1939-03-28

[Stage Direction]
for 1939-40
Mr. A. L. BEAUBIEN (Provencher) presented an interim report of the special committee on radio broadcasting, as follows:
The special committee on radio broadcasting appointed to consider the annual report of the Canadian Broadcasting Corporation and to review the policies of the corporation begs leave to present the following as an Interim Report
Your committee, having heard the evidence of the chairman and the general manager of the Canadian Broadcasting Corporation as to the curtailment in service that must result from a reduction in revenues of the corporation, takes the view that the present scale of radio licence fees shall be continued for the fiscal year 1939-40.
Respectfully submitted,
A. L. Beaubien,
Chairman.


[Stage Direction]
Mr. HUGHES CLEAVER (Halton) moved the first reading of Bill No. 55 (from the
senate) to change the name of Ancient Foresters' Mutual Life Insurance Company to Toronto Mutual Life Insurance Company.
Mr. LOCKHART:: May I have an explanation of the bill?


Mr. CLEAVER:: This company was incorporated in 1934 under the name Ancient Foresters' Mutual Life Insurance Company. It has been found in carrying on the operations of the company not to be advantageous to have the words "Ancient Foresters" in the title. Therefore it is requested that the name of the company be changed to Toronto Mutual Life Insurance Company.
Motion agreed to and bill read the first time. SASKATCHEWAN FLOOD CONDITIONS



QUESTION OF DANGER TO OXBOW AND OTHER DAMS

[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: I desire to direct a question to the Minister of Agriculture (Mr. Gardiner) based on a report appearing in the western press, which states that the Oxbow dam is threatened by floods; that a rush call to Harold Beatty of Spears Airways sent 1,000 pounds of sand in bags to the district. It was reported that the water was going over the top of the dam. The bags were carried to the district in two trips and dumped over the side of the plane as near the town as possible. My question is whether they were successful in saving the dam and how many other dams have been threatened or are likely to go out because of the flood.


Hon. J. G. GARDINER (Minister of Agriculture) :: I have not had a report of any
difficulty in connection with the dam at Oxbow. I hope it has not gone out.



MUNICH AGREEMENT


[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: In view of the fact that the Prime Minister (Mr. Mackenzie King) is to make an announcement with regard to international affairs will he inform the house of the exact terms of the message, to which some reference was made in the press last October, which he was reported to have sent to Right Hon. Neville Chamberlain, congratulating him upon the Munich agreement?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Yes, I shall be very happy to do so,

Fishing Industry-Beam Trawlers



WAYS AND MEANS


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee of ways and means.
Mr. J. J. KINLEY (Queens-Lunenburg):: Mr. Speaker, I desire to take advantage of this motion to bring to the attention of the house a matter that is of great importance to the fishing industry, especially in the province of Nova Scotia. I refer to the annual licensing of beam trawlers, sometimes called steam trawlers, I suppose because they are propelled by steam. The immediate reason for bringing forward this matter at the present time is that before April 1 the Minister of Fisheries (Mr. Michaud) must make up his mind whether he will renew the licences already existing; whether he will receive new applications or, on the other hand, whether he will cancel the licences that exist at the present time. My purpose at the moment is to make an appeal to him, in addition to the representations I have already made, in the interests of the hook and line fishermen of the Atlantic mast.
This matter is controlled by an order in council dated August 29, 1931, which provides:
1. A licence for a fishing vessel using an otter or other trawl of a similar nature, other than a small dragger operated by inshore fishermen, will not be' granted, except under the following conditions:
(a) That the applicant for such licence shall furnish the Minister of Fisheries with evidence that will satisfy the said minister that he cannot obtain an adequate supply of suitable fish to enable him properly to conduct and develop his business from the hook and line fishermen, and that if the licence is granted, the extent of his purchase of fresh fish from the said fishermen will not be adversely affected.
You will note, Mr. Speaker, that there are two conditions necessary for the granting of a licence; first that the operator cannot obtain a suitable supply of fish from the hook and line fishermen, and second that his purchases from these fishermen will not be adversely affected if he obtains a licence. He must satisfy the Minister of Fisheries, according to the provisions of this order in council.
I do not like this order in council. Each year this matter comes up and the Minister of Fisheries must make a decision. The hook and line fishermen who desire to promote their industry and who wish to build vessels are not able to do so because of the insecurity brought about by this legislation, since they never know what is going to happen each year

when this question comes up for consideration. Then again, it puts the Minister of Fisheries on the spot each year, and it seems to me hardly fair that he should be made the umpire, as it were, between different forms of fishing.
I claim that the situation is such that licences should be refused for the year 1939. In the first place there is no question that the corporations can get an adequate supply of fish from the hook and line fishermen; in fact there is an over supply of fish on the Atlantic coast, as there has been for some years. Only the other day we were told by men interested in the business that the cold storages along the coast were full of fish, and that the great difficulty was to get a market for them. There are several large companies on the Atlantic coast engaged in the distribution of fish, but only one company has the privilege of trawling. If trawling is a good thing and something that should be promoted in the fishing industry, why should just this, one company have that privilege? Again, in the interests of employment I think the decision this year should go to the hook and line fishermen. In January, 1938, the one company using trawlers employed nine Lunenburg vessels and 225 men. Then when the fishing season started in the fall of 1938 they laid off five vessels and employed only four of the hook and line vessels. This meant that 125 men in my constituency became unemployed, and for every man unemployed in the primary enterprise there are about three others also unemployed in the allied industries.
I wonder if there was ever any definite matter considered by this house that was looked into by so many commissions, and in connection with which the reports of these commissions were not accepted to the extent that is the case here. In the first place we had the Maclean commission, which went throughout Nova Scotia and New Brunswick and down to the Magdalen islands. The majority report of that commission contained this recommendation:
With mounting density of population and a much larger consumption of fish, it is possible that in some future time steam trawlers may be required in Canada to meet the demands of a large fish consuming population. But that time seems to us to be very far distant. And meanwhile, steam trawlers should in our judgment, without fear of the consequence, be prohibited from landing their fish and from obtaining supplies at Canadian ports, in order that the fishing population of the maritime provinces may be protected and retained.

Fishing Industry-Beam Trawlers
It is only fair to say that the minority report of the chairman, who is now Judge Maclean, dissented from the majority report. He submitted a report of his own, in which he said:
The number of trawlers in use should not exceed that number which will produce from time to time the market requirements in excess of boat and vessel production. The interest of trawler owners and general public interests would be best served by such a policy, and no sacrifice would be required in its adoption.
Of all the commissioners, Mr. Speaker, who have investigated this matter of trawling on the Atlantic coast the opinion of Judge Maclean is the only one except that of Mr. Young of the price spreads, which did not definitely say that the use of the beam trawler should be prohibited.
This matter has been receiving consideration in Nova Scotia during the past week. A resolution was introduced into the local legislature which reads as follows:
Whereas a majority of the royal commission, provincial economic inquiry, 1934, appointed under an act of this legislature, found that the beam trawler "should not be permitted to operate" and recommended "that its use be prohibited";
Therefore resolve that this house urges upon the dominion government and parliament the need for early action to terminate beam trawler operations as recommended by said committee.
This resolution was debated for two days in the provincial legislature, and only two members of the legislature who spoke registered their opinions in favour of the trawlers. A member of the government who on the main motion had spoken against the trawler moved the following amendment:
That this government requests the Minister of Fisheries to grant no licences to beam or otter trawlers for the year 1939 until it is definitely known and decided that Nova Scotian hook and line fishermen cannot furnish an adequate supply of suitable fish.
Thus it was indicated to the federal authorities that before they permit the operation of the beam trawlers it should be definitely known that the hook and line fishermen cannot supply the needs of the fishing industry. In this regard the Minister of Fisheries has the complete say as to what shall be done. There is no appeal from his decision. As I said before, every year this burden is put upon him.
Then there was a commission in Nova Scotia called the Jones commission. On the Jones commission sat a professor of the University of Toronto; also Mr. Alex. Johnston, at one time federal deputy minister of Fisheries. That commission asked for the abolition of the trawler.
I come now to what has been known as the price spreads committee, followed by a royal commission appointed by the government, which went exhaustively into the matter of beam trawlers. The commission reported as follows:-
This argument that the trawlers are necessary to provide continuity of supply, has been advanced on previous occasions, and before other commissions investigating the fishing industry. It has, indeed, been the heart of the case in favour of the trawler. We feel, however, that the new type of fishing vessel known as the Lunenburg auxiliary schooner, the development of which has recently been so successful, offers all the advantages of continuity of supply possessed by the trawler and at the same time utilizes more fishing labour, a point which we consider of great importance. We feel, therefore, that under present conditions, trawler operations should be gradually discontinued by government prohibition.
Can we lightly cast aside the findings of three such important commissions? Was there ever a matter so exhaustively investigated, and upon which there seems to have been so much unanimity of opinion on the part of those who have visited the field? In the department, at Ottawa, where men do their work at desks and by correspondence, we find that there is a difference of opinion. But any man who is sent down into the field to see conditions as they really are comes back with the view that the trawler is not necessary and that our social and economic problems would be better served by sticking to the hook and line fishermen.
The fact that there are three trawlers in Nova Scotia does not tell the whole story. The trawler makes of the fish corporation a primary producer; he uses that instrument as a club which he holds over the heads of the fishermen of the country in order that he may control prices. The fishermen have no bargaining power, because the company with the three trawlers say to the fisherman, when he comes in, "I have a trawler coming in tomorrow; if you do not take the price I will give you, I do not need your fish."
The buying of fish in Nova Scotia is highly centralized. Three big companies do the buying, namely the National Fish Company, Lunenburg Sea Products, and General Seafoods, and it is my opinion that they work pretty closely together. I think also that they control to a large extent the prices paid to fishermen. The Lunenburg Sea Products organization is the most successful fishing corporation on the Atlantic coast. They buy fish from all parts of Nova Scotia. They have fleets of vessels under their own management, and working in cooperation with the fishermen. They do not use trawlers. It is the most

Fishing Industry-Beam Trawlers
successful company on the coast, and it seems to me that that is evidence that a company can get a suitable supply of fish without having trawlers.
It might be said that we have a new market in the United States, and that therefore trawlers are necessary. I must advise the house that the United States fishermen were somewhat concerned about the trade agreement, because they said we were going to flood their market. The report came out that they were going to restrict the action of their trawlers from the port of Boston. But one of the principal items in the treaty is fillets, which go in under a quota of 15,000,000 pounds, being 9,000,000 pounds extra per year, amounting to about 27,000,000 pounds of round fish. The three trawlers now operating from Nova Scotia can produce just about that 27,000,000 pounds of fish, which will 'be necessary to make the fillets to fill the quota for the United States market.
We have an over-supply, and we are told that we should have trawlers because the United States fishermen have trawlers. We are told about two hundred trawlers and all this sort of thing. The United States fishermen have seventy trawlers. I have a telegram before me from Mr. E. H. Cooley, president of the American Fishermen's Association, who tells me that they have seventy trawlers. But the United States people import fish, they cannot get a supply sufficient for their demand, and we regard the United States market as a splendid market for Canadian fish. When it is argued that because the United States fishermen have seventy trawlers we should have seventy, I say simply this, that we dd not need trawlers at the present time, and that the fishermen of the maritime provinces want to make a living.


Mr. DEACHMAN:: If they do not need them in the fishing industry, why do they buy them? If they have seventy trawlers in the United States, perhaps they should also have trawlers in Canada.


John James Kinley: I do not think that is any argument that we should have them in Canada. The question is whether you do or do not need them. They were able to get them from Great Britain at a low price.
Some beam trawler advocates argue that they can produce fish cheaper than the hook and line fishermen. I refer hon. members to what was brought out in the evidence given before the price spreads commission and what is stated in the Maclean report. It was stated there that the cost of producing fish by beam trawler is $1.89 per hundred pounds. That was the cost some years ago, and it is likely higher 
to-day. At no time do the fishermen receive more than a cent and a half per pound on the average for their fish from the trawler companies. These companies are able to save money by buying fish from the fishermen, and they get better fish. According to the evidence given before the price spreads commission by a former president of one of the fish companies, these companies preferred trawlers because it gave them better control of the industry and of prices; they were an instrument by which they were able to control their business without regard to the human element. They were able to get along without bargaining with the fishermen when they wanted to buy fish.
The hook and line method is not inadequate, nor is it uneconomical. The Lunenburg fishing schooner is the most economical fishing machine in the world. The companies owning trawlers recognize this fact. Two new vessels have been built after the fashion of the Lunenburg fishing schooner, and they are now being operated successfully out of Halifax. The fisherman is much better off with the hook and line method of fishing. The cost of a fishing schooner is within the range of the pocket-books of a group of fishermen, whereas a beam trawler is such an expensive machine that only a corporation can purchase it. Anyone in Nova Scotia who wants to engage in hook and line fishing can easily secure a schooner. In Lunenburg this method of fishing is a cooperative enterprise, every vessel usually being divided into 64 shares. Any young man who thinks he is fit to command a vessel can go around among the people of the town and county and sell shares in it. Sometimes those who work on the vessel have shares. This has proved to be the most successful method of fishing in Nova Scotia.
It seems to me we would go far towards solving the great problem of unemployment if the production of fish in Nova Scotia were left in the hands of the hook and line fishermen. What is the argument advanced by the trawler companies? They contend that the Americans use trawlers. I say the United States must import fish because they are unable to supply their own market. On the other hand, there are many fishermen along the Atlantic coast who cannot find employment. In former years the Nova Scotia fisherman could go to New England and ship out on a vessel from Gloucester or Boston, but the immigration laws of the United States do not permit that to-day. These men are in Nova Scotia and our main idea should be to find employment for them.
The trawler companies contend that there are certain kinds of fish which cannot be caught

Fishing Industry-Beam Trawlers
by the hook and line fishermen. For several years they came here with the argument that they wanted to catch rose fish. This fish is caught in deep water; it is a soft-fleshed fish caught principally along the coast of the United States. Its selling price is quite low and there is no profit in it for anyone except these large corporations who want to dump it on certain markets. Recently it was found that this fish had a parasite and I understand the health authorities of the United States have had trouble about its use in many of the western states. Fish from Canada enter the United States under a quota, and if we allow this quota to be filled by redfish caught by the beam trawlers, they will replace the higher priced fish which should ibe going into the United States market.
The trawler companies contend also that they want continuity of supply. The Lunenburg fishing schooner is a more mobile unit than the beam trawler, and it is cheaper to operate. These schooners are equipped with radio telephones and are propelled by diesel engines. They can be brought in and out of port more quickly and are much less expensive to operate. Last year we were told by the trawler companies that they wanted fast transportation. A beam trawler will average nine knots an hour, but a fishing schooner can go from nine to twelve knots an hour. Fish caught one day on the banks can be on the market the next day. When it comes to transportation, the diesel schooner is far ahead of the beam trawler, and their record of continuity is splendid.
Most of these old arguments have been dropped. We are now told that they want these trawlers so that they may catch a few flounders which are probably sold on the English market. The line fisherman can also catch flounders, but when the fishermen bring in too many, the companies use their judgment as to whether they shall buy them. There is one thing which must be admitted about the beam trawler, it is a safer way to fish. However, there is a suggestion now being put forth in connection with the schooners that in addition to the use of dories, they use a long rubber covered line which can be hauled in over the bow and which goes in over the stern. This method will practically double their capacity, and will make the operation of these schooners even more economical. The long line and dory method of fishing from the schooner will make fishing practically as safe as with the beam trawler.
Then we are told that while all this will help the Lunenburg fishermen, it will not help the shore fisherman. If we have an over supply of fish on our markets, if these companies can get their supplies of fish without going to the fishermen, the shore fishermen will suffer. Do you not think that the shore fishermen would be benefited if these companies were obliged to send out their buyers to buy fish from them? There would then be a seller's market instead of a buyer's market in the fishing industry in Nova Scotia.
Hook and line fishermen buy large quantities of bait from the shore fishermen. The hook and line fishermen have built up towns and communities in the province of Nova Scotia. They have helped to establish the allied industries-the sail maker, the blacksmith, the block maker and the shipbuilder; but in view of the insecurity that exists today in the fishing industry people will not build vessels in Nova Scotia now.
The shore fisherman lives on the headlands along the shore, and he must be there to catch the mackerel, the herring, the lobster, and the seasonal fish that frequent those waters at certain seasons of the year. We all know that the headland is the proper place for the shore fisherman to live. But if you take away his backlog, which is the cod fishery, a vital element in making up his revenue, it will make conditions such that the shore fisherman cannot make a living. The first consideration, Mr. Speaker, should be given to the fisherman who lives in the outport and who must maintain himself there for the purpose of carrying on certain of the fisheries of this country, and the cod fishery should be preserved for him.
Suppose someone says that we should allow the beam trawlers to operate; and suppose they increase until you have eight or ten or twelve beam trawlers. There will then be no room for anybody else in the fishing industry in Nova Scotia, and what will you do? You will make of them slum dwellers in the city.
Our shore fishermen are skilled workers. They live in humble homes, it is true, but in healthy homes along the shore of the province where they can bring up their families in wholesome surroundings and get an education in the rural districts; and the rural people are after all the backbone of this country. Anything that tends to centralize this industry in one big port is bad for the province of Nova Scotia. There is no reason why the hook and line fishermen should not be sustained. The menace of the trawler should not be allowed to grow; I contend that for the year 1939 no licences should be issued to the beam trawlers.
There has been a lot of propaganda in this country in favour of the trawler. Some

Fishing Industry-Beam Trawlers
months ago I observed in the Financial Post an article headed, "Truce in the trawler war." The article goes on to say:
A skilful manoeuvre directed, it is believed, by dominion government officials, has transformed the opposing armies in the maritime trawler battle into comrades in arms-though not perhaps yet in each other's arms.
In a letter to the editor of the Financial Post I said that I did not think this article correctly portrayed the situation as regards either the fishermen or the general public, and I asked to be permitted to write an article for the Financial Post. They sent one of their representatives here and I had a discussion with him. I saw him upstairs, and I expected that the Financial Post would invite me to write the article. Their representative said that the article that had appeared in the Financial Post had been prepared by their own correspondent in the interests of the public. But the Financial Post did not permit me to write an article to be reproduced in that paper in the interests of the public, and I have not yet been granted that privilege.
To sum up, Mr. Speaker, under the order in council you are not permitted to have a trawler unless you cannot get an adequate supply of fish from the hook and line fishermen. I claim also that the purchases from the hook and line fishermen should not be adversely affected, as undoubtedly they have been. The burden was put upon the minister to decide, and he must decide before next Saturday.
I liked better the order in council of 1929. Hon. members will recall that when the Hon. Mr. Cardin was minister of fisheries he visited the maritime provinces, and after he came back to Ottawa legislation was passed by parliament amending the Fisheries Act. Under section 56 beam trawling was not permitted except under certain conditions. This led to an order in council which practically prohibited beam trawling, because the order in council of 1929 stipulated that the trawler must be built in Canada and provided for the payment of a tax which would have been prohibitive and would have driven the trawlers out of business. The trawler companies refused to pay the tax and took the matter to the courts. After the case had been before the courts for some time it was withdrawn, and the money thaw had been paid in taxes by some companies was refunded.
The order in council under which we are working to-day is the one under which the minister must act in dealing with this problem.
Parliament has spoken on this question; three commissions have also spoken. An order in council was passed in 1929, which is said

to be ultra vires, but which expressed the opinion of the government and parliament of this country. All the evidence is against the trawler, yet the companies concerned are able to convince people in this part of the country that beam trawlers are necessary in the fishing industry. But the people that we should sustain in the province of Nova Scotia are the hook and line fishermen. We are told that we are against progress. We come here and say to you that what parliament has done in the past should be invoked now, that the time is even more opportune for prohibiting beam trawlers.
While I know this is a difficult question, and while I appreciate the difficulties of the Minister of Fisheries in view of the contending interests who prosecute the fisheries in this country, the evidence is wholly on the side of the hook and line fishemen. I trust that when the minister makes his decision he will see to it that the interests of these fishermen are preserved and protected so that once the industry is stabilized it can go forward- and be a benefit to the whole province of Nova Scotia.
Mr. J. S. WOODSWORTH (Winnipeg North Centre) Mr. Speaker, while I have no expert knowledge of the fishing industry, representations have been made to me as to the position in which the fishermen are placed, and as representing one of the groups in this house I feel I could not let the opportunity pass without endorsing what has just been said by the hon. member for Queens-Lunen-burg (Mr. Kinley). I have no desire to go over the ground which he has so fully covered. As I have looked into the situation, one or two points appeal to me which I should like to bring before the house.
First.of all, these licences for trawling are being given as a special privilege. The applicant for the licence must convince the Minister of Fisheries that he cannot obtain from the hook and line fishermen an adequate supply of suitable fish to enable him properly to conduct and develop his business. The hook and line fishermen claim very emphatically that that condition does not prevail, that they are able to provide an adequate supply of fish. Futhermore, they claim that even under the new arrangements that have been made under the treaty they can fill the entire quota without any assistance from the trawlers. It is quite obvious that members of parliament cannot go into that technical matter, although sometimes it seems to us from the west that members from eastern Canada discuss the question of growing wheat, and matters of that kind. However, these are matters for the specialist.

.	Fishing Industry-Beam Trawlers
I would emphasize what the hon. member for Queens-Lunenburg has said, that every royal commission appointed by the government in the past ten years, including the price spreads committee, consisting of members of parliament, has recommended the abolition of the trawler. With that situation prevailing, it seems to me the minister should be able to produce overwhelming evidence to show why the granting of licences should be continued.
A few weeks ago, on March 11, there was published in the Halifax Herald an interesting table showing what the fishermen get and what the consumer has to pay. I shall not take the time to read the whole table, but there are three or four items which are fairly representative, and perhaps I might give them:
Fisherman is Consumer pays
paid by	delivered
wholesaler	into home
Cents per lb.	Cents per lb.
Haddock fillet.	..2	20
Fresh cod fillet. .. li	15
Finnan haddie.	..2	12
This appears under the heading "Fish spread from producer to consumer."


John James Kinley: I do not want to interrupt
the hon. gentleman, but he speaks of fillets of haddock as being sold at two cents a pound. A fillet is a third of the fish, and that would mean six cents.


Mr. WOODSWORTH:: I am quoting from the table. Fresh cod per pound is li cents to the fisherman and 15 cents to the consumer. That is the information this newspaper gives, and I am quoting as I stated from a table published in the Halifax Herald of March 11. Perhaps it is only fair to say that there are some losses, as noted here, in cutting off the heads, fins, tails and so on. Still that is a tremendous spread, and it may indicate some of the reasons why the ordinary fisherman feels that he ought to have a fair break in this matter. Not only, he thinks, is it a matter of his being able to fill the quota, but in addition to that, this arrangement by which the trawlers are not only fishermen but also dealers gives an unfair advantage to the trawlers, and this seems to be the result.
I should not like to be considered as one who is in any way blocking the natural progress in the development of the best means of getting fish. I know something about the difficulties with which we are faced in regard to trawlers on the Pacific coast. I do not know whether the same difficulties obtain on the Atlantic. But under these circumstances, 71492-147
with the information before the house, it seems to me that the minister should consider very carefully the whole situation before giving licences to the trawlers.


Mr. V. J. POTTIER (Shelburne-Yarmouth-Clare):: I wish to correct an impression that has 'been left by the hon. member for Winnipeg North Centre (Mr. Woodsworth) with regard to the price of fillets. A fillet is about a third of the fish, and I should be very much surprised if fillets sold at less than from five to six cents per pound. That would be a fairer price. That is as I understand the situation, and I make that remark in order to give a fairer picture of it. Two cents a pound is altogether too low for fresh fillets, unless there is a glut or something of the kind.
I have heard a great deal about the beam trawler, and I think I can truly say that I have given more thought and consideration to this one item than to any other single question connected with the fishing industry. As far back as I can remember, the fishermen in my constituency have been almost unanimous in their opposition to the trawler.


Mr. ISNOR:: What about the local member?


Vincent-Joseph Pottier: I am speaking of the fishermen in my constituency. I have no doubt the hon. gentleman is referring to the member for Digby county. The district of Clare, which forms a part of my constituency, is opposed to the beam trawler. That takes care of the remark of my hon. friend. The feeling has been that the 'beam trawler and the hook and line fisherman cannot exist side by side when both are given an unrestricted field. That is to say, the market for our fish is not such that you could allow a number of beam trawlers to operate without any restriction whatever, because in the end they would take over the production from the hook and line fishermen. That is the view of the fishermen in my district, and it dates back to a time during the war and afterward.
In 1910 we had one beam trawler; in 1913 five; in 1915, four; in 1917, six; in 1918, eight; in 1919, seven; in 1921, six; in 1923, seven; in 1925, nine; in 1927, ten. At the present time we have three. The three beam trawlers now operating catch approximately one-tenth of the fish caught in Nova Scotia. I think it is fair to say that we catch about 200,000,000 pounds of ground-fish in that province, and the three beam trawlers catch about 20,000,000 pounds.
To give a fair picture of the benefits which would accrue from the abolition of the three beam trawlers, one must say that the resulting good is exaggerated. For example, in



Fishing Industry-Beam Trawlers
one of the counties I represent, the county of Yarmouth, if you abolished beam trawlers to-day and related the proportion of fish they catch to the total quantity of fish caught in Nova Scotia, you would find roughly that each fisherman had benefited to the extent of between seven and ten dollars.


Mr. MICHAUD:: Per year.


Vincent-Joseph Pottier: Yes, per year. I think I can say that, because there is no use in exaggerating the situation. In respect to some counties that would not be true, because they catch the larger proportion of the fish, and without the 20,000,000 pounds caught by the beam trawlers it is fair to expect that they would benefit in proportion; twenty million pounds averaged at li cents a pound comes to about $300,000, and we have between 12,000 and 13,000 bounty fishermen who would be involved in the division of that sum. Some individuals of course who catch more fish would get a larger proportion of the $300,000, such as $20 or $30.
Thinking back over the years, and seeing the trend that has developed, fundamentally the issue as I see it is not only the three beam trawlers, but who is going to survive in Nova Scotia with beam trawling or hook and line fishing. Trawlers and hook and line fishing cannot exist together; with unrestricted trawling in Nova Scotia the hook and line fishermen are doomed. This is demonstrated by what has been happening for the last ten or fifteen years in Massachusetts. For some years I have gone to the fish pier every time I visited Boston, and it is easy to see what is happening there. They have unrestricted beam trawling; the number of trawlers is increasing, and the hook and line fishermen are being gradually pushed out. There are several reasons for this, but the principal one is that a man on a beam trawler in Massachusetts makes about twice the amount that the hook and line fisherman does on a fishing schooner. We have to be careful to see that we do not have in Nova Scotia a repetition of what is happening in the United States.
I speak of beam trawlers unrestricted in number. Fundamentally that is what has brought about this agitation. After the war. when the demand for fish was good, we increased the number of beam trawlers; then the demand fell off; the United States placed a tariff on fish; the West Indian and other foreign markets were affected, and the fight was on.
I do not know what view the minister has. He has to deal with the matter on the evidence submitted to him. But it should not be left in that position; we should have one

thing or the other, and the minister should not be harassed and criticized by one side and the other every year. Parliament should relieve the minister of the burden and decide whether we are to have beam trawlers or not. Then the fishermen as well as the companies would know where they stand, and it would be better for the industry generally. I suggest to the minister that if he is going to renew these licences, they should be renewed only for at the most sixty or ninety days, and in the meantime the whole question should be referred to the fisheries committee with instructions to submit definite recommendations so-that this matter may be settled once for all.
When this question goes before the committee, two or three other important matters should be considered. There is the question whether foreign trawlers should be allowed to come to our three mile limit when our own trawlers have to keep outside the twelve mile limit. At the present time hundreds of foreign beam trawlers operate on the Atlantic coast and some of them come up to the three-mile limit.


John James Kinley: What does the hon. member say is coming to the three mile limit?


Vincent-Joseph Pottier: I said there were hundreds of foreign beam trawlers on the Atlantic coast. It may be 250 or 350.


Joseph Enoil Michaud: The number is 300.


Mr. CAHAN:: I do not know the numbers, but my hon. friend's legal argument is certainly sound.


Vincent-Joseph Pottier: In former years it was hoped that foreign governments might be approached with a view to bringing about some order in this matter and having their trawlers observe the twelve mile limit, thus reserving our shore fishing for our own fishermen who are fishing from day to day in small boats and can go out only a limited distance. This question should be dealt with by the fisheries committee.
Another matter which should be dealt with-is foreigners coming in and hiring on Nova Scotia fishing vessels. There should be some restriction on Newfoundlanders who, on our own vessels, are catching as much fish as the beam trawlers. Some of these captains who argue against the beam trawlers have crews who come from a foreign country.


Charles Hazlitt Cahan: The hon. member does not call Newfoundland a foreign country, does he?-


Vincent-Joseph Pottier: Well, not necessarily a. foreign country-


Joseph Enoil Michaud: Extraterritorial.

Fishing Industry-Beam Trawlers


Vincent-Joseph Pottier: These things are of paramount importance and should be considered by the committee with a view to recommending to the house a definite policy which would relieve the Minister of Fisheries of the burden which now rests upon him, so that this question of renewal of licences would not come up each year without any appeal from his discretion or reference to any other tribunal. This, of course, is subject to the minister having it in mind to renew the licences. As an alternative I suggest that since a resolution was passed in the provincial legislature to the effect that these licences should not be renewed unless it is definitely known and decided that the shore fishermen cannot produce the fish, a judge of the Supreme Court of Nova Scotia should be selected to go into the evidence submitted by the corporation as to whether they can get the fish or whether they cannot. The facts would be brought out by a fair and impartial person. I do not see how anyone could object to that procedure. That would be my second alternative, my second suggestion, before these licences could be issued. It might take two or three months to have this inquiry made, and in that case I would have no objection to the licences toeing renewed for that short period of time, while the matter is toeing considered.
I cannot agree entirely with the thought that Canadian owned trawlers are going to remedy the situation. You could develop smaller trawlers; you could develop schooner trawlers that would be just as monopolistic as the present trawlers. So I suggest caution in deciding whether or not Canadian owned or Canadian registered trawlers


John James Kinley: Canadian built.


Vincent-Joseph Pottier: But even if you have a Canadian built trawler fundamentally he is going to be on one side or the other, whether the hook and line fisherman is to survive or whether the trawler is to survive.
I think I should say that my fishermen are practically unanimously against the trawler. I would ask the minister, before issuing these licences, if he is planning to do so, to refer the question to the fisheries committee or appoint a judge to decide and report on the facts with reference to the contention of the companies that they cannot obtain a supply of fresh fish.


Hon. H. H. STEVENS (Kootenay East):: Mr. Speaker, the condition of the fishing industry, particularly in regard to the mari-times, is a matter which has interested parliament for a great many years. The one outstanding thing which may be said in this 71492-1471
connection is that parliament has done very little about it. The hon. member for Shel-burne-Yarmouth-Clare (Mr. Pottier), who has just taken his seat, suggests that this matter should be referred to the fisheries committee. I do not see any great objection to that, except that this matter has been investigated over and over and over again, and at the conclusion of each investigation virtually nothing has been done. I do not believe any additional information could be secured. I am certain that the department and the minister have been surfeited with information, contentions and representations of all kinds; in my opinion there is no need for further investigation. What is really needed is action.
The hon. member said that he was opposed to unrestricted trawlers. That was a qualified statement. I should have thought he would take a definite stand on this question, such as that taken by the hon. member for Queens-Lunenburg (Mr. Kinley).


Vincent-Joseph Pottier: I said definitely that my fishermen were opposed to trawling.


Henry Herbert Stevens: But is the hon. member
opposed to it?


Vincent-Joseph Pottier: I am representing my
fishermen. I hope the hon. gentlemah does not think I am representing anybody else.


Henry Herbert Stevens: That is better, because
the minister will be called upon to issue trawler licences within the next few days, and I think it desirable that hon. members speaking to this question should express their opinions very definitely to the minister. The hon. member for Queens-Lunenburg has put up a very strong appeal, and I intend to express my views also. I have no connection with the fishing industry, but I think it necessary that every member of this house with any knowledge of the subject, or any member who has taken the trouble to inform himself, should express his views.
The suggestion of my hon. friend in regard to the twelve mile limit is a very sound one. The whole field in that regard should be explored and possibly an effort made to come to an understanding with other countries under which the twelve mile limit might be substituted for the historic, recognized three mile limit. But that is a large question of policy.


Mr. ILSLEY:: It has been contrary to the whole policy of Great Britain from time immemorial to extend that three mile limit.


Henry Herbert Stevens: Well, we did it in connection with liquor right in Canada, right on our own coast, where these fisheries are.

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located. If we can deal with it in regard to liquor surely we can at least explore the situation in regard to fisheries.


James Lorimer Ilsley: In connection with liquor
it was an anti-smuggling provision.


Henry Herbert Stevens: Surely we do not have
to have a venal crime before the government takes action. However, that does not affect this immediate issue, and I suggest to the minister that the question is one which might be taken into consideration and explored, for whatever it may be worth.
Coming now to the question before us, it seem to me a comparatively simple matter. The policy of this country-and the only policy as far as administration is concerned- that has been followed by different governments is set forth in the order in council which was read by the hon. member for Queens-Lunenburg. A mere order in council is a pretty weak basis for administration. Perhaps it was all right at the time, for the moment, but it would have been much better if we had crystallized that order in council into an amendment to the act which would have declared our position beyond peradven-ture. Then, as my hon. friend said a moment ago, the minister would not be badgered every year with the responsibility of coming ito a decision. However, that is the basis of [DOT]our policy. In effect that order in council .-simply says that if it can be shown that there is an insufficient supply of fresh fish from normal sources, namely the shore fishermen or the hook and line fishermen, the minister is at liberty, as a matter of emergency, shall I say, to issue trawler licences. I think no one will challenge my interpretation of the order in council.


Joseph Enoil Michaud: Except that it is stated in a positive rather than in a negative way.


Henry Herbert Stevens: The question arises, is there an insufficient supply of fish? Need I do more than ask the question? One of the problems with which we are confronted is the finding of markets for our fish. The senior member for Halifax (Mr. Finn) a few weeks ago discussed the question of lobsters, and in the course of that discussion the question of a market for fish came up. Last session, and again this session, the hon. member who has just taken his seat, together with other hon. members from the maritimes, made eloquent speeches pleading with parliament to do something to find extended markets for the fish of the maritimes. We are justified, I think, in concluding that there is an ample supply of fish; therefore on that ground there is no need for the issuing of trawler licences.

I propose to refer briefly to the investigation made by the price spreads committee and commission so far as it related to this matter. The subject was gone into fully, and I believe the report discloses what is really at the root of this whole problem; I shall refer to that later, after I have read a few extracts from the report. At page 175 of the report I find this paragraph:
It appears that formerly there were a number of small companies or dealers purchasing fish from the producers in practically every fishing centre along the Atlantic coast. Gradually, consolidations and amalgamations took place; some of the dealers were forced out of business; larger companies arose. For a time these larger units maintained plants along the sea coast, but later the plants located at remoter points were closed and there became apparent a general trend towards centralization. Even in communities where dealers and companies continued to operate, this trend toward centralization had its effect through a decrease in the number of those offering to purchase fish. In other words there was a local "centralization" even in instances where this did not extend to provincial " centralization."
Here I think we have largely the crux of the whole problem. There has been a gradual concentration in the processing and distribution side of the fisheries industry. I remember a year or two ago visiting some of the centres along the straits of Canso, where magnificent plants had been bought up by the large central company, and closed down; the purchase of fish in that whole district had been more or less abandoned. The result was that the fish had to be taken all the way to Halifax to find a market. Obviously this was done, of course, as a part of the business efficiency methods of the distributing and processing company, but with disregard for the convenience and indeed the welfare of the fishermen themselves.
Let me read further:
The evidence submitted to us, however, clearly indicates that there are few, if any, problems in connection with actual production.
This supports what I said a moment ago about supply.
The catch of fish in eastern Canada is ample, and, in some seasons, more than ample to meet the demands of Canadian and export markets.
That I submit in respect to the question of supply. As to earnings of fishermen, everyone knows that in the maritimes they are scandalously low. The figures given here, which prevailed in 1933-there may have been some variations since-were these :
Evidence submitted by competent witnesses indicates that the earnings of the average fisherman in the different localities of eastern Canada for the year 1933 ran from $75 to $400, according to the district in which the fisherman worked.

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Of course I am not including in these figures the workmen on the trawlers. In justice I should say that these figures apply chiefly to shore fishermen. The point I wish to emphasize is that the earnings of fishermen are extremely low. The fisherman's condition is certainly very serious. That I offer further on the question of supply. The report goes on:
These low earnings are in the vast majority of cases, not due to any lack of industrious application to his work on the part of the fisherman, who works longer hours and endures more hardships than do those in many other occupations. They are the result of unfavourable economic conditions which have reflected themselves in the industry and which for the fisherman are intensified by the fact that on the side of the corporation buyer there is strong bargaining power; on his side complete or almost complete absence of such power.
Here again we have the effect of the concentration of control. Let me pause there to say this: After a close study of the problem from the standpoint of distribution and processing, and from that of the fisherman, my firm conviction is that the corporation, chiefly the largest one, desires to have the trawler so that he may have large quantities of fish which will enable him to control the market price of fish from the hook and line fishermen and from the shore fishermen. The minister shakes his head. He may differ from me, and others may differ. But that is my firm conviction, after a careful study of the whole business. I am convinced from the evidence which we heard from the heads of the corporation itself as well as from others-and there were several days of it- that the main reason for the persistent demand for the existence of the trawler is to maintain control over the supply of fish.
If we take the argument they have advanced and treat it seriously, we find it is this. They say that there is a fluctuation in the flow of supply from the hook and line and shore fishermen. That is challenged; however it is their argument. Therefore in order to maintain a steady supply to the markets of Montreal, Toronto and other points in upper Canada, they must have the trawlers. Their argument is that if they cannot have the trawlers, they may break down in their distribution to these centres. I do not consider the argument worthy of very much consideration.


James Lorimer Ilsley: Why not?


Henry Herbert Stevens: First, in the light of the facts as we know them with regard to a supply of fish-and I say an ample supply of fish.


James Lorimer Ilsley: A steady supply?


Henry Herbert Stevens: Yes, a steady supply on the market, and-here is the point exactly-not to the convenience of the big processing firm.


Joseph Enoil Michaud: To the consumer.


Henry Herbert Stevens: Yes, the consumer. What consideration is given the consumer, after all?


Joseph Enoil Michaud: Very much.


Henry Herbert Stevens: What consideration is
given the consumer? He has to pay from 18 cents to as high as 30 cents a pound.


Joseph Enoil Michaud: For good fish.


Henry Herbert Stevens: Yes; and Mr. Fisherman gets from three-quarters of a cent to half a cent a pound. When I asked the head of the institution if there was not somewhere in between a cent and a half-taking the highest price he was giving-and the selling price of 18, 20 or 30 cents another half cent for the fisherman, he shook his head and said he did not think it could be found. No; there was very little consideration for the consumer. And I am not at all satisfied with the method of distribution of fish, despite all this [DOT] boasting of efficiency on the part of the larger corporation. There is perhaps an improvement, but I doubt if there is very much. We can show extensions of business here and there. But, for example, let us consider the city of Ottawa: Anyone interested in fish merchandizing who will walk around this city and see the way maritime fish is offered to the consumer here will wonder that as much of it is consumed. That is my conviction so far as the distribution in Ottawa is concerned.


Charles Hazlitt Cahan: That is due largely to a civic regulation which ought to be abolished if we are to have edible fish in the city of Ottawa.


Henry Herbert Stevens: Possibly so. But what I am getting at is that we are always willing to find some almost visionary excuse for the distributor-in this instance the distributing company; but it is always at the expense of the fisherman. Here we are, going over this problem year after year, although the facts and conditions have been known for ten or fifteen years. We know about the problems of the fishermen, but outside of some little grant here or some little sop or palliative there, we are doing little or nothing to meet their needs. The first thing we ought to do is to endeavour to get the producing end of this business on a sound footing.
Let us consider the interjection made a moment ago by the Minister of National Revenue with regard to the question of

Fishing Industry-Beam Trawlers
supply. Any study of the . history of the industry will disclose the fact-and the hon. member for Queens-Lunenburg will set me right if I am astray-that within the last ten or twelve years the schooners from Lunenburg have developed a technique in connection with hook and line fishing which is a great credit to the fishermen of that district. I am told by those who are competent to judge that in its essence the Lunenburg schooner is equal or superior to the trawler, except that it does not sweep up huge quantities of fish in a short time. Steady progress has been made in the last ten or fifteen years by the producers of fish in improving their methods. I am told that these splendid schooners now surpass anything in the world as a fishing instrument. The supply of fish is just as soundly assured as it would be through the operation of trawlers.
There is another question to be considered, that of conservation. I know that this will be brushed aside, but it should be considered nevertheless. I am not advancing this argument with a view to doing away with the trawler because of destructive methods; I am simply saying it is a factor which should be considered, particularly where we have assured an ample continuous supply. The trawler sweeps the 'bottom of the fishing areas; it sweeps into the ship all sorts of immature fish, poor fish and good fish. I am told there is a possibility of the trawler destroying the marine vegetable life on the ocean floor, which may have some effect upon our fisheries. These are questions to be determined by the fishery experts. I believe they are divided in their opinions, but one thing is certain, that the trawler method of fishing is not helpful to the conservation of fish. At least we can dogmatize on that point.


Vincent-Joseph Pottier: That is why we should try to have foreign trawlers keep outside the twelve mile limit.


Henry Herbert Stevens: I agree that that would be an excellent thing if it could be done. We should have an understanding with the other countries.


Charles Hazlitt Cahan: The only possible way it could be done would be by international convention.


Henry Herbert Stevens: My hon. friend is quite right, and I would strongly urge that that be done. I am told that very few of them come within the twelve mile limit, but if they do, the effect is bad.	>
In its report, after considering all the factors, the question of supply, the low wages TMr. Stevens.]
paid to the fishermen, the processing costs, the consumer interest, and so on, the commission made this recommendation at page 198:
This board might be known as the "Fisheries Control Board" and should be restricted only by the terms and provisions of the marketing act. The proposed board should not in the first instance attempt to institute revolutionary reforms, as affecting various branches of the industry, but should proceed through successive steps to eliminate, in logical order, the more pressing disabilities. Its most important duty would be to make every possible effort to ensure that the fishermen secure a fair price for his fish and not, as at present, the pittance that is left over from the consumer's dollar after all other branches of the industry have received their share. The board might next approach the problem arising from conditions in domestic retail markets.
Let me pause to give utterance to a bit of philosophy of mine with regard to the primary producer, not only of fish but of other products as well. The first duty of parliament, indeed I would say the first duty of all students of economics who have the welfare of Canada at heart, should be to see that the primary producer receives a fair return for his effort. That should be the fundamental principle underlying all our economic thinking. It is the basis of whatever I may have in the way of philosophy in approaching economic problems. The same applies to the farmer. I am sorry to say that many approach this question from the point of view of what they call the consumer's dollar-page the hon. member for Huron North (Mr. Deachman). They take what they call the consumer's dollar, and out of that must come distribution costs, transportation, processing costs and the profits of these various activities. The primary producer gets what is left. My argument is that it should be exactly the reverse. There should be a fair return to the primaiy producer, in this instance the fisherman, and upon that you should erect your costs. Then it should be the duty of parliament or other public bodies to scrutinize carefully the subsequent charges and costs, such as processing, distribution and so on, to see that there is no unfair exploitation of the consumer. If we do not give the primary producer a fair return, we cannot have a healthy economic condition. Roughly speaking, one-half of our population is in agriculture while another substantial portion is engaged in the fishing industry. Then we have our lumbering and mining, both major operations. All of these activities are of immense importance to Canada. If this great body of activity is not assured a reasonable and fair price for its efforts, there cannot be

Fishing Industry-Beam Trawlers
a healthy economic condition in the state. Let me continue with the reference the report makes to this board, which I submit is quite appropriate at this time. They recommend further:
Through successive steps the board might then proceed to action in connection with disabilities of the industry in something approaching the following order:
(1)	The elimination of misrepresentation of varieties and grades of fish as now prevailing in the retail markets in Canada.
I pause there to interject what I said a moment ago. One of the difficulties in the interior part of Canada, particularly in the densely populated parts of old Ontario, is the lack of accurate information as to the varieties and uses of fish. The minister and his predecessor have done a good deal to improve this condition. Lately we have had a number of broadcasts by some charming lady whose name I have forgotten. All this is useful work, but it merely touches the surface. I continue:
(2)	The establishment of a higher standard of quality of fish marketed in Canada by regulating the conditions under which fish, and especially fresh fish, may be handled.
There is a long story there which might be elaborated.
(3)	The establishment of adequate inspection of grades as affecting products for the Canadian and export markets.
(4)	The elimination of consignment shipments.
This is something which might very well engage the attention of the government.
(5)	The elimination of cut-throat competition and other unsound trade practices.
This could be done by making the trade and industry commission a functioning body. In saying that, I do not intend to reflect upon the late Mr. Justice Sedgewick. During his excellent administration his time was fully occupied with the tariff board; the trade and industry commission was a mere incident. It has never been given the consideration or support which it deserved. Such matters as I have mentioned ought to be referred to the suggested board for its consideration and finding-the elimination' of cut-throat competition and other unsound practices; the direction of surplus production of fish through channels calculated to bring the most profitable financial return. Let me say this in connection with the export business, whether in fish or in any other product. It is possible that with the growing control of markets the world over, the nation as a whole will be forced to take some part in the export of certain of our primary products. I shall not go
further into that at the moment. There is this other question which ought to be referred to the board: a thorough survey of conditions surrounding, as well as the disabilities retarding. development of existing and potential export markets.
These are some of the suggestions that were made. I do not see why such a board as that recommended by the price spreads commission has not been set up before this. Even though there may be a question of jurisdiction, such a board could in my opinion, through the effect of publicity alone, as I have said in this house before in regard to other matters of the kind, where jurisdiction is in question, do a great deal of good.
Let me come back to the immediate issue before us, namely, whether or not within three days to issue licences for these trawlers. I suggest to the minister that for this year we give the fishermen a break. Let us have the corporation do the suffering, if there is to be any suffering, refuse the licences for the trawlers this year, and see what happens. The suggestion is made that if the licences are refused, there will not be a- supply of fish. Very well; let us prove it. Why should we always make the fisherman the goat? Why must we always do nothing for fear of interfering with some large corporation operating trawlers, for fear that they might peradven-ture suffer, on the other hand ignoring the interests and repeated requests of the fishermen? Let us this year reverse the process and refuse the licences for the trawlers. Let us give a test to this request which the fishermen have made, and see if we cannot improve their conditions. At the end of the year, if we see that we have actually improved the conditions of the fishermen, and if there should be some loss or alleged or supposed loss on the part of the corporation, it will be a question of balancing advantages and disadvantages.


Joseph Enoil Michaud: But what if the loss is on the other side? What if the hook and line fishermen lose?


Henry Herbert Stevens: As a result of cancellation of the licences?


Joseph Enoil Michaud: Yes.


Henry Herbert Stevens: The only way that loss could come about

and here I warn the minister-would be through a deliberate and intentional effort on the part of the corporations that are buying these fish to penalize the fishermen.


Joseph Enoil Michaud: But the damage would be there, nevertheless.

Fishing Industry-Beam Trawlers


Henry Herbert Stevens: Then parliament should be made aware of what had happened, and perhaps more drastic measures should be made effective. I have not an atom of sympathy with any institution which would cause loss or suffering to a body of primary producers, just out of spite; just because a policy they advocated was not put into operation- not an atom of sympathy; and nothing this parliament could do would be too severe in dealing with such a situation.


Vincent-Joseph Pottier: Refer it to the fisheries committee.


Henry Herbert Stevens: No, this is something to be acted on right now. I am not reflecting on the fisheries committee at all. Refer your twelve mile limit and these other questions to the committee, but on this particular question let us have action. Let the government, I was going to say, take the bull by the horns, but that would be a mixed metaphor-let them take the fish by the tail and refuse the licences this year, and let us see what will happen as a result. My own feeling is that if these corporations play the game decently there will be benefit to the fishermen, and we shall find that we can get along without the trawler. If the result is such as to warrant it, one might -I am not saying that it should be done- consider the question whether the corporations should be compensated for the loss of the trawlers, assuming it were considered desirable as a matter of permanent definite policy that there should be no trawlers. Let us at least give it a trial. If three trawlers are good for the fishing industry, if trawling is the best way as the hon. member for Huron North seemed to suggest a little while ago, then why not six or twelve or twenty-four trawlers ?


An hon. MEMBER:: Never.


Henry Herbert Stevens: No, there would be a revolution down there.


Charles Hazlitt Cahan: Will my hon. friend allow a
question?


Henry Herbert Stevens: Certainly.


Charles Hazlitt Cahan: Has he considered the effect of abolishing trawling in the maritime provinces, and allowing trawler fish to come into our markets under the present customs duties?


Henry Herbert Stevens: I would certainly deal with that situation by increasing the duties if they did come in to any great extent. My hon. friend has asked a reasonable and pertinent question, but let us look at this thing. We have an asset in our fisheries which we in this parliament control. We have 
some thirty to forty thousand fishermen engaged in that industry, with tens of thousands more indirectly affected. In three provinces fishing is substantially the major industry. The maintenance of this industry is something worthy of almost any action on our part. If fish filter into our markets from trawlers from Boston or other United States ports, we can deal with that situation, and I would not hesitate to deal with it. This idea that protection is something which should be eternally abhorred is all wrong. In taking that attitude we belie ourselves because we give protection indirectly, this way and that, in many ways; but hon. gentlemen opposite cry to high heaven when the word "protection" is used. Self-preservation is the first law of nature, and reasonable protection for indigenous industries of this kind is the perfectly sound and natural course for us to take, I would not hesitate a moment to meet a contingency of that kind by adequate protection. But let us give to the fishing industry the opportunity which is now before us of doing something at least towards its improvement.


James Lorimer Ilsley: Mr. Speaker, I should like to say a few words on this question. I do not know that I would have spoken this afternoon except for the remarks made by the hon. member for Kootenay East (Mr. Stevens). He seemed to assume that the issue here was one between the interests of the fisherman and the interests of the big companies or of one big company, and of course after my hon. friend, with his parliamentary experience and forcefulness, repeats that a number of times hon. members and others are perhaps likely to assume that it is the real issue. The question here is not whether parliament or the minister should act in the interests of the Maritime National Fish company or in the interests of the fishermen of Nova Scotia. The question here is what is in the interests of the fishermen of Nova Scotia.
I should like to say a few words about the background of this matter and about the trawler issue generally. I have listened to discussions in this house during many sessions, and the situation does not develop a great deal as the years go by. There are, however, some slight changes.
As has been pointed out, there are fishing on the banks off the shores of Nova Scotia, the 'banks of the north Atlantic, about three hundred American and foreign trawlers. Canada has, all told, three trawlers under licence, all three owned by one company, the Maritime National Fish company, which has its head office at Halifax and does business

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there. It used to be said that the Maritime National Fish company was a United States owned corporation, and that fact was always stressed in the debates; but since 1937 that can no longer be said, because the company, a Canadian corporation, is now widely owned in the maritime provinces. The question, however, is this: Shall the Maritime National Fish company be granted a renewal of its trawler licences?
As to the effect of that, if it were done, I want to trace the facts in detail as I see them. Hon. members must realize that in Nova Scotia there are many types of fishing for ground or bottom fish. There is schooner fishing. The centre of the schooner fishing industry is, I suppose, the town of Lunenburg from which the hon. member for Queens-Lunenburg (Mr. Kinley) comes. There are the inshore fisheries, which extend almost all around the shores of Nova Scotia. The hon. member for Shelburne-Yarmouth-Clare (Mr. Pottier) is chiefly interested in the inshore fisheries. East of Halifax, along the long shore-line of eastern Halifax, Guysborough and Richmond, are a large number of inshore fishermen. I believe the bounty figures show about 3,000 of these inshore fishermen along that long coast.


Charles Hazlitt Cahan: That is boat fishing.


James Lorimer Ilsley: Yes, the inshore fishermen.
They go out in small boats and fish, bring their catch in at night, go out again the next day and so on. The economic distress in Nova Scotia is mainly on that shore-line from Halifax ea'st. That is where conditions became desperate a few years ago, and conditions there are still bad. That is the home of the cooperatives. That is where these priests, clergymen and others have taken an interest in the conditions in their various communities and have organized cooperative stores, credit unions and cooperative lobster packing plants, and they have made some progress in improving the economic condition of the people.
In considering the fishing problem of Nova Scotia, I am not ignoring the problem in my own constituency, or the problem in the constituency of the hon. member for Shelburne-Yarmouth-Clare; and there is some problem, not nearly as serious as in the eastern constituencies, in the constituency of the hon. member for Queens-Lunenburg. Ordinarily, however, we think primarily of the problem that exists in the great eastern district, with a large population and a small production, and its poverty. What sort of business does the Maritime National Fish company at Halifax carry on? It carries on predominantly
a fresh unfrozen fish business. Hon. members this afternoon have not made any reference to the distinction between the fresh unfrozen fish business and the fresh frozen fish business. Perhaps the hon. member for Queens-Lunenburg did; I do not know; but I do not think a clear distinction was made between the fresh unfrozen fish business and the fresh frozen fish business. There is all the difference in the world between the two, and that difference is at the root of the question. It is that distinction which makes the question a difficult one, not a one-sided question as the hon. member for Kootenay East would have us think.
A distributor who carries on a fresh unfrozen fish business must get the fish into the hands of the consumer a very few days after they leave the water, and that means that if there are periods of a week or two weeks during which, on account of storms or for any other reason, the fish cannot be landed at the port and sent forward, the fresh fish business passes into the hands of somebody else. It passes into the hands of suppliers of competing fresh fish, other food products or other kinds of fish. At any rate, it goes. Hon. gentlemen may say there should not be any fresh unfrozen fish business, and there is something to be said for that position in general. It may be said that it would be desirable if all fresh fish that was marketed could be put on the market as frozen fish. But parliament cannot decide the taste of the consumer. The consumers of Montreal, Toronto and other places to which this cod and haddock go from Nova Scotia ask for fresh unfrozen fish and demand that they get it. Therefore the fresh unfrozen fish business is different from the fresh frozen fish business.
I do not blame my hon. friend the member for Queens-Lunenburg for urging what appears to him to be the interest of his constituents- and it was more nearly the interest of his constituents than that of anyone else that he was urging


John James Kinley: They are in the forefront.


James Lorimer Ilsley: -as I shall show in a
few minutes. The hon. member asks this question:	Why should one company and
no one else be allowed to use these trawlers? Well, the hon. gentleman knows, and it is a fact, that at Lunenburg the business is mainly, about eighty-five per cent, a fresh frozen fish business.


John James Kinley: At certain times of the
year only.


James Lorimer Ilsley: Those are the figures.



Fishing Industry-Beam Trawlers


John James Kinley: They have plants at Locke-port and other places where they produce fresh fish.


James Lorimer Ilsley: At Lockeport the business
is fifteen per cent fresh unfrozen and eighty-five per cent fresh frozen; at Lunenburg, thirteen per cent fresh unfrozen and eighty-seven per cent fresh frozen; at Halifax, for the Maritime National Fish Company, 57-4 per cent fresh unfrozen and 40-6 per cent frozen.


John James Kinley: What about Lunenburg?


James Lorimer Ilsley: I have already given the figures for Lunenburg-thirteen per cent fresh unfrozen and eighty-seven per cent fresh frozen.


John James Kinley: And Lockeport?


James Lorimer Ilsley: I have given it. I must proceed with my speech if I am to finish. I have given those figures. The point is this. Companies such as the Lunenburg Sea Products, a most efficient company, which conducts its business at Lockeport and Lunenburg, although it does some at North Sydney, can operate with schooners because it is doing very largely a fresh frozen fish business. The character of the Maritime National Fish company's business is entirely different.
I want to show the trend of the business during the past few years, and the proportion of these ground fish supplied by the trawlers. In 1934 the total catch in Nova Scotia was
161.110.000	pounds. By 1937 the total had risen to 181,574,000 pounds.
The trawler catch in 1934 was 17,972,000 pounds, and in 1937 that had increased to
18.057.000	pounds.
The catch by offshore schooners in 1934 was
23.132.000	pounds, which by 1937 had increased to 76,870.000 pounds.
The catch of the inshore fishermen in 1934 was 120,005,600 pounds, and by 1937 that had decreased to 86,646,000 pounds.
That is, there was in those four years a 12-7 per cent increase in production, of which increase four-tenths of one per cent was on account of the production by trawlers, and there was an increase of 232-3 per cent in production by schooners and a decrease of 27-8 per cent in the catch of the inshore fishermen. So the business of the inshore fishermen has not been taken away by increase in trawler production of fish but by the 232 per cent increase in schooner production.


John James Kinley: There is an innovation
since the earlier years, namely the diesel engine schooner.
[Mr. Xlsley.l


James Lorimer Ilsley: The price spreads committee report was in 1934 and that dealt with the schooners. The proportion of total catch on account of trawlers was as follows:
Trawler catch, Percentage All Atlantic
coast Nova Scotia
Per cent Per cent
1930	
12-3	17-31931	
11-9	17-11932	
11-3	17-41933	
8-9	14-51934	
7-4	11-11935	
8-9	13-21936	
7-5	10-71937	
7-3	9-9
For 1938 I think the proportion landed in Nova Scotia by trawlers was about ten per cent.


Gordon Benjamin Isnor: It was 9-96 per cent.


James Lorimer Ilsley: It is admitted, I think, by everyone that for supplying the fresh fish market in the winter, next to the trawlers the best method is the Lunenburg schooners. The hon. member for Queens-Luncnburg will say that they are the best method, but even the closest friends of the trawlers would admit that the Lunenburg schooners are the next best. It must be realized that there are no inshore fisheries at Halifax to amount to anything; a few fishermen are along the coast outside Halifax, but anyone carrying on a fresh fish business at Halifax has to rely on fish from the banks in the north Atlantic, and the only way to get fresh fish from there is by trawlers or schooners.


Henry Herbert Stevens: Can they not get fresh fish along the east coast?


Joseph Enoil Michaud: It is no longer fresh when it gets to Halifax.


Henry Herbert Stevens: Why did this Maritime National Fish company, with which the minister is very familiar, buy and close up the plant on the strait of Canso where they used to get a supply of shore fish?


James Lorimer Ilsley: I do not know anything
about that. And if the hon, member, when he uses the words "with which the minister is very familiar," is intimating that I have any brief for the Maritime National Fish company he is very much mistaken.


Henry Herbert Stevens: I simply say the minister is obviously very familiar with the operations of the Maritime National Fish company.


James Lorimer Ilsley: 
Henry Herbert Stevens: Will the minister permit a question?
Mr. ILSLEY; Yes.


Henry Herbert Stevens: Frozen fresh fish would not be affected in the way in which the minister has just intimated?


James Lorimer Ilsley: No.


Henry Herbert Stevens: And a very large proportion of the fish is frozen?


James Lorimer Ilsley: Oh, yes.


Henry Herbert Stevens: And could be marketed in those periods when fresh fish is not available?


James Lorimer Ilsley: I gave the figures; between fifty and sixty per cent of the output of the Maritime National Fish company is fresh fish; and that is a great deal of fish.
Just let me continue. I had a train of thought, but I get led away from it iby these interruptions, and for some reason or another I find it hard to get back to it again to-day. The second point I was going to make was that the Minister of Fisheries, this minister who, we are told, has not done anything for the inshore fishermen of Nova Scotia, within the last year attached a condition to the granting of these licences, that condition being that the Maritime National Fish company must purchase all the fish that was offered from Halifax to Richmond. That is the part of the coast which needs help. The condition was that the company must purchase all this fish at Halifax prices, and provision was made for a collection service to deliver the fish there. The company have carried out that undertaking. Hon. gentlemen might say, "Ah, well, why not make them do that anyway, whether or not they have trawlers?" Well, we have no control over this corporation, which, if I am not mistaken, is provincially incorporated. This is practically the only control this government has; that is, it can stipulate as a condition of the granting of these licences that they treat the inshore fishermen in a certain way, and as a matter of fact that is what has happened. Every year they purchase more hook-and-line fish than they catch in their trawlers. I have not the latest figures, perhaps the Minister of Fisheries can give them later

Fishing Industry-Beam Trawlers
on. I 'believe they catch something like twenty million pounds of fish by means of their trawlers and purchase between twenty and twenty-three million pounds of hook-and-line fish. So the granting of these licences gives us an opportunity to attach these conditions which will make it necessary for them to purchase these fish from these inshore fishermen. If the trawler licences were cancelled, I do not know who would buy these fish, which are a long distance away and which cost a great deal of -money to get to Halifax. I suppose the government would be asked to purchase the fish, or something like that.


Henry Herbert Stevens: Yes, but the company bought and closed up a plant on the strait of Canso.


James Lorimer Ilsley: I do not know the stoiy of that plant.


Henry Herbert Stevens: I saw it there.


Charles Hazlitt Cahan: The cost of transportation from the port of Canso was too heavy to permit them to compete with shipments from Halifax.


James Lorimer Ilsley: I have listened to evidence given at inquiries in regard to that plant at Canso, which at that time had six or seven trawlers. The agitation against trawlers became very hot, and they could not carry on without them.


Henry Herbert Stevens: No.


James Lorimer Ilsley: Oh, yes; that evidence has been given repeatedly.


Joseph Enoil Michaud: Yes, that is what happened.


Henry Herbert Stevens: That is not what the local people say.


James Lorimer Ilsley: I was interested in what was said -by the hon. member for Kootenay East as to the point at issue; that is, he said it was not worth while arguing as to whether a steady or adequate supply of fish of a suitable type could be supplied otherwise than by the trawlers. "Why," he said, "look at the tremendous quantities of fish caught in Nova Scotia." He was not getting to the point. When you are dealing with a fresh fish market, it is of no use to have quantities of fish stacked up in Cape Breton or Yarmouth. An adequate supply of suitable fish means a supply when you want it, a steady supply, coming in day by day, which enables you to retain and, if possible, expand and develop your market. That was the point he did not argue; that was the point he said was not worth while arguing, but that is the issue the Minister of Fisheries has to decide.
{Mr. Usley.]


Henry Herbert Stevens: The fresh frozen fish would fill any gap.


James Lorimer Ilsley: My hon. friend is back on that. He is suggesting that we change the consumer demand, which parliament cannot do.


Henry Herbert Stevens: No.


James Lorimer Ilsley: I would suggest that the hon. member read the Cockfield Brown report. They went into nearly every retail store in Canada, and made an exhaustive census as to the demand for fresh fish compared with the demand for frozen fish. They came to the conclusion that the demand for fresh fish was very much greater than the demand for frozen fish. Now, does my hon. friend suggest that we do something in an attempt to force frozen fish down the throats of people 'who want to buy fresh fish? I never heard anything so irresponsible in this house.


Henry Herbert Stevens: It is not quite so silly as the minister seeks to make out. We are not quite as ignorant as he tries to suggest.


James Lorimer Ilsley: But my hon. friend says, "If there are times when you cannot supply fresh fish and you have plenty of frozen fish, why not send them?" That was what he said. His statement can have no other meaning in the world than that which I have placed upon it.


Mr. NEILL:: If I might ask a question, are not the fresh fish markets of the whole world governed from time to time by the weather conditions prevailing at nearby sources of supply?


James Lorimer Ilsley: Yes, that is so; and practically every country in the world has overcome that condition by means of trawlers, of which there are four thousand in operation throughout the world. The United Kingdom relies on trawlers as its method of getting fresh fish; the United States, France and many other countries rely on trawlers. No one will suggest that there is any comparison between trawlers and dories as a means of catching fish in a storm.


Alan Webster Neill: I did not ask that. I asked if the fresh fish markets in other countries were not subject to the exigencies of the weather in nearby sources of supply. I do not think you can get away from that.


James Lorimer Ilsley: I do not think that is the case.
It has been said that every commission has found in favour of the abolition of the trawler. I was on one of these commissions, and at the time, on the evidence presented to

Fishing Industry-Beam Trawlers
us, I did come to the conclusion, which was shared by a majority of the commission, that the method of fishing by the Lunenburg schooners would be perfectly suitable. My hon. friend says this question was gone into thoroughly. I want to say this, that none of these commissions was set up to deal with the trawler question exclusively. These were commissions which dealt with a wide range of subjects; and when you are dealing with this question and-in the case of the price spreads commission-a hundred others, an extremely limited time is given for consideration of this particular problem. I have learned a good deal since then; I have gone into this question. As far as I can remember, this distinction between fresh and frozen fish was not dealt with before that commission at all. The matter was gone into in a sketchy way; and, as I see them, the facts are exactly as I have stated them to-day. There was the Maclean commission, in which there was a dissenting report. The report following the Coclcfield Brown investigation was wholly in favour of trawlers. In the case of the Jones commission, one of the commissioners refused to express any opinion because he did not feel competent to do so. In the price spreads commission also there was a dissenting report. But here is the singular fact, that no one charged with responsibility, no one in the position of a minister and no one in the position of a government since 1910, when trawlers first came into use, has ever reached the situation where they thought they dared take that chance with the fresh fish business of eastern Canada.


John James Kinley: Except in the Ralston order in council of 1929.


James Lorimer Ilsley: That was a compromise, or something of the kind.


John James Kinley: It was absolute prohibition.


James Lorimer Ilsley: No, it was never put into force at all. No person charged with real responsibility has undertaken to abolish these trawlers. It may be that they should be abolished. The situation is in a narrow compass: It is up to this Minister of Fisheries to decide on that question of fact, and unfortunately he has to decide it every year. He has to decide on this question: Can another method of catching fish furnish an adequate supply of suitable fish? He gets evidence on both sides, and he has found himself impelled from year to year to come to the conclusion that it cannot do it.


Mr. DUNNING:: Just as his predecessor did.


James Lorimer Ilsley: Just as Mr. Rhodes did, just as Mr. Duranleau did and just as other ministers of fisheries have done. They have been doing that every year. Members from Nova Scotia, and notably one of the ablest of Nova Scotians, Mr. Ernst, who represented Queens-Lunenburg, and who was the predecessor of the hon. member who spoke this afternoon, said in a speech I heard in the house, that the question is not one of abolition, but one of regulation. He said, "While this may not be popular in my constituency. I feel that this company in Halifax cannot get a continuous or steady supply of fish unless they have trawlers." Therefore he said they should not * be abolished but should be restricted. He and every other minister who held office in the Bennett government between 1931 and 1935, and ministers who have held oflice since 1935, have come to the same conclusion. There is a business situation there. There is a practical situation. There is no use in trying to make it into an issue between a big corporation and the fishermen. The question is: How are you going to maintain your business and see that you look after those fishermen in eastern Nova Scotia, and at the same time keep some hold on the people who are processing, who have plants and facilities for processing, and see that they buy those fish.
It is true that in some parts of Nova Scotia sentiment is strongly against trawlers. I have heard it said that there was no use in arguing against the sentiment, because people's minds were set. But, as a minister from Nova Scotia, whether it hurts me or helps me, I cannot help saying what I sincerely believe about this matter to which I have given a great deal of thought and study during the last two or three years. I have no fault to find with the manner in which the Minister of Fisheries has dealt with it and is now dealing with it. I hate the legislation, and I hate the order in council. I wish we did not have to have this barrage every year from both sides of the house, but we have to face our responsibilities.
As I have said, the minister has not yet given his decision this year, and I do not know what it will be. But the position lies right within a very narrow compass. There is no use in trying to convert it into a great social or humanitarian issue, because it is not anything of the kind. It is a question of what is the best thing to do for the fishermen of Nova Scotia.


Henry Herbert Stevens: Would the minister permit a question? I believe he has under his hand some statistics which might be helpful to me. Where was the frozen fish marketed?
234S

Fishing Industry-Beam Trawlers


Joseph Enoil Michaud: In the United States
and Canada.


James Lorimer Ilsley: I have not the figures or
destinations before me, but generally speaking 'I know frozen fish is marketed in Canada and the United States.	.


Joseph Enoil Michaud: And Great Britain.


Henry Herbert Stevens: Who was the scoundrel
who rammed it down people's throats, to whom the minister referred?


James Lorimer Ilsley: I cannot seem to explain
myself to the hon. member. There is a market for frozen fish and a market for fresh fish, and anybody who knows his business is going to cater to both markets.


John James Kinley: Right.


Henry Herbert Stevens: And the one company
which handles only fresh fish is the company which insists upon these trawlers.


James Lorimer Ilsley: No, not only fresh fish-but the greater part of its output is fresh fish.


Henry Herbert Stevens: Its principal business.


James Lorimer Ilsley: Yes, and that is the reason
why it says it needs trawlers.


Henry Herbert Stevens: Yes, exactly.


Robert John Deachman: 
Vincent-Joseph Pottier: By what means would you expand?


Robert John Deachman: Is it possible that in Nova Scotia we have the only province which cannot and will not accept improved methods? Are we to move from the cradle to the combine in agriculture; are we to move from the tallow dip to the electric light; are we to have all these great changes in the development of industry, and yet say that Nova Scotia will continue to catch fish as they were caught centuries ago on the sea of Galilee? I cannot believe it possible. I cannot believe that in every other province, in every other dominion and in every other section of the world progress is to be made and yet stop at Nova Scotia because you will not face the inevitable, because you resist continuously the application of the best, most simple and easiest means to achieve the end you have in view. My hon. friend complains that these men are unemployed; but what does he say of the average wage they received? That wage was so low that they would be better unemployed.


John James Kinley: Is the hon. member referring to me?	.


Robert John Deachman: I was referring to
some hon. member who asked about unemployment.


Mr. BAKER:: I asked: What about the unemployment question?


Robert John Deachman: Are you approaching this question from the old point of view of increasing employment? You might as well say that men in the woods should use dull axes because more men would be employed. After all, it would take more men to achieve a given purpose with dull axes than it would with proper tools. This summer I saw that lovely province of Nova Scotia in all its glory and beauty, and I hate to think of the men of that province being destined to work with dull axes.


Vincent-Joseph Pottier: What the hon. member
wants is a fishing industry with no fishermen.


Robert John Deachman: What I want is a
fishing industry producing a large volume of fish. I want to see the fishing industry of Nova Scotia producing greater wealth than it is to-day. Admitting that this can be done with fewer men, the fact remains that if there is more wealth produced there will be a greater expansion in business, there will be increased employment and improved conditions for the province. It cannot be possible
that all hope of expanding markets for the province of Nova Scotia has ceased. A few years ago there were markets abroad for a much larger volume of fish. If my memory serves me aright-and I think it does-in 1926 eleven trawlers were operating out of Nova Scotia. Was your fishing industry at that time in the state in which it has been lately? Have you improved conditions as you have gradually moved towards the elimination of the trawler? You have not. Conditions have become worse and worse as time has gone on.
In times of depression you come back to fish, and come back to it steadily. The movement of men into inshore fishing decreases the price received for fish, demoralizes the market and ruins the industry which you seek to create. I ask for fair treatment and fair consideration of those men who are actually seeking to expand the industry in Nova Scotia by using the best means available.
A few moments ago the hon. member for Kootenay East (Mr. Stevens) referred to the fact that a fairly large factory had been closed at Canso. Let me ask this question: What would happen in any industry if a factory were being operated which did not pay? When the men who own a factory have to take a loss, what follows? That means a decrease in the capital invested in the industry. What does a decrease in the capital invested in an industry mean? That affects the prosperity of your industry. This industry in Nova Scotia depends upon whether it is able to expand foreign and domestic markets. That cannot be done unless there is capital available. The industry depends upon the cooperation of capital.
There is the memorable remedy which can be applied to this or any other problem. There must be an extension of freedom to men to do what they want to do. I do not want to see them restricted by being forced to have their trawlers built in Canada. Last year I found out something about the cost of building trawlers in Canada, compared with having them built in Great Britain. There are some ardent souls who are so anxious to have trawlers built in Canada that they would be willing to have these companies pay double the price they would have to pay to have them built in Great Britain. It is only by the extension of economy; it is only by lowering your costs, that you can operate successfully in this highly competitive market. Here as everywhere freedom is necessary, and I ask the Minister of Fisheries (Mr. Michaud) to consider the extension of freedom to the Canadian fishing industry.

Fishing Industry-Beam Trawlers


Joseph Enoil Michaud: Mr. Speaker, much has been said this afternoon about the steam trawler, and I am sure the discussion we have heard will bring back fond memories to many of the older members. This question has been debated on many occasions, and the same arguments have been advanced from different sides of the house. The last two memorable occasions upon which it was debated were in 1929 and 1930. Before 1929, steam trawlers were permitted to operate off the shores of Canada without too much restriction or regimentation, 'but at that time parliament thought it advisable to regulate trawlers.
For those who are not familiar with fishing terms-and I am sure there are some in this house-may I say that three methods of fishing are used by those who fish on the Atlantic coast for what is known as ground fish, that is cod, haddock and whitefish generally. First, there is the old method of hook and line which has been in use for the last 300 years. Men go off the shore in small boats with a hook and line and try to catch the cod with bait. As soon as they have sufficient fish in their boats, they come to shore to dispose of them as best they can.
Then, there is the more modern method of using the Lunenburg schooner. This type of schooner is called the Lunenburg schooner because the first schooners were built at that port. The fishing is not done from the schooner proper. The schooner is a large boat propelled by a diesel engine. It goes to the grand banks or off the shore and stays several days, generally being manned by a crew of about twenty-five men. Each of these schooners has ten or twelve dories, small wooden boats, which are lowered to the sea when the schooner is out on the high seas, and from which two fishermen fish with hook and line. The success of their catch depends upon the weather and other conditions; when the dory is full, it returns to the schooner, its fish is put into the schooner's stores, and finally the schooner brings its whole catch back to port.
But there is another method which has been described as the trawler method. The trawlers are large boats of the mine sweeper type. As a matter of fact, during the war all our steam trawlers were used as mine sweepers. They are operated by steam, and the fishing is done mechanically. The trawler fishes with a bag which is dragged along the bottom of the sea; when full, the bag is raised with a mechanical derrick and the fish are dumped on to the deck of the trawler. The operation is very similar to the operation of purse seiners

on the west coast. It is obvious to those who have seen either the purse seiners on the west coast or the trawlers on the east, that the trawler method enables the operators to catch a large quantity of fish in a relatively short time, and the fish are not kept lying exposed for a long time to sun and weather. That helps to preserve the quality of the fish when it is offered to the consumer.
Trawling is not a new method of fishing; it has been in operation in the old world for many, many years. It was only in 1908 that a company in Nova Scotia decided to try to develop a fresh fish business in Canada by the trawler method. The records of the department show that before the year 1908 there was hardly any fresh fish, unfrozen, sold in Canada, and the very little quantity that was sold on the Toronto and Montreal markets was imported overnight from Boston, or Portland, Maine, and then distributed and consumed. Thirty years ago most of the fish consumed in Canada was dried, salted, pickled or processed fish. But these people had vision and decided to try to capture whatever market there was in this country for fresh fish, and to expand that market if possible.
The department, working in cooperation with these people, approached the Canadian National Railways and the Canadian National express to secure transportation facilities for the delivery of fresh fish from the Atlantic coast to inland markets. When it is realized that the nearest market of any importance to the Atlantic coast is about fifteen hundred miles from the source of production, one appreciates the difficulties of transporting fresh caught fish and keeping it fresh until it is distributed to the consumers in Toronto and Montreal. But that is something which the trade has been able to accomplish in this country. Canada is now recognized as having the best transportation and distribution facilities of any country in the world for marketing fresh fish far from the source of production. The national railways, in cooperation with the government and the industry, helped to develop markets in the large consuming centres, with the result that from 1925 to 1927 there were about twelve trawlers operating from the coast of Nova Scotia to supply the needs of this expanding market.
After the war, people on the Atlantic coast went into fishing more extensively than before, and a far greater number were engaged in the industry. There was a good market in the United States and the fishing industry on the Atlantic coast expanded. In the winter

Fishing Industry-Beam Trawlers
of 1926-27, the weather was very mild and huge quantities of fish were caught by the inshore fishermen, the schooner fishermen, and the twelve trawlers. There was a glut on the market and prices slumped. The natural result followed, and the claim was made that there was no profit in fishing. The hook and line fishermen blamed the trawlers for the predicament they were in, and so the government of the day appointed a commission of five members, headed by Mr. Justice Maclean, to study the problem. On this trawler question the commission divided, four reporting that the trawlers should be abolished, and Mr. Justice Maclean filing a minority report that the use of the trawlers should be restricted and regulated. The government, as a consequence, decided to regulate the use of trawlers. The then Minister of Fisheries, now Minister of Public Works (Mr. Cardin), went down to the Nova Scotia coast, and upon his report regulations were made whereby the use of trawlers was limited and a tax was imposed on fish caught by trawlers to compensate the inshore fishermen for the loss of revenue in their vocation. Two years afterwards, the courts declared these regulations ultra vires, and the situation reverted to practically what it was before 1929.
Parliament in the session of 1931 went fully into the question again and referred it to the fisheries committee, which investigated and made a report, and on that report are based the regulations which have since governed the licensing of trawlers up to this date. I might as well put on the record the regulations of 1931. Section 56 of the Fisheries Act is the one which applies to trawlers. It reads:
56. (1) Every person shall be guilty of an offence, and shall incur therefor a penalty of not less than one hundred dollars and not more than two thousand dollars, recoverable with costs upon summary conviction, who at any time, except under licence from the minister-
(a)	with intent to fish or to cause any other person to fish with a vessel that uses an "otter" or other trawl of a similar nature . . .
That is a positive enactment in the fisheries act. Subsection 2 reads:
(2) No such vessel shall carry on fishing operations from or to any Canadian port or ports, unless such vessel is registered as a British ship in Canada and is owned by a Canadian or by a body corporate incorporated under the laws of the Dominion of Canada or of one of the provinces thereof, and having its principal place of business in Canada.
I can skip subsection 3, which has no bearing on the discussion. Subsection 4 reads:
(4) The minister may determine the number of such vessels that shall be eligible to be licensed.
Since 1931, the number of vessels has been limited by the minister by virtue of the power conferred upon him by this subsection, and the number has remained the same until the present date. Subsection 5 reads:
(5) Regulations may be made under the provisions of section thirty-four of this act-
(a)	prescribing the form of licence;
(b)	specifying the evidence to be submitted with an application for a licence;
(c)	fixing the conditions under which a licence shall be issued;
(d)	making any other provisions respecting licences.
This is the legislation that authorizes the minister and imposes upon him the obligation of issuing licences when those who apply for them comply with the provisions of the law. Under subsection 4 of section 56 of the Fisheries Act regulations were made from time to time and revised. There were some regulations in 1929. In 1930 and finally in 1931 regulations were formulated providing:
1. A licence for a fishing vessel using an otter or other trawl of a similar nature, other than a small dragger operated by inshore fishermen, will not be granted, except under the following conditions:
(a) That the applicant for such licence shall furnish the Minister of Fisheries with evidence that will satisfy the said minister, that he cannot obtain an adequate supply of suitable fish to enable him properly to conduct and develop his business from the hook and line fishermen, and that if the licence is granted, the extent of his purchase of fresh fish from the said fishermen will not be adversely affected.
These are the main provisions of the regulations that must be complied with by those who are applying for licences. The minister is being placed in the position of an arbiter or a judge in the matter, and if he is satisfied that the evidence which is submitted to him shows that the person applying for the licence is entitled to receive it, he acts accordingly. I have felt, ever since I have been in office that there was no alternative to issuing the licence, and I have done so for the last three years. True, it puts the minister in an awkward position to have this responsibility placed upon him, but each of us must face his responsibilities and discharge them, and I have tried to discharge my duty as best I could in the last three years.


James Shaver Woodsworth: Will the minister
indicate the type of evidence that satisfies him?


Joseph Enoil Michaud: The type of evidence
I have required is evidence under oath showing that the applicant cannot obtain from the hook-and-line fishermen an adequate supply of suitable fish-it must be adequate and suitable-to enable him properly to conduct

2352 .
Fishing Industry-Beam Trawlers
and develop his business; and that if the licence is granted, the extent of his purchases of fresh fish from the fishermen will not be adversely affected. 1 have always insisted, as my predecessors have done-the record shows this-that the applicants should submit to me sufficient evidence to show that they could not obtain an adequate supply of suitable fish to enable them to carry on their business properly, and that the granting of the licence would not affect the extent of the purchases from the hook-and-line fishermen. Every year such evidence has been submitted under oath, and I have been satisfied that the applicant could not properly continue to develop his business without the operating of the trawler. This year again, evidence has been submitted under oath. There are ten pages of it. I will not read them, but they constitute a public document which can be placed on the records of the house or given to anyone who asks for it.
I have been criticized for having delayed until the last moment the giving of my decision. I felt that in order properly to discharge the duty imposed upon me by the act, and to be fair to everyone concerned, I should wait until the last moment so as to give everyone interested every facility and ample time to put before me such evidence as was required. For that reason I have always delayed as long as possible before making a decision in the matter.
I have before me, up to the present, evidence under oath from two companies. One of these is the Maritime National Fish, Limited-that is the new company-which has applied for three licences, that is, the renewal of the three licences which the company has enjoyed for the last seven years. I have also two applications from General Seafoods, Limited, a United States company that has established a base of operations in Halifax and is applying for these licences.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS


SECOND READINGS
[Stage Direction]
Bill No. 57, respecting the United Church of Canada.-Mr. Motherwell.
Bill No. 58, to incorporate the Trustee Board of the Presbyterian Church in Canada. -Mr. Cameron.
Bill No. 56, to incorporate the Associated Canadian Travellers.-Mr. McPhee.

[Stage Direction]
SEINE FISHING FOR SALMON PROHIBITED IN WATERS ADJACENT TO MOUTH OF FRASER RIVER	,
Mr. THOMAS REID (New Westminster) moved the second reading of Bill No. 29, to amend the Fisheries Act, 1932.
He said: This bill is similar to one which I have introduced on several prior occasions. Briefly, the bill asks for the elimination of seine fishing from a part of the gulf of Georgia, which is really the estuary of the Fraser river. For the benefit of those who are not familiar with the methods of fishing employed on the Pacific coast, which differ somewhat from those in use on the Atlantic coast, it might be advisable if I take a moment to say that there are three principal methods of fishing in use on the Pacific coast, namely, gill netting, seining and trolling. Of course, we have some traps at Sooke harbour, which matter came before the house a short time ago and which, I understand, will come before the fisheries committee for discussion. Gill netting and the use of seines are entirely different. The seine boat is a large power boat costing some $15,000 to $16,000, having a net 1,200 feet long and seventy-three feet deep, whereas the gill net is 1,200 feet long and some thirty-two feet in depth. I give the dimensions in feet rather than the mesh or fathoms to make the picture clear to hon. members.
Reviewing briefly the history of the agitation which has been proceeding on behalf of the seine net fishermen of the Fraser river,
I might say that until 1933 the area in question was fished entirely by gill netting; no power boats were allowed into that area. As a result of intensive fishing by seine boats in other parts of the province, an agitation was started by the canning interests and the owners of seine boats, seventy-five to eighty per cent of which are owned by the canning interests, to allow this Fraser river area to be opened up to the use of seines. While there are districts in British Columbia where seine boats can operate and perhaps should be allowed to operate, it has long been the policy of the department to prohibit their operation in certain narrow channels and estuaries. A seine boat with its long deep net follows the fish; the net is cast wherever the fish school, making a circle, and then the bottom of the net is drawn tight, bringing the catch up to the surface of the water. That is why the net is called a purse seine. Then the fish are brailed from that into the boat.

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In 1933 there was no Minister of Fisheries, but there was an acting minister whose name was Mr. Duranleau. While the house was in session, an order in council was passed allowing these seine boats to fish in this area. Protest was made by myself and others to the acting minister and, later, on the floor of this house. The explanation given by the acting minister for allowing seine boats to fish in the gulf of Georgia related to quality only. I should like to read one or two extracts from a letter sent by the then acting Minister of Fisheries to myself, stating why he considered the seine boats should be allowed to operate in this area to catch what are called pink salmon. He claimed that the seines could catch them out in the open, and they would be of better quality and so enable the Canadian fishing industry to compete successfully in markets abroad. His whole letter is a setting forth of that argument. He said in part
If these advanced fish could be caught before Fraser river water is reached, their value for canning would be safeguarded. A canned product of a valuation of from one-half million to a million dollars is involved. The question thus resolves itself into one as to whether a type of gear will be permitted that will be effective in acquiring these fish for a first-grade article of commerce, or of permitting an economic loss and waste that will accrue if it is not allowed.
After the order in council was passed, the acting minister and his officials started to bolster up the argument that the purpose of allowing the seine boats in this area was to get better quality pink salmon. They said that the gill net boats could not or did not catch the fish in the same place as the seines, and the quality of their catch was not as good as that of the seines. Knowing that an agitation had started against the use of seines, the fisheries department sent out letters to the industry. I have one here, dated September 27, 1933, which was sent out to the canneries, with a view, I claim, of bolstering up the action of the department and the acting minister in allowing seines in this area. I have not time to read it all, but Mr. MacLeod, supervisor of fisheries, sent this out to the industry, and the last clause reads:
I have been further requested to obtain from each cannery manager a communication getting out his opinion as to whether the seine-caught fish were superior for canning purposes as compared to fish caught by means of gill nets, and also if the authority to use purse seines in the gulf of Georgia has been the means of raising the standard of district No. 1 pack of pink salmon.
I claimed at the time and I still maintain that that letter was worded in a leading way. There was an inference to be drawn from
it; the cannery men knew when they got this letter just what the departmental officials wanted. And those cannery interests that had seine boats sent back the report that these seine boats caught pink salmon of better quality than the gill nets. But, Mr. Speaker, this whole matter was a farce, as I can illustrate in just a moment. There were two types of gear operating in this area at one and the same time-seine boats and gill nets. Both brought their catches alongside the wharves at the canneries; they emptied their fish on the cannery floor one after another. So the fish lying on the floor, ready for canning, would be a mixture of pink salmon caught by seines and pink salmon caught by gill nets, all in one heap. Yet some of the cannery men came back with an official reply to the departmental officials in which they stated that in their opinion the salmon caught by the seine boats was of superior quality. There was nothing in the world to substantiate that statement. At that time the inspection board were asked to inquire into the authenticity of this declaration, and their reply is given iu a brief which was presented to the fisheries committee by the then deputy minister of fisheries, Doctor Found, when this whole matter was under discussion there. The inspection board were asked as to the quality of the salmon caught by seine boats as against that of the fish caught by gill nets, and this is what they said:
The board had no information regarding each parcel as to whether packed from seined or gill-netted pinks and so can deal with the question in only a general way-
That is a fairly direct statement; yet ever since the order in council-perhaps up to the present day, although I am not sure of that- the departmental officials have endeavoured to bolster up the action taken in 1933, when for the first time by order in council the seine boats were admitted into the gulf of Georgia or the estuary of the Fraser river. In my protest at that time I pointed out to the then acting Minister of Fisheries that this step, under the guise of enabling the seine boats to catch the variety of salmon called pink, was the thin end of the wedge; and that if they were allowed to remain, these seine boats would catch every other variety of salmon coming from outside waters and heading through the strait of Juan de Fuca to the Fraser river, which is exactly what has taken place.
It is true that there was an inspection board in existence at that time, but the way_ in which that board operated was a scandal, if I might use that term. I should like to use stronger language, but since I am in the House
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of Commons I will let it go at that. The three men who composed that board were also brokers; that is, they received orders from abroad to buy fish. Very often, consignments or cases of salmon would be turned down by this board, and the canners would be told that the particular pack of salmon graded B. Then, two or three days later, the canners would receive inquiries from these brokers-who were also the inspectors-asking if they had any cases of grade B salmon to sell. It amounted almost to a racket. Just to show how farcical the whole thing was, I might mention just one instance. Certain canners in the northern part of British Columbia would send tins of salmon to Vancouver and ask the board to inspect them. But there was no check made at the canneries in the north in regard to the cases of salmon whence came those samples. In other words, the inspection board trusted to the honesty of these men. I am not doubting their honesty for a moment; but how the inspectors could say, from the samples received, that the pack should be passed, is away beyond me.
Then, as an argument as to why the seiners should be allowed to catch pink salmon, they said, "Well, we are paying a better price for ' the salmon caught by the seiners compared with the salmon caught by the gill netters," and it was said that the cannery men would never pay a higher price to the seine boats unless the fish were of better quality. Well, I looked into that aspect of the argument and found there was nothing to it. As a matter of fact, one could take various districts where fishing takes place, outside the estuary of the Fraser, and find different prices; but these differences were not altogether on account of differences in quality. For instance, up in Butedale, or Namu, or Bella Coola-and I have the prices for April 2, 1935, as sent out by Doctor A. W. Found-purse seine fishermen were receiving 3i cents each for pinks, while the gill net fishermen were receiving only three cents. On the other hand, in Butedale the salmon fishermen operating cannery gear, that is, nets loaned to them by the cannery men, were receiving only 2i cents. In 1934, when I argued this matter, I placed on record figures proving that there was no truth whatever in the statement that the seiners had received a greater price for their pink salmon than had the gill netters.
Then, to come again to the matter of quality, in 1934 they began to exhibit figures of the number of cases of salmon condemned, seeking to leave the thought that these salmon had been caught by gill netters further up the river, that they were of poorer quality 
and that all the salmon caught by the seiners were A-l fish. Well, Mr. Speaker, I think I proved to the satisfaction of everyone but the departmental officials and the acting Minister of Fisheries that this was not so. The then acting Minister of Fisheries spoke to me in 1933 when I left the house; he said, "Mr. Reid, I do not know the first thing about fish. I do not know whether a haddie swims opened out flat as you see it in the store, or whether it goes around the sea closed up. But," he stated, "I took the advice of the British Columbia men"-including the then Minister of Trade and Commerce- "but I don't know what it's all about." That was his frank admission to me, just after I had advanced the argument in the house in 1933.
Mr. Speaker, the seine boats never before were allowed in this area. Ever since 1922, after the commission consisting of members of this house had gone to British Columbia and had reported to the house-and I have a copy of the report before me-it was stated that in any district or area where gill netting could be done, no seine boats should be allowed. That policy had been adhered to all the way along until, as I say, in 1933, when they were allowed by order in council to move into this area.
I well remember some of the other arguments in those days by the Department of Fisheries. Prior to that time and in the year following they were arguing, and arguing strenuously, that if the Fraser river fishermen were allowed to export their salmon before it was canned, the whole industry would collapse. And well do I remember the strong arguments put up by the deputy minister of fisheries, both in committee and in person. The argument was made in this way, "Oh, no, we cannot allow the Fraser river fishermen to export these salmon, even though they would get a better price in the United States. If we do that, the industry will be doomed; it will collapse."
Well, Mr. Speaker, after many protestations, especially by the hon. member for Comox-Alberni (Mr. Neill) and myself, the embargo was lifted. The industry is still going on. It may be in a little worse condition to-day, but it is not 'because fishermen have exported great numbers of salmon across the border. May I point this out to hon. members: While it is true that United States interests allow the use of seine boats close to the international boundary line, still they take very great care that in their own country they do not allow the use of seine boats at the mouths

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of their own rivers. Let me read a communication I have in my hand which sets out the policy in the United States. This was sent to me from the department of fisheries in the state of Washington, under the hand of Mr. B. M. Brennan, Director of Fisheries. Dated May 3, 1934, the letter is as follows:
Northern Puget sound does not permit gill netting, with few exceptions, because of the nature of the area, hence the fishermen are forced to use a gear which is suitable for that district. The Fraser river permits extensive ill netting as does our Columbia river. We ave ruled purse seines out of the latter district and off the coast of Washington within our jurisdiction to prevent the catching of immature fish.
That is in the state of Washington. Up in Bristol bay they have gone a great deal farther in their endeavour to protect the salmon industry there, because no power boats of any kind are allowed in that bay. They do not allow even gasoline engines in the gill net boats, and all salmon fishing in the bay of Bristol must be done by boats driven by sail or by oars. Those are the precautions they take, so careful are they not to allow anything in that district which, in their opinion, would deplete or do harm to the great salmon fishing grounds in Bristol bay and in Alaska.
In the gulf of Georgia we have a condition which, if not watched, will be far more serious than anything which might develop in Bristol bay, because we have a short stretch of water called the strait of Juan de Fuca. All the fish returning from the open waters of the sea pass through that strait and up through the narrow channels heading towards the Fraser river. It is with a view, not altogether but primarily to preserve this area, first of all from depletion and, second, in the interests of the gill net fishermen that I have kept up a fight to have the seine boats eliminated entirely from the gulf of Georgia.
On two occasions I was fortunate enough to have them moved out, first a short distance, and then on another attempt, when a bill was introduced, the minister agreed to move them out still farther. When they were first allowed in, they were right up into the mouth of the Fraser river, and there was a most regrettable destruction. The seine boats are mobile traps. We have heard a great deal about traps. I shall not go into that matter, however, because it is already under discussion.
But I point out that the seine boats in the estuary of the Fraser river can be more destructive than traps, because, while it is true that the fish meet the traps, follow the lead into the heart of the trap and are thereby
caught, the seiners watch, just like hawks, and when the fish gather together in schools preparatory to heading up the Fraser river, the seine boats swoop into the midst of them, encircle their nets round them, pull tight the string at the bottom and bring the fish up. A catch of 10,000 salmon at one haul is not unusual.
The fish gather in schools or in masses preparatory to spawning; if they are split up or interfered with, as happens when a seine boat goes in among them, the fish are thrown considerably off their course, and the action of the seining to quite an extent interferes with their migration. It takes some time before they gather together again, heading for the head waters of the Fraser river. The seines catch not only one variety, but all varieties, and in this district where they have been allowed to operate the water is so shallow at times that the net of the seine boat strikes on the bottom and everything including crabs is caught. All varieties, including not only pink and sockeye salmon but spring salmon, are caught; and as the net of the seine is only three and a half inches in width, as against the five and a half or six and a half inches of the gill net, every time the seine boat circles a school it catches everything within that circle, nothing escaping. Considerable quantities of immature fish are destroyed; I refer to fish in the schools of adult salmon hordes heading to the head waters of the Fraser river. The seine net catches everything even, as I say, to the extent of crabs.
When seines were allowed into that area, it was expected and also argued that only a few seine boats would come in. In 1933, some fifty-four seine boats went into the district and caught considerable numbers of fish. . In 1938 practically all the seine boats in British Columbia came down into that area. There were as many as 105 large power seine boats waiting in that small area to catch the salmon heading up to spawn. There are only a certain number of fish each year which come through the strait of Juan de Fuca to spawn. If you have 2,000 or more gill-net fishermen and no one else is allowed to fish in that area, the catch would be distributed among those men. But if you allow 105 seine boats to have first crack at the great hordes of salmon, this means not only that they destroy immature fish and split up the schools, but that they rob the gill-net fishermen of part of their legitimate livelihood.
I should like to mention what is not generally known, that the seine boat has from between seven and nine men on board. The boat is worked on shares which are divided into twelfths, five-twelfths going to the owners
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and seven-twelfths to the crew. If the total catch of a seine boat is worth $12,000, it means that $5,000 goes to the owners of the vessel, while $7,000 is distributed among the crew. But if the same amount of fish were caught by gill-net fishermen, all the $12,000 would be distributed among those fishermen. The loss is borne by the gill-net fishermen who have to buy their own equipment and who mostly reside along or adjacent to the banks of the Fraser river. These seine boats can operate anywhere. They may fish one area and then, when the season opens in another area, they may go there. They may fish in the gulf of Georgia and then go along the west coast of Vancouver island or down into other areas, as they have been doing ever since 1933, and particularly in 1938.
One variety of salmon being caught by the seine boat is known as spring salmon. These schools or hordes of pink or sockeye salmon are so large that generally there are other varieties of fish found mixed up with them. Spring salmon have been getting scarcer as the years go by, and fewer of this variety of fish have been caught by the gill-net fishermen ever since 1933, when the seine boats were first allowed to operate.
Let me go back for a moment again to the quality of the fish. I have before me a letter from Edmunds and Walker Limited, which states that the purse seine fishing bruises the spring salmon when catching them. They point out that better prices are paid to the gill-net fishermen for this variety of salmon than are paid to the seine fishermen when they are presumably out fishing for either pink or sockeye salmon. They have this to say about price:
At the same time as the seiners were receiving this price of 25 cents a piece or about two-thirds to three-quarters cents per pound the gill-netters were receiving three cents per pound for reds and one cent per pound for whites.
And again:
The reason for this is that these fish in the process of being brailed and of being transferred from the seine boat to the collector are being so badly bruised and smashed that they must be classified along with white salmon and sold at an equivalent price.
That is most interesting in view of the argument put forth by the departmental officials that the seine boats catch fish of a better quality than those caught by the gill-netters. The evidence this year shows that the seine boats are endeavouring to control the whole area. I am not arguing for one moment that purse seine fishing should not be allowed in British Columbia, because I realize that there are certain districts where
[Mr. Trid.j
it should be allowed. My argument for the elimination of purse seines from the area is based on the fact that the area is small and is an estuary of the Fraser river where the fish school and get ready to head up the river to spawn. For that reason it is important that fishing by seines be entirely eliminated. So far as I know, no protests have been made this year by the industry. In my ax-gu-rnent I xvant it distinctly understood that I am speaking on behalf of the British Columbia Fishermen's Protective Association, whose head office is in New Westminster. The president of this association has the following to say about last year's operations:
Last year during the run of late sockeye owing to the peculiarity of movement shown by this school of fish, the seines seemed to be unable to contact the school owing to the fact that the fish remained further north for quite some time, which is not usually the ease, but once the fish moved south, in the vicinity of Canoe Pass, the seines then plugged the canneries immediately, boats bringing in six to eight thousand loads for each days fishing, and in order to stop a repetition of the wasteful loss of fish through the canneries being plugged, which occurred in 1936, and also to avoid putting up a lot of fish at a cheap price, it was mutually agreed by both our association and the cannery operators to close district number one and let a very fine run of fish go on to the spawning ground.
This would have been very difficult for us to do, had the price, offered by the cannery operators, remained at a fair level and might be impossible another year. It should be plain from this that the seines still constitute a grave menace to the gill-net fishermen when the fish school in the vicinity of Canoe Pass.
Briefly, my argument is this: The livelihood of well over 2,000 gill net fishermen will be jeopardized if these 105 seine boats are allowed to continue to take from this area salmon heading up the Fraser river. I want to repeat that there are only a certain number of fish which come through the strait headed for the Fraser river. The more seine or power boats that are allowed to operate in that area, the fewer fish there will be for the individual gill-net fishermen who live in this district and whose homes are mostly along the banks of the Fraser river or in the immediate vicinity.
If one looks at this bill from the point of view of the greatest good to the greatest number, one cannot help coming to the conclusion that it should be accepted by the house. This is not altogether a fight that has been going on since British Columbia became a province, because it has become a well established fact in the estuary of the Fraser that this area has always been fished by gill net fishermen. As to quality, I think I have exploded any arguments that have been

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advanced in that regard. The gill net fishermen went far out in the same area last year and in great numbers. There is no difficulty about the canneries not having sufficient fish. It is a questio"n now of other districts having been depleted, and the cannery men and the seine boat owners saying, "Here is one large area, allow us to fish there."
Alan Webster Neill: I do not think the house should pass this bill unless we hear some more substantial arguments in favour of it than have been presented to-night. While much of what the hon. member said was correct, a good deal of it was beside the point, such as the matter of inspection by brokers; and other parts of it were predicated on conditions as they existed six years ago and which no longer exist today.
I see three substantial objections to the bill. In the first place, the passing of the bill, nay, even the introduction of it, is going to be used as an argument-an unsound argument if you will, but nevertheless an argument-in favour of those few individuals in British Columbia who want to maintain the traps at Sooke. The question of fish traps is sub judice; that is, it is referred to a committee and therefore it is not debatable here. But the fishermen out there are dissatisfied over the introduction of this bill. There was a meeting of the United Fishermen's Union in Vancouver recently, and the statement was made there:
Meantime Mr. Tom Reid, M.P., is reported to have brought down a bill which will, if passed, ban purse-seining on the gulf of Georgia off the Fraser river mouth. The P.C.F.U. and the S.P.S.U. both protest that Mr. Reid should not bring in such a bill at this time, but should devote all his efforts to the fight against fish traps.
At another meeting of the two fishing bodies, a speaker, discussing the same subject, said:
The fact that 105 seine boats fish in the gulf for 12 days each season, during slack time up north, has little effect on the catches of the gillnetters of the Fraser river. He said that the old antagonism between seiners and the gillnetters and between other various branches of the fishing industry is dying out.
Then a paper called the Fisherman, which I think more truly represents the working fisherman than any of the fishery papers published in Vancouver, had an editorial on fish traps in which there appeared this paragraph :
We regret that Mr. Tom Reid, unwittingly or otherwise, also played into the hands of the operators and acted against the best
interests of the fishermen when he chose such a time to put forward his bill to eliminate seining in the gulf.
This bill will merely make a selfish, local, geographical appeal to one class of fishermen located in the district of New Westminster. It does not forbid seining in British Columbia; it only forbids seining in a small area of a small district. If the opposition to seining were genuine, we would expect to find opposition to seining all over British Columbia; but the hon. member himself admitted twice to-night in his speech that seining must be allowed in the waters of British Columbia. In other words, he is willing to allow seining all over that province provided it is kept out of his district.
There are three methods of commercial fishing in British Columbia-and I am leaving out fish traps, which is not a method of fishing at all, but has been aptly defined, at a meeting of the Olympia legislature, as grand larceny of the fishing industry and a rape of mother nature. Leaving that aside, however, there are three methods of commercial fishing. These methods are; first, trolling, which must not be confounded with trawling, and which is an amplification of the hook and line, which system we are all in favour of because it gives the greatest employment to the greatest number of fishermen and promotes a breed of fine independent fishermen. It does not cost a great deal of money, with hard work and economy, to get the necessary boat and gear, and you could not get a better class of fisherman than the independent troller. But it would be impossible to confine fishing to trollers only because they can catch only two of the five or six varieties of fish. There are only two varieties that take the bait on the hook, and therefore we have to fall back on the gill net, which is a long net that floats with the tide or the current. The fish run up against it and try to go through it, and, as the name implies, they get caught by the gills and are captured. The gill net catches any variety of fish, but it cannot operate in clear water. The water must be muddy or discoloured because, if it is clear, the fish can see the net and readily dive under it and so escape.
It is admitted by my hon. friend himself that the seines do form a certain part of industrial fishing there. It is not the most desirable method of fishing and can be made destructive. The policy of the department is, therefore, that where certain waters can be fished adequately by the gill net or by trolling, the use of seines should be forbidden in that area. But they must allow
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seines. There are large bodies of water where, on account of the fact that they are frequented by fish which will not take the troll, or because the water is clear and they cannot be fished by gill nets, seines must be allowed. But they are safely guarded. The department is aware of their destructive potentialities, and large areas are set aside in which seines are not allowed to fish at all. Where they are allowed to fish, they are fully and, as they claim, harshly circumscribed by regulations. For instance, they cannot fish within half a mile of the mouth of a creek or river. There is a closed season of forty-eight hours each week, and some weeks they can fish only four days. With these restrictions they are allowed to fish in certain waters. This is quite different from the privileges allowed the traps.
In the early days seines were owned entirely by the canneries, and there was then a good deal of trouble. Now, however, the canneries and the fishermen realize that they need each other and they cooperate to some extent. There is a better feeling now, but they still fight over prices, et cetera. Conditions have changed in regard to seines. The working fisherman has gone ahead, saved and bought his own boat. He is a man of property. A fully equipped seine boat, with diesel engine and the appropriate seine, would be worth up to about $25,000. These men have a considerable stake.
I said that there was a selfish, geographical appeal in this matter, and I can prove it. The waters of British Columbia are divided into three districts-one, two and three-regardless of electoral districts. No. 1 district is in the neighbourhood of Westminster, including the Fraser river. No. 2 district is represented by the hon. member for Skeena (Mr. Hanson) and takes in all the northern waters. No. 3 covers the district represented by myself and the hon. member for Vancouver North (Mr. MacNeil). It is principally in Comox-Alberni, although there is a portion in North Vancouver. If this bill passes, there will be no seining in No. 1 district; it will be entirely confined to No. 2 and No. 3. But I ask, why should it be confined to two districts? Why should it not apply to all three?
Seining is allowed in British Columbia by the law of the land, under proper restriction. I do not deny that there is keen competition, but why should the Comox-Alberni district and the Skeena and North Vancouver district carry the whole burden of seiners for 365 days of the year, and No. 1 district kick because they are asked to carry the burden for only ten days of the year-because that is

all the time the seines fished there last year. It is really worse; it is not ten days; it amounts to perhaps hardly more than half of that; but at the outside it would be ten days a year. Last year they were allowed to fish ten days in No. 1 district, but on account of the weekly closed season they had only eight days.
These two runs of fish caught in these waters, under these conditions and at that time, are two separate runs, the pinks and the late sockeye, which run in a peculiar way. The sockeye run for two years running, then miss two years, and then run for two years more. The pinks run every alternate year. So it would be fair to say that on the average they run only every second year. Consequently, if fishing were allowed for three weeks every second year, it would not amount to taking off much more than an average of ten days a year during which No. 1 district is asked to carry the burden, if you like, of the seiners, while the other districts carry it for 365 days. Therefore, it is a wholly selfish appeal to one section of fishermen, and only to a part of them, located in the neighbourhood of the Fraser river and a few also in the district represented by the hon. member for Fraser Valley (Mr. Barber).
These Fraser river gill netters are not confined to district No. 1. They go up in large numbers in the summer time to the Skeena district, and fish in the Skeena river, but it is now proposed to stop No. 2 and No. 3 district seiners from coming down into No. 1 for ten days, while on the other hand No. 1 district fishermen are welcome to come up and pursue their fishing in No. 2 district.
Now, on the merits of the subject, in 1933 the dominion government allowed seining in all that area from the Fraser river down, to the international boundary line, and I may say that the line is not on the land but in the water. They allowed them to come right into the mouth of the river almost, or at least up to where the muddy water came out and mixed itself up with the gulf waters. Down near the line the water is perfectly clear. In 1933, when they allowed fishing all over that area, it did do harm to the gill netters. The hon. member was right in his argument regarding that period. He brought into the house a .bill which was referred to the fisheries committee, and was defeated on a nine to eight vote. I was one of the eight who voted for that bill. But conditions have changed. I would still vote for that bill if the area were the same, but it has been changed. The hon. member brought in another bill in 1936, but

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he withdrew it on the promise that the minister would look into the matter. The minister did so, and he changed the area in 1937, moving the line right down near the boundary line. It just left a strip two miles north of the boundary line. That may seem a good deal, but seines take a great deal of water to operate in. They are liable to drift and so require a great deal of water. The water down there, I say without fear of contradiction, is clear. It cannot be gill netted; it never has been successfully gill netted ; it never will be; that is, that area close to the line, two miles north of the line. That is what makes the difference.
Moreover, they catch a very good quality of fish there. Seines are only allowed in that limited area outside the scope of the gill netters. All that muddy water for gill netters is preserved for them. It is only in the clear water that the seines are allowed to operate now.
In 1938 seines took 200,000 sockeye, and the gill netters considerably over a million. The gill netters had a grievance in 1933, and I voted to remedy that grievance, and would do so again. But the grievance has been remedied, and an arrangement made that is fair to all parties.
Therefore I oppose this bill, first, because it gives a specious argument, not a sound one, but still an argument, to those who wish to continue to use traps. Second, there is no hardship done to the gill netters. The present arrangements have been in operation for two years in this reduced area, and no figures have been given to substantiate any complaint; in fact, no complaint has been made. Third, it is unfair to allow the seiners to operate only in No. 2 and No. 3 districts throughout the province, compel our gill netters and trailers in those two districts to carry the burden of the seines for 365 days, and begrudge us the temporary relief that would be afforded by No. 1 district carrying them for ten or fifteen days, and that operating on the average only every other year. Therefore I am against the bill.


Mr. OLOF HANSON (Skeena):: Mr. Speaker, I rise to support this bill for several reasons. First of all, I have had information from the fishermen in the area concerning the conditions, and, second, I think the explanation that has been given in support of the bill warrants me in supporting it.
There were no seines in the Fraser river prior to 1933. The gill net fishermen developed the area by gill net fishing. The gill net
fishermen establish themselves in and about the mouth of the Fraser river.
In 1933, by order in council, purse seine fishing was allowed' in that area. At that time there were approximately three thousand gill net fishermen operating in the mouth of the Fraser river. The number of seiners increased, and last year there were 105 boats fishing in that area, employing perhaps 700 men. There were also between two and three thousand gill net fishermen, and it is difficult for them to make a living in competition with seine fishing.



WAYS AND MEANS


[Stage Direction]
Motion (Mr. Dunning) agreed to and the house went into committee of ways and means, Mr. Sanderson in the chair.
On schedule 1:
Customs tariff-588a. Gas for heating, cooking or illuminating, imported by pipe line: 3 cents per one thousand cubic feet.
Item agreed to.
Customs tariff-589.	Charcoal made from
wood: $4 per ton.
Item agreed to.
Customs tariff-597. Pianofortes and organs: 25 per cent.
Mr. WERMENLINGER:: I should like to say a few words on this particular item dealing with pianofortes and organs. Although the piano industry is not large, it is an important industry in this dominion and should be given consideration. From the information I have gathered I am convinced that if this item goes through, we shall be loaded up and flooded with second-hand instruments from the United States. And that will happen at a bad time. This industry suffered during the depression from the competition of other lines of household utilities invented during the last decade. Recently, through its own efforts and initiative, the industry has been recuperating from a long slump. I should like to review briefly the history of the tinkering with the tariff on this line of goods. In 1931, after many years of dumping into this country of pianos from the United States, from the Bowery and the Bronx of New York where they were used to accompany the singing of "The Sidewalks of New York" in the gay nineties, there was established a value for duty-


Mr. McLEAN (Melfort):: Was that the
first of the tinkering the hon. member complains about?
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Edgard Jules Wermenlinger: One of my hon. friend's colleagues, I think his neighbour on his right (Mr. Moore), said to this house the other day that it is not so much the tariff rates that stop productivity and curb employment as changes in and tinkering with the tariff.


Malcolm McLean: I was asking
whether the change of 1931 was the first tinkering about which the hon. member complains.


Edgard Jules Wermenlinger: No; that change was made to stop the dumping of pianos and organs that was ruining our industry. In 1935, there was a change in that tariff by which an appraisal value was fixed on pianos, new or used, of $75 as a specific minimum. The excise tax remained; the duty was still 30 per cent. But in 1936 the most favoured nation provision of the trade agreement brought the duty down from 30 per cent to 24f per cent, the duty being bound not to be increased over 25 per cent. Under this latest agreement we still have the 24f per cent duty; but the excise tax is gone, the specific minimum valuation is gone, and I am informed by leading piano and organ manufacturers of this country that this industry is gone. It may be a comparatively small industry; but if the importance of a large river depends upon the small streams that flow into it, and if a chain is as strong as its weakest link, the industrial fabric in Canada to-day depends upon the prosperity of each and every one of the small industries.


Mr. DUPUIS:: Where is that industry situated?


Edgard Jules Wermenlinger: The Minister of Labour (Mr. Rogers) said, bearing out the statement in the Purvis commission report, that to curb unemployment the government expects cooperation from private industry. This is an opportunity to implement that. I am speaking of the piano industry not because I am interested in it, for I am not; I am not a manufacturer or a dealer-


Vincent Dupuis: I asked the hon. member where that small industry is situated.


Edgard Jules Wermenlinger: In Ste. Therese and St. Hyacinthe, Quebec, in Clinton, Ontario, and the Heintzman company in Toronto; we have plenty of them. I may tell the hon. member that in the late 1920s we bad a certain number of piano manufacturers, and to-day only twenty per cent of that number remain in business. Are we going to destroy them one by one?


Vincent Dupuis: Will the hon. member allow me to remind him that the decrease in the piano industry is principally on account of the radio and the gramophone.


Edgard Jules Wermenlinger: I admit the
advent of radio and the introduction of other household necessities, but the decrease is to a greater extent a result of changes in living conditions.


Mr. ROWE (Dufferin-Simeoe):: And to
Liberal party politics.


Edgard Jules Wermenlinger: At the low year of the depression there were manufactured in this country 400 pianos. Last year, on account of the initiative of the piano manufacturers, 4,000 were manufactured, giving a weekly payroll of $25,000 to workers in piano plants and supply houses. Last year men working in such plants had forty weeks employment out of fifty-two, and manufacturers expected that this year for the first time since the depression they would have been able to give employment for fifty-two weeks had it not been for the change in this item as a result of the concession we have made to the United States.
I have a circular issued by a house in New York, addressed to dealers and pedlars of pianos in Canada. This circular was sent out at the time this treaty was just about concluded, when our manufacturers and wholesalers and dealers in Canada were not aware of the details of this treaty. This circular reads:
Under the new trade agreement the duty on pianos is reduced to such an extent

"To such an extent."
-as to make it highly profitable to import pianos from the United States, particularly when they can be bought at a fraction of their true worth. With such values to offer we hasten to communicate the details in order that you may lose no time in availing yourselves of the possible profits. For instance we can furnish twenty-one pianos, harnessed to the car, at $500 or $600 for the entire lot. In both cases the pianos will be unrepaired uprights.
As I said a few moments ago, Mr. Chairman, as a result of new designs and the initiative of our piano manufacturers, new interest in this instrument was developed. Within the last few years the piano has come to be recognized as something more than a piece of furniture in a home, rather, as an instrument carrying with it a certain mark of refinement and possessing great educational value. The duty against Canadian pianos entering the United States is forty per cent. There was a time when our pianos and organs

Canada-United States Trade Agreement
were welcome in the markets of the world; but now the high tariffs of other countries are interfering with the export of Canadian made pianos, which are recognized to be of sound, good quality. Under this treaty not only is the tariff against Canadian pianos entering the United States placed at forty per cent as against our tariff of 24| per cent; not only have we the elimination of our specific minimum valuation of $75 and the removal of the three per cent excise tax; to add insult to injury the parts required to manufacture pianos in Canada, parts coming from the United States, including ebony, ivory, sounding boards, music wire, glues of all kinds and veneers of woods that do not grow in Canada, all come in under the same tariff rates that applied previously. Therefore, the effective duty against pianos coming from the United States under this item represents a protection to Canadian manufacturers of not 241 per cent but fifteen per cent.


Vincent-Joseph Pottier: Could the hon. gentleman say when the $75 minimum duty was imposed?


Edgard Jules Wermenlinger: In 1935.


Charles Avery Dunning: No, 1931.


Edgard Jules Wermenlinger: In 1931, if I am not mistaken, there was an advance of seventy-five per cent in the invoice value of pianos entering Canada.


Charles Avery Dunning: No; the minimum duty
of $75 was imposed in 1931.


Edgard Jules Wermenlinger: Then, when was the seventy-five per cent advance made in the invoice prices of these pianos?


Charles Avery Dunning: About the same time,
but it was discontinued later by the same government that had imposed it.


Edgard Jules Wermenlinger: From the information I have, it appears that the seventy-five per cent advance took place in 1931, after we had experienced so much dumping, and the $75 minimum duty was applied in 1935. I may be wrong, but the fact remains that at the end of 1938 there was a treaty negotiated under which the minimum valuation of S75 was eliminated. That is the crux of the situation.


Charles Avery Dunning: No; the minimum duty, not the minimum valuation.


Edgard Jules Wermenlinger: Well, call it
the minimum duty; but now, under this item, pianos entering Canada from the United States will come in at their invoice value.


Charles Avery Dunning: Not those second hand
pianos.


Edgard Jules Wermenlinger: Certainly;
second-hand or new.


Charles Avery Dunning: No; the Canadian customs law will apply to those.


Edgard Jules Wermenlinger: Then, why
should that circular be issued from New York to all dealers in Canada? At any rate there is an extremely limited market in Canada, and I admit at once, before I am told, that this is not a very, very important industry. There is such a limited market for pianos in Canada that to share this market with foreign competition simply means that our Canadian manufacturers will have to put up with an increased cost per unit in overhead.


Vincent-Joseph Pottier: May I ask what effect
the increase in duty brought about by the Bennett government had on the industry?


Edgard Jules Wermenlinger: As I mentioned before, it stopped the dumping. Eighty per cent of the pianos sold in the last two or three yearsfhave been of the new design, the boudoir size, and so on. Naturally, in order to sell those pianos, trade-ins had to be accepted. Therefore dealers and wholesalers in Canada are already glutted with old stuff; yet here we are making it possible for second-hand pianos to be brought in from the United States. I fail to see that this is any concession to them, because there are so many dealers, jobbers, wholesalers and manufacturers in the United States that I do not see how they can make any profit out of the small market that is available in Canada. The only result will be that our few remaining plants will close, and. as I said before, we have only about twenty per cent of the plants that were in existence prior to 1929.
There is another side to this story and it is this, that the mechanics engaged in the production of these pianos are experts who have acquired their knowledge through experience and study. If, within the next ten or twenty years, the population of this dominion should become double what it is to-day, where shall we find our experts to work in these plants? Surely my good friends from the west will not say that by purchasing second-hand pianos coming from the Ghetto, the Bronx or the Bowery, of New York, they will bring down the cost of production of wheat. I cite that only because I hear so much about it.
Now, Mr. Chairman, let me conclude with these words. It will be remembered that until about two years ago Japan exported
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Canada-United, States Trade Agreement
to the United States pianos that could be sold at retail for less than the wholesale price of pianos made in the United States. What happened? The United States authorities did not hesitate; they notified their customs officials to advance the invoice prices of these pianos.


Mr. LANDERYOU:: Can my hon. friend tell us the difference in price between pianos in the United States and in Canada?


Edgard Jules Wermenlinger: 
Mr. MacNICOL:: How is the department going to take care of a situation that might arise from the information contained in the letter which was read by the hon. member, and which I also read earlier in the debate?


James Lorimer Ilsley: I have not the bulletin before me which was sent to collectors instructing them how to deal with dumped secondhand pianos. However, to the best of my recollection, the matter has been dealt with in a just but effective manner. The officials of the Department of National Revenue are not here, and I cannot tell the hon. member just what action was taken, but I think there was consideration of some proportion of the value new, or some value which had reason-

able relation to the value new, which was fixed as being the minimum value for secondhand pianos.


John Ritchie MacNicol: Would it be possible to import a piano at less than $75?


Edgard Jules Wermenlinger: Certainly.


James Lorimer Ilsley: It would all depend upon the-value of the piano. I cannot speak definitely but I think some new pianos were quoted at under $100 some years ago. As the item stood, the duty was $75 on those new pianos,, plus twenty-five per cent, which was unreasonable.


Charles Avery Dunning: As to the effect on the industry may I point out that I have before me figures showing the production of pianos in Canada in 1934 under the rates which my hon. friend described as being suitable and satisfactory. In that year a total of 542' pianos were produced in Canada. In 1936, the first year of the first treaty with the United States, the total production of pianos in Canada, under the reduction which applied until January of this year, was 1,652. That is, the production of pianos actually tripled from 1934 to 1936.


Mr. GLADSTONE:: Mr. Chairman, as a. result of the use of victrolas and the invention of radio, the piano industry in Canada has declined for many years. But more recently there has been an upward trend in that industry. It has almost become an infant industry in respect to the production of commercial pianos. One can see that the present rate of duty of twenty-five per cent is quite effective on a piano which sells for $300 or $500, or possibly up to $1,000. In those instances there would not be much necessity of the specific duty of $75 per piano which had previously prevailed. But, as I understand the situation, the new commercial type of piano may be valued anywhere from $75 to $100. Consequently, the amount of duty at a twenty-five per cent rate on that commercial piano is not very great.
Considering all the industries related in connection with the supplying of parts and materials, I believe some consideration should be given to the various costs which go into-the piano. For instance, in the city of Guelph large quantities of piano plates or castings are manufactured. The coal used in the smelting of the iron costs at shipping points located near where United States pianos are made only about $1.50 a ton. But to bring that coal to Guelph the cost for freight is something like $4.35 a ton, and there is the duty of 81-7 cents a ton. So that a company which

Canada-United, States Trade Agreement
manufactures piano plates carries a heavy additional cost of duty and freight on raw materials which does not have to be borne by the plate manufacturers located near United States plants producing these commercial pianos.
I believe the Minister of National Revenue has acted wisely in fixing a valuation on second-hand pianos-


John Ritchie MacNicol: But he has not done that.


Robert William Gladstone: -and I think it would be well for him to keep a watchful eye on the value of the cheaper pianos which are likely to come into this country. I refer to pianos such as would be sold to the large departmental stores in New York and Chicago.


[Stage Direction]
Item agreed to.
Customs tariff-597a. Musical instruments of all kinds, n.o.p.; phonographs, graphophones, gramophones and finished parts thereof, including cylinders and records therefor; and mechanical piano and organ players: 25 per cent.
Item agreed to.
Customs tariff-ex 597a. Cvlinders or records specially made for use in the study of languages, under such regulations as may be prescribed by the minister: free.
Item agreed to.
Customs tariff-ex 598a. Brass band instruments, of a class or kind not made in Canada: 25 per cent.
Item agreed to.
Customs tariff-599. Hides and skins, raw, whether dry, salted or pickled; and raw pelts: free.
Mr. HOMUTH:: Is there any duty on hides going into the United States?


Charles Avery Dunning: On bovine hides the rate is ten per cent, and on others it is free, going into the United States.


[Stage Direction]
Item agreed to.
Customs tariff-601. Fur skins of all kinds, not dressed in any manner: free.
Mr. BROOKS:: I notice this item is marked "free," and I believe it has been free for some time. I do not know that in the past the fox industry in the United States has particularly affected the fur industry in Canada. I understand, however, that the ranches in the United States are increasing rapidly. I have been informed that a few years ago fox raisers in eastern Canada exported large numbers of live animals to the western United States. As soon as the United States had a
sufficient number of these animals to stock their own ranches, they placed a heavy duty against the importation of live animals. To-day the fox farming industry is flourishing in many of the western states. There has been possibly no reason for placing a duty against fox furs coming into Canada from the United States up to the present time, but with the increase in fur ranching in the western United States there is a greater need for protection than there has been in the past. What were the importations of fox furs from the United States during the last three years.


Charles Avery Dunning: I shall give the figures for all furs under this item, that is fur skins undressed. Imports of all varieties of fur skins from the United States last year were valued at $2,639,000. Our exports to the United States, which enter that country free, were valued at $4,420,000.


Alfred Johnson Brooks: Is the minister correct in saying that foxes enter the United States free?


Charles Avery Dunning: Not foxes, but the others do.


Alfred Johnson Brooks: The duty on fox skins is 37J per cent.


Charles Avery Dunning: Everything except black and silver foxes goes in free. They have a duty on fox skins, but that has been reduced under this treaty. My hon. friend wanted the importations of fox skins as distinct from the others?


Alfred Johnson Brooks: For the past three years.


Charles Avery Dunning: I have only the figures for two years. In 1937, imports of fox skins from the United States were $276,000, and in 1938, $172,000.


Alfred Johnson Brooks: I think they were about half a million dollars in 1936.


Charles Avery Dunning: It varies with the years. Our exports of black and silver foxes last year to the United States were $177,000, and our exports of other fox skins were $570,000.


Alfred Johnson Brooks: Under this treaty the
Scandinavian countries will have the same privilege of exporting to the United States market as Canada, under the favoured nation clause?


Charles Avery Dunning: Yes.


Alfred Johnson Brooks: What other countries
besides the Scandinavian countries will have that privilege?
2364	COMMONS
Canada-United, States Trade Agreement


Charles Avery Dunning: I have not in mind a list of all the countries with which the United States has most favoured nation treaties, but I think it is all but Germany.


[Stage Direction]
Item agreed to.
Customs tariff-604.
(i)	Belting leather in butts or bends; and all leather further finished than tanned, n.o.p.: 20 per cent.
(ii)	Sheepskin or lambskin leather, further finished than tanned, n.o.p.: 25 per cent.
Henry Herbert Stevens: I think the committee is entitled to some explanation of those two items. The present item in the tariff reads:
Belting leather in butts or bends; sole leather; and all leather further finished than tanned, n.o.p.
Under the treaty that item has been divided, and belting leather, which has been separated from the main item, is to be admitted on a twenty per cent basis, while the duty on sole leather is fixed at twenty-five per cent. It is extremely difficult to understand why there is this difference in these two items, unless it was thought desirable to give some special consideration to manufacturers of sole leather. I do not know whether the minister is in a position to explain why this division was made, but I think the committee is entitled to a complete explanation. As a matter of fact, the result is grossly unfair to the industry because it gives virtually the same protection to sole leather, whereas in connection with belting leather there is a reduction of 7i per cent. I should like to ask the minister or his colleague, the Minister of Trade and Commerce (Mr. Euler), for an explanation of the division of this item.


Charles Avery Dunning: We simply considered
the relative importance of the different branches of the leather industry. For instance, last year the production of sole leather in Canada was over $6,000,000, whereas the production of belting leather was just $200,000. The production of sole leather is an important branch of the leather industry. I do not think it is fair to charge discrimination in the treatment given to different types of leather. It must be remembered that the people who manufacture sole leather do not manufacture patent leather; these are separate and distinct industries.


Henry Herbert Stevens: Where is the sole leather industry located?


Charles Avery Dunning: At a number of points in Ontario and Quebec.


Mr. McNEVIN:: At Omemee and Barrie.


Charles Avery Dunning: The Minister of Trade
and Commerce volunteers the information that there is an industry in Kitchener.


[Stage Direction]
Item agreed to.
Customs tariff-604b. Sole leather: 25 per cent.
Item agreed to.
Customs tariff-605a. Genuine pig leathers and genuine morocco leathers; so-called roller leathers: 25 per cent.
Item agreed to.
Customs tariff-607. Leather, when imported by manufacturers of gloves or leather clothing, for use exclusively in manufacturing gloves or leather clothing, in their own factories: 7i per cent.
Item agreed to.
Customs tariff-609. Belting, of leather: 25 per cent.
Item agreed to.
Customs tariff-ex 611a. Boots, shoes, slippers and insoles of any material, n.o.p., not including canvas shoes with rubber soles: 30 per cent.
John Ritchie MacNicol: What amount of shoes were brought in free in 1938 under the $100 exemption?


Charles Avery Dunning: If you allow for the
twelve months, it would be about $1,000,000.


Karl Kenneth Homuth: Has the minister comparative figures of the importations in January and February of this year and January and February of last year?


Charles Avery Dunning: I am sorry I have not.


Karl Kenneth Homuth: I realize the futility of protesting against this item which deals with boots and shoes. This treaty is going to be passed and anything we may say will not change the situation. In spite of what the Minister of Trade and Commerce and other ministers have said with regard to importations of shoes into this country, a great many more shoes are coming into Canada as a result of the changes in this tariff, and a great many shoes are ordered for spring delivery,, with the result that our shoe industry is suffering to-day.
Furthermore, wages have had to be cut in the shoe industry, even in those industries where the highest wages were paid of all the shoe industries in Canada, in order to compete with the low-grade shoes coming in from the United States. I can understand to some extent why the government takes the attitude that a few hundred thousand pairs of shoes coming into Canada last year had no serious effect

Canada-United States Trade Agreement
on the industry in this country, because one has only to read the speech delivered by the Minister of Trade and Commerce in the Waterloo South by-election to appreciate that in his view the trouble with the shoe industry in Canada, so the minister said, was that we had too many shoe factories, and he also said that the same thing applied to the furniture industry. If that is the attitude of members of the cabinet who negotiate trade agreements, I can readily understand that industry in this country cannot expect any consideration whatever from this government. The government might just as well say we have too many wheat farmers, too many butter producers, and if that is their attitude we might just as well get out of the country and give it back to the Indians.
The fact of the matter is that the shoe industry is one that means a great deal to other industries in this dominion. It is important . to the tanneries, for instance, and let us consider for a moment some of the other industries that are affected when we import large quantities of shoes. The upper leather for the shoes comes from Oshawa or Kingston, the black or brown leather from Newmarket or London. Then there is Clark's of Toronto; another firm at Omemee and one at Barrie; also two large industries in the city of Kitchener. All these industries are going to be affected by the greater importation of shoes. Then we have the industries supplying the thread, the wooden heels, the eyelets, the packing cases and various other necessary items in the manufacture of shoes. While I realize the futility of protesting against this reduction in the tariff, which with the removal of the excise duty will represent a reduction of some eight or nine per cent, I do say that to-day the shoe industry in Canada is feeling the very serious effects of the greater importations.


Olof Hanson: An industry that cannot live with thirty per cent protection has no right to live in this country.


John Charles Landeryou: I agree with the hon. member for Skeena. Under the high tariff policy of the Conservative government I could have purchased hides in western Canada for fourteen or fifteen cents. The price is substantially higher now than it was when the Conservative tariff went into operation. I think a thirty per cent protection for the shoe industry is sufficient, particularly in view of the fact that hides and other leathers come in free, and we have now this situation, that because of the high freight rates hides are coming in from the United States instead of being purchased in western Canada. So I agree with the reduction that is made here.


Mr. EULER:: Mr. Chairman, the hon. member for Waterloo South (Mr. Homuth) has made some reference to something I said in the Waterloo South by-election of more or less unhappy memory.


Mr. MANION:: Not for us.


William Daum Euler: No, but I am really rising in my place, not on account of what my hon. friend from Waterloo South said, but rather to ascertain the attitude of my hon. friends opposite with regard to tariffs. I do not think anyone in this house who has known me as a member for a good many years will say that I have at any time been in favour of such a reduction in tariffs as will ruin any Canadian industry. I believe my record will prove that. At the same time I have always contended, and I mentioned in the debate on the address that the former leader of the Conservative party, Mr. Bennett, laid this down as a principle, that the Canadian producer or manufacturer should have sufficient tariff protection to give him a chance of fair competition in his own market. I have said that I have no fault to find with that. I believe that Canadian industry ought to have a fair chance in its own market; but if it ought to have a fair chance for competition, surely that means that there should be some competition.
I mentioned the shoe industry in the Waterloo South by-election, where my hon. friend was a candidate at that time, because he had said that the shoe industry was being seriously injured by imports from the United States, and I quoted figures from my own department, the Dominion Bureau of Statistics, showing that our importations of shoes from the United States amounted to less than two per cent of the consumption in Canada. I was not referring to what came in under the $100 exemption. I contended that that was not a large enough import to injure the Canadian manufacturer seriously. If it is, then the only possible remedy is to put on a prohibitive tariff. I do not think that can be denied.
I was surprised yesterday or the day before, in the debate on textiles, when my hon. friend, I think from Waterloo South, protested against the injury being done to certain textile industries in this country. The Minister of Finance (Mr. Dunning) showed that less than one per cent of the consumption in Canada was imported. If there is going to be the protest made that Canadian industry is going to be ruined because of importations amounting, in some instances, to less than one per cent and, in others, to less than two per cent of the consumption in Canada, then I say the only policy our hon. friends opposite
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can adopt is one of complete exclusion. I asked my hon. friend the leader of the opposition, when I spoke in the debate on the address, whether he was in favour of a prohibitive tariff, and he said he was not.


Robert James Manion: I am not.


William Daum Euler: 
John Ritchie MacNicol: With regard to the minister's remarks about two per cent, what I want him to answer me if he can is this: What per cent of fine shoes of Canadian production is the million dollars' worth that came in under the $100 exemption?


Charles Avery Dunning: Nobody can answer that.


John Ritchie MacNicol: The Minister of Finance referred a few moments ago to the $100 exemption under which fine shoes, or any kind of shoes, but particularly fine shoes, came in. What percentage of Canadian production does that million dollars' worth represent? It is fine shoes that are coming in under the $100 exemption.


Charles Avery Dunning: 
William Daum Euler: There is one point that
must be remembered there. While possibly boots and shoes lend themselves a little more readily to importation under the $100 exemption than some other commodities, it must be borne in mind that there is no legislation

Canada-United States Trade Agreement
which provides merely for the importation of boots and shoes in that way under the $100 exemption. It runs all along the line and applies as well to many other commodities. And the same condition exists in the United States. When United States tourists come to Canada, they take back goods to the United States, and therefore it is not fair to apply the principle only to boots and shoes. It applies to radios and to a good many other articles as well.


John Ritchie MacNicol: Do I understand the
minister to say that the percentage of ladies' shoes imported under the $100 exemption was eight per cent?


Charles Avery Dunning: No.


John Ritchie MacNicol: What did the minister
say?


Charles Avery Dunning: I was trying to calculate mentally the percentage of the figures I gave. I am of the opinion that the $100 exemption both ways is of distinct advantage to Canada on balance. There is no doubt about that.


John Ritchie MacNicol: By which the minister means that United States ladies take back Canadian shoes.


Charles Avery Dunning: I am talking about the whole exemption, not boots and shoes alone. Americans take back more goods to the United States than Canadians bring back.


John Ritchie MacNicol: We have not yet seen any of their statements indicating how much was taken back. In any event, I suppose they would take back more on account of their population. But comparing their population and their production with ours, I am inclined to think we get the wrong end of the stick so far as providing employment for our people is concerned.


William Daum Euler: Even if the reduction of five per cent in the tariff had not been made, there would still be imported as many under the $100 exemption as before, so that it should not enter into the calculations from the point of view of the reduction made.


Robert James Manion: The minister of Trade and Commerce rather threw a challenge at me in regard to the question of tariffs.


Charles Avery Dunning: Not a challenge.


Robert James Manion: In a sense it was a challenge, although I did not take it in any offensive spirit. It was a challenge in regard to our attitude towards tariffs. Let me say frankly that I am not a high tariff man, in the sense that I do not favour prohibitive tariffs. I am exactly the same sort of tariff 71492-149
man as the Minister of Trade and Commerce. He is one of the best protectionists in the house and-I say this without intending to be unfair to him-he has never failed to protect the interests and the industries in his own riding. He has watched them carefully. I do not say that offensively, and indeed I do not find anything wrong with it. But take furniture, for example. In this present treaty it is cut down about one-half of one per cent on a thirty-three per cent tariff. My figures are not exact, but I do not think I am far wrong. However, I do not want to argue any questions of detail. Let me say that I believe in a moderate, not a prohibitive tariff; and that is the attitude of the Conservative party generally. I do not agree with my friends from the west, who seem to have the idea that if you put on a thirty per cent tariff the price goes up thirty per cent. In many instances nothing of the sort occurs. The purpose of a tariff is not to raise prices at all; it is simply to hold the market for the people of the country concerned. That is the real purpose of the tariff.


John Ritchie MacNicol: And to give employment.


Robert James Manion: Yes. It not only protects the market, it not only protects the industry affected, but also protects the workingmen in the industry; it protects agriculture in many instances.


Robert John Deachman: What about the consumer?


Robert James Manion: I will answer that question in a moment. My hon. friend is a free trader so long as he is not voting, but the minute he votes he is the best Grit in the house. I used to meet him in the street and discuss various questions with him. I used to think he was one of those chaps who always was fighting for principle, but I found when I got here that no one votes more regularly with his iparty-


Robert John Deachman: I could not vote for yours.


Robert James Manion: You could vote for ours just as well as for yours on protection, generally speaking. As far as the consumer is concerned, I have said many times on the public platform, and I think it is the belief of every hon. member on this side, that no manufacturer or producer has a right to exploit the people behind tariff walls. If a manufacturer, or any producer, is taking unfair advantage of a tariff, he should lose his protection. When the Bennett government in 1930 to 1935 increased the tariff, we took back from the producers and manufacturers a

2368	COMMONS
Canada-United States Trade Agreement
promise that they would not raise prices; and so far as I know, with the exception of one industry, they lived up to their agreement.


Robert John Deachman: That was on April
Fool's day.


Robert James Manion: Perhaps my hon. friend
knows more about April Fool's day than most people, but that was the agreement and it was carried out.
One point brought out by the hon. member for Huron North (Mr. Deachman) seems to me utterly foolish. He and some few others talk free trade, but there are only a few supporters of free trade left in the world; they are a sort of extinct species. No country in the world has free trade; the only country that approached it was Great Britain which had free imports, but not free trade, because there was no nation with which they could trade freely. However, from the early part of the last century up to the war Great Britain had free imports, but we all know that now Great Britain has become one of the most highly protected countries in the world. I am sorry to take up time, but I have not taken much time on this agreement except on the original discussion. I put some figures on Hansard in my remarks on the address in reply to the speech from the throne showing that Great Britain is at the present time collecting by means of protective duties three times as much per head of the population as we are. If I remember the figures correctly, Great Britain is collecting about $25 per head and we are collecting $8.50. That is the country which was once free trade. And now the hon. member for Huron North comes out with this antiquated obsolete argument that everyone but himself and a few others threw aside long ago, and attacks his own government with it. The hon. member is about the most antiquated gentleman in this house; he should get up to date.


Charles Avery Dunning: Before this Donnybrook goes any further, I did not raise a point of order while the leader of the opposition was speaking-


Robert James Manion: Or the Minister of Trade and Commerce (Mr. Euler).


Charles Avery Dunning: As my hon. friend said, he did not take up much time himself on the treaty. But I suggest, as a matter of good sportsmanship that you, Mr. Chairman, might allow the hon. member for Huron North five minutes to reply, which is about the time the leader of the opposition took on the general question of free trade.


Robert James Manion: I am only giving him back a little of his own. He has been abusing me ever since the house met.


Charles Avery Dunning: The hon. member when he "abused" the leader of the opposition was in order so far as the item was concerned. The hon. member for Huron North complained of my appealing on a point of order the other day, so I am trying to put myself right with him now by pleading that he be allowed to be out of order for not more than five minutes.


Robert John Deachman: I shall not need that amount of time. All the arguments which I have heard from my hon. friend the leader of the opposition were old when Adam quarreled with the food controller; there is no need to discuss them. I rise merely to ask the Minister of Finance a simple question:	Will he be good enough to let the
committee know the percentage that wages bear to the total costs of production in the shoe industry in Canada, and also the percentage of material cost?


Charles Avery Dunning: I am sorry I have not
that information here, but I can get it at a later stage.


Robert John Deachman: I take it as a fairly
accurate guess that wages amount to roughly thirty per cent. The tariff rate we now have is thirty per cent, and in addition there is a certain protective element in the sales tax of eight per cent which is levied not only on the value of the goods but on the duty. Last year, or before this change was made, the tariff on shoes was thirty-five per cent plus three per cent on the duty paid value, bringing it up to about thirty-nine per cent, plus the sales tax of eight per cent levied on that value, which would mean approximately an additional three or four per cent levied by the sales tax, bringing the duty altogether pretty close to fifty per cent. Is it enough? It is 100 per cent on the wage cost, at least. Surely even the most embittered protectionist who ever fought the battle for protection must say that a tariff which represents 100 per cent of the wage cost is enough. Surely it is enough.


Mr. HEAPS:: One or two statements have been made in connection with which I should like to say a word. In the first place a thirty per cent duty on boots and shoes is fairly high protection. I do not think the shoe industry has much to complain about in that respect. It has been shown by the Minister of Finance that comparatively few shoes are imported. Even if the tariff were doubled or

Canada-United States Trade Agreement
tripled, there would still be some amount of boots and shoes of specialized kinds imported, which certain people demand.
The leader of the opposition made the general statement that tariffs do not raise prices-


Robert James Manion: I said they are not for the purpose of raising prices.


Abraham Albert Heaps: Well, a statement of that
kind is too general. So far as the boot and shoe industry is concerned, I believe the tariff has not had the effect of raising prices in Canada to any appreciable extent. However, I remember very well sitting on the price spreads committee when it went carefully into the boot and shoe industry and discovered a sad state of affairs. Wages in the industry were extremely low; men and women employed in it were very much underpaid, and furthermore many of the concerns in the industry were in a bad financial condition. So apparently the tariff had not the effect of increasing prices; there was so much internal competition that prices were kept fairly low. But, I may mention in passing, there are industries that take full advantage of every bit of tariff protection. I do not want to go into that aspect now. As regards the boot and shoe industry, however, I point out that in spite of the thirty per cent protection granted by this government, and the still higher protection formerly granted, the men and women employed in that industry receive no advantage whatever from the protection given to the industry. It came out in the price spreads investigation that they are among the lowest paid workers in Canada.


[Stage Direction]
Item agreed to.
Customs tariff-611b. Leather garments, lined or unlined: 30 per cent.
Item agreed to.
Customs tariff-612. Harness and saddlery, including horse boots, n.o.p.: 22 i per cent.
Item agreed to.
Customs tariff-613. Manufactures of leather, including manufactures of rawhide, n.o.p.: 25 per cent.
Item agreed to.
Customs tariff-ex 616. Rubber, recovered: free.
Item agreed to.
Customs tariff-618. Rubber cement and all manufactures of India-rubber and gutta percha, n.o.p.: 22J per cent.
Item agreed to.
Customs tariff-618b. Tires of rubber for vehicles of all kinds, fitted or not: 25 per cent.
Item agreed to.
Customs tariff-618c; ex 711. Chlorine derivatives of India-rubber insoluble in carbon tetrachloride, in sheets not exceeding three one-thousandths of an inch in thickness, coloured or not but not printed, lithographed or embossed, when for use in Canadian manufactures: 5 per cent.
Item agreed to.
Customs tariff-619. Rubber or gutta percha hose, and cotton hose lined with rubber; rubber mats or matting and rubber packing: 22J per cent.
John Ritchie MacNicol: What are the imports of rubber hose?


Charles Avery Dunning: Of rubber hose, mats and packing, imports from the United States last year amounted to $216,000. Our exports to all countries totaled $224,000, to the United States, $7,900; and our Canadian production, adding all items together, was $2,400,000.


Mr. ROSS (St. Paul's):: What are our importations of crude rubber from the United States for the last ten years, since the imposition of the excise tax?


Charles Avery Dunning: Crude rubber not being in the agreement, I have not the details before me with respect to the imports. If my hon. friend will communicate with me, I shall gladly give him the information as a matter of general interest.


Douglas Gooderham Ross: Then, may I ask if it is intended to remove the excise tax from crude rubber?


Charles Avery Dunning: My hon. friend will realize immediately that this question does not arise under this agreement. Under the agreement the Canadian government agrees with the United States government that it will ask this parliament to remove the excise on those items named in the schedule. Any decision with respect to items not named in the schedule is a matter of domestic policy for Canada, which will be revealed by the government in due course.


Douglas Gooderham Ross: There are many articles that enter into the manufacture of rubber tires and rubber goods, and a great many of those articles are not mentioned in the agreement. Others are included in the agreement, and it is proposed to remove the excise tax from them. In addition, the duty has been reduced on many lines of rubber goods coming into Canada, and it seems to
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me that before we can intelligently discuss these items concerning rubber goods, we should know what articles will have the excise tax removed, and on what articles it will remain.


Charles Avery Dunning: May I tell my hon. friend why that information is not necessary to him. It is not necessary because he gets all his crude rubber free, now, under the British preference, and at present under the British preference there is no three per cent special excise. So my hon. friend can possess his soul in patience in that regard, and be sure that everything is going well.


[Stage Direction]
Item agreed to.
Customs tariff-619a. India-rubber clothing and clothing made from waterproofed cotton fabrics: 30 per cent.
Item agreed to.
Customs tariff-622.	Trunks, valises, hat
boxes, carpet bags, tool bags, and baskets of all kinds, n.o.p.: 30 per cent.
Item agreed to.
Customs tariff-623.	Musical instrument
cases and fancy cases or boxes of all kinds, portfolios and fancy writing desks, satchels, reticules, card cases, purses, pocket-books, fly books and parts thereof: 30 per cent.
Item agreed to.
Customs tariff-624a.
ex (i) Toys of all kinds, n.o.p.: 30 per cent.
(ii) Mechanical toys of metal: 30 per cent.
Item agreed to.
Customs tariff-647.	Jewellery of any
material, for the adornment of the person, n.o.p.: 35 per cent.
Item agreed to.
Customs tariff-651. Buttons of all kinds, covered or not, and button blanks other than in the rough, n.o.p.; recognition buttons and cuff or collar buttons: 30 per cent; and, per gross, 5 cents.
Karl Kenneth Homuth: What is the importation of buttons from the United States? I should like those figures for this and the next item; I do not know whether or not they are separate.


Charles Avery Dunning: I have them separately. Under this item we imported $155,000 worth from the United States and exported $37,000 worth to all countries, the exports to the United States being very small.


Karl Kenneth Homuth: Were our exports chiefly to Australia and New Zealand?


Charles Avery Dunning: Our exports were chiefly to the United Kingdom, British South Africa and Trinidad.


[Stage Direction]
Item agreed to.

Customs tariff-651a. Buttons, and button blanks other than in the rough, of vegetable ivory: 30 per cent, and, per gross, 10 cents.
Charles Avery Dunning: My hon. friend wants the same information on this item. Our imports from the United States amounted to $54. Exports were included in the previous item, and our Canadian production was $205,000.


[Stage Direction]
Item agreed to.
Customs tariff-654. Bristles, broom corn, and hair brush pads: free.
Item agreed to.
Customs tariff-ex 655a. Crayons of chalk: 20 per cent.
John Ritchie MacNicol: I should like to ask the reason for cutting this tariff by approximately forty-two per cent.


Charles Avery Dunning: I receive a great deal of correspondence about many of these items. I cannot remember one about which there were more requests for a reduction in duty in the last couple of years than I received from schools and places of that kind in connection with the duty on chalk. On looking into the matter it seemed to me that we could do that which is here done.


John Ritchie MacNicol: Do we export any
crayons ourselves?


Charles Avery Dunning: Exports are not separately recorded. If any, they go in with a basket item of exports.


Major James William Coldwell: Is there any considerable industry in the making of such crayons?


Charles Avery Dunning: Our production of chalk and wax crayons amounted to $112,000 in the last recorded year.


Major James William Coldwell: And our imports?


Charles Avery Dunning: Our total imports were
$90,000, of which $61,000 came from the United States and most of the balance from Great Britain.


[Stage Direction]
Item agreed to.
Customs tariff-657a.	Cinematograph or
moving picture films, positives, one ancl one-eightli of an inch in width and over, n.o.p.: 2J cents per linear foot. [DOT]
Mr. ESLING:: May I ask the minister
if this is a new item?


Charles Avery Dunning: No; this is the same
item, with a reduction in the tariff rate.


William Kemble Esling: Then, how does it differ
from the ordinary film?

Canada-United States Trade Agreement


Charles Avery Dunning: It is the only item covering cinematograph films, and therefore includes everything one and an eighth inch and over in width. I should make the qualification that these are positives.


William Kemble Esling: These are not returned?


Charles Avery Dunning: No; these pay the duty.


[Stage Direction]
Item agreed to.
Customs tariff-657b; ex 532; ex 711. Parts, unfinished, when imported by manufacturers of cameras, for use in the manufacture of cameras, in their own factories: 5 per cent.
Item agreed to.
Customs tariff-663. Fertilizers, compounded or manufactured, n.o.p.: 5 per cent.
Provided, that Canada reserves the right to withdraw this concession should any restriction be placed on the export of phosphate rock or superphosphate from the United States of America.
Item agreed to.
Customs tariff-663c; ex 711. Soya beans, soya bean oil cake and soya bean oil meal, when imported for use as animal or poultry feeds, or as fertilizer, or when imported for use in the manufacture of animal or poultry feeds or fertilizers: free.
Douglas Gooderham Ross: Is there any considerable production of soya beans in Canada?


Charles Avery Dunning: The value of the production of soya beans is not separately recorded, but there is very little production of the bean. There is a certain amount of production for fodder purposes, but the trade journal, the Linseed-Soya Bean Oil Industry, reports that soya bean products, which include soya bean oil, soya bean meal and soya bean flour, had a production to a value of $51,000 in Canada in 1936 and $110,000 in 1937; a small production for a variety of purposes.


Douglas Gooderham Ross: Might I point out to the minister the danger in having soya bean oil cake and other products of the soya bean on the free list. These products are rapidly replacing ordinary farm products of Ontario used for feed, greatly to the detriment of the farmers of this province. I believe soya beans formed the fourth largest field crop of the United States last year, and in view of that fact our farmers are bound to have more and more competition from the soya bean. The production of this commodity is increasing rapidly, but now we find that these products are bound on the free list for three years.


Charles Avery Dunning: The only change in this item is that previously manufacturers of products of soya beans obtained their soya
beans free, but the man who desired to feed soya beans in order to produce live stock had to pay 22i per cent. All the change involves is that it gives the man who feeds soya beans the same privilege the manufacturer has had all these years. There has been no production in Canada of any account. Nobody imagines for a moment that placing a tariff on soya beans would help the farmers to grow them in parts of Canada which are climatically unsuited for it. Even in Ontario, in that favoured part of Ontario in which experiments are being made, may I say that a year ago I had figures which showed how very, very small was the production of soya beans of commercial value. I am distinguishing between soya beans in the commercial sense and soya beans in the fodder sense.


Douglas Gooderham Ross: I understand what the minister has said. There is in process I know a greater production of soya beans in Canada.
The other important matter is this: I am not objecting to this being placed on the free list, but I am objecting to having these products bound for three years. You cannot get away from it; they are replacing other farm products to a very large extent. Beans are being imported and processed here. More and more of them will be imported, and there are new industries in prospect at the present time. I say the item should not have been bound for three years, and that is my objection.


[Stage Direction]
Item agreed to.
Customs tariff-670. Grinding wheels, stones or blocks, manufactured by the bonding together of either natural or artificial abrasives; manufactures of emery or of artificial abrasives, n.o.p.: 22J per cent.
Mr. CLARKE (Rosedale):: How much of this product is manufactured in Canada and exported to the United States?


Charles Avery Dunning: Total imports of grinding wheels, grinding stones and blocks, and manufactures of emery or abrasive articles from the United States were valued at $170,000, on the whole of the item. Our total exports were valued at $151,000. Our total production is valued at about $1,255,000.


Harry Gladstone Clarke: What is the rate into the United States? '


Charles Avery Dunning: The rate is ten per cent on emery wheels, files and manufactures of emery, corundum and artificial abrasives, and twenty per cent on wheels of corundum or silicon carbide.


[Stage Direction]
Item agreed to.
2372	COMMONS
Canada-United States Trade Agreement
Customs tariff-682a; ex 618. Net floats of aluminum, glass, canvas, cork or rubber, for use exclusively in commercial fishing: free.
Item agreed to.
Customs tariff-688. Artificial teeth, not mounted: free.
Karl Kenneth Homuth: Is this the teeth in the legislation, Mr. Minister?


[Stage Direction]
Item agreed to.
Customs tariff-693. (iii) Antiquities (other than spirits or wines) produced more than 100 years prior to date of importation, under such regulations, including proof of antiquity, as may be prescribed by the minister: free.
Provided that, notwithstanding anything to the contrary in any law or regulation relating to customs, antiquities as described above shall be relieved from the requirements as to origin or content.
Item agreed to.
Customs tariff-711. All goods not enumerated in this schedule as subject to any other rate of duty, and not otherwise declared free of duty, and not being goods the importation whereof is by law prohibited: 20 per cent.
Provided that duty shall not be deemed to be provided for by this item upon dutiable goods mentioned as "n.o.p." in any preceding tariff item.
Provided further that when the component material of chief value in any non-enumerated article consists of dutiable material enumerated in this schedule as bearing a higher rate of duty than is specified in this tariff item, such non-enumerated article shall be subject to the highest duty which would be chargeable thereon
if it were composed wholly of the component material thereof of chief value, such "component material of chief value" being that component material which shall exceed in value any other single component material in its condition as found in the article,
John Ritchie MacNicol: Will the minister explain the significance of this item?


Charles Avery Dunning: This is a general, allinclusive basket item for everything which has not otherwise been provided for in any part of the tariff schedule. Last year from the United States we imported under the item $6,000,000 worth of all sorts of odds and ends. The long list appears on two pages of the information before me.


Mr. HARRIS:: What were the importations for the year before?


Charles Avery Dunning: I believe there are sixty-two headings. In the year before, from the United States we imported goods under this item to the value of 15,300,000.


John Ritchie MacNicol: Could the information be placed on Hansard. I do not wish the minister to read it, but possibly it could be handed to Hansard.


Charles Avery Dunning: 
Joseph Henry Harris: This is a large item, and although I do not wish to hold up the minister-


Charles Avery Dunning: Has the hon. member anything in mind, because if he has, I can answer specifically.


Joseph Henry Harris: There are one or two observations I should like to make. In this day and generation when inventions are being made by leaps and bounds, and when each day there is something new, particularly great advances in science in the United States and in the larger countries, we find more and more items creeping into the basket item 711. Apart, from the fact that the loss in this item 711 in revenue from excise tax is $180,000 this year, during the lifetime of the agreement, unless those charged with the responsibility of saying that such and so shall be listed under item 711 perform their duty thoroughly, a very large number of new materials will find their way into the item. I do not refer to new inventions, particularly, but more to the derivatives from old, established products. I would have in mind coal-tar products, or something of that kind. I do not say, of course, that coal-tar is a
specific item, but I just mention it so that hon. members will have some idea of the possibilities of commodities which are liable to find their way into the basket item 711 during the lifetime of this trade agreement.
I should not be at all surprised to see this figure of $6,000,000 imports for last year and $5,000,000 for the year before reach a sum three or four times as large before the expiry of the agreement. That will be so, unless the Minister of Finance and the department under him, and any others who may be charged with the administration of this agreement, are meticulous in exercising their discretion as to what will or will not be allowed to go into the item. I suggest that they should go so far as to make new items, as they go along, so that we in this country, who as a rule are a step behind scientific advance in the United States, will not find this basket item standing out as one of the main items under which tremendous volumes of importations may enter Canada to the detriment of similar Canadian products. Had I known we would reach this item I would have brought a sample of what I have in mind to the attention of the committee. Branch factories may
2374	COMMONS
Canada-United States Trade Agreement
be erected in Canada for purposes of distribution of certain products, but those products invariably have been made for several years in the United States and will find their way into Canada under this particular item.
Leaving all that aside for the moment, I would give warning to those who are charged with the administration of this agreement. Let me reiterate what I have said on previous occasions, that to my mind this is a case where the excise tax provision, which will form part and parcel of the trade agreement after the ratifying legislation is passed, will bring further loss to the treasury of Canada. I know the minister will reply immediately that rather than there being a loss to the treasury, there will be an advantage to the consumer. However, let us be sensible. This three per cent excise tax is not going to be given entirely to the consumer. For example, if three pairs of socks are being sold for $1 and the three per cent excise tax is taken off, they will still be sold for SI. The treasury of Canada will be bereft of $180,000 under this item and $12,000,000 under all the items, and we shall still be paying $1 for three pairs of socks.


[Stage Direction]
Item agreed to.
Customs tariff-ex 711. Oyster shells, not further manufactured than crushed or screened, or both, for use as poultry feeds or in the manufacture of poultry feeds: 10 per cent.
Item agreed to.
Customs tariff-ex 711. Activated clav, when imported for use in the refining of oils: 10 per cent.
Item agreed to.
. Customs tariff-ex 711. Coal-tar benzol, when imported by refiners of crude petroleum, for use exclusively in blending with gasoline wholly produced in Canada: 10 per cent.
Item agreed to.
Customs tariff-ex 711. Vermiculite. crude, or not further processed than ground and screened: 10 per cent.
Item agreed to.
Customs tariff-756. Artificial abrasive grains, crushed or ground, when imported for use in Canadian manufactures: free.
Item agreed to.
Customs tariff-792. Cotton pulp imported by manufacturers for use exclusively in their own factories in the manufacture of yarns of artificial silk or similar synthetic fibres produced by chemical processes, under regulations to be prescribed by the Minister of National Revenue: free.
Item agreed to.
Customs tariff-816; 664b. Ethylene glycol, when imported by manufacturers for use

exclusively in the manufacture of anti-freezing compounds or of explosives, in their own factories: free.
Item agreed to.
Charles Avery Dunning: That completes the
schedule. If hon. members will turn to the articles in the agreement, we shall deal first with article I.


Mr. STIRLING:: After having passed the articles, shall we then proceed to the memoranda and annexes at the end?


Charles Avery Dunning: I do not know that the annexes at the end require to be adopted. They will not be in the bill at all, so we shall not require to deal with them. They are for the information of hon. members in considering the bearing of the various features in the treaty. The procedure will be as formerly. We shall go through the articles and then report the whole schedule, being the treaty, out of committee, after which I shall ask for leave to introduce a bill. The bill will go through the usual stages. It will not be read a second time immediately, but it will go through the normal stages of a bill except that when we come to committee of the whole house the chairman will call the schedule, which is the agreement itself, and this, having been carried previously in committee of ways and means, will not require to be gone through again in detail in the committee.


Grote Stirling: Would the minister mind turning to page 51 of the trade agreement and telling me under which particular article I could ask for information with regard to the last paragraph?


Charles Avery Dunning: There is no article specifically covering that. That is an understanding between the two countries as to the working out of the treaty in the event of certain contingencies.
On article I:
1.	Canada and the United States of America will grant each other unconditional and unrestricted most-favoured nation treatment in all matters concerning customs duties and subsidiary charges of every kind and in the method of levying duties, and, further, in all matters concerning the rules, formalities and charges imposed in connection with the clearing of goods through the customs, and with respect to all laws or regulations affecting the sale or use of imported goods within the country.
2.	Accordingly, articles the growth, produce or manufacture of either country imported into the other shall in no case be subject, in regard to the matters referred to above, to any duties, taxes or charges other or higher, or to any rules or formalities other or more burdensome, than those to which the like articles

Canada-United States
Trade Agreement
the growth, produce or manufacture of any other foreign country are or may hereafter be subject.
3.	Similarly, articles exported from the territory of Canada or the United States of America and consigned to the territory of the other country shall in no case be subject with respect to exportation and in regard to the above-mentioned matters, to any duties, taxes or charges other or higher, or to any rules or formalities other or more burdensome, than those to which the like articles when consigned to the territory of any other foreign country are or may hereafter be subject.
4.	Any advantage, favour, privilege or immunity 'which has been or n\ay granted by Canada or the United States of America in regard to the above-mentioned matters, to any article originating m any other foreign country or consigned to the territory of anv other foreign country shall be accorded immediately and without compensation to the like article originating in or consigned to the territory of the United States of America or Canada.' respectively, and irrespective of the nationality of the carrier.
Article agreed to.
On article II:
1.	No prohibition or restriction shall be imposed or maintained on the importation into either country of any article, from
place arriving, the growth produce or manufacture of the other country, to which the importation of the like article the glow i. produce or manufacture of any other foreign country is not similarly subject.
2.	No prohibition or restriction shall be imposed or maintained on the exportation of any article from either country to the other to which the exportation of the like article to any other foreign country is not similarly subject.
Article agreed to.
On article III:
If imports of any article into either country should be regulated either as regards the total amount permitted to be imported or as regards the amount permitted to be imported at a specified rate of duty, and if shares are allocated to countries of export, the share allocated to the other country shall be based upon the proportion of the total imports of such article from all foreign countries supplied by that country in past years, account being taken in so far as practicable in appropriate cases of any special factors which may have affected or may be affecting the trade in that article. In those cases in which the other country is a relatively large supplier of any such article, the government of the country imposing the regulation shall, whenever practicable, consult with the government of the other country before the share to be allocated to that country is determined.
Article agreed to.
On article IV:
1. If either country establishes or maintains a monopoly for the importation, production or sale of a particular commodity or grants exclusive privileges, formally or in effect, to one 71492-150
or more agencies to import, produce or sell a particular commodity, the government of the country establishing or maintaining such monopoly, or granting such monopoly privileges, agrees that in respect of the foreign purchases of such monopoly or agency the commerce of the other country shall re-eeive fair and equitable treatment. To this end it is agreed that in making its foreign purchases of any product such monopoly or agency will be influenced solely by those considerations, such as price, quality, marketability, and terms of sale, which would ordinarily be taken into account by a private commercial enterprise interested solely in purchasing such product on the most favourable terms.
2.	In awarding contracts for public works and in purchasing supplies, neither government shall discriminate against articles the growth, produce or manufacture qf the territories of the other country in favour of those of any other foreign country.
Article agreed to.
On article V:
Articles the growth, produce or manufacture of Canada or the United States of America shall, after importation into the other country, be exempt from all internal taxes, fees, charges or exactions, other or higher than those payable on like articles of national origin or any other origin, except as otherwise required by laws in force on the day of the signature of this agreement and subject to the limitations on the authority of either government.
Article agreed to.
On article VI:
1.	Articles the growth, produce or manufacture of the United States of America, enumerated and described in schedule I annexed to this agreement shall, on their importation into Canada, be exempt from ordinary customs duties in excess of those set forth in the said schedule, subject to the conditions therein set out. The said articles shall also be exempt from all other duties, taxes, fees, charges, or exactions, imposed on or in connection with importation, in excess of those imposed on the day of the signature of this agreement or required to be imposed thereafter under laws of Canada in force on the day of the signature of this agreement.
2.	Schedule I shall have full force and effect as an integral part of this agreement.
Article agreed to.
On article VII:
1. Articles the growth, produce or manufacture of Canada enumerated and described in schedule II annexed to this agreement shall, on their importation into the United States of America, be exempt from ordinary customs duties in excess of those set forth and provided for in the said schedule, subject to the conditions therein set out. The said articles shall also be exempt from all other duties, taxes, fees, charges, or exactions, imposed on or in connection with importation, in excess of those imposed on the day of the signature of this agreement or required to be imposed thereafter



Canada-United States Trade Agreement
under laws of the United States of America in force on the day of the signature of this agreement.
2. Schedule II shall have full force and effect as an integral part of this agreement.
Article agreed to.
On article VIII:
1.	The provisions of articles VI and VII of this agreement shall not prevent the government of either country from imposing at any time on the importation of any article a charge equivalent to an internal tax imposed in respect of a like domestic article or in respect of a commodity from which the imported article has been produced or manufactured in whole or in part.
2.	Moreover, the provisions of articles VI and VII shall not be construed to embrace such reasonable fees, .charges or exactions, imposed at any time by the government of either country in connection with the documentation of any shipment, as are commensurate with the cost of the services performed.
Article agreed to.
On article IX:
Sawed lumber and timbers, telephone, trolley, electric-light, and telegraph poles of wood, and bundles of shingles, the growth, produce or manufacture of Canada, imported into the United States of America, shall not be required to be marked to indicate their origin in any case where the imported article is of the same class or kind as articles which were imported into the United States of America in substantial quantities during the five-year period immediately preceding January 1, 1937, and were not required during such period to be marked to indicate their origin.


John Ritchie MacNicol: Could the minister explain the significance of the five-year period in this article?


Charles Avery Dunning: In order to determine what articles shall not be marked, reference is made to those which entered the United States from Canada in substantial quantities during the preceding five years without marking required.


[Stage Direction]
Article agreed to.
On article X:
1.	No prohibition, restriction or any form of quantitative regulation, whether or not operated m connection with an agency of centralized control, shall be imposed or maintained in Canada on the importation or sale of any article the growth, produce or manufacture of the United States of America enumerated and described in schedule I, or in the United States of America on the importation or sale of any article the growth, produce or manufacture of Canada enumerated and described in schedule II, except as otherwise expressly provided in the said schedules.
2.	The foregoing provision shall not apply to quantitative regulations in whatever form which may hereafter be imposed by the government of either country on the importation or sale of any article the growth, produce or manufacture of the other, in conjunction with governmental measures or measures under governmental authority

(a)	operating to regulate or control the production, market supply, quality or price of the like article of domestic growth, production or manufacture; or
(b)	operating to increase the labour costs of production of the like article of domestic growth, production or manufacture;
Provided, however, that the government proposing to impose any such quantitative regulation shall have satisfied itself, in the case of measures described in subparagraph (a) of this paragraph, that such quantitative regulation is necessary to secure the effective operation of such measures, and, in the case of measures described in subparagraph (b), that such measures are causing the domestic production °f the article concerned to be injuriously affected by imports which constitute an abnormal proportion of the total consumption oi such article in relation to the proportion supplied in the past by foreign countries.
. 3. Whenever either government proposes to impose or to effect a substantial alteration in any quantitative regulation authorized by the preceding paragraph, that government shall give notice m writing to that effect to the other and shall, upon request, enter into consultation regarding the matter. If agreement is not reached within thirty days after the receipt of the notice the government giving it shall be tree to impose or alter the regulation at any time, and the other government shall be free within fifteen days after such action is taken to terminate this agreement in its entirety on givmg thirty days' notice in writing to that
[Stage Direction]
Article agreed to.
On article XI:
In respect of articles the growth, produce or manufacture of the United States of America enumerated and described in schedule I, imported into Canada, and of articles the growth, produce or manufacture of Canada enumerated and described in schedule II, imported into the United States of America, on which ad valorem rates of duty, or duties based upon or regulated in any manner by value, are or may be assessed, the general principles on which dutiable value is determined in each of the importing countries on the day of the signature of this agreement shall not be altered so as to impair the value of any of the concessions provided for in this agreement.
Article agreed to.
On article XII:
1.	Nothing in this agreement shall be construed to prevent the enforcement of such measures as the government of either country may see fit to adopt
(a)	relating to the importation or exportation of gold or silver;
(b)	relating to the control of the import or exjiort or sale for export of arms, ammunition, or implements of war, and in exceptional circumstances, all other military supplies;
(c)	relating to neutrality or to public security; or
(d)	should that country be engaged in hostilities or war.
2.	Subject to the requirement that, under like circumstances and conditions, there shall be no arbitrary discrimination by either country against articles the growth, produce or manufacture of the other country in favour of the like articles the growth, produce or manufacture of
[Stage Direction]
any other foreign country, the provisions of this agreement shall not extend to prohibitions or restrictions
(a)	imposed on moral or humanitarian grounds;
(b)	designed to protect human, animal or plant health or life;
(c)	relating to prison-made goods; or
(d)	relating to the enforcement of police or revenue laws.
Article agreed to.
On article XIII:
If a wide variation should occur in the rate of exchange between the currencies of Canada and the United States of America, and if the government of either country should consider the variation so substantial as to prejudice the industries or commerce of that oountry, it shall be free to propose negotiations for the modification of this agreement; and if agreement with respect thereto is not reached within thirty days following receipt of such proposal, the government making such proposal shall be free to terminate this agreement in its entirety on thirty days' written notice.
Major James William Coldwell: I was wondering just what is meant by this particular article. Does it not tend to tie our currency to that of the United States?


Charles Avery Dunning: No.


Major James William Coldwell: I notice there is provision for negotiation and so on, but I have in mind 1931 and 1932 when we kept our currency in line with that of the United States, I think very much to the detriment of our primary producers. It seems to me that if, inferentially at least, we are going to do this under this article, it will be somewhat dangerous from the point of view of the primary producer. To negotiate variations in this treaty at a time when exchange fluctuations overseas are rather serious would, in my opinion, militate rather seriously against the primary producer. I should like to have a word from the minister on this.


Charles Avery Dunning: If this ties us to the United States exchangewise, then the other trade agreement ties the United Kingdom to the United States, because the same conditions are present in each treaty. I may say that it would be quite impossible in these days to negotiate a treaty without a provision which would enable each country to be free with respect to exchange. My hon. friend will appreciate that when he considers the matter. This article does not change our situation in the slightest degree, but of course the existence of a trade treaty with any country compels us to count the cost exchangewise with respect to anything we may be contemplating at any time.


[Stage Direction]
Article agreed to.
28, 1939	2377
Canada-United States Trade Agreement
On article XIV:
The government of each country reserves the right to withdraw or to modify the concession granted on any article under this agreement, or to impose quantitative regulations on the importation of any such article if, as the result of the extension of such concession to other foreign countries, such countries obtain the major benefit of the concession, and if in consequence imports of the article concerned increase to such an extent as to threaten serious injury to domestic producers: Provided, that before any action authorized by the foregoing reservation is taken, the government proposing to take such action shall give notice in writing to the other government of its intention to do so, and shall afford such other government an opportunity within thirty^ days after receipt of such notice to consult with it in respect of the proposed action.
Article agreed to.
On article XV:
1.	Should any measure be adopted by the government of either country which, while not conflicting with the terms of this agreement, appears to the government of the other country to have the effect of nullitymg or impairing any of the objects of the agreement, the government which has adopted any such measure shall consider such representations and proposals as the other may make, with a view to effecting a mutually satisfactory adjustment of the matter.
2.	The government of each conutry will accord sympathetic consideration to, and when requested will afford adequate opportunity for consultation regarding, such representations as the other government may make with respect to the operation of customs laws and regulations quantitative restrictions on imports or the administration thereof, the observance of customs formalities, and the application ot sanitary laws and regulations for the protections of human, animal or plant health or life.
3.	In the event that the government of either country makes representations to the government of the other country in respect of the application of any sanitary law or regulation for the protection of human, animal or plant health or life, and if there is disagreement with respect thereto, a committee 9f technical experts on which each government will be represented shall, on the request of either government. be established to consider the matter and to submit recommendations to the two governments.
Joseph Henry Harris: Could the minister enlarge on the meaning of the second paragraph where it says, "adequate opportunity for consultation regarding such representations as the other government may make with respect to the operation of customs laws and regulations." My next question, which is perhaps more important, is with reference to the consultations covering quantitative restrictions on imports. What sort of machinery is being set up for the administration of this part of this act?


Charles Avery Dunning: Normally, External
Affairs, from Canada's end, with the Department of the Secretary of State at Washing-
2378	'	COMMONS
Canada-United States Trade Agreement
ton, at their end. It is an undertaking on the part of each party that they will listen sympathetically to any representations made by the other party.


Joseph Henry Harris: But in matters of consultation of this kind the essential element of time creeps in. I am thinking of another agreement passed in 1932 in connection with which representations have been made in the past, and the minister will have in mind probably what I am thinking of. Just now I am thinking of the great difficulties that Canada is going to get into during the lifetime of this three-year agreement. Will this organization take two or three years, or is there any way of speeding it up? I put this on record in Hansard so that reference may be made to it. The minister will probably agree that the administration of matters of this kind is something like the administration of justice- you get it eventually. I did not know whether the minister would like, from his seat, to enlarge upon the routine that would be followed, so that when we have to do it we may do it with some expedition.


Charles Avery Dunning: You can always agree to consult with anybody, but you cannot decide how long it is going to take the two parties who consult to agree. This merely provides amicable machinery for consultation, but it does not guarantee agreement. In the instance to which my hon. friend refers, which was so unfortunate, in connection with the trade treaty known as the Ottawa agreements of 1932, there was no lack of facilities for consultation and communication, but there was distinctly a lack of agreement.


Joseph Henry Harris: Would this have the same effect as article XVIII, as I recall it, of the 1932 agreement?


Charles Avery Dunning: It is not exactly the same wording.


Thomas Bruce McNevin: Could dumping be considered under this provision?


Charles Avery Dunning: No, that is covered by Canadian law.


Alfred Johnson Brooks: Would bonuses be considered under this item?


Charles Avery Dunning: Yes, anything of that kind of which either country complains could result in representations under section 1 of Article XV.


Douglas Gooderham Ross: Under which
article does Canada undertake to remove the excise tax?


Charles Avery Dunning: We have already passed that as the head-note to schedule I, at the top of page 13.


Joseph Henry Harris: The provision here is for "a committee of technical experts on which each government will be represented to consider the matter and to submit recommendations to the two governments." I imagine this would cover such things as products being shipped into this country in jute packages where the jute might be second-hand, and such like. Has the minister in his docket a note upon which he might enlarge and tell us who the technical experts on this committee are likely to be? Will they be officers within the departments or people drawn from scientific organizations?


Charles Avery Dunning: It has not been necessary to invoke the provision as yet, but each country, I think, would decide for itself.


Joseph Henry Harris: Countries that have trouble with the foot-and-mouth disease-I am not referring to the United States at the moment -cannot ship goods to this country except under certain regulations. That applies to Scotland at the present time, and it has always been a question as to how judgment shall be given, particularly in the matter of animal products of all kinds; so much so that it has been necessary to send from London, England, to places like Scotland, a special representative of the dominion government to examine the product and give a certificate that the goods are of a class or kind that might be approved and sent through to Canada. The entire plant where the goods are being manufactured is inspected and checked by an official of this dominion government, who is sent at the expense of this government from London to Scotland to examine the entire plant, and a certificate is required from this dominion official that the goods are such as might be shipped in here without let or hindrance. The question I wish to ask is whether the technical experts, in the case of shipments from the United Kingdom, will be from the high commissioners' office. Whether or not they are qualified to pass judgment is another matter.


Charles Avery Dunning: I would point out that there is no such provision in the United Kingdom agreement as is contained in section 3 of article XV of this treaty.


Joseph Henry Harris: But this is a particular provision now being made. I come back to my question: Who would the technical experts be?


Charles Avery Dunning: Each government would be responsible for appointing its own to deal with the particular case as it arises; but remember the decision of the technical experts is not final. The decision of each government

Canada-United States Trade Agreement
with respect to the matter still remains, but this does provide a means of endeavouring to negotiate a way out of a difficulty which arises through sanitary or other regulations for the protection of animal or plant health or life. My hon. friend is thinking, and quite properly, of cases where apparently such regulations have been used to create a prohibition, always a difficult matter. There is no machinery in the United Kingdom-Canada agreement to deal with that. We have to appeal to them as a friendly co-member of the British commonwealth of nations to hear us on the matter. But in this agreement we have tried to set up machinery whereby there can be a technical examination of the merits and a report by such a committee to both governments.


Joseph Henry Harris: I appreciate that, and that is the reason I brought up the point. I want to find out what kind of machinery this is going to be, because the minister will agree that it is something new.


Charles Avery Dunning: The same provision was in the 1935 agreement with the United States.


Joseph Henry Harris: Has it ever functioned?


Charles Avery Dunning: We never had occasion to use it.


Joseph Henry Harris: If you had, what sort of machinery would it be?


Charles Avery Dunning: It would depend upon the particular nature of the disagreement. For instance, if it were something connected with animal health we would not appoint a man from the Department of Public Health.


Joseph Henry Harris: But a man from some one of the departments?


Charles Avery Dunning: We can get someone from outside if we wish. The government is quite free to do what it wishes in the matter. I cannot say in advance just who it would be.


[Stage Direction]
Article agreed to.
On article XVI:
The provisions of this agreement relating to the treatment to be accorded by Canada and the United States of America, respectively, to the commerce of the other country shall apply, on the part of the United States of America, to the continental territory of the United States and such of its territories and possessions as are included in its customs territory on the day of the signature of this agreement. The provisions of this agreement relating to most-favoured-nation treatment shall apply, however, to all territories under the sovereignty or authority of the United States of America, other than the Panama canal zone.
Article agreed to.
On article XVII:
Except as otherwise provided in article V of this agreement:
(a)	Nothing in the agreement shall entitle the United States of America to claim the benefit of any treatment, preference or privilege which may now or hereafter be accorded by Canada exclusively to territories under the sovereignty of His Majesty the King of Great Britain, Ireland and the British dominions beyond the Seas, Emperor of India, or under his majesty's protection or suzerainty.
(b)	Nothing in the agreement shall entitle Canada to claim the benefit of any treatment, preference or privilege which may now or hereafter be accorded by the United States of America, its territories or possessions or the Panama canal zone exclusively to one another or to the republic of Cuba. The provisions of this subparagraph shall continue to apply in respect of any benefits now or hereafter accorded by the United States of America, its territories or possessions or the Panama canal zone to the Philippine islands, irrespective of any change in the political status of the Philippine islands.
Article agreed to.
On article XVIII:
1.	The present agreement shall be ratified by His Majesty the King of Great Britain, Ireland and the British dominions beyond the Seas, Emperor of India, in respect of Canada, and shall be proclaimed by the President of the United States of America. It shall enter definitively into force on the day of exchange of the instrument of ratification and a copy of the proclamation, which shall take place at Ottawa as soon as possible.
2.	Pending the definitive coming into force of this agreement, the provisions of article IX shall be applied provisionally on and after the day following the proclamation of the agreement by the President of the . United States of America, and the provisions of article I, article VI and article VII shall be applied provisionally on and after January 1, 1939, subject to the reservations and exceptions elsewhere provided for in this agreement.
3.	Upon the provisional application of article I, article VI and article Vll of the present agreement, and during the continuance of such provisional application, the provisions of article
I.	article III and article IV of the trade agreement concluded between Canada and the United States of America on November 15, 1935, at Washington, shall be inoperative, and upon the definitive coming into force of the present agreement the whole of the said agreement of November 15, 1935, shall terminate.
4.	Subject to the provisions of article X and article XIII, this agreement shall remain in force for a term of three years from the date of the provisional application of article fX, and, unless at least six months before the expiration of the aforesaid term of three years the government of either country shall have given notice to the other government of intention to terminate the agreement upon the expiration of that term the agreement shall remain in force thereafter. subject to the provisions of article X and article Xlff, until six months from the date on which the government of either country shall have given notice to the other government of intention to terminate the agreement.
Article agreed to.	.
[Stage Direction]
Suspension oj Standing Order 28
On the preamble.
Mr. MaeNICOL: I should like to make one or two observations before the preamble carries.
Charles Avery Dunning: If I might make a suggestion to my hon. friend, I think that on the second reading of the bill there will be a better opportunity for him to make general observations. That is where such discussion would normally occur.
Mr. MaeNICOL: Thank you.
Resolutions reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 64, respecting a certain trade agreement between Canada and the United States of America.
Motion agreed to and bill read the first time.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, March 29, 1939