers seek the best and most convenient and most remunerative market for the product of the dairy cow. One cannot blame them for that. The fact is that the surplus milk which exists in such great quantities around Toronto must find a release through some channel, and one of the channels which I have heard suggested on many occasions, both when I was on the

farm and since I have left it, is that, if the price of butter, cheese and other dairy products were higher in proportion to the price of milk, many dairy farmers would find it profitable to leave whole milk production and go into other lines of dairying. So, as was so forcibly shown to-night by the hon. member for Danforth (Mr. Harris) and others, it is a matter of much importance that the farmers and dairymen of this dominion should be seized of the grave consequences which come from the free entry of these oils competing with the product of the dairy cow. After all, it does not seem to me that we are likely to do much in the way of increasing the price of the dairy commodities which the farmers have to sell so long as we permit the competition of commodities produced under the conditions so clearly stated to-night by the hon. member for Danforth.
I often think that farmers do the least advertising of their products of any class in Canada. I am not referring, of course, to the hon. member for Moose Jaw (Mr. Ross) who is an excellent advertiser along certain lines. Someone just now suggests that he is not a farmer, but he has answered that point several times, and from his tremendous interest in wheat I am almost inclined to think that he must be engaged in some agricultural enterprise. In any event I do think that this vegetable oil industry, which produces the various brands of shortening and other vegetable oil products that are for sale in the country, very largely promotes the sale of those products through intensive advertising. I believe that this government, which from time to time spends money on things which it believes to be legitimate might give some consideration to spending some money in advertising our own agricultural products. The Minister of Agriculture looks very interested as he sits over there, and I am sure he would be the first to agree that wherever possible the products of the farm, particularly the dairy farm, ought to have some encouragement and assistance by way of advertising throughout the country. A couple of weeks ago I attended a little gathering at which I heard several housewives discussing vegetable oils in relation to the butter fat industry. An argument ensued, and it does appear to me that there is a grave division of opinion as to whether butter fat or vegetable oil is actually the best for the purposes of the housewife. I have come to the inescapable conclusion, however, that one of the reasons for the wide use of the different kinds of shortening is the extensive and intensive advertising which has been carried on.

Canada-United, Kingdom Trade Agreement
We are all interested in farm affairs and agriculture in general. It may be a hackneyed phrase, but agriculture is still the backbone of this country. If you study the matter at all you will soon find that when the purchasing power of the farmer is reduced there is not very much business left in the country for anyone else. So I suggest to you, Mr. Chairman, that our farm products ought to be brought before the purchasing public by means of intensive advertising. I think we have a right to expect that the purchasing public, not only in this country but overseas as well, should be made acquainted with the excellent qualities of the products of our farms.
I leave this suggestion with the Minister of Agriculture to-night. I think he might very well give some study to the situation, because in many instances the merits of our agricultural products are not being properly brought before that great buying public from which the farmer must obtain his livelihood.
Further, by way of caution to the Minister of Finance, I think we ought to be very careful to see that the interests of the dairy farmer in the province of Ontario, as well as in every other province of this dominion, are thoroughly protected against competition from products such as those which have been described and which are under discussion tonight, in order that the farmer of eastern Canada as well as the farmer of western Canada may receive a fair deal at the hands of the government of the day.


Joseph Henry Harris: I should like to correct an observation made by the Minister of Finance, if I may, and in doing so may I say that I am very anxious that nothing that may be said by any hon. member of the 'house, particularly myself, shall prejudice our position before the tariff board.
The minister mentioned the name of the National Dairy Council of Canada, and intimated that he had received no word from them until they joined with the animal oil and fat producers. I am glad that the Minister of Agriculture is here. He knows, and the Minister of Finance knows, that the national dairy council make their representations to the Minister of Agriculture. They always cooperate and consult with the minister, and he and they get together and work out everything they possibly can in the best interests of Canadian agriculture. The Minister of Agriculture had representations made to him, and when those representations were made, I suppose the natural feeling was that they were being made to the government of 31111-122*
Canada. So when this is referred to as something new that was brought forward by this group of packers, if you like to call them that, who were not importing or manufacturing shortening, that is hardly the fact. I know that the first letter I saw in Montreal was written by the dairy council to the Minister of Agriculture, and I think as long as thirteen months ago he had certain people come to see him regarding the matter. If he will consult his files he will perhaps find correspondence from the hon. member for Chateau-guay-Huntingdon (Mr. Black), the hon. member for Stanstead (Mr. Davidson) and others, and he may remember that members of the dairy council had interviews with him and with the Prime Minister, who I am sorry is not here.
In all fairness I think the Minister of Agriculture should not let this item go through without giving us hi9 views based on the economics of this question, which I conceive to be of great national importance. Perhaps now that we are all tattling just a little, the Minister of Agriculture will remember that another member of this house, the hon. member for Danforth, discussed this matter with him and agreed that it was a matter for the Minister of Finance. The member for Danforth left the office of the Minister of Agriculture after that first interview, which was very cordial, and went to see the Minister of Finance. I do not propose to pursue the matter; I just wish to make the situation abundantly clear. The Minister of Finance rather left the impression in my mind that there might have been some deep-I will not say conspiracy, because that is not a nice word

but a correlation between the actions of certain groups, a getting together of strange bed-fellows all of a sudden to further their own interests.


Charles Avery Dunning: I congratulated you on your organization, and1 I said so.


Joseph Henry Harris: I will leave the Minister of Agriculture for a moment and deal with that point. Sixty members of parliament wrote letters as a result, as the minister knows, of propaganda by very powerful interests, carried on to the extent of many thousands of letters circularizing everyone on their lists of customers. They even went so far as to tell their members of parliament in writing, "Prices will jump four cents a pound immediately if the Minister of Finance takes any action on this question." That assertion is in black and white. I have it under my hand.
1938	COMMONS
Canada-United Kingdom Trade Agreement
The evidence is available now to members of the house, or will be after the report of the tariff board is down. I do not wish to prejudice the position of anybody. But the bold statement was made, and the users and consumers, the bakers, confectioners, laun-drymen and so on swallowed it hook, line and sinker, and felt badly about it. Members of parliament were written to, but members of parliament -being such busy people just looked at it, and sent it to Mr. Dunning. So he got sixty letters. Had the other group which had been taking the Minister of Agriculture into their confidence, and now that their names have been mentioned I can name them-the National Dairy Council of Canada and the Animal Oil and Fat Producers of Canada-started out with propaganda, the minister would have had two complaints to-night, instead of one, from those members. The minister knows, and we know, that I had thought to keep this thing out of a political atmosphere. He will agree with me that neither the National Dairy Council of Canada nor the Animal Oil and Fat Producers permitted themselves to engage in any propaganda whatsoever in any way until after they felt the Minister of Finance was fully satisfied to air the whole thing.
The customers and friends of the five firms who control this business in Canada- two United States, one English, and one Canadian-had been spreading propaganda for months and had come here equipped with professors, statisticians, legal talent, and what not, to break down the issue as it was laid before the government by this other small group.
I had hoped that the problem being of such magnitude the Minister of Agriculture would have seen fit to confirm what I have said, that we worked through his department, or rather kept his department informed until such time as he thought it might be good business to approach the Minister of Finance on the problem.


The CHAIRMAN (Mr. Young):: Shall the item carry? Carried.


Joseph Henry Harris: No; the Minister of Agriculture was on his feet.


James Garfield Gardiner: No, I was not on my feet; but I think in view of what the hon. member has said I had better check up on the records of my department. I realize the hon. member did come to my office on one occasion, and as he has already stated to the committee he informed me it was his intention to take this matter up with the Minister of Finance. In a very general way he outlined his ideas in regard to the matter, but did

not go into details. My memory is that all representations made to the department, so far as they were made to me personally, were pretty much along that line. The question was not discussed at length, but reference was made to the fact that they intended to bring the matter up with what they considered to be the proper department, the Department of Finance. But I should like to check up before making any general statement to the house on just what the records of the department are in regard to the representations made.


Joseph Henry Harris: Mr. Chairman, I should like to ask the Minister of Finance if, in view of the fact that this report will probably be down in a month or two, or three months, and in view of the fact also that these items are bound, is it still possible, as it was in the case of the previous agreement, to have conversations with representatives of -the United Kingdom, even on a bound item?


Charles Avery Dunning: Yes, on any item. That is covered by section 16 of the agreement. The parties to the -agreement reserve the right by agreement to vary its provisions.


Joseph Henry Harris: The minister in making his earlier observations mentioned that there was that possibility. Is it the possibility he had in mind when on the budget speech being made he intimated the possibility of some amendments?


Charles Avery Dunning: No, it was a different thing altogether. In the budget speech I did not refer to the tariff items in the agreement. I referred to tariff board reports which might be received prior to this committee finishing its work. May I say that I have received some tariff board reports. I expect under the law to lay them on the table, but may I say that I should like to have a little -time to look into them before doing so. However, under the law I must lay them on the table within fifteen days of their receipt. Can we say " Carried "?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Item agreed to.
Alexander MacGillivray Young: Item 277.
Palm and palm kernel oils, unbleached or bleached, not edible; shea butter:	rate of
duty, free.


Some hon. MEMBERS:: Carried.


Alexander MacGillivray Young: Item 278.


Joseph Henry Harris: Mr. Chairman, I do not take much of the time of the house. Further, I do not make any threats and do not purpose making any, but if you are going to start the practice of trying to carry items when I am on my feet-

Foreign Enlistment-Mr. Lapointe


Alexander MacGillivray Young: I did not see the hon. member; I am sorry.


Joseph Henry Harris: Perhaps you, Mr. Chairman, have been in the house long enough to-night to know that I have been talking on a matter of great moment to Canada, a matter respecting oil. Perhaps, you, sir, realize that the item previous to the one now called is of a like nature, that you have declared it carried, and have tried to get on with the next one.


Charles Avery Dunning: In all fairness to the chair, if the hon. member will permit me, may I say that I am at least equally guilty, because the discussion in the last two and a half hours has ranged completely over the oil items. The observations of the hon. member were not confined to one item, and if he is insisting upon a strict interpretation of the rules, his remarks should have been confined to cotton seed. No one attempted to confine him to cotton seed. He was permitted, and I believe properly, to deal with the general question. I was under the impression that the discussion which we have had covered, not to the exclusion of further discussion, but to the satisfaction of the committee, items 277 and 278, at all events. However, I shall not insist. The committee can do as it likes, but it is my duty to point out-the hon. member said he did not want to threaten, and of course I am not threatening-that at the present rate of progress it will take six weeks of steady sittings to pass the items in the agreement. I speak only of the rate of progress, and move that the committee rise, report progress and ask leave to sit again. Evidently it is not the intention to pass the oils items to-night.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Friday, March 19, 1937