1940-07-18

[Stage Direction]
Third report of standing committee on banking and commerce.-Mr. Moore.
First report of the joint committee of both houses of parliament on printing.-Mr. Dupuis.

[Stage Direction]
On the order for motions:
Hon. R. B. HANSON (Leader of the Opposition):: Yesterday the Prime Minister 95826-1081
(Mr. Mackenzie King) tabled a reply to a question asked by the hon. member for Gaspe (Mr. Roy). The first part of the question was:
Has the government appointed any person to write the history of our participation in the present war, and, if so, who was appointed
The answer was, "No," and the rest of the question was answered in the same sense. The answer is literally correct, I think, but in a practical sense I do not think it is correct; and I believe it is due to the house and the country that the Prime Minister should make some explanation as to just what the true position is.
I hold in my hand a copy of a press release issued when the Prime Minister made the announcement some months ago. It describes as follows the duties of the gentleman to whom it refers:
To act in an advisory capacity to the war committee of the cabinet in the recording and interpretation of Canada's war effort; to advise and assist the government in providing accurate and essential information in these respects to the people of Canada and to the government of the United Kingdom, and to assist the Prime Minister by keeping a chronicle and other essential records of the progress of Canada's war effort.
The press report concludes:
In this capacity, Mr. Brockington will be designated, recorder of Canada's war effort and counsellor (in the above respects) to the war committee of the cabinet. He will be attached to the Prime Minister's office.
The essentials of the press release are incorporated in the order in council P.C. 4284 passed on the 21st December last, with respect to this appointment.
Now, the question related to the appointment of a person "to write the history of our participation in the present war". The exact duties as defined in the order in council are, "as a recorder and interpreter of Canada's war effort". They mean very much the same thing, and it does seem to me that the answer is somewhat misleading; I do not wish to put a worse interpretation upon it than that. Perhaps the Prime Minister did not give the question any personal consideration. I am not going to attribute any ulterior motives, but I think it ought to be made clear, on a fair interpretation of the order in council, the press release, and the duties to which I understand the gentleman referred to is engaged in, that he is in fact if not in name the historian of Canada's war effort.
Right Hon. W. L. MACKENZIE KING
(Prime Minister): I had no intention whatever of misleading the house in any way.


Richard Burpee Hanson: I have not
suggested that.
Duties of L. W. Brockington


Mr. MACKENZIE KING:: As a matter of fact, no one has been appointed as historian of the war. After the last war Colonel Duguid was appointed to write a history of the war and I believe as historian he has thus far published two volumes. Mr. Brockington was certainly never appointed as historian of the war. He was appointed, among other duties, to keep a record of, and to help to chronicle, matters pertaining to the war, which is one of the functions he is performing at the present time.
As my hon. friend must know, events bearing upon the war are taking place in all parts of the world which have an important relation one to the other. There is a part of the general war effort of the United Kingdom and the dominions which concerns Europe, a part that concerns Asia, Africa and other continents. The Prime Minister cannot possibly be expected to keep himself posted day by day upon significant features of the war unless there is in his office someone specially charged with the duty of assembling material bearing upon the war and perusing as well as keeping records that are issued from time to time by different governments and from other sources. Since the war started recorded proceedings have been published by different countries setting forth their interpretation of various positions, state documents and the like, all of which material is being collected and in different ways utilized under the responsibility of Mr. Brockington. From time to time, as I have occasion to speak upon these matters, or to consult with my colleagues individually respecting them, or to discuss them in the cabinet, Mr. Brockington brings to my attention essential features which in his opinion the Prime Minister should have a knowledge of. That is the nature of the work which it was intended that he should perform in relation to the chronicling of the war effort.
It was not the purpose that Mr. Brockington should be an historian. I believe it will be found at the close of the war that there will have been assembled in the Prime Minister's office a complete set of documents having an immediate bearing upon the situation as it has developed from day to day and as it is developing from month to month and may develop from year to year. Had there not been someone specially charged with that duty we might find ourselves at the close of this war without any of these official records, so necessary in the present, and so essential for reference in the future.
I have occasion almost every day to make perfectly sure of some fact upon which I am expected to express an opinion publicly, or to take up for consideration with my colleagues, and I cannot possibly go and search my own

files to discover relevant documents. I must necessarily appeal to someone who is watching the progress of events from day to day. Mr. Brockington's duties lie, in part, in that field, but that is only a part of his duties.
As my hon. friend must know, in a time of war when events are such as they are to-day, all sorts of unforeseen communications come into the Prime Minister's office which must be dealt with in a more or less exceptional and very careful maimer. It would take me too long to enumerate them, but I might point out, by way of illustration, events such as occurred when Holland was invaded, Belgium surrendered and France collapsed. Public reference had to be made almost instantly to the significance of these events. Communications had to be sent by the Prime Minister to representatives of those countries here and abroad. I must take time to outline what I believe ought to be said in these and other circumstances requiring some expression of sympathy of views, to indicate to my staff the tenor of communications that should be drafted in the circumstances. But I have not the time from day to day to sit down and personally draft these particular communications.
From day to day we receive from various sources generous gifts of money, other gifts of one kind or another, from different organizations. The country will expect that where people are voluntarily making contributions to our war effort contributions of the kind should be acknowledged with something more than a mere line from a private secretary or some member of a departmental staff. They should if possible receive a letter from the Prime Minister himself. Mr. Brockington has an exceptional gift in his facility of expression, and I had felt, at the time I asked him whether he would assist me in the other matters to which I have referred, that he might help in the drafting of communications of this kind. Again, in the preparation of statements for this house, and statements to be given to the public over the radio and elsewhere, he has given me very real assistance. Let me say, however, that so far as any speeches that I have made are concerned, any public pronouncements or radio broadcasts that I have given, they have been my own. I have been assisted in the work; but I would ask any hon. gentlemen here who have had experience in matters of this kind, whether they ever found it possible to have someone else write a broadcast for them. Especially would I ask this of one who happens to be in a position of responsibility such as I hold at the present time.

Duties of L. W. Brockington
While I am on this subject I might say a word which may help hon. members to understand the position in the Prime Minister's office as contrasted with other departments of government. When ministers of the crown take over different departments they go to departments that are fully organized, with deputy ministers, secretaries of the department, clerks, staffs, and every arrangement made which it is possible to make in order to facilitate the work of those departments. On the other hand, when the Prime Minister goes into his office he walks into an empty office except for one or two secretaries who may have come in with him; and from time to time, as the situation changes, there comes upon him a volume of additional demands for which no preparation whatever has been previously made. In other departments it is easy to add to the staff here and there as fresh demands arise. For example, large staffs have been added to the Department of National Defence and to the Department of Munitions and Supply to assist in meeting the demands war has created. In my own office, as Prime Minister I have had to assist me in meeting new situations from day to day since this session began, only Mr. Brockington in addition to one or two other younger men whom I have been able to borrow from some of the other departments. He is the only person who has been given a special retainer in connection with the Prime Minister's office, and this not merely because he is doing some highly specialized work requiring wide knowledge of men and affairs, but because of the exceptional judgment and ability which he possesses.
So far as Mr. Brockington's services are concerned they are not confined to myself. He has generously shared his abilities with my colleagues in the cabinet in connection with many matters to which they have been obliged to give their attention. There is not a day passes when there does not arise some question which calls for careful and thoughtful consideration before the Prime Minister is in a position even to discuss it with his colleagues. In matters of the kind it is absolutely necessary that I should have someone in the capacity of a counsellor attached to my office. Mr. Brockington is one of the leading counsel in Canada. He has had large retainers and he has accepted the position which he now holds in my office at great personal and financial sacrifice. Through myself and the government, in the advice and counsel which he has given to me personally and to the cabinet touching a hundred and one different matters that have come up, he has rendered this country an exceptional service.
I could say a good deal more, but perhaps I have said enough to indicate that at least there is some justification for the Prime Minister having at his side, at a time like the present, a gentleman with wide experience in affairs, an able counsellor, one who is largely informed on public matters, and who because of his special attainments is in a position to be able to render an absolutely essential service to the office of prime minister and to the country in the present state of world affairs.


Richard Burpee Hanson: I made
no attack on Mr. Brockington. I made no attack on the Prime Minister, or anything in the nature of an attack, with respect to the matters to which he has alluded. All I rose to do was to call attention to what I considered was an inaccurate reply to a question on the order paper.


William Lyon Mackenzie King: I hope I have made it plain that the reply was not inaccurate.


Richard Burpee Hanson: I do not
think the right hon. gentleman referred to the gravamen of the question at all. In my judgment he entirely disregarded it.


William Lyon Mackenzie King: Mr. Brockington's name was not mentioned on the question at all. I did not assume it had reference to Mr. Brockington; I assumed it had reference to some appointment similar to the appointment made by a former government in the last war, of someone to write a history of the war. It is true that my hon. friend has said nothing in the way of an attack to-day, but he has brought Mr. Brockington's name up on one or two previous occasions. He has been kind enough to say to me that he did not mean anything he said as any attack on Mr. Brockington; quite clearly then he meant what he said as a reflection on myself. At any rate I have taken it as such, and I am replying to what he said in a way which I think will justify before the country the position in which I have been placed.
In addition I would point out that while my hon. friend has been reflecting upon me in the house in this matter, some of his supporting journals on the outside have been making their attack from an opposite point of view; they have been saying it was part of my business to stand up and defend Mr. Brockington. My hon. friend said he was not attacking Mr. Brockington, so that no defence of him was needed; yet by his press on the outside I am being attacked on the score that I have attached to my office a gentleman who is being attacked and I am not defending him.
So far as Mr. Brockington is concerned, I think his abilities speak for themselves, I do not think he needs any defence. So far as I
Questions

am concerned I am prepared to abide by such attack as has been made and the explanation I have given.



DEBTS DUE THE CROWN


[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 99, to amend an act respecting debts due to the crown.
He said:	The dominion government has
agreements with some of the provinces under which the dominion government collects income tax and similar taxes imposed by a province. The purpose of this bill is to enable the crown in the right of Canada to deduct from the salaries of federal employees resident in these provinces the amount of the provincial taxes which it is the duty of the dominion government to collect under these agreements.
Motion agreed to and bill read the first time.

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

Mr. ROY:: How many miles of railway line of the National Railways system were abandoned from 1929 to date (a) in British Columbia, (b) in the prairie provinces, (c) in Ontario, (d) in Quebec, (e) in the maritime provinces?


Mr. CARDIN:: (a) In British Columbia, 16; (b) in the prairie provinces, 58; (c) in Ontario, 350; (d) in Quebec, 187; (e) in the maritime provinces, 40; a total of 652.


BRITISH CHILDREN
Mr. BRUCE:: Has the minister set up the dominion-wide organization to facilitate the extension of hospitality by Canada to British children for the duration of the war, to which he referred on June 27th last?


Mr. CRERAR:: Substantial progress has been made in the matter to which this question refers. It is still receiving consideration.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. DIEFENBAKER:: 1.	When did the government sell the ship Prince Henry ?
2.	Was sale made by tender?

3.	What other offers for the purchase thereof were received ?
4.	What was the sale price and terms, if any?
5.	Has the purchase price been paid? If not, what portion remains unpaid?


Pierre-Joseph-Arthur Cardin: Return tabled.


ALIENS NATURALIZED SINCE 1936 AND INTERNED
Mr. ROY:: 1.	How many aliens were naturalized in Canada from 1936 to date?
2.	How many aliens, naturalized in Canada since 1936, have been interned since the beginning of the war?


ASSOCIATIONS OR SOCIETIES DECLARED ILLEGAL
Mr. ROY:: 1.	What associations or societies have been outlawed since the beginning of the war?
2.	On or about what dates were such associations or societies organized in Canada ?
3.	What is the approximate membership of each?


Mr. CASGRAIN:: Return tabled.


HUDSON BAY RAILWAY
Mr. ROY:: 1.	What has been the cost to date of the construction of the Hudson bay railway and equipment at Churchill?
2.	How long has the railway been in operation?
3.	What have been the receipts, and expenses, each year, as well as the annual deficit?
4.	What was the annual volume of exports from Churchill during the past five years?


EXEMPTIONS FROM MILITARY SERVICE
Mr. CHURCH:: 1.	What classes are exempted from any form of military duty in Canada (a) under the Militia Act, (b) from overseas service, (e) home defence duties?
2.	What percentage of Canada's population are exempt from military duty under (a), (b) and (c) above?
EXPERIMENTAL FARMS-SALES OF PURE BRED DAIRY animals


Mr. BROOKS:: What is the number of pure bred dairy animals, male and female, breed, and the price of each, sold by the dominion experimental farms to individual farmers from 1935 to 1939 (a' in the maritimes, (b) Quebec, (c) Ontario?


DOMINION-PROVINCIAL RELATIONS COMMISSION- SECRETARIAL STAFF
Mr. ROY:: 1.	Who were the members of the secretarial staff of the dominion-provincial relations commission?
2.	What was the remuneration of each?
3.	Were they paid any living and travelling allowances?
4.	If so, what amount was received by each member of the secretarial staff under each of these headings?

Unemployment Insurance



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: I understand my hon.
friend the leader of the opposition (Mr. Hanson) does not wish to proceed with the second reading of the unemployment insurance measure to-day.


Richard Burpee Hanson: That is correct. I have striven vainly to understand the principles and details of this bill. Under ordinary circumstances counsel would take at least three days to brief this bill: I have had about four hours. I protest against any attempt to rush this bill through the house without adequate time for study, even before it comes to second reading. The bill, apart from any war measures that we have put through parliament, is the most important measure that I can recall for years, since the act of 1930 at any rate. It involves the annual expenditure of millions upon millions of dollars. There should be no rush to push it through the House of Commons, even if it is to be sent to a special committee.


William Lyon Mackenzie King: As I said yesterday, the government hav.e no desire to rush the bill at all. Our desire is simply to expedite the business of the session as far as we can.


Richard Burpee Hanson: I am prepared to stay.


William Lyon Mackenzie King: In view of the remarks of my hon. friend a few minutes ago, perhaps he would not regard me as out of order if I say that he may now appreciate the better why I need to have at my side someone of the quality of Mr. Brockington to help me digest the essence of important documents which come to my office continuously and on which I am not infrequently called upon to express an opinion inside of a few hours.


Richard Burpee Hanson: That
observation may serve to give me an opportunity to wonder whether the country would provide me with a 89,000 a year counsel to help me examine these bills. However, I am not going to ask for it; I think the country can ill afford it.


William Lyon Mackenzie King: If this country begrudges the best of counsel and advice to the Prime Minister in a time of war, it is a very different country from Canada as I know it.


Mr. M. J. COLDWELL (Rosetown-Biggar):: I suggest to the Prime Minister that we be given a little more time to look over this bill. I do not believe that the reference to the committee is the course that ought to be taken. I want to see the measure go through this session, but every hon. member ought to have an opportunity to examine with care this very long bill, consisting of thirty-six pages, which we have only just received. I was on a committee all the morning and have not even had time to read it. I am afraid that if it goes to a committee it will be unduly delayed, and I should like to see the house discuss it without sending it to a committee.


William Lyon Mackenzie King: In agreeing to have the bill sent to a special committee after the second reading I was seeking to oblige the leader of the opposition, who made the suggestion, and I propose to hold to the arrangement made. I have sought to expedite the step, since it has already been made abundantly clear that all parties in the house are agreed upon the principle of the bill. If my hon. friend feels that to take second reading to-morrow would not give him sufficient time to examine the bill, I am prepared to hold it until Monday. But I very much hope he may be ready to-morrow.



MUNITIONS AND SUPPLY


[Stage Direction]
On the orders of the day:
Mr. J. H. HARRIS (Danforth):: I should like to ask the Minister of Munitions and Supply (Mr. Howe) whether the record of contracts awarded in May, 1940, is in print, and also the record for June, 1940, and when we may expect to receive copies.


Hon. C. D. HOWE (Minister of Munitions and Supply):: The department has a staff continuously engaged in compiling the information desired by my hon. friend. Each month the volume gets a little larger aDd the staff gets a little behind, but I shall do what I can to expedite the publication of the two volumes mentioned.


INFORMATION GIVEN IN PRESS RELEASES WITH RESPECT TO CONTRACTS
[Stage Direction]
On the orders of the day:
Mr. KARL HOMUTH (Waterloo South):: Some time ago I spoke to the minister and asked that when these releases were given out the number of units should be mentioned. The minister said he would give consideration to the request, but so far that has not been
Munitions and Supply

done. In these lists we see the total sum but no number of units, and if we could get that it would give us a great deal more information.


Clarence Decatur Howe: I passed on the request to the officers in charge of that work. Probably that did not appear in the April issue because the work on that issue was too far advanced at the time, but the request has been sent on to the proper officers.


MINE WORKERS
[Stage Direction]
On the orders of the day:
Mr. A. R. ADAMSON (York West):: I should like to direct a question to the Minister of National Defence (Mr. Ralston). In view of the probable shortage of skilled mine workers will the minister consider: first, asking the recruiting officers not to accept mine workers until the national registration scheme is completed and we have taken stock of our man-power resources; second, the formation of a special pioneer corps of miners who would be trained together so that their specialized knowledge of rock explosives and demolition work would be used to the best advantage?


Mr. SPEAKER:: The other day I gave a ruling with regard to the asking of questions on the orders of the day. These questions might well go on the order paper.



NAVAL SERVICE ACT


[Stage Direction]
Hon. J. L. RALSTON (Minister of National Defence) moved the second reading of and concurrence in amendments made by the senate to Bill No. 2, to amend the Naval Service Act.
Richard Burpee Hanson: What are these amendments?


Mr. RALSTON:: Hon. members will remember that this amendment to the Naval Service Act provided that agreements might be made with civilians to serve his majesty in particular ships. This had to do with people such as radio operators, stewards and others on merchants ships which have been converted into armed merchant cruisers. I would say the senate amendments have the effect of making it clear that the persons with whom these agreements are made do not thereby become members of the naval forces. Provision is made for entering into an agreement

with these persons, and the amendment provides that as long as the engagement remains in force, notwithstanding the fact that for the time being the person may not be serving in any ship, he is subject to the act. They except sections 38 and 39, which provide certain compensation in cases of injury and illness. So far as the department is concerned there is no objection to the amendments.
Motion agreed to; amendments read the second time and concurred in.



MUNITIONS AND SUPPLY


[Stage Direction]
Hon. C. D. HOWE (Minister of Munitions and Supply) moved the second reading of and concurrence in amendments made by the senate to Bill No. 41, to amend the Department of Munitions and Supply Act.
He said: These are minor amendments making slight changes in the wording, inserting or deleting a comma, an adjective or a conjunction, and so on. They have been examined by my officers, who advise me that they make no difference to the meaning and intent of the bill.
Richard Burpee Hanson: There is a whole paragraph struck out of section 2 on page 2. I notice the minor changes to which the minister has alluded, and this seems to be the only major change. What is the effect of it?


Clarence Decatur Howe: The paragraph in question provided that the employees of the department would have a certain standing in the eligible lists of the civil service commission. When the bill was in committee I told the house that this provision had been approved by the commission. This was the representation made to me by my officers, but subsequently it developed that this was not entirely correct. It was also drawn to my attention that there were other war service boards for whose employees similar provision should be made if it were to be made for the temporary employees of the Department of Munitions and Supply. I therefore decided that the proper course was to defer consideration of the matter until later in the war, and at my request the senate deleted that provision.


Richard Burpee Hanson: It was done at the minister's request?


Clarence Decatur Howe: Yes
Motion agreed to; amendments read the second time and concurred in.

Special War Revenue Act


CIVIL SERVICE SUPERANNUATION
[Stage Direction]
Hon. C. W. G. GIBSON (Minister of National Revenue) moved the second reading of and concurrence in an amendment made by the senate to Bill No. 28, to amend the Civil Service Superannuation Act, 1924.
Richard Burpee Hanson: Would the minister explain this amendment?


Mr. GIBSON:: There is no change in the wording; it is just a change in the formation of the act.


Richard Burpee Hanson: With all due deference to the minister, that is hardly an explanation. What is the change in the formation of the act? I see there is just one minor change, but I invite the minister to tell the house what it is. Many hon. members have not this amendment before them.


Colin William George Gibson: The amendment simply
numbers the section differently. That is the only change. There is no change in the intent of the amendment we brought in.
Motion agreed to; amendment read the second time and concurred in.


DAIRYING INDUSTRY
[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved the second reading of Bill No. 89, to amend the Cheese and Cheese Factory Improvement Act.
He said: As I said in moving first reading, this is an amendment to make possible the payment of the subsidy in connection with the improvement of cheese factories, by the payment of fifty per cent of the cost of the insulation alone.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Vien in the chair.
On section 1-Condition of grant.
Mr. TUSTIN:: Has not work been done under the existing act along the lines suggested in this measure?


Mr. GARDINER:: Yes. As I said when the bill was given first reading, during the season the Department of Justice gave us an opinion that under the wording of the act it was intended payments of this kind could be made. Only within the last week or two some question 95826-109
has been raised as to whether or not the meaning is clear, and the Department of Justice has advised this change.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported.


[Stage Direction]
The house in committee of ways and means, Mr. Vien in the chair.
The CHAIRMAN:: Resolution No. 5, as
amended. Shall the resolution as amended carry? Carried.


Richard Burpee Hanson: Mr. Chairman, I do protest. I have no doubt you are the most efficient chairman of the committee of the whole we have ever had, but your chief deficiency, may I say is in the direction of speed.


Thomas Vien: Patience?


Richard Burpee Hanson: Well, I
think I did admonish the chairman in a private note I sent him the other day, suggesting he should be more patient. I must say the way legislation has been railroaded through the house is not conducive to a clear understanding of what it is all about. If we were passing divorce bills there might be some excuse for it, but I do not think we ought to apply to the passage of ordinary legislation the same principle that we apply to the passage of divorce bills.
Last night just before the adjournment the minister gave notice; an amendment was moved, and read into the record. Was it with respect to the resolution now before the committee?


Mr. ILSLEY:: I understood that resolution No. 5 was carried last night.


Richard Burpee Hanson: I thought so too.


James Lorimer Ilsley: Yes, it was carried last
night. After that I proceeded to propose an amendment to the resolutions relating to the Income War Tax Act. I then moved that the committee rise, report progress and ask leave to sit again.


Mr. MacNICOL:: Was the amendment not to be put on Hansardl


Thomas Vien: I was not in the chair last night when -the committee adjourned, and that is why I did not know about it. However, I should like to say with respect to the statement of the leader of the opposition regarding railroading-

Income War Tax Act


Richard Burpee Hanson: I withdraw that.


Thomas Vien: I am sure the hon.
member did not mean that.


Richard Burpee Hanson: I should not have used that word.


Thomas Vien: I am quite satisfied to give every hon. member every possible chance to say what he wishes to say. I take it, however, that all hon. members are alert in respect to the business of the committee, and when the question is put, "shall the section carry" and nobody rises, I consider it my duty to expedite the work of the committee and, if no one objects, to state that the resolution has been carried. As suggested by the leader of the opposition to-day, and in his note, I shall be very patient; on the other hand every hon. member will appreciate that it is my duty to expedite the work of the committee, and I take it that all hon. members, including those of the opposition, will be on the alert and will cooperate to dispose expeditiously of the business of the committee.
I note in the scroll of yesterday that resolution No. 5 was carried; therefore I shall take up the other resolutions.


Richard Burpee Hanson: May I
ask the minister if the bills are now ready?


James Lorimer Ilsley: Yes, they are now ready.


Richard Burpee Hanson: Then I suggest they should be introduced right away.


James Lorimer Ilsley: Yes.


Thomas Vien: I am informed by the clerk that last night, just before the committee rose, the Minister of Pensions and National Health moved, for the Minister of Finance, an amendment to the Income War Tax Act. Am I correct in that understanding?


James Lorimer Ilsley: Yes.


Thomas Vien: I gather that the
amendment so moved is an additional amendment to the budget resolution concerning the Income War Tax Act. But these resolutions have been passed, and we are now on the resolutions concerning the Special War Revenue Act.


James Lorimer Ilsley: Yes.


Thomas Vien: Therefore we should revert to the Income War Tax Act.


Richard Burpee Hanson: That is agreeable.


James Lorimer Ilsley: Yes, we will do that.



INCOME WAR TAX ACT

Thomas Vien: The business before
the committee is the following motion made
[The Chairman.]
yesterday for the Minister of Finance by the Minister of Pensions and National Health:
That it is expedient to amend the Income War Tax Act and to provide that if any tax, licence or other impost, otherwise deductible under the said act is imposed or increased after June 24, 1940, by or under the authority of a provincial statute, the amount of any such tax, licence or impost imposed and the amount of the increase of any such tax, licence or other impost shall not be allowed as a deduction from the income of any taxpayer except to the extent permitted by the Minister of National Revenue.
Mr. HANSON (York-SunbupO:	This is
a special resolution, Mr. Chairman, and I suggest that the minister should make an explanation to the committee.


James Lorimer Ilsley: I shall do that. Of course
the provinces have the right to impose taxation within the powers conferred upon them by the British North America Act. But it would be within the powers of any province to go very far towards nullifying the effects of the Excess Profits Tax Act by, if they so wished, imposing special exceptional taxes.
It will be understood that it would be presumptuous on the part of the dominion government to take power to interfere with the normal exercise of the power of taxation of the provinces, but it is felt there should be a power in the Minister of National Revenue or in some other minister not to allow special exceptional provincial taxes as deductions from income, where that would nullify or go a considerable distance toward nullifying the effect of the very important taxation being imposed for war purposes. That is the reason for the resolution.


Richard Burpee Hanson: The minister has stated in a general way the purpose of this resolution, and I am largely in agreement with what he has said. Has he given any consideration to the question of making no allowance in the case of a special tax imposed by a province on a small class of taxpayers purely for the purposes of revenue, in the hope that it might prove a deterrent against this form of taxation on the part of provincial taxing authorities?
This leaves it in the discretion of the minister.


James Lorimer Ilsley: I should not like to interfere to that extent.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
8. That schedule I to the said act be further amended by adding at the end thereof the following section:	.
"5. Cameras, phonographs, radios and radio tubes, 10 per cent."
Resolution agreed to.

Special War Revenue Act
9.	That schedule II to the said act be amended by repealing section one thereof and substituting therefor the following:
"Cigars:
(a)	valued at not more than forty dollars per thousand, per thousand, $1.
(b)	valued at more than forty dollars per thousand and not more than one hundred and ten dollars per thousand, per thousand, $6.
(c)	valued at more than one hundred and ten dollars per thousand and not more than one hundred and fifty dollars per thousand, per thousand, $14.
(d)	valued at more than one hundred and fifty dollars per thousand and not more than two hundred dollars per thousand, per thousand, $20.
(e)	valued at more than two hundred dollars per thousand, per thousand, $32.
Provided that the value on imported cigars shall be the duty paid value as defined in section seventy-nine of this act; the value on cigars manufactured in Canada shall include the amount of excise duty payable thereon."
Richard Burpee Hanson: The only remark I have to make is that this is the end of the good five cent cigar.


[Stage Direction]
Resolution agreed to.
10.	That schedule II to the said act be further amended by repealing section three thereof, and substituting therefor the following:
"Tires and tubes:
(a)	Tires in whole or in part of rubber for automotive vehicles of all kinds, including trailers or other wheeled attachments used in connection with any of the said vehicles, 5 cents per pound;
(b)	Inner tubes for use in any such tires, 5 cents per pound;
Provided the tax hereby imposed shall not apply to the goods mentioned herein when used exclusively for the original equipment of such automotive vehicles."
Richard Burpee Hanson: What is the increase here?


James Lorimer Ilsley: The present tax on tires is two cents per pound and three cents per pound on inner tubes; this resolution proposes to raise both rates to five cents per pound. It will be observed that the tax will not apply to tires which constitute original equipment on new cars.


Mr. EVANS:: Will it apply to tractor tires?


James Lorimer Ilsley: Yes.


Mr. CASTLEDEN:: Why should there be discrimination between original equipment and equipment required for repairs?


James Lorimer Ilsley: As original equipment it is part of a motor vehicle upon which extraordinary taxes have been imposed.


George Hugh Castleden: That would be under resolution No. 7?


James Lorimer Ilsley: Yes.


Charles Robert Evans: But this applies to tractors.


James Lorimer Ilsley: The extraordinary taxes are not applied to tractors. There is no tax on tires which form part of the original equipment of a tractor.


Mr. LEADER:: New tires would be taxed.


James Lorimer Ilsley: Yes.


[Stage Direction]
Resolution agreed to.
11.	That schedule II to the said act be further amended by repealing section four thereof and substituting the following:
"4. Carbonic acid gas and similar preparations to be used for aerating non-alcoholic beverages, 5 cents per pound."
Agar Rodney Adamson: What will this tax amount to per bottle of aerated beverage, or "soda pop"?


James Lorimer Ilsley: Fifty pounds of carbonic acid gas makes 200 cases of beverage, on the average; one pound would make about four cases. It works out at about cents a case.


Agar Rodney Adamson: About a twentieth of a cent a bottle? '


James Lorimer Ilsley: Yes, with a 24-bottle case. The present rate is two cents a pound.


Agar Rodney Adamson: This "soda pop" industry is distinctly a luxury industry, and it is escaping quite lightly with a tax of only a twentieth of a cent a bottle. We have taxed coffee and tea, tea being an empire product, coffee to a certain extent also. The minister is overlooking a very considerable source of income in not arranging for some slightly higher tax on this soft drink industry. The Coca-Cola company is one of the most extraordinarily successful corporations in North America to-day. Its stock is selling at $103 a share, paying enormous dividends. This and other companies of that nature should not escape this taxation, while tea and coffee, which are the natural drinks of the poorer people, are taxed heavily under these proposals.


James Lorimer Ilsley: There are two other taxes on this type of soft drink. There is the sales tax and also a tax on the sugar which is used in the manufacture of soft drinks. It is also to be remarked that the standard-size bottles sells at five cents, and a tax which would make it unprofitable to sell at that price would put certain companies, probably the smaller ones, altogether out of business and so concentrate the trade in the hands of their larger competitors.


Richard Burpee Hanson: A cent is not much.


James Lorimer Ilsley: I know, but it is quite a lot on the number that are sold.
Special War Revenue Act


Mr. FAIR:: The argument advanced by the hon. member to my right is not very convincing, because it is the poor who would have to pay this tax. I think he should realize that, and if he wants to put any tax on drinks he should advocate putting it on the more expensive beverages which are consumed by people of the prosperous classes,- for example, champagne and a number of the higher-priced whiskies which are consumed only by those who can very well afford to pay war taxation. If anything is to be done with regard to "pop", which is used almost exclusively by the poorer people, cut down the price.


[Stage Direction]
Resolution agreed to.
12.	That schedule III to the said act be amended by striking out under the heading of "Farm and Forest, in the eighth and ninth lines the following words:
"farm produce sold by the individual farmer of his own production," and substituting therefore the following words: "farm produce sold by the individual farmer of his own production, riot to include canned fruits or vegetables when produced in excess of 10,000 cans of one pound each or their equivalent, per annum, nor flowers, flowering plants or bulbs, when the sales thereof exceed $500 per annum."
Resolution agreed to.
13.	That any enactment founded on this resolution shall be deemed to have come into force on the twenty-fifth day of June, one thousand nine hundred and forty, and to have applied on all goods imported or taken out of warehouse for consumption on and after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
Richard Burpee Hanson: The other day I made a plea for certain classes of importation, of a class or kind not made in Canada, ordered under a firm contract, shipped before the 24th of June. I thought I had made out a case. I did experience some difficulty, I think, in convincing the minister that I was correct in the principle I was contending for, but he did not absolutely shut the door in my face, and I am wondering if he has given further consideration to the position, if any representations have been made to him on behalf of others, if it could be considered that there was a large number of cases of a similar kind, and if there was a very substantial amount of revenue involved. All these are considerations which might affect the mind of the minister or of the government in exacting new taxation on the particular item to which I had reference. Would he be good enough now to say if consideration has been given to these representations, and has it been favourable? rMr. Ilsley.l


James Lorimer Ilsley: I have given some consideration to the suggestion of the hon. gentleman, and I have received a few letters. I understand also that the officers of the department have had some representations made to them in cases where there has been a resale of goods not yet imported before this tax went on. But I regret to say that I have not seen my way clear to come to a conclusion different from that expressed the other day.
If I were asked to state the ground for adhering to the position I took, I think I could give it under three heads.
The first is that there would be considerable difficulty in checking the matter of resales. There would be a considerable opportunity of evasion unless the facts were very carefully checked; because it will be readily understood that an importer could rid himself of the tax by establishing to the satisfaction of the department that he had entered into a contract for the resale of the goods. That is a real difficulty when applied generally, because it must be remembered that if we change this principle this year in this budget, everyone would have the best of grounds for believing next year that it would be changed and would regard himself as unfairly treated if we did not continue with our changed policy.
The second reason is that we would be upsetting an established practice with regard to duties imposed at the time of the budget. I understand that the same has not always been true when duties or higher values resulting in dumping duties are imposed by order in council; consideration has been given to existing contracts and to goods in transit; but so far as my information extends, that has never been the case at budget time. It is universally understood by people in business that they take their chances on the imposition of duties at budget time and that if their goods have not arrived they are subject to duties when they do arrive and are taken out of warehouse or entered for consumption. I think that has been universally the case. It is a contingency with which business has to reckon, and many importers have been caught in times past to the extent of the increase of the duty. This is not an extravagant or an exceptional increase. It is not a large duty. It is not like a 50 or 75 per cent duty. It is only 10 per cent; and, as I said the other day, there are no special circumstances here which differentiate present from previous importations in previous years in, at and around budget time.
In the third place, an importer could have protected himself by his contract of resale. This is not an academic or theoretical consideration; because, as I said the other day,

Special War Revenue Act
one importer who waited on me had protected himself in his contract of resale. He had ordered in large quantities an ordinary type of commodity, and by his contract of resale he was enabled to pass the ten per cent on to the consumer. It would not be any more than ordinary prudence, I think, for importers in a time of war, when it is known that there may be large increases, when -they have anticipated considerably larger increases than this of duties for revenue purposes or for exchange conservation purposes, or both, to protect themselves.
I should not like to open the door here because, apart altogether from the considerations I have mentioned, there are other cases where goods are being manufactured at the present time in the United States under agreement, for future delivery at a laid down price. The United States exporters, through their representatives-they are allied with interests in this country-have said that it is a great hardship to them. In one case there will be a loss of $15,000. The house may take the view that that is a loss to be borne by the American, but we cannot make such a distinction; we have to treat the people with whom we do business pretty much like our own people in matters of this kind. There is the question of periodicals. We have had representations from representatives of American periodicals to the effect that subscriptions were taken out for such periodicals without any anticipation of the ten per cent tax. The tax goes on, and it is only fair, they say, that they be allowed to complete the year on the basis of the present subscriptions without the addition of the tax. That is something we have had to cope with. It is hard for one to visualize a number of cases, and while I may be too conservative-


John Ritchie MacNicol: You cannot be too conservative.


James Lorimer Ilsley: Well, it may be said that I
am too rigid in this, but I do not think so. I hesitate to depart from the practice established as the result of the cumulative wisdom of a long line of ministers.


Richard Burpee Hanson: I am certainly not impressed with the first two reasons assigned by the minister, especially the first one. He suggests that all kinds of fraud may be resorted to in order to defeat the tax.


James Lorimer Ilsley: To evade the tax.


Richard Burpee Hanson: I do not
believe reputable business houses resort to fraud. In my opinion that is not by any means an insuperable difficulty. The departments have inspectors and they know with whom they are dealing, so that in any bona fide case they can soon determine whether it
should be allowed or not. Fraud, of course, ought to vitiate anything of that kind, but I do suggest that, as regards the first objection, there is no insuperable difficulty and it should not stand in the way of doing what I consider to be justice. The second reason is the same as that given previously; it is that an established practice will be upset. Of course, that is only a matter of the convenience of the department. In the course of his remarks the minister said that an exception had been made to the rule when the dumping duties were applied. Consideration was then given to the position of importers who might be caught by the imposition of the dumping duty. If I understood him correctly, that was what he said.


James Lorimer Ilsley: Because they were between
budgets.


Richard Burpee Hanson: But that does not alter the principle at all. The time factor does not affect the principle. If it is wrong in principle to give consideration to the position of importers who are caught by the imposition of the dumping duty it is wrong in principle with respect to the imposition of the budget tax. These two reasons do not impress me as insurmountable. The department has recognized the injustice of it by making some concession in the second case alluded to by the minister. The third example, that an importer could have protected himself by his contract of resale, is of course an important reason and it is the only real reason that the minister has given. Unfortunately, men are not all as clearheaded and far-sighted as they ought to be. I suppose that is the penalty they pay for incompetence. If the minister cannot change his mind I will not pursue the matter further.


John Ritchie MacNicol: With reference to the words in line 3 of paragraph 13, regarding goods imported or taken out of warehouse, in view of the decision the minister gave the other night I presume "taken out of warehouse" would include motors in transit from factory to dealer.


James Lorimer Ilsley: We are talking about customs warehouses.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the schedule to the Excise Act, 1934, and to provide:
1.	That the duty of excise on malt syrups as defined by paragraph (c) of section six of the Excise Act, 1934, when imported into Canada and entered for consumption be increased from twenty-one cents per pound to twenty-five cents per pound.
Excise Act
Richard Burpee Hanson: What is malt syrup used for? Will the minister read the definition referred to in paragraph (c) of section 6 of the Excise Act?


James Lorimer Ilsley: Malt syrup is used for making home brew beer. The explanation is a little complicated for such a small matter, but I will give it. The increase of four cents per pound in the excise duty on imported malt syrup is necessary to correct an omission in the budget of last September. At that time the tax on malt itself was increased by four cents per pound, and the tax on malt syrup, whether domestic or imported, was increased by five cents per pound. This meant that the total tax on domestically produced malt syrup was increased by nine cents; that is, four cents on malt used in making the syrup and five cents on the finished product. The manufacturer of the malt syrup which is imported into Canada is not subject to a tax on malt used in making the syrup, and therefore, in order to equalize the position as between the imported product and the domestic product, it is necessary to impose an additional four cents on the imported product, bringing the rate to twenty-five cents per pound.


[Stage Direction]
Resolution agreed to.
2.	That the duty of excise on tobacco of all descriptions manufactured in Canada, except cigarettes, be increased from twenty-five cents per pound to thirty-five cents per pound actual weight.
Richard Burpee Hanson: What effect will this have on the ordinary package of tobacco? Will it decrease the size, or increase the price, or both?


James Lorimer Ilsley: There will be some variety in the means by which manufacturers adapt themselves to this tax. Possibly some will reduce the size of the package, while others yill increase the price.
(Resolution agreed to.
3.	That the duty of excise on cigarettes manufactured in Canada which was formerly $5 per thousand when weighing not more than three pounds per thousand be increased to $6 per thousand when weighing not more than tw'o and one-half pounds per thousand.


John Ritchie MacNicol: How is the difference in veight arrived at? Are there fewer cigarettes
n a package?


James Lorimer Ilsley: The length of the cigarettes would be the main cause. Some are longer than others.


[Stage Direction]
Resolution agreed to.
IMr. Ilsley.]
4.	That the duty of excise on cigarettes manufactured in Canada which was formerly $11 per thousand when weighing more than three pounds per thousand shall now apply to cigarettes weighing more than two and one-half pounds per thousand.
Resolution agreed to.
5.	That a duty of excise of ten cents per pound actual weight apply on all Canadian raw leaf tobacco when sold for consumption.
Richard Burpee Hanson: What is the present tax?


James Lorimer Ilsley: There is nothing on raw leaf now.


Richard Burpee Hanson: This is a new tax?


James Lorimer Ilsley: Yes.


John Ritchie MacNicol: Will it tend to cut down the use of Canadian-grown tobacco?


James Lorimer Ilsley: I do not think so. It applies only when sold for consumption; it does not apply when sold to the manufacturer. It was considered necessary to impose this tax because of the substantial increase in the tax on the manufactured product. There was a big differential as it was, but to add ten cents more and still leave raw leaf free would have made quite a considerable difference in our revenue.


Richard Burpee Hanson: Is the
minister going to collect it at a French-Canadian shack?


James Lorimer Ilsley: We shall have to collect it when it is sold to consumers.


[Stage Direction]
Resolution agreed to.
6.	That any enactment founded on paragraphs one, two, three and four of this resolution shall be deemed to have come into force on the twenty-fifth day of June, one thousand nine hundred and forty, and to have applied to all goods mentioned therein imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for consumption for which no entry for consumption was made before that day.
Richard Burpee Hanson: This is intended to catch this year's crop?


James Lorimer Ilsley: Yes.


[Stage Direction]
Resolution agreed to.
7.	That any enactment founded on paragraph five of this resolution shall come into force on the first day of August, one thousand nine hundred and forty.
John Ritchie MacNicol: Why the first day of August?


James Lorimer Ilsley: We have to have time to get out the forms and licences and stamps.


[Stage Direction]
Resolution agreed to.

Customs Tariff

[Stage Direction]
1.	Resolved, that schedule A to the customs tariff, being chapter forty-four of the revised statutes of Canada, 1927, as amended by chapter seventeen of the statutes of 1928, chapter thirty-nine of the statutes of 1929, chapter thirteen of the statutes of 1930 (first session), chapter three of the statutes of 1930 (second session), chapter thirty of the statutes of 1931, chapter forty-one of the statutes of 1932, chapters six and thirty-seven of the statutes of 1932-33, chapters thirty-two and forty-nine of the statutes of 1934, chapter twenty-eight of the statutes of 1935, chapter thirty-one of the statutes of 1936, chapter twenty-six of the statutes of 1937, chapter forty-one of the statutes of 1939 (first session) and chapter two of the statutes of 1939 (second session), be further amended by striking thereout tariff items 209b, 210, 210e, 281a, 281b, sub-division
(a)	of items 429, 4401, 440m, 440n, 445o, 445p, 505, 505b, 791 and 825, the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty in said schedule A:
Mr. HANSON (YorkJSunbury):: Could not the departmental officials have drafted this in some way so as not to have to name every chapter of every statute in this way? It seems an awkward way of doing it.


John Ritchie MacNicol: Would not the word
"therefrom" be better than the word "thereout" in the ninth line from the last?


James Lorimer Ilsley: I am informed that is the usual word. At any rate it is not ambiguous.


Richard Burpee Hanson: The word is all right, but is it necessary to recite all these statutes?


James Lorimer Ilsley: Apparently the only alternative would be a repeal and consolidation.


Richard Burpee Hanson: That is
what it ought to be.


James Lorimer Ilsley: It will have to be done some time, but it is such a monumental task to consolidate the customs tariff that it has been carried on this way since 1927.
Customs tariff-208x. Materials, including all parts, entering into the cost of cyanide of potassium and cyanide of sodium, when imported by manufacturers of cyanide of potassium and cyanide of sodium for use in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, free.


Richard Burpee Hanson: What is the reason for the change?


James Lorimer Ilsley: The previous rates were subject to 99 per cent drawback when used by these manufacturers. Objection has been taken to those items where there appears to be a duty but there is none because of the
99 per cent drawback. This is one of the items that was referred to the tariff board in a large inquiry into the whole question of drawbacks, and it was one of the tariff board recommendations that these be made free instead of leaving them subject to various rates with provision for 99 per cent drawback. The tariff board recommended the deletion of drawback item 1042 and the insertion of this new item in schedule A of the tariff. The drawback item provided for a drawback of 99 per cent of the duty paid on materials, including parts, entering into the cost of cyanide of potassium and cyanide of sodium. Under the new item materials, including parts, are admitted duty free from all countries, whereas formerly these materials and parts were dutiable at various rates which were subject to drawback.
Mr. MacNICOL; But they will still all be subject to the ten per cent war tax?


James Lorimer Ilsley: Yes, when not coming from British countries.


[Stage Direction]
Item agreed to.
Customs tariff-209b. Nicotine; salts of nicotine; non-alcoholic preparations containing nicotine in a free or combined state, for dipping, spraying or fumigating, n.o.p.: British preferential tariff, free; intermediate tariff, free; general tariff, 10 per cent.
John Ritchie MacNicol: This item and the one following do not seem to have been changed. Why are they mentioned here at all?


James Lorimer Ilsley: The only change made in this item is the insertion of the word "non-alcoholic" before the words "preparations containing nicotine". Item 209b was re-worded and enlarged by the budget of April, 1939. So far every known spraying preparation containing nicotine is nonalcoholic. It is thought advisable to insert the words "non-alcoholic" to keep this item in line with the general practice followed in regard to similar items. I think it is felt that one should not take any chance of thi importation of alcoholic preparations of this kind.


[Stage Direction]
Item agreed to.	.
Customs tariff-210. Peroxide of soda; silicate of soda in crystals or in solution; bichrom ate of soda; sulphide of sodium; nitrate o. soda; arseniate, binarseniate, chlorate, bisulphite and stannate of soda; prussiate of soda and sulphite of soda: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 20 per cent.
James Lorimer Ilsley: The only change in this item is the deletion of the words "nitrate of soda or cubic nitre, n.o.p." which henceforth will
Customs Tariff

be exempt from customs duty under tariff item 210e, regardless of the purpose for which it is imported.


Richard Burpee Hanson: What is it used for?


James Lorimer Ilsley: Just from my own knowledge, nitrate of soda is used as a fertilizer.


Richard Burpee Hanson: But what is cubic nitre?


James Lorimer Ilsley: It is the same thing under another name.


Richard Burpee Hanson: It is a fertilizer ingredient, and it is being made free?


James Lorimer Ilsley: It has been free right along.


Richard Burpee Hanson: It has been free under the British preference?


James Lorimer Ilsley: It is free anyway; I remember that item distinctly. Perhaps the explanation of the next item will make it clear.


[Stage Direction]
Item agreed to.
Customs tariff-210e. Nitrate of soda or cubic nitre: British preferential tariff, free; intermediate tariff, free; general tariff, free.
James Lorimer Ilsley: This item formerly provided for entry free of customs duty under all tariffs of nitrate of soda when for use in fertilizers, fluxes, meat curing, glazes, enamel frits, and explosives. Until recently these were all its known uses. It is now being used in the manufacture of preparations for the making of alloy steel. Under the new item nitrate of soda will be admitted free under all tariffs regardless of the use for which it is imported.


[Stage Direction]
Item agreed to.
Customs tariff-281a. Fire brick, n.o.p., of a class or kind not made in Canada, for use exclusively in the construction or repair of a furnace, kiln, or other equipment of a manufacturing establishment: British preferential tariff, free; intermediate tariff, free; general tariff, 15 per cent.
Richard Burpee Hanson: Is any fire brick imported of a class or kind not made in Canada?


James Lorimer Ilsley: Yes. The explanation of this item is that there is no change in the wording, but the intermediate tariff rate of 12J per cent is reduced to free on the recommendation of the tariff board. The board also recommends the deletion of drawback item 1044 which. provides for a drawback of 99 per cent of the duty paid on fire brick used by manufacturers of iron or steel in the construction or repair of blast furnaces, open hearth furnaces or rolling mill furnaces. The
FM-. Ilsley.]
net result of this change is that fire brick of a class or kind not made in Canada now will be admitted duty free from intermediate tariff countries when imported for use in any manufacturing establishment.


Mr. FRASER (Peterborough West):: Would it not be wise to retain that duty of 12i per cent in order to give the manufacturer of fire brick in Canada a chance to make fire brick of this class? I understand that we have the necessary material here with which to make it.


James Lorimer Ilsley: The only fire brick that will be free will be of a class or kind not produced in Canada. I do not think it has been the general policy of governments in Canada to place duties on goods of a class or kind not produced in this country with the idea of encouraging someone here to make them. Certainly that has not been done in very many instances. The probabilities are that this fire brick could not 'be made in Canada, that it must be made from some clay found only outside this country. I do not know that, but I would gather that to be the case. If it were not so I presume this brick would have been made in Canada. Presumably there is some necessity for this importation.


Mr. REID:: For the benefit of the hon. member for Peterborough West I can say from actual experience that brick made in Canada and put in a crucible steel furnace will last something like six weeks, whereas brick of the same class which is imported will last nine months to a year under the same heat conditions. That is the experience of a firm with which I have something to do. That is nothing, however, against this country; it just happens that some countries have a superior kind of silica sand and hence can make better fire brick.


John Ritchie MacNicol: Does that particular kind of brick come from Scotland?


Thomas Reid: From Glenboig in Scotland we do get one variety, but another variety comes from Illinois, where they have a very superior kind of silica.


[Stage Direction]
Item agreed to.
Customs tariff-281b.	Fire brick, n.o.p.:
British preferential tariff, 5 per cent; intermediate tariff, 15 per cent; general tariff, 22J per cent.
Richard Burpee Hanson: What is the reason for the reduction in the British preferential and intermediate tariffs?


James Lorimer Ilsley: This item mainly covers
fire brick of a class or kind made in Canada.

Customs Tariff
It also covers fire brick of a class or kind not made in Canada which does not fall under items 281 and 281a, but there are very few in this category. The British preferential rate attached to item 281b is reduced from 74 per cent to 5 per cent and the intermediate rate from 20 per cent to 15 per cent. These reduced rates are recommended by the tariff board, which also recommended the deletion of drawback item 1044, under which a drawback of 99 per cent of the duty was allowed on fire brick used by manufacturers of iron or steel in the construction or repair of blast furnaces, open hearth furnaces and rolling mill furnaces. About one-third of the fire brick imported under this item is used in connection with iron or steel furnaces and it will be subject to these new rates without the drawback. About two-thirds of the imports under this item will enjoy a reduction from 74 per cent to 5 per cent under the British preferential tariff and from 20 per cent to 15 per cent under the intermediate tariff, but the drawback is taken away.


[Stage Direction]
Item agreed to.
Customs tariff-429. Cutlery of iron or steel, plated or not:
(a)	Knife blades or blanks, and table forks, of iron or steel, in the rough, not handled, ground or otherwise manufactured; spoon blanks of iron or steel, in the flat, not further manufactured than stamped to shape; blanks, of iron or steel, for scissors and shears, in the rough, not ground nor otherwise manufactured: British preferential tariff, free; intermediate tariff, 74 per cent; general tariff, 10 per cent.
John Ritchie MacNicol: Where does this line of goods come from?


James Lorimer Ilsley: From the United States.


John Ritchie MacNicol: And what is the present
significance of the rates of 174 per cent, 274 per cent and 30 per cent?


James Lorimer Ilsley: That is the rate on forgings. The present item covering knife blades or blanks, spoon blanks and table forks in the rough is enlarged to cover blanks of iron or steel for scissors and shears. Blanks for scissors and shears are at present dutiable as forgings at rates of 174 per cent, 274 per cent and 30 per cent. Under the new item they will be entitled to the same tariff treatment as blanks for other cutlery, namely the rates of free, 74 per cent and 10 per cent.


John Ritchie MacNicol: Will not the minister
lose revenue there?


James Lorimer Ilsley: The importations are small,
but for persons who wish to import the forgings for the purpose of finishing scissors, it
seemed as if they were entitled to the same treatment as importers for the other purposes indicated in the item.


[Stage Direction]
Item agreed to.
Customs tariff-4401. Aircraft and complete parts thereof, n.o.p., not including engines, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 274 per cent.
James Lorimer Ilsley: There is no change here.


John Ritchie MacNicol: There is no change in the duty schedule.


James Lorimer Ilsley: The only change made in respect of this item is the insertion of the letters "n.o.p." The present rates are unchanged. The United States trade agreement rate is 20 per cent on aircraft, excluding engines, and 15 per cent on completed parts of aircraft. The tariff board reviewed the existing tariff items 4401, 440m and 440n, drawback item 1063 and drawback item 1064. which has been inoperative since July 1, 1935, and recommended the new set-up covered by items 4401, 440m (i), 440m (ii), 440n, 440-O (i), and 440-o (ii), and the deletion of drawback item 1063.


[Stage Direction]
Item agreed to.
Customs tariff-440m (i). Unfinished parts of aircraft, n.o.p., not including parts of aircraft engines: British preferential tariff, free; intermediate tariff, 15 per cent; general tariff, 274 per cent.
John Ritchie MacNicol: What is the significance of the change here, particularly when in the present schedule there are four rates in each division?


James Lorimer Ilsley: This is a new item. It is recommended by the tariff board to provide for entry of unfinished parts of aircraft, n.o.p., not including parts of aircraft engines, at the rates of free under the British preferential tariff, 15 per cent under the intermediate tariff, and 27 per cent under the general tariff, the rates applying to complete parts. Unfinished parts of aircraft were formerly dutiable according to material. But the hon. member will notice in the last three columns that there were various rates for unfinished parts, and the recommendation was made by the tariff board that they all be put into one item, and made dutiable at these rates.


John Ritchie MacNicol: Both this item and the previous one constitute an effort to foster the manufacture of aircraft engines in Canada.


James Lorimer Ilsley: Well, there are separate
items covering engines and parts of aircraft engines. We will come to them later.


[Stage Direction]
Item agreed to.
Customs Tariff
[Stage Direction]
Items 440m (ii), 440n, 440o and 445o agreed to.
Customs tariff-445p. Ceramic parts; copper alloys for welding; getter and getter assemblies; glass parts; metal bulbs and shells and metal headers; mica parts; mica assemblies; wire snubbers, clips and straps; wire of molybdenum and molybdenum alloy; nickel and nickel alloy tubing, wire, ribbon, screen and strip, coated or not, carbonized or not; metal cathodes; nickel, nickel alloy and nickel plated parts, coated or not, carbonized or not; tungsten and tungsten alloy and zinc wire; leads, spuds and welds; iron parts designed for sealing to glass; hooks and supports; base pins; wire and strip of silver copper, chrome copper, chrome iron or plated iron; top cap assemblies; graphite anodes; heaters and filaments; all the foregoing when imported by manufacturers of radio tubes and parts therefor, for use exclusively in the manufacture of such articles, in their own factories:	British preferential tariff, free;
intermediate tariff, free; general tariff, 30 per cent.
John Ritchie MacNicol: I suppose the explanation the minister gave a moment ago respecting an earlier item would apply to all these items. He indicated a desire to give this class of items similar rates?


James Lorimer Ilsley: Yes, and there are other
reasons. These are items recommended by the tariff board. Some parts not previously specified are here indicated.


John Ritchie MacNicol: As was explained a moment ago.


James Lorimer Ilsley: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-505.	Planks, boards, deals
and other lumber of wood, not further manufactured than planed, dressed, pointed, tongued or grooved, n.o.p.: British preferential tariff, 10 per cent; intermediate tariff, 10 per cent; general tariff, 25 per cent.
John Ritchie MacNicol: Does the same explanation apply in this instance?


James Lorimer Ilsley: No. This is a new item replacing existing items 505 and 505b, covering dressed lumber. After the Canada-United States trade agreement went into effect on January 1, 1939, it was found that lumber dressed on four sides was dutiable under tariff item 505 at the trade agreement rate of 10 per cent, while lumber dressed on two sides only was dutiable at the rate of 20 per cent. It was necessary to pass an order in council providing for the entry of lumber dressed on two sides only at the rate of 10 per cent. This order in council expired on July 1, 1940. The new item simplifies the wording of the existing items covering dressed lumber, and provides for a rate of 10 per cent on imports of all dressed lumber from the United States.


[Stage Direction]
Item agreed to.
[Mr. Ilsley.l
Customs tariff-791. Materials of all kinds for use only in producing or manufacturing preparations provided for in tariff items 209b and 219a, under regulations prescribed by the Minister of National Revenue: British preferential tariff, free; intermediate tariff, free; general tariff, free.
John Ritchie MacNicol: Why would item 791 not be associated in the first instance with item 209b?


James Lorimer Ilsley: This is a separate item. It covers materials entering into the manufacture of the goods mentioned in the earlier item. I believe it should be separate.


John Ritchie MacNicol: I can see that item 791 might refer to item 219a, but it struck me it would be better to place material entering into the construction of articles mentioned in item 209b along with that item. However I am not pressing the point.


[Stage Direction]
Item agreed to.
Item 825 agreed to.
James Lorimer Ilsley: I will ask my colleague to move an amendment.


James Garfield Gardiner: I move:
That schedule A to the customs tariff, as amended by resolution No. 1 of June 24, 1940, be further amended by striking thereout tariff item 616 and by inserting in lieu thereof the following item, enumerations and rates of duty:
616. (1) Rubber, crude, caoutchouc or India-rubber, unmanufactured, n.o.p.: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 5 per cent.
(ii)	Powdered rubber and rubber or gutta percha waste or junk; recovered rubber and rubber substitute: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(iii)	Latex, being crude natural rubber in
liquid form, not compounded beyond the addition of preservatives:	British preferential tariff,
free; intermediate tariff, free; general tariff, free.


James Lorimer Ilsley: Item 616 is being amended to provide for a new subdivision to cover latex, which is crude natural rubber in liquid form, not compounded beyond the addition of preservatives. Latex is at present dutiable as crude rubber at rates of free, 5 per cent and 5 per cent, under subdivision (i) of item 616. Latex comes chiefly from the Straits Settlements, and is imported directly to New York in tank steamer. It is impossible to bring this material direct to a sea or river port in Canada because there are no unloading facilities for it at any Canadian port. Most of the Canadian imports of latex are brought to Canada in tank cars from New York. The new item exempts latex from customs duty regardless of the country of origin or of the manner in which the latex is imported. Perhaps it is unnecessary to make any further explanation.

Customs Tariff


John Ritchie MacNicol: Did the tariff board
Tecommend this?


James Lorimer Ilsley: This was not done as the result of a recommendation by the tariff board. The committee may remember that during the spring session of 1939 parliament made rubber dutiable at five per cent under the intermediate and general tariffs. I do not know whether the purpose of that tax was explained at the time, but it was imposed largely, if not wholly, to make sure that the existing flow of crude rubber into Canada should continue to come through the then existing channels. Practically all the rubber came from British countries and entered under the British preferential tariff. This rubber came direct to sea, lake or river ports of Canada, and it was necessary that it should take this route in order to obtain the benefits of the British preferential tariff. When we entered into the trade agreement with the United States the committee will remember that we agreed to repeal the three per cent special excise tax on goods entering from intermediate tariff and most favoured nation countries. It was contended by Halifax and Montreal, and perhaps by other ports as well, that taking off the three per cent tax on rubber would mean that rubber would no longer come through Canadian ports. In order to keep the arrangement exactly as it was, the five per cent duty was imposed. Latex cannot enter through Canadian ports because no Canadian port has the necessary unloading pumping facilities. These facilities are quite expensive, but they are available at New York. Unless the rubber companies were to be unnecessarily penalized, it was necessary that this material be put on the free list.


[Stage Direction]
Amendment agreed to.
Item as amended agreed to.
Resolution as amended agreed to.
2.	Resolved, that schedule A to the customs tariff, as amended, be further amended by deleting from the Customs Tariff Amendment Act, 1939, being chapter two of the statutes of 1939 (second session), the following enumerations of goods and rates of additional duties of customs:
"Manufactured tobacco of all descriptions except cigars, cigarettes and snuff, 5 cents per pound.
Cigarettes weighing not more than three pounds per thousand, $1 per thousand.
Tea, when the value for duty thereof under the provisions of the Customs Act:
(a)	is less than 35 cents per pound, 5 cents per pound.
(b)	is 35 cents or more but less than 45 cents per pound, 74 cents per pound.
(c)	is 45 cents or more per pound, 10 cents per pound."
and by substituting therefor the following enumerations of goods and rates of additional duties of customs:
"Manufactured tobacco of all descriptions except cigars, cigarettes and snuff, 15 cents per pound.
Cigarettes weighing not more than three pounds per thousand, $2 per thousand.
Tea, when the value for duty thereof under the provisions of the Customs Act:
(a)	is less than 224 cents per pound, 5 cents per pound.
(b)	is 224 cents or more but less than 30 cents per pound, 74 cents per pound.
(c)	is 30 cents or more per pound, 10 cents per pound."
James Lorimer Ilsley: This resolution applies to imported goods, whereas the other applied to domestically produced goods. It is necessary to balance the excise tax. When the excise tax is raised, the customs duty must be raised as well.


John Ritchie MacNicol: I have no objection to imposing a tax on cigars and cigarettes even though it affects the price of the smokes of my hon. leader, but I should like to say something about this tax of five cents per pound on tea. Tea is a poor man's beverage, and I should like to know if the minister thinks it absolutely necessary to impose this tax, especially on the cheaper grades of tea?


James Lorimer Ilsley: This resolution increases the duty and widens the range.


Richard Burpee Hanson: We are to get more money out of the tea drinker. As I understand it, the present duty is 5 cents per pound where the tea costs less than 35 cents per pound; 74 cents per pound on tea costing between 35 and 45 cents per pound, and 10 cents per pound on tea costing over 45 cents. We are now imposing a tax of five cents per pound where the tea costs less than 224 cents per pound; 7i cents per pound on tea costing from 224 to 30 cents per pound, and 10 cents per pound on the tea costing over 30 cents per pound. What will be the increased revenue?


James Lorimer Ilsley: The effect of the proposed amendment will be to make a larger proportion of the imports subject to the additional duty. This reduces the range of imports which previously came under the 74 cent and 10 cent rates, and lowers the range for the 5 cent rate. Formerly about 90 per cent of our imports entered under the 5 cent rate. With this increased tax it is estimated that 25 per cent will enter under the 5 cent rate; about 57 per cent under the 74 cent rate and about 18 per cent under the 10 cent rate.


Richard Burpee Hanson: What will be the increased revenue under the three rates?
Customs Tariff


James Lorimer Ilsley: About $800,000.


Richard Burpee Hanson: What is the present revenue?


James Lorimer Ilsley: Heretofore the revenue has been $2,100,000, and hereafter it is estimated it will be $2,900,000.


Richard Burpee Hanson: What do we take from the coffee drinkers?


James Lorimer Ilsley: I am afraid I have not before me any figures that would be of any value.


Richard Burpee Hanson: It is about $5,000,000.


James Lorimer Ilsley: Yes.


[Stage Direction]
Resolution agreed to.
3.	Resolved, that schedule B to the customs tariff be amended by striking thereout tariff items 1042, 1044 and 1063.
Richard Burpee Hanson: What are the items referred to in this resolution?


James Lorimer Ilsley: These are the items to which I referred as I went along; they are drawback items which were struck out and free items substituted therefor.


[Stage Direction]
Resolution agreed to.
4.	Resolved, that any enactment founded upon the foregoing resolutions to amend the customs tariff or schedules thereto shall be deemed to have come into force on the twenty-fifth day of June, nineteen hundred and forty, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Mr. HOBLITZELL:: Mr. Chairman, I should like to say a word or two on this resolution, as it affects the oil industry in which I am engaged. Due to the war crisis and as a new member I might not have addressed the house during this session but I feel that this is a subject upon which I am qualified to speak from personal experience. I observe in this item of the resolution the government intends to impose a war exchange tax of ten ,per cent on the value for duty purposes of all goods imported into Canada. This would apply to all petroleum products imported into Canada, and this is the business in which I have been engaged for over twenty-five years.
I do not object to the tax as such, because one of its purposes is to conserve exchange, and in addition I understand that its application is to be limited to the duration of the war. The danger of this law is not in the tax itself but rather in the possibility of a combine in the oil industry which by this amendment may become possible. There are 
only four major oil companies which have large refineries in Canada, and the only opposition to these companies is that of small independent oil companies which obtain their supplies chiefly from the United States. This means that the importing companies are not now in as favourable a position to compete with the Canadian refineries, and they will be more or less forced to purchase their requirements from the big majors, and at the same time compete against them. The result of this may be that the 'big companies will dictate the policy and the prices of the whole industry. As a matter of fact, I am informed, they have already made plans to do so. They have drafted a set of regulations which, I understand, they hope this government will enact, and they have seen to it that they have dollar-a-year men down here on the job to protect their interests. A short time ago a banker got himself appointed to the position of controller of oil. So far as I know, this individual has had no previous experience in the oil industry. Although he has been in office for only two or three weeks, he has already drafted regulations which I have reason to fear. I wonder who are the real drafters of these regulations. I would now ask the minister if the new regulations governing the oil industry will be given to the house before it prorogues.
I hope that the members of the government are alive to this situation. I believe them to be vigilant and earnestly desirous of protecting the public interest. But, as a matter of fact, I have not very much confidence in some of these dollar-a-year men. It would be interesting to know how many orders have gone directly or indirectly to the firms which these men represent or by which they are employed. Presumably these men are still on the payrolls of these firms. If labour is worth anything at all, it is worthy of its hire, and Canada can well afford to pay salaries to those who serve her, and it might be cheaper in the long run to do so. There are hon. members of this house well qualified to act in advisory capacities.
In conclusion, let me commend the government for its efforts to bring about the use of our own natural resources, but let us beware lest, in doing so, we create monopolies detrimental to the public.


Thomas Vien: Shall resolution 4 carry?


Richard Burpee Hanson: Surely the minister is going to make some statement in reply. There is an implied attack on a class of citizens in this country, in some instances men who have been drafted into the govern-

Customs Tariff
ment service, and I do not think that this sort of thing should be allowed to go unanswered. I agree with the hon. member who has just spoken that probably there are some instances of what may be called misfits, and of course there is always an opportunity- I do not say that it has been taken advantage of-for gentlemen drafted from industry to favour their own businesses. But I do not think that, in the interests of a class of men who are patriotic and who are endeavouring to serve Canada, the minister should let the statement that has been made go unchallenged. As a class these men are entitled to some defence.


James Lorimer Ilsley: The hon. gentleman did make what I think was a rather serious attack on one of the controllers appointed by the Department of Munitions and Supply.


Richard Burpee Hanson: That is, the oil controller.


James Lorimer Ilsley: The oil controller. I would have asked my colleague the Minister of Munitions and Supply (Mr. Howe) to come into the chamber had there been time, but the hon. gentleman's remarks were concluded so soon that there was not an opportunity. I am quite sure that if that minister were here he wbuld like to say something, although he would be under the disadvantage of not having heard what the hon. member said.
I should like to say this, that while the government has employed quite a large number of persons drawn from industry in Canada, and while it has been necessary, I have no doubt, for the government to place orders with some of the industrial establishments with which these men were formerly connected, I have never heard it suggested in a single instance that one of these men here serving the government has sacrificed the interests of his country for the benefit of the industry with which he had previously been connected. I would not make that statement if I had ever heard such a suggestion. I know it is impossible for persons who have been associated with industry, in buying large quantities of goods from industry in Canada to omit altogether the organization with which they were previously associated, but personally I am completely satisfied that their service collectively and individually has been patriotic and of a high order. I noticed that some hon. members were disposed to agree with observations made by the hon. member-


Mr. JACKMAN:: It was also the hon.
member's maiden speech.


James Lorimer Ilsley: -in reference to t'he dollar-a-year men, so-called. I agree with the leader
of the opposition that it would be very unfortunate, it would be very unfair, if hon. members acted purely on suspicion and without any knowledge of 'the facts or the circumstances in a case of this kind.
Unless since the beginning of the war something has happened which I know nothing about and have never heard suggested from responsible sources, there is nothing to hide and nothing to fear with regard to the quality of the services rendered by the gentlemen who have placed 'themselves at the disposal of the government of Canada.


Mr. STIRLING:: I do not know the hon. member who has made the statement to which we have just listened, or anything of his connections, or for whom he may have spoken. But I did notice that he drastically criticized certain regulations made use of by the government, and since I understand that those regulations apply not to something in the department of the Minister of National Revenue, but to something in that of another, it appears to me that it would be an advantage to this house, if the regulations have not yet been laid before parliament, that they should be laid before us, so that we can form our own opinions as to the value of the said regulations which have been criticized.


James Lorimer Ilsley: I am afraid that we are
all out of order in this discussion. I understood the hon. gentleman to refer not to regulations which have been made, but to regulations which he understands are contemplated.


Frederick George Hoblitzell: So I am informed.


Richard Burpee Hanson: By the
oil controller.


James Lorimer Ilsley: By the oil controller. That is what I understood him to say.
Resolution 4 agreed to.
Resolutions reported, read the second time and concurred in.



EXCISE ACT, 1934, AMENDMENT

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 100, to amend the Excise Act, 1934.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 101, to amend the Customs Tariff.
Motion agreed to and bill read the first time.
[Stage Direction]
Supply-Agriculture-Production

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 102, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 103, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 104, the Excess Profits Tax Act, 1940.
Motion agreed to and bill read the first time.
[Stage Direction]
The house in committee of supply, Mr. Vien in the chair.
DEPARTMENT OF AGRICULTURE Production service.
20.	Plant protection, $257,92S.
Mr. SENN:: What are the functions of this particular branch?


James Garfield Gardiner: This vote is for the inspection and treatment, if required, of import and export shipments of plants and plant products; for insects and diseases; inspection in the field, in storage and at shipping points, of potatoes entered for certification as seed potatoes; the issuance of certificates of health to meet requirements of importing countries; maintenance of quarantine under the Destructive Insect Pests Act; prevention of invasion by or eradication of foreign insects and plant diseases.


Mark Cecil Senn: A short time ago there was a serious infestation known as the apple maggot which threatened entry of our apples into the United Kingdom. What progress has been made in the eradication of this pest?


James Garfield Gardiner: The control is under the province and it consists largely in spraying. We simply check in connection with exports to protect those in other countries who have regulations against the importation of products that may be infested with the maggot.


Mark Cecil Senn: There is an advisory committee in this branch of the service. Is the committee functioning and whom does it comprise?


James Garfield Gardiner: The advisory committee is made up of representatives of the provinces concerned and of the federal government. They act in an advisory capacity.


Mark Cecil Senn: Is the pest under control or is it still dangerous?


James Garfield Gardiner: The numbers of orchards examined last year were:
Province	Number
Prince Edward Island	 none
Nova Scotia	 6,231
New Brunswick	 46
Quebec	 78
Ontario	 2,621
Total	 8,976
The numbers of orchards free were: Province	Number
Prince Edward Island	No figures
Nova Scotia	 5,228
New Brunswick	 26
Quebec	 31
Ontario	 1,595
6,880
That is, of 8,976 orchards examined, 6,880 were free.


Mr. BLACK (Cumberland):: Free of what?


James Garfield Gardiner: Maggots.


Mr. HATFIELD:: Has the number of
inspectors for certified seed potatoes been increased?
Mr. G.4.RDINER: No; I understand the number this year is the same as last.


Heber Harold Hatfield: There has been a large increase in the number of acres of certified seed potatoes grown, and there should be an increase in the number of inspectors because there are not enough inspectors in New Brunswick to inspect the acreage.


James Garfield Gardiner: One of the reasons why we have not increased the inspection staff is that sufficient money has not been voted. There is some increase in the amount of work, and we are using some of the other plant inspectors to do that work.


[Stage Direction]
Item agreed to.
Production service.
21.	Plant products-seeds, feeds, fertilizers, insecticides and fungicides control, including grant of $18,900 to Canadian Seed Growers Association, $518,487.
Mr. PERLEY:: According to the details on page 71 of the estimates there is a reduction of $46,000 in subsidies. Will the minister explain that?


James Garfield Gardiner: No subsidies are being paid this year in connection with seed. It is

Sup-ply-Agriculture-Production
one of the places where we have reduced expenditure in order to get down to the amount that we thought we could legitimately spend this year.


Ernest Edward Perley: It just applies to seeds?


James Garfield Gardiner: Yes.


Mark Cecil Senn: With regard to the subventions that have been given in the past for seed fairs, et cetera, is it intended to carry on that programme this year?


James Garfield Gardiner: It is not the intention to continue those subventions this year. They have been removed as a result of the attempt to cut down expenditures.


Mark Cecil Senn: In respect of the operation of the different acts that come under the control of this branch, such as the Seeds Act, the Feeding Stuffs Act, the Fertilizers Act, the Agricultural Pests Control Act, and the Inspection and Sale Act, which last, I suppose, has to do with hay particularly, is it the intention to carry on the work under these acts to the same extent as formerly?


James Garfield Gardiner: Yes; we are carrying on all these activities to the same extent as formerly.


Mark Cecil Senn: Is the advisory board under the Seeds Act carrying on; has it met this past year, and has it made any radical changes in the standards set up from time to time, particularly in relation to clover seed?


James Garfield Gardiner: The advisory committee is still in existence. My information is that it did not actually meet during the year, but that the representatives of the department, while going through the country, saw all the members of the committee and submitted certain changes which were proposed, and those have been agreed to. It is really a long list, I think it would be better if I tabled it rather than attempted to read it.


Mark Cecil Senn: I would not ask the minister
to read it. Is there any change in the advisory committee, and who are the members now?


James Garfield Gardiner: There has been no
change. I have not the names here; we will get them later and bring them down.


George Hugh Castleden: I see there are twenty-six seed and feed inspectors, and thirty-six seed analysts. Will the minister explain how the work done by the dominion is correlated with similar work in the provinces, or do the provinces not carry on this work?


James Garfield Gardiner: There is not any similar work done in the provinces; we do this particular line of work under an arrangement that there will be no overlapping.


Heber Harold Hatfield: What use is made of
this $18,900 that goes to the Canadian Seed Growers Association?


James Garfield Gardiner: The Canadian Seed
Growers Association is a national organization of farmers who specialize in the production of registered seed. They multiply for commerce the foundation and elite stock seed produced by dominion and provincial experimental stations and by qualified selected private growers. The association's office functions as a registration bureau for seeds, maintains systematic records of their history, pedigree, disposal and performance, directs the work of the growers and acts as a connecting medium between the registered seed growers and the dominion services, and publishes a seed crop catalogue. Registered seed provides much of the seed stock for field crop competitions.
Commencing with 1931 the association enlarged upon its programme for developing the production of elite stock seed, of field roots, garden vegetables and forage crops. It is the purpose gradually to improve the seed supply of these crops by enlarging upon the plans that have proven to be efficient in creating a substantial supply of pure variety seed of cereal crops. The association is maintained by this grant.


[Stage Direction]
Item agreed to.
Production service.
22.	Grants to fairs and exhibitions in the amounts detailed in the estimates, $65,000.
Robert Fair: For this year the grant is $65,000. For the year 1939-40 the grant was $322,409.86, so that this year there is a reduction of $257,409.86. I believe this is one item that should not have been decreased in this way. Canada at the present time needs the services of the fairs that have been operating. These fairs have done splendid work in the past. I am particularly interested in the class B fairs of western Canada. I believe there are fourteen of these in operation, and they have been receiving a grant of $2,500 each. That is, $35,000 would satisfy these fairs on the same basis as last year. That amount would pay for our war effort for something like twenty-five minutes. We should not cut out the grants to these fairs this year at least. I understand that the directors of the different fairs have made contracts, and cutting this grant off will be a serious blow to them. I know that in some instances they had a hard time to get along, and this will make their trouble so much greater. Therefore I would ask the minister and the government to reconsider this item and carry on the grants as before, for this year at least, to the class B fairs.

Supply-Agriculture-Production


Mark Cecil Senn: Would the minister indicate just what fairs have had their grants reduced and what fairs have had them cut off entirely? This is a very large reduction. As has just been stated, many of these fairs depend materially upon these grants in order to get along at all. I have no doubt there is need for retrenchment, but this is a serious step.


James Garfield Gardiner: The ordinary fair grants have been entirely discontinued this year; that is, the grants to all A and B fairs. I want to take this opportunity to express my appreciation and that of the government of the manner in which this reduction has been accepted by the various associations across Canada. In the early part of the season they did make representations to the effect that they would like to have these grants continued; but as soon as it was indicated to them that this step was being taken in order to cut down expenditures this year so that we might have more money with which to carry on the war, we had letters, I think from all associations, accepting the situation and agreeing that the necessities of our war effort were perhaps greater than those of the associations, at least for the time being.
Provision is made under this item for some grants. The $65,000 indicated in it is necessary in order to pay some of the building grants to Which we are committed under agreements with some associations. I think those concerned are the associations at Amherst, Quebec, Vancouver, and the royal winter fair at Toronto. Those payments are made under contracts extending over a number of years. In addition, some grants are provided for competitions held for boys and girls.
_ Mr. PERLEY: What is the reason for the increase in the Quebec grant?


James Garfield Gardiner: The amount necessary under the agreement with Quebec was provided in the special vote of $100,000 last year. This year that estimate has been removed, and the grant to Quebec appears together with the other similar grants in these estimates. The Quebec arrangement is an old one, made,
I think, about the time of the last war, in connection with which there has been some discussion from year to year as to whether or not all the terms of the arrangement were being carried out. Last year they undertook to make special provision in order to meet some of the terms that previously had not been met, so the arrangement was renewed and payments again are being made under it.


Mark Cecil Senn: I notice a grant to the winter fair at Toronto. Last year that fair was not held, because the buildings were occupied

by troops. Will that fair be held this fall? If not, why is it necessary to provide for additions to the buildings at this time?


James Garfield Gardiner: There is no necessity for additions to the buildings. This has to do with the cost of the original buildings. Under an agreement made with the government of Canada-I am not sure which government it was-we pay $35,000 a year towards the cost of the buildings, part of which cost is paid also by the government of Ontario and the city of Toronto. That has to be paid in spite of the fact that the fair is not going on. There was no fair last year, and I understand there will not be one this year.


Ernest Edward Perley: When will the agreement terminate ?


James Garfield Gardiner: It has three more years to run.


Mark Cecil Senn: Why was the grant last year $60,000, whereas this year it is only $35,000?


James Garfield Gardiner: Last year there was a grant of $25,000 to the fair itself, but I think only part of that was spent. Some expenses had been incurred before the buildings were required by the military authorities. This year there is no provision for any such grant.


Mr. MARSHALL:: How much of the amount of $122,409.86 set aside last year was spent on buildings and how much was paid in prize money?


James Garfield Gardiner: I think I am correct in saying that the reduction represents the amount of the grants formerly made to agricultural associations in connection with the payment of prizes at the fairs. Any provision made in connection with buildings at fairs was under another vote, for which we are not asking this year. Two years ago it was $50,000; last year it was $100,000, and these items were brought in with the special supplementary estimates.


Alfred Johnson Brooks: I thoroughly agree with the cutting down of this item, which seems to afford a splendid opportunity of saving money to be used for war purposes. I should like to know if any of the fair buildings are being used for military purposes and, if so, if this department is receiving rent from the defence department.


James Garfield Gardiner: My understanding is
that all these buildings are owned by the agricultural societies Which conduct the fairs; and any rentals being paid by the military authorities for the use. of these buildings are,

Supply-Agriculture-Production
I would assume, being paid to those associations. This department has no direct interest in those buildings and would not collect rental for them.


Richard Burpee Hanson: My understanding is that they are not charging rent.


James Garfield Gardiner: That may be so. I know some of the Toronto buildings, the London buildings, and a number of other buildings that I could enumerate are being used, although I have not a complete list.


Gordon Knapman Fraser: In
Peterborough the exhibition board offered their grounds and buildings to the Minister of National Defence absolutely without charge.


James Garfield Gardiner: I think that is the situation in most places. The Ottawa buildings are also being used. I believe the military authorities make any changes that are necessary, and when they are through with the buildings will put them back in the shape in which they found them.


Richard Burpee Hanson: I wonder what they will do with regard to the Fredericton buildings, which were burned while being occupied by the Department of National Defence. I have endeavoured to get, and I think perhaps I have arranged, an adjustment of the damage sustained by the association by reason of the cancellation of the fair. There seemed to be no great difficulty about that, but there is a substantial claim against the government with respect to the damage by fire. The buildings were burned down while being occupied by the troops, and, it is said, through the negligence of the troops. Of course this does not come within the jurisdiction of the minister, but when the question comes up he will know that a claim has been made for the loss of this property, which was only partly covered by insurance.


James Garfield Gardiner: I would assume a matter such as this would come under the Department of National Defence.


Mr. CRUICKSHANK:: I understand the fair boards are granting their grounds and buildings to the militia free of charge. Is that correct?


James Garfield Gardiner: That has just been
stated by men who are associated with some of these boards.


George Alexander Cruickshank: Is that correct?


James Garfield Gardiner: I could not say; it is not under this department.


George Alexander Cruickshank: I understand that the only grant in British Columbia is to Vancouver. Is that correct?


James Garfield Gardiner: There are only four grants taken care of in the $65,000 vote. These are building grants, and not grants to exhibitions in the sense they have been made in the past. In respect of Vancouver we have had for over ten years an agreement under which we pay a certain amount each year. Then, we have an agreement in Quebec of the same kind, one in Toronto of the same kind- which, by the way, has three years to rim- and one at Amherst.


George Alexander Cruickshank: The class B fair at Chilliwack has offered its grounds for the full use of militia units, or for home defence. Will we be given a grant, such as is being given to the Vancouver exhibition, where a charge is being made for the same facilities?


James Garfield Gardiner: The Vancouver exhibition is not charging the Department of Agriculture. I would not be in a position to answer the hon. member's question. He may ask it, however, when the estimates for the Department of National Defence are being considered.


George Hugh Castleden: Is the minister referring to the grants to the provincial exhibition of Quebec, the Vancouver exhibition, the maritime winter fair and the royal agricultural winter fair at Toronto?


James Garfield Gardiner: Yes.


George Hugh Castleden: I notice in respect of one of them, namely the provincial exhibition of Quebec, there is an increase of $10,000, whereas there is a decrease of $5,000 for the maritime winter fair. Are these annual grants?


Richard Burpee Hanson: They are building grants.


George Hugh Castleden: If so, why the
variation?


James Garfield Gardiner: These are changes made necessary partly because of changed conditions this year as compared with last year. It was thought that $5,000 would cover the grant necessary for the provincial exhibition at Quebec, but because of the time over which it was to run, the amount was finally increased to $15,000. Apparently we paid $9,000 last year in connection with the Vancouver exhibition. The agreement is for $10,000. I presume there was some reason for only $9,000 being paid out last year. Last year the arrangement in the maritime provinces was for an expenditure of $10,000. I understand that only half of it was spent, and the same amount is being voted this year as was spent last year. In connection with the royal agricultural winter fair, may I point out that the additional $25,000, in the total of $60,000,

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was for expenses incurred last year before the fair was discontinued. The $35,000 is a regular building grant.


James Alexander Marshall: May I add my voice in protest against the reduction in this particular item, because that reduction affects about seventy fairs, particularly those in class B. I have before me the report of the Minister of Agriculture for the year ended March 31, 1939, which, at page 102, deals with the department's policy with regard to fairs. It states this:
Nineteen class A exhibitions, thirteen winter and provincial shows and forty-three class B fairs, a total of seventy-five, received grants in 1938-39. The royal agricultural winter fair, Toronto, received a grant of $60,000 in general and building grants.
Then I draw the attention of the committee to the following:
Seventy-four fairs and exhibitions received regular grants totalling $232,910.06 for judges, boys' and girls' club work and prize lists exclusive of building grants amounting to $11,675. In addition, $28,850 from a special grant of $50,000 was provided class A and B fairs, while the balance of this special grant for a total of $21,150 was distributed among twenty-four smaller fairs in the provinces of British Columbia, Quebec, Nova Scotia and New Brunswick.
It seems to me we are penny-wise and pound-foolish in taking such drastic steps in reducing the vote from over $300,000 to $65,000. I would ask the minister to consider the item carefully in order to see whether or not it would be possible to bring in a supplementary estimate which would place the figure where it was before.


James Garfield Gardiner: I do not know whether the hon. member was in his seat when I dealt with the matter a moment ago, in re.ply to the question of an hon. member sitting behind him.


Thomas Vien: There has been a considerable repetition of questions already asked and answered. I have also noticed questions which were not directly related to the subject matter before the committee, although they may have had a slight indirect connection. I should like to give reasonable latitude, but hon. members should not unduly repeat questions which have been asked and dealt with already.


James Alexander Marshall: I am not in the habit of wandering away from the subject under discussion. The government's policy with respect to fairs is important and, I suggest, should be given a little more consideration. It should not be dismissed in a peremptory manner, particularly when the vote has been decreased by a quarter of a million dollars.


James Garfield Gardiner: I was on the point of saying that previously I had explained the first part of the hon. member's question. I had pointed out that it had been decided to discontinue these grants this year in order to assist in the war effort. I believe all the -associations which had sent letters earlier either protesting or -asking that the grants be continued, wrote later acknowledging the policy which had been determined upon, and agreeing -that probably it was the proper course to take, in view of the fact that we are at war. It is not the intention of the government -to bring in supplementary estimates to provide any further grants this year.


Richard Burpee Hanson: That is settled.


Mr. DOUGLAS (Weyburn):: This is the first time to my knowledge that objection has been taken to making representations to the minister in respect of an item. I suggest that hon. members have a perfect right to make representations suggesting that an item should not be reduced, despite the fact that representations may have been made earlier. While I suppose most people realize that in a time of war there must be certain economies, and while it is obvious that the government is faced with the difficult task of deciding what must or must not -be cut, the fact remains that the cutting of this item will work considerable hardship in various parts of Canada. And when I see some of the Buiek cars being driven around Ottawa I have the feeling that economies might have been carried out in other places.


Richard Burpee Hanson: Whose
cars? Not mine, I hope.


Thomas Clement (Tommy) Douglas: No; I am talking about persons holding government positions. In other places there might have been economies which would have affected less adversely the morale of the agricultural population. I realize that fair boards across Canada have in the main stated that if the government believes economies should be made in this direction, they are prepared to put up with them. But I am not yet convinced that this item should be decreased.


James Garfield Gardiner: In view of what has been said, probably I should place on Hansard a few sentences from letters which have come to me. The one I have in my hand is from E. L. Richardson, general manager at the Calgary exhibition and stampede. I shall read one or two sentences as follows:
This will involve a very serious situation, but in order to do our part in carrying on during the war, the Calgary exhibition has decided to continue the prizes as decided upon before your letter was received, with the proviso

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that should conditions make it necessary, we reserve the right to retain up to but not exceeding 25 per cent of the prize money won. It is our hope that it may be possible to pay the prizes in full.
That is the spirit in which these people are accepting this move. From Vancouver I received the following:
We realize the necessity for drastic action in the curtailment of expenditures during these exceedingly difficult and troublesome times, and while it is going to be no easy matter for us to overcome the withdrawal of your support this year, you will be happy to know, I am sure, that after due consideration by the board of control a resolution was passed unanimously approving this and any other step the government may deem necessary to conserve our finances and enable us to do our part in the successful prosecution of the war.
And from Knowlton, Quebec:
Although we regret that this has to be done, we also appreciate the situation.
Then from Lachute, Quebec:
In reply I may say that, at a meeting of our directors held on May 18, it was decided to cancel the 1940 Lachute spring fair, and to offer the use of the grounds and buildings to the Department of National Defence.
That was their reaction. I quote from a news item published in Edmonton:
Edmonton exhibition association will take no action to persuade Ottawa to reconsider its move cancelling the $5,000 grant to the fair this year if association directors approve a suggestion to be made to them by Percy W. Abbott, fair manager. Ottawa recently announced that the fair grants to Edmonton and other cities have been cancelled.
_ Mr. Abbott will suggest to a directors' meeting to be held shortly that the fair can carry on without the $5,000 grant during war time. Careful revision of the association's 1940 budget has resulted in savings that will about offset the loss of the grant for this year, it was reported.
"It is my view that the association does not want to hinder Canada's war effort in any way," Mr. Abbott said Thursday.
These letters are typical. I have had others from Saskatoon, Winnipeg, Estevan and other points pretty well covering western and eastern Canada and all expressing similar sentiments.


Thomas Clement (Tommy) Douglas: The people
of Canada are prepared to make most serious sacrifices; all I am saying is that if the people are going to be asked to curtail their expenditures, they will expect the government to institute the same type of economies.


Gordon Knapman Fraser: The Peterborough fair will not receive the $4,000 grant this year, but the board are prepared to go on and have the fair. They have offered the fair grounds and buildings which are in
A-l shape and as good as any in Ontario with the exception of the class A fairs, to the government.


James Garfield Gardiner: I read just what letters I happened to have on my desk. I may say that only recently I was in London in order to attend a meeting of the board of trade, and it was decided that whether or not a grant was paid, they were going ahead with their fair. However, they were asked by the military authorities for the use of the buildings, and this request was granted. I think this has been the attitude all across Canada.


Richard Burpee Hanson: I think
that is correct. While these associations are reluctant to abandon their fairs, I do not think it will affect the morale of the Canadian farmer, as has been suggested by one hon. member to my left. While we give due credit to the minister for reductions in this regard, I should like to tell him of something that came to hand from a gentleman who is interested in the war savings certificate plan. He is putting over a drive for the sale of these certificates and endeavouring to induce the people of his community to buy them in order to assist the government in its war effort. He found a state of affairs existing which I should like to bring to the attention of the minister. I have brought this to the attention of the Minister of Finance (Mr. Usley) in a letter which I have addressed to him but which he has not received as yet. This question is inevitably raised by many people who are asked to buy these war savings certificates: What is being done at headquarters in Ottawa to cut down the ordinary operating costs of the country? That thought seems to be uppermost in the minds of the people of Canada to-day. However, there is one thing which I think ought to be known. The income tax now paid by cabinet ministers, and also by myself, amounts to five times the tax we paid last year. Nevertheless the people of Canada are looking to the government for a reduction in overhead costs here in Ottawa.
We have set up war services which have necessitated 6,000 new employees in Ottawa. We are about to set up a board or commission in connection with unemployment insurance which will require at least 3,500 additional civil servants. The people are wondering if there is to be an equality of sacrifice. The people who are being asked to buy these war savings certificates at the rate of twenty-five cents a day or twenty-five cents a week are beginning to ask that there be some cut in the cost of government right here in Ottawa. One answer to that is the increased income taxes being paid, but that is an indirect method. I was so much struck by this letter

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that I immediately wrote to the Minister of Finance pointing out the information it contained as an illustration of the feeling of the people. I hope the minister will give some consideration to it.


[Stage Direction]
Item agreed to.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.
Production service.
2S. Grants to agricultural organizations, in the amounts detailed in the estimates, $35,500.
Mr. ROSS (Souris):: On page 72 of the estimates is shown a reduction of $2,000 in Canadian national live stock records. How is that estimated?


James Garfield Gardiner: That item is to cover the usual grant in connection with records. There has been $2,000 taken off. That had to do with the checking of the entries at the fairs, and since we have cut out the grants to the fairs this year, this has been taken out as well.


James Arthur Ross: This is not for the records themselves?


James Garfield Gardiner: The records themselves continue as before. The records set-up is not exactly a departmental set-up, but we have made a grant towards it every year.


Mark Cecil Senn: I did not hear what has been already said in respect of this item, but I notice that a number of grants have been cut off, some of them, I think, unjustifiably- some of them to which the minister might have given further consideration. It came to my attention some time ago that grants for the eastern and western live stock unions have been entirely removed. These two organizations have been doing good work for a long time. The grant for the past year was small, I believe about $1,000 to each organization, and it seems to me that in view of the fine work they have done the minister might well consider continuing the grant. He made the statement, however, just before six o'clock, that it was not the intention of the government to bring down any supplementaries for grants, so I suppose there is no use in urging that the matter be reconsidered. But I draw the matter to the minister's attention particularly because it is a small vote and might very well, I think, have been continued.


James Garfield Gardiner: As I said before the dinner recess, I do not expect that any supplementaries will be brought down in connection with the grants. Under those circumstances I am afraid that there will be no possibility of making grants to these organizations this year.


[Stage Direction]
Item agreed to.
Marketing service.
2-}. Marketing service administration, $94,262.
James Arthur Ross: The chairman of the bacon board, Hon. J. G. Taggart, has made several statements throughout the country that as a result of the operations of the board there will be approximately one million dollars for distribution among hog producers. Upon what basis will the distribution be made?


James Garfield Gardiner: I believe that when we were dealing with the item on administration there was some discussion with regard to the bacon agreement. As was then pointed out, under that agreement the bacon board has set up a fund. That fund is composed of amounts made available through taking, during the early months of the agreement, the difference between $18.01 and $17.29, which is seventy-two cents, on each hundredweight of bacon shipped from our ports, and placing that money in a fund. There was, in addition to that, the amount which was secured from the packers at the time the agreement was first made, of about $300,000 which had accumulated because of the higher price which the packers received for their bacon, as a result of the agreement, than would have been justified on the basis of what they paid for hogs during a period from some time in December until some time in January. That $300,000 together with the seventy-two cents per hundredweight made up an amount which, three or four weeks ago, according to a statement of Mr. Taggart, the chairman of the board, stood at approximately a million dollars. Since that time we have been collecting more than seventy-two cents a hundredweight; the amount was increased by fifty cents, so that $1.22 a hundredweight has been collected from that time until the present. On account of the fact that the price of hogs in Canada was reduced by reason of a decline in the local or consumers' market, there resulted a decrease in the price being paid for hogs to farmers, but the price under the bacon board agreement to those who were shipping bacon to Great Britain remained the same. An extra half-cent a pound was taken off that and put into this fund as well. I have not the figure at which the fund now stands, but it is considerably more than it was when Mr. Taggart made that statement.

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The reason for setting up the fund in the first place was that it was thought that, if the price of hogs continued in the usual course throughout the year, in all probability it would be higher in June, July and August than in the winter months. But of course, as a result of war conditions, the open market does not exist at present, and the situation which some thought might develop has not done so. The price of hogs is lower at present than it was in the winter months.
The thought at first was that some money might be required to encourage farmers to raise more hogs for summer production and also to take care of the situation on the British market by storing pork products or green sides from the winter months in cold storage until the time when they would be turned into bacon to supply the summer needs of the British public and the forces. But circumstances have not developed in that direction. Enough hogs are being delivered in the summer months so far this year, I believe, to have supplied the market under the agreement. In other words, storage is remaining at about a level. So it has not been considered advisable up to the present to make those payments.


Joseph Henry Harris: Is it not a fact that more is produced than is needed?


James Garfield Gardiner: Yes; there will probably be more produced, all matters being considered, than at the present time seems to be necessary.


Joseph Henry Harris: And more-far more-will be coming in during the months of September, October and November.


James Garfield Gardiner: There probably will be. But that is ahead of us.


Joseph Henry Harris: If the hogs are alive, they will then be matured, and there will be a good deal more than we can take.


James Garfield Gardiner: Of course there are some other things alive which may change the situation materially before September and October.


Joseph Henry Harris: Not hogs.


James Garfield Gardiner: But the situation is that we shall have at least as many hogs as we need in order to satisfy the agreement.


Joseph Henry Harris: Far more.


James Garfield Gardiner: And probably, as the hon. member says, more. But the facts as we know them now indicate that it is not necessary at present to issue greater amounts to encourage the production of hogs in the summer months. I would assume, therefore, that we shall permit the fund to accumulate,
and probably any distribution which is made as a result of the existence of this fund will be made throughout the next season, if it is considered wise to have it disbursed at that time.


James Arthur Ross: That is hardly an answer to my question. Mr. Taggart said that this fund was available for distribution among producers who had marketed their hogs. I want to know how I would be recompensed out of that fund for the hogs I have already marketed.


James Garfield Gardiner: We shall have to make arrangements with Great Britain during the month of August for the price to be paid for bacon in the next year. At the moment we do not know whether that price will be higher or lower than the price now received. It is just possible that it may be lower. If it were found necessary to hold the price of hogs in Canada at the present level, in spite of the fact that we might be receiving a lower price, or even the same price for bacon from Great Britain as we are receiving now, then it might be necessary to distribute that sum of money over a sufficient portion of the year to have the distribution made among practically the same persons who had delivered hogs last year.


Mr. JOHNSTON (Bow River):: In view of the minister's statement I cannot understand why it was necessary, if we have such a large production of hogs now, to have so many hogs shipped into Canada from the United States a few months ago. About two months ago Canada Packers were trying to sell to the Canadian army bacon shipped in from the United States.


Richard Burpee Hanson: They did.


Charles Edward Johnston: Yes, and it speaks well for the army that they refused to take it. It was of an inferior quality and had to be sent back, and they had quite a time getting the packers to take back that United States bacon and supply first-class bacon instead.


James Garfield Gardiner: That may be true. We all know that now. If, however, one were to examine the records, so far as hog production is concerned, over the last ten years, and indeed over a much longer period than that, it would be found that the situation which I have described has not happened before, at least not according to any of the records that I have checked up. I doubt whether it has happened at any time in our history that the production of hogs throughout the summer months has continued to maintain its level or even to go higher than it has been in the winter. No one in the hog business, whether

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producer or packer, had anticipated that it would happen, and I do not believe that anyone connected with the government service anywhere expected it. But it has happened and it is a situation that must be met.


James Arthur Ross: Suppose I do not market more hogs now; the fact is that I would not benefit under this distribution, as it is proposed to handle the surplus now. Is that correct?


James Garfield Gardiner: I am not sure what the board will decide to do. I am stating the possibilities. The first intention-was to distribute a part of the fund at the time when the price of hogs should be higher as a rule, because it costs more to produce hogs for summer delivery. Those who have fed hogs will agree that if you have the animals coming on the market in July and August, it costs considerably more per hundredweight to produce them than it does to produce hogs that go on the market in November. Having had that experience in the past, and the further experience that farmers do not produce hogs for summer delivery-or at any rate they have not done so in anything like the volume we have seen this year-we thought it would be necessary to pay more for hogs this summer in order to induce farmers to produce them next summer and thus throughout the war period. But the farmers have produced more this year without that inducement, and the board is still trying to devise a method whereby the fund can be properly distributed among the producers throughout the period which will make it possible for at least the great majority of those who delivered in the last year to obtain something from the distribution.


Thomas Clement (Tommy) Douglas: What the minister means is that the surplus accumulated from those who sold pork products this year may be distributed among those selling similar products next year, assuming that they will be the same persons. In other words, the people who delivered out of their pork production will lose whatever they might have made and it will be passed on to others, assuming that they do not continue producing now.


Heber Harold Hatfield: Why is the fund allowed to accumulate? Why is it not paid from now on to the producers?


James Garfield Gardiner: Of course, there is a question as to whether it would be advisable to do that. The distribution can be made at this time of the year among those people who are delivering, or it can be left until a later time.
I think the desire of the board at the moment would be to await the discussions that are to take place with the British government at the
IMr. Gardiner,]
beginning of August, when we shall have a better idea whether Britain will be prepared to pay the same price this year.


Thomas Clement (Tommy) Douglas: May I take it that the amount of the surplus would be too small to enable the board to pay back to people who actually sold?


James Garfield Gardiner: I doubt whether it would be possible at this stage to identify the people. I do not think one could find the persons who produced the hogs that made the bacon which was shipped to Britain.


Thomas Clement (Tommy) Douglas: There is no record of it?


James Garfield Gardiner: No.


Mark Cecil Senn: I have listened with a good deal of interest and attention to the minister's explanation of this whole matter. It seems to me he is trying to make out a good case for the mistakes which may have been made by the bacon board. Perhaps those mistakes were unavoidable. There is no doubt, however, either in my mind or in the minds of the hog producers of Canada that a grave mistake was made, first, in allowing so much pork to come in from the United States, and, second, in other methods that have been followed. The minister stated that a deduction had been made from all pork shipped overseas, which deduction was, I think, perfectly justifiable for a certain length of time. A part of the money derived from these deductions was spent, I understand, in paying for the storage of bacon, Wiltshire sides, and so on, which could not be shipped at the time, in order to make up for any shortage that might come later on.
Some time ago the board in its wisdom saw fit to discontinue that practice, but immediately it was discontinued the price of hogs to the Canadian farmer went down. It seems to me that somebody must have benefited by that action, because when hogs went down there was no corresponding reduction in the-price of bacon, ham and Wiltshire sides sent to the old country, and so far as we can learn there was very little reduction if any in the price of fresh pork when the consumer went to the butcher shop to buy it. Somebody must have been profiting to a certain extent by that action on the part of the bacon board or the Department of Agriculture.
I do not believe there was any justification whatever for the bacon board's suggestion that there might be a shortage of Wiltshire sides for shipment to the United Kingdom at any time. I took the trouble the other day to look up the number of hogs marketed this year and last year. In the first four months-

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of 1939 there were 864,854 hogs marketed according to the report from the department concerned. In the first four months of 1940 the number was about 1,600,000, or nearly twice the number marketed a year ago. I find that the pork on hand for the first five months of 1940 was considerably above the amount for 1939. For instance, in January, 1939, there were 27 million pounds; in January, 1940, the amount was 44 million pounds, and so right down to the end of May we find a continual increase in the amount of pork on hand. In May the amount of fresh pork on hand in Canada was 66 million pounds, and in addition there were some 32 million pounds of export storage pork, Wiltshire sides, et cetera, making nearly 100 million pounds on hand in Canada at that time.
It seems to me, therefore, that the bacon board's estimate must have been very badly at fault if they found it necessary to allow bacon and pork to be imported from the United States in such large quantities. It was imported in very large quantities. In the last sixteen months something like 47 million pounds of fresh pork was imported as well as a very large quantity of bacon and hams, making something like the product from
240,000	to 250,000 hogs imported into Canada during the past sixteen months, the greater portion being, of course, during this year.
There has been, as the minister stated, a considerable amount of United States pork used to feed the Canadian army. A short time ago an answer to a question which I placed on the order paper was brought down. In substance it stated that United States bacon has been used for military purposes in Canada, although it did not say to what amount; that question was not answered. But it stated, just as the minister has done in trying to justify the situation, that there did not seem to be sufficient Canadian pork on hand to supply the export demand for pork and bacon to Great Britain. I think I have given conclusive figures to show that there was sufficient pork on hand at all times during this year to supply not only the Canadian demand but the demand from Great Britain, and to have an excess over and above that. It seems to me that the bacon board have made a mistake for which the farmers of Canada will have to suffer, although I suppose the bacon board itself was not responsible for the importation. The government and the Minister of Agriculture should have foreseen the situation and seen to it at an earlier date that these large importations of cheap pork from the United States did not enter this country.


Richard Burpee Hanson: Would the minister tell us what if anything his department is doing to assist the marketing of the major crop in New Brunswick and Prince Edward Island, namely table-stock potatoes and seed potatoes? Or are they leaving that entirely to the provincial governments? In 1935 when I was in the Department of Trade and Commerce I requested a sum of money to be placed in the estimates for the purpose of promoting markets for New Brunswick seed and table-stock potatoes in the West Indies and in Central and South America. Unfortunately we were defeated at the election and the item did not appear in the estimates for the coming year, although I took the trouble to write to my successor who came into the government in 1935 and who has now gone to a place of repose and refuge in the other chamber, asking him to do something to help the New Brunswick potato producer in marketing our potatoes; something, not in any sense comparable with what the federal government has done or is endeavouring to do for the wheat producers, but at least a gesture along the line of helping them to get a greater market. But nothing was done by this government.
There had been introduced into the provincial department in New Brunswick, prior to the change of government there and prior to 1935, a gentleman who was well versed in the marketing of New Brunswick potatoes. I am glad to know that the provincial department have kept him on and have been sending him south each year in an endeavour to find markets for our surplus products. I am sorry to say they pay him scarcely a living salary, and I was hoping that this government would join with the government of New Brunswick, and also, I trusted, the island government, in doing something to promote the sale of one of our major products, a product of a very high quality.
The potato farmers of New Brunswick are just as badly off, or nearly so, as the wheat farmers of the west. Those of them who depend upon potatoes as the one crop are seriously embarrassed. Fortunately the great majority of them have better judgment and engage in mixed farming, and those who do so have in a measure, perhaps not a very large measure, survived the shock of the period of depression. Those who depended upon the one crop have fared badly. I have taken a great interest in the farmers in my county, and have endeavoured to impress upon them the necessity of diversification, of keeping a good herd of dairy cattle where possible, and increasing dairy and poultry products and all the other products of a mixed farm. But, after all, the farmers of New Brunswick, looking across the border to the state of Maine where they have seen, I suppose in one season out of four on the average, large

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sums of money made by the United States potato farmer, and knowing that in a good year returns are large, have been inclined in a degree to follow his example.
I am not blaming this government especially, but the difficulty has appeared more intensely, I think, in the last few years; the federal government have done nothing for the potato producer in New Brunswick. They have done valuable service in respect of plant diseases; they maintain a laboratory in Fredericton, where the study of plant pathology has been centred and a great deal of good work has been done, and that work I am bound to say has been extended under the present minister. For that I give him credit. More may be done, because it seems new problems are always arising. I suppose there is no one in business who has so many enemies as the farmer-I mean insect enemies.


Thomas Reid: The enemies are not all insects.


Richard Burpee Hanson: I do not just understand the implications of that remark, but I know that the insects are among the chief enemies of the farmer. Another enemy may be the weather, but unfortunately we have no direct communication with Providence in the control of the weather. Weather has a marked effect on the success of the potato grower, but it needs someone wiser than I to handle that. The government, however, can do something under this item with respect to assisting the New Brunswick potato farmer in marketing his crop.
May I revert to the item I spoke about the other day in connection with the revision of the Canada-West Indies treaty, which has an indirect bearing on this subject, and which I have drawn to the attention of the Minister of Trade and Commerce (Mr. MacKinnon). I believe that properly it comes under his department. I hope consideration is being given to this matter, notwithstanding the fact that the ministers are busy with the war effort. Perhaps the Minister of Trade and Commerce is not so vitally concerned with that war effort, aside from the question of wheat, and he might give some consideration to the question of the revision of this treaty, and see if some arrangement cannot be made by which our marketing agencies may gain entry into the Cuban market. With sugar stabilized, the purchasing power of the island of Cuba will become greater, I hope; and if it becomes at all normal, I should like to see us get some of the benefit. The purchasing power of Cuba is greater than that of all the other islands of the West Indies put together. If the government could get

some measure of entry into that market, and prevent it from being cornered by one or two individuals, they would be greatly helping the New Brunswick farmer. If the minister has any information to give me as to what has been done or what they propose to do, I shall be glad to hear it.


James Garfield Gardiner: I should like to direct attention to the fact that this item of marketing services is divided into administration; agricultural economics; dairy products; subsidies to cold storage warehouses; fruit, vegetable and maple products; live stock and live stock products; the marketing of agricultural products, and so on. I say this because I have before me at the moment certain officials who are prepared to assist me in answering any questions of a general nature having to do with the marketing of farm products. Mr. Wheeler is in charge of fruits and vegetables, and he could give me much more detail than the officials who are here at the moment, which would enable me to answer the question much more satisfactorily than I could do now.


Richard Burpee Hanson: That is quite agreeable to me. I thought it might be more appropriate under the heading of administration.


James Garfield Gardiner: It can be discussed under that heading, of course, but it would be more convenient if hon. members would bring up questions in regard to particular matters when we reach the appropriate heading. Under item 28, for instance, we could discuss the whole question of hogs, and at that time I shall have before me the official who has to do with that phase of the work. It might be better to confine our remarks under the heading of administration to general matters having to do with the administration of the department.
I should like to make one other observation before sitting down, in order that a general answer may appear together with the question just asked by the leader of the opposition. It has been suggested that we might do something to assist the governments of the maritime provinces in the marketing of potatoes. I should like to point out that during the last five years at least-I am not so familiar with what happened before-we have worked in cooperation with the governments of the maritime provinces, particularly the government of New Brunswick, in connection with the potato question. It is true that Mr. Cunningham has been in the Argentine on behalf of the government of New Brunswick on a number of occasions. I believe he has spent a considerable part of his time there,

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but on a number of occasions we have sent with him Mr. Tucker, who is the expert of our department in connection with potatoes. He has been in the Argentine, at times with Mr. Cunningham and at times alone, with regard to this matter. We also employed Mr. Arkell and sent him along with Mr. Cunningham and Mr. Tucker.


Richard Burpee Hanson: What does Mr. Arkell know about potatoes? He knows more about running elections.


James Garfield Gardiner: He knows considerably more about potatoes, I think, than about running elections. In any event, for many years he was an employee of the government in charge of one of the branches of the department. He was engaged to go to the Argentine and report, and he made a very full report which has been printed. At the moment I have not a copy of that report before me; I did have a copy the other evening when the leader of the opposition dealt with this same question while the Minister of Trade and Commerce was discussing certain matters. That report can be secured by any hon. member, and it goes fully into the possibility of marketing Canadian potatoes not only in the Argentine but also in all countries of South America and in the West Indies. The possibility of marketing our farm products, including potatoes, was considered during that period-.that is, 1938 and the following year- with regard to not only South America but also the continent of Europe and Great Britain. The benefit of that investigation is, of course, not so obvious now that the war is on.


Richard Burpee Hanson: Were you ever able to overcome the prejudice against the Colorado beetle?


James Garfield Gardiner: No, not yet; but there is always the possibility that these things may be done over a period of time. I am only pointing out that we have not ignored the problems of the maritime provinces in relation to potatoes. We have had men investigate and make very full reports on these markets, and I think an examination of the records during the years that work was being done by our department and the New Brunswick department, will indicate that the marketing of potatoes was carried on more successfully as a result of that work.
In addition, we have men in the southern United States who are investigating the possibility of marketing seed potatoes there. As is known by the leader of the opposition and, indeed, most hon. members, our northern potatoes are used for seed purposes in the southern United States, the West Indies and South America, and at the present time we are trying further to promote the marketing of 95826-110
our potatoes in the southern part of the United States. At the same time I should say that the problem of marketing in those countries is particularly the problem of the Department of Trade and Commerce, but we have been cooperating by supplying the expert advice, so to speak, the experts who deal with potatotes and with diseases of potatoes, and who are in a position to point out to people in other parts of the world the degree to which our potatoes are free from the diseases which might make it difficult for them to be used as seed.
I believe that in continuing with this discussion we might confine ourselves to the various items as they come along, and in so doing I think we shall get fuller information than would be the situation otherwise.


Joseph Henry Harris: I am quite in
accord with the idea that we should conduct our affairs in an orderly manner, as it were; but under this item we are asked to vote some $94,000 to pay for the services of various economists. I think I am right in that.


James Garfield Gardiner: We are still on item 2/f.


Joseph Henry Harris: The details of
this item are found on page 72 of the estimates, and it includes the salaries of certain agricultural economists. At any rate, this item has to do with administration, and I should like to bring to the attention of the minister a rather broad question. In the administration of this department are the government thinking of the primary producers? Are they trying to gather advice from the primary producers? Are they trying to assist the primary producers, or do they take their advice from the processers of the primary products? We must remember that those processors are well organized, whereas, on the other hand, the primary producers are not well organized. But, day by day the administration is well lobbied by the processors. And when I think of processors I think not only of processors of fruits and vegetables, but also of the packing house industry. That lobbying is carried on from week to week, one year after another. Is the administration giving enough attention to the primary producers of original products?
Probably the minister knows what is running through my mind. He knows I have in mind something which has been discussed many times during the last five years. Each year we produce in Canada about 95,000,000 pounds of lard. Prior to legislation passed by the country to the south of us, we in Canada enjoyed an export of lard to Great Britain. In 1936, however, by reason of provisions contained in appendix 4 of the Baillie amendment signed by the president in August of that year,

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an excise tax ranging from three cents a pound to, in some instances, a total of as high as eight cents was placed against imports of fats, fatty acids, and all commodities of that kind going into the United States. That ruling applied not only to the edible field but also to the inedible, with the result that the entire economy of Canada, so far as fat production is concerned, was affected. We must remember that the production of fat is a native industry in Canada. It is native to this northern hemisphere, this zone in which geographically we are situated. In this country the farmer is a natural producer of animal fat, but he is not a producer of vegetable fat. So far as animal fats are concerned, our market for the last half century has been centred at Chicago, the stock yards in that city handling more live stock than those in any other market anywhere in the world. For that reason prices are set at Chicago.
In August, 1936, in their wisdom, the United States saw fit to place a duty of almost 100 per cent against the invasion of products of the vegetable kingdom and, so far as Canada, Mexico and South America were concerned, of the animal kingdom, entering their market. When I speak of the animal kingdom I think of it with particular reference to fat production. That duty of three cents a pound was placed against products of South America, Mexico and Canada, so far as products of the animal kingdom were concerned. It was placed against the vegetable fat production of Nigeria, the Gold Coast, the Straits Settlements, and had particular effect in reference to Indian peanuts and Chinese peanut oil. Hon. members may smile, but the quantities involved are tremendous, and swamp entirely our small production of butter fats and lard.
As the minister knows, when that duty of three cents a pound was placed against animal fat products entering the United States, automatically the Chicago market was cut off from the fat supply of the Americas. Automatically millions of pounds, yes billions of pounds a year of vegetable oils were turned back into the markets of the world. Those vegetable oils still found a free market in Canada, to the demoralization of the Canadian market for lard products, and animal fat products of all kinds. At the same time importations of those vegetable oils tended to depress and to hold down the butter market of Canada.
To put it another way, to such an extent was that the situation that importations of vegetable oils from the world markets rose from a normal yearly figure of 90,000,000 pounds to figures of 113,000,000 pounds, 156,000,000 pounds and 200,000,000 pounds, until

last year it reached a figure equalling the production of creamery butter in Canada, namely 250,000,000 pounds.
I now address my question to the administrators and economists of the Department of Agriculture. I feel disposed almost to charge that they have been giving too much attention to the lobbyists and the processing interests, and have ignored this vital question which affects agriculture in Canada. They have not considered this encroachment on our Canadian market by vegetable oils against our production of live stock fats. This matter has not received from the department the degree of attention it deserves.
When in 1936 the National Dairy Council of Canada, representing 300,000 dairy farmers, and when all the packing house interests, with the exception of the two major packing house companies in Canada, joined forces and, upon recommendation by the then Minister of Finance, made an application to the tariff board of Canada, headed at that time by the late Judge Sedgewick, their representations were heard, under application 99. Finally, after many delays, and after requests had been made by the government, there was filed in April of last year a report in which it was stated that in order to help the economy of the Canadian farmer, a duty which I believe rests upon the economists in the Department of Agriculture, something should be done to meet the requests contained in the application.
I say at this time that the administration, the economists and the staffs employed by them did not give to that finding the recommendations it deserved. In my opinion the minister failed to observe the findings of the tariff board in that regard. In not doing so, he failed to look after the interests of Canadian agriculture. He certainly looked after the interests of two large packing houses in Canada as well as the interests of three large soap corporations. According to the records in the parliamentary library, one made more profit in one year out of processing vegetable oils sold in competition with our natural animal fats than they did from all their other lines of business put together. They made their profits from the processing of vegetable oils costing four, five and six cents a pound which were sold over the counters of our grocery stores for two pounds for a quarter. Importations of these oils amount now to 250,000,000 pounds a year. This large consumer demand has been built up by high pressure advertising over the radio and in the press and by work carried on in our universities and schools. The women of Canada have been made to believe that they must use vegetable oil shortening.

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Those members of this house who belong to the old school well realize that pies can be made by using lard. Our own domestic fats should be used.
I was amazed to learn from a return brought down in this House of Commons that vegetable oil shortening is being used 100 per cent by the dietitians who have charge of the cooking for our troops. I sent the minister a copy of the specifications having to do with shortening, and I should like him to tell me why a specification prepared by the Department of National Defence should state that vegetable oil shortening should be used 100 per cent, and then have the words "lard will not be acceptable" underlined. I know what his answer is going to be, and perhaps I can give it first. It will be said that these oils come from Nigeria, Straits Settlement, the Congo, Africa and other empire countries. During the last twenty years these oils have been improved somewhat by the cultivation of large orchards of palm trees and other trees which produce these products, which are brought to Canada in crude form in tank steamers. I shall not attempt to place my experience as a scientific chemist against that of research chemists, who will contend that these oils are refined and made almost 100 per cent pure. But they are also made inert and the original vitamins are largely removed. They do produce a pure, inert substance which has a high shortening value, and probably a high food value. But in the old days the product came into Canada looking like blackstrap. If lard came out of the packing house looking like that, the inspectors of the health of animals branch would not allow it to go to the edible side of a packing house. The product arrives in Canada in tank steamers running over two per cent free fatty acid. Two per cent free fatty acid is the line of demarcation between the edible and the inedible in our packing industry. The product is then refined and sold to the Canadian public.
These industries are making thousands and thousands of dollars in producing a product which is not native in this country and which is not in the interests of Canadian economy or of Canadian agriculture. These companies are allowed to operate without let or hindrance, and yet they do not pay into the treasury of Canada a fair portion of the profits made on this particular part of their business. Because of the non-action of the present administration they are still carrying on this business-I feel almost like calling it a traffic-without paying a fair share into the treasury.
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I contend that in this connection the administration has not given sufficient consideration to Canadian agriculture. I do not know to whom they have listened, but I have an idea. Certain interests have put before them the argument that because we export bacon, we should import vegetable oil. But these products do not come from Great Britain, where we send our bacon. Palm trees do not grow in Scotland, England and Ireland. These products come from the colonies. In passing, I may add that we have an unfavourable balance of trade to the tune of nearly five to one with the countries growing vegetable oils. We do not owe these particular colonies anything. We certainly owe Great Britain something, and I contend that we should buy all we can from Great Britain. But that argument does not apply to the countries producing Chinese peanut oil, Indian peanut oil, Nigerian palm oil and Straits Settlements coconut oil.
In the main, Mr. Chairman, the Department of Agriculture has neglected to get on the side of the farmer in this particular instance. In this year of war, if all other considerations had been put on one side, something might have been done. These imports would not have stopped; 250,000,000 pounds would still be coming in. If an exchange tax against the United States is good business; if it is going to raise $65,000,000, the recommendation of the tariff board which was placed on the table of the house in April, 1939, should have been given effect, and into the treasury of Canada would have come this year between seven and ten million dollars, and into the pocket of the primary producer who is putting lard on the hog's back would have come at least another half-cent a pound for every hog produced in Canada. I agree that there will be more than six million hogs this year; there may be eight millions; and, calculating the return at half a cent a pound on 200 pounds per hog, the resulting payments to the Canadian farmer would have been of some advantage to him. The honest packers, getting a few cents more for their lard, would have given the farmer all the extra coppers they received. They do that; that is a habit of theirs, and this money would have been passed to the primary producer. What would it have cost the consumer? Not much more. I doubt if it would have cost him any more. I am of opinion that shortening made from vegetable oil would still be selling at two pounds for a quarter. So much for the edibles.
As regards the inedibles, although my notes are on my desk in my office and not here, I know whereof I speak. I saw in this city
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of Ottawa a specification, drawn by, I believe, the purchasing standards committee with reference to soap. Soap is a product made from inedible fats which are produced by the hog and the steer, and also, more particularly in the last decade, provided by the Ethiopian who climbs up a palm tree to cut down the palm fruit. I find in a specification drawn in Ottawa for soap to be used by our boys who are at present serving in the army, that the soap must not have a titre of more than 25 degrees centigrade, "titre" being the freezing point or the point at which an oil crystallizes. Take an oil; put it in a flask and warm it up; let it cool down by packing it in ice, and the mercury in the thermometer will run down until it touches a point at which the oil crystallizes. Water, of course, freezes at 32 degrees fahrenheit, and the mercury in the thermometer will remain rigid at 32 until all the water in the flask crystallizes. The titre is determined by the crystallization point of fat. In the animal kingdom fats crystallize at anywhere from 33 to 46 degrees centigrade. Neat's-foot oil, for example, will crystallize at about 33 degrees centigrade; Australian mutton tallow, which is the hardest tallow produced in the animal kingdom, crystallizes at about 46 degrees centigrade. In the vegetable kingdom, we find peanut oil crystallizing at 18 degrees centigrade; palm kernel oil at 20 to 22 degrees centigrade, coconut oil at around 25 degrees centigrade.
The specification to which I have referred- 2-G.P -17-1940-requires that soap be made from fats or fatty acids which titre 25 degrees centigrade-which means that soap to be used in Canada by our troops cannot possibly be made from the fat of Canadian steers or Canadian hogs. Producers must use vegetable oil; manufacturers cannot use animal fats to meet the specifications of our friends the standards committee. Never in the history of the industry has it been found necessary to use entirely vegetable products for this purpose. Ever since soap was first produced it has been recognized that fats from the animal kingdom are used to make a first-class toilet soap. Somehow, for some reason, soap manufacturers must use the residue from the production of shortening. You put your stock in the kettle, alkalize it, and down to the bottom of the kettle goes the inedible portion which is used for soap. The clear oil runs off the top; it is then hydrogenated and brought to a consistency equal to that of lard; or, if it is going to be used in the place of butter, it is brought to the hydrogenation point where it will be of the same consistency as butter. But in the bottom of the kettle we find the residue, the inedible portion which

is used for soap. In the government specification for soap is the requirement, in effect, that it must be vegetable oil. The Canadian farmers tallow and lard cannot comply with official requirements. Therefore the big five who import, in spite of the tariff board's findings under application No. 99, 250,000,000 pounds of oil into Canada each year free of any tax, enjoy the entire business, and Canadian farmers, unorganized as they are against these five who are organized, must just sit outside. That condition applies in connection with the edible as well as the inedible fats. I charge the Department of Agriculture and its economists with not having given consideration to vital Canadian products.
I grant you that we must buy from Britain. I have said so time after time; I hope to say so again. But let us give the Canadian producer of agricultural products, especially when he has been fair enough to go through all the routine of an application to the board and has won his case against the big industries, a fair chance and a fair break.


James Garfield Gardiner: Mr. Chairman, this is, I believe, the tenth time that I have listened to the speech which we have just heard.


Joseph Henry Harris: On a point of order, Mr. Chairman, I have this evening approached this problem in an entirely different speech, and I appeal to the chair to ask that the minister look up the reports.


James Garfield Gardiner: I have them before me.


Thomas Vien: Does anybody desire to speak on the point of order? In my opinion there is no point of order. The minister has not referred to speeches delivered during the present session. What he said was that he had heard that speech of the hon. member about ten times.


Joseph Henry Harris: On a point of order, inasmuch as I made a speech previously on the same subject, I deny that the minister heard the same speech on a previous occasion. I ask him to accept my denial.


Thomas Vien: It is only a question of fact on which the minister may have his own opinion.


James Garfield Gardiner: The only detail in which I may have been wrong is in the number of times I have heard it. It has been delivered at least twice every session since I have been here and, I fancy, more frequently than that. I have here the records of two sessions in which there was considerable discussion of the matter. On the first occasion on which it was considered after I came here, it was discussed in consequence of an interview which had taken place in my office between the hon.

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member for Danforth and myself, and I had occasion to read into Hansard at that time the correspondence that had taken place between myself and some of the persons whom the hon. gentleman has been attacking to-night.


Joseph Henry Harris: Mr. Chairman, I made no attack on anyone.


James Garfield Gardiner: My hon. friend made his speech and he will have sufficient opportunity in committee to make another one when I have finished.


Joseph Henry Harris: I object to the word "attack".


James Garfield Gardiner: I shall leave it to members of the committee to draw their own conclusion as to whether my hon. friend was attacking anyone, when he has repeated over and over again, in the time he has been discussing the matter, that the officials of this department have been under the control and influence of packing houses in Canada. That is the type of charge which the leader of the opposition on a previous occasion asked me to be kind enough to answer in this house, when he pointed out to me that the officials of the department could not be here to speak for themselves; and when a member of this house rises in his place and attacks officials with regard to something which, after all, is not a matter for the officials to deal with at all but something which is purely a question of policy, if anyone was to be atttacked it should have been the minister of the department and the government as a whole and not the officials.


Richard Burpee Hanson: And I thought those were the ones he was attacking.


James Garfield Gardiner: He repeated over and over again that the officials of the department were lobbied by the packing houses, and influenced in the recommendations they made to the government and to the minister, and that the minister was influenced in the recommendations he made by the representations of the packing houses. My hon. friend knows better than that. He has discussed the question on at least ten occasions in this house during the last five years, and at other times in briefer form than he has done to-night; but he has discussed it at length on at least the number of occasions I have suggested; and on each occasion on which he has discussed it the Minister of Finance of the time has taken the question up, debated it fully with him and told him exactly what the position was at that particular time, and the report of the tariff board in regard to the question, along with other matters related thereto.


Richard Burpee Hanson: That was only a year ago.


James Garfield Gardiner: This was in 1937. The first record I have is 1937, and in this report the Hon. C. A. Dunning, then Minister of Finance, replying to the hon. member for Danforth, made the following statement, as reported at page 1928 of Hansard of March 18 of that year:
Well, I went to England to negotiate this treaty. Obviously the British people were interested in continuing free entry into Canada of a commodity such as this which, from their point of view, was an important export commodity. The fact that they import the raw material from India or Egypt does not lessen their desire to obtain a market for the refined product they derive from that material, and I did not offer any great difficulty in agreeing to continue free entry of these vegetable oils, not merely those included under this item but also those dealt with in the three or four succeeding items.
On the next page, 1929, he is reported as follows:
I may point out also that what we are considering here to-night involves not only free entry under the British column, but also a ten per cent duty against intermediate countries. There is nothing in the agreement to prevent us from increasing the intermediate and general rates at any future time if in the judgment of the parliament of Canada that should be a desirable thing to do.
In the next column on the same page he says:
The board gave it wide publicity . . .
He is referring here to the point I am making in relating the history of the matter. It became public, of course, that the Minister of Finance had granted a reference to the tariff board with respect to vegetable oils coming into Canada, and Mr. Dunning made this Statement:
The board gave it wide publicity, and invited the public and those particularly interested to come to give evidence. What resulted? I will tell the committee, just to show that there is another side to this question. No less than sixty members of this house-more than sixty- wrote me protesting against any idea of putting a duty on these imported vegetable oils, and conveying to me resolutions by the hundreds from all the bakers in their constituencies, from all the laundry people in their constituencies, and from others interested in the use of this commodity. I repeat, there were no less than sixty members, regardless of party.


Joseph Henry Harris: Lobbied.


James Garfield Gardiner: My hon. friend said the lobbying was carried on by packing houses.


Joseph Henry Harris: Certainly it
was.


James Garfield Gardiner: The lobby that was
put on was put on by members of the house after discussion with certain people, bakers and others throughout the dominion, who had been interested in this particular matter. May

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I point out that there has been no duty on vegetable oils, because of an agreement with Great Britain. My hon. friend is aware of the fact that in 1939 when this question was under discussion the same Minister of Finance, Mr. Dunning, told him at that time that he was as anxious to get more revenues for Canada as was the hon. member for Danforth; and my hon. friend to-night, in the last few sentences of his remarks, refuted everything else he said in his address when he made this statement- that if you do put the duties on, vegetable oils will continue to come in and you will get the revenue. He now shakes his head, "Yes," agreeing with that statement. Well, if that statement is true-


Joseph Henry Harris: Mr. Chairman-


James Garfield Gardiner: The hon. member will have plenty of time in which to reply. I did not interrupt him when he was speaking. If vegetable oils continue to enter Canada in the same quantities-


Joseph Henry Harris: I did not say that.


James Garfield Gardiner: My hon. friend said that it would not make any difference, that vegetable oils would continue to come in, and that we could only get revenue for this country if they did continue to come in. His whole argument in 1939, part of his argument the other night, part of his argument to-night again, was to the effect that Canada could make money for the treasury by taxing these vegetable oils which were coming in, and that it was only to the extent that they did come in that they could be taxed. If his statement of a few moments ago was correct, namely, that these oils would continue to come in, and that it would make no difference, then there would be just as much vegetable oil used in Canada for shortening purposes after the act as there would have been before the act. His whole argument in 1939 was an argument for the collection of revenues for Canada by having these oils taxed if they came into this country. When he argued in that way in 1939, the Minister of Finance of that day said he would consult with Britain and ask them if they would relieve us from the terms of the previous treaty and permit of a tax being placed upon these vegetable oils to the extent advocated by the hon. member for Danforth. My understanding is that such consultation was had and that the British government were anxious to maintain this eighty per cent of all the vegetable oils entering this country coming from Great Britain. I have before me, in the records of the session

of 1939, page 2157, the statement of Mr. Dunning. Mr. Stevens said, "Not from the United States." Mr. Dunning replied:
No. Something like eighty per cent of our total imports comes from British countries. At any rate, we do not face the problem unless we take into consideration the fact that the great bulk of our imports is from the United Kingdom and British colonies. I have here the figures showing our imports.
And he went on to give a statement of the amounts, and then continued:
The item from China would not he affected by the British agreements of 1932. A small proportion of the whole comes from the United States. However that may be, everyone who is looking at the problem in the manner in which my hon. friend the member for Danforth (Mr. Harris), who has presented it on former occasions-
The former Minister of Finance referred to the fact that the hon. member for Danforth had presented this case on a number of occasions.
-looks at it, recognizes that it is a very difficult one to deal with tariffwise, as indeed the hon. member for Dufferin-Simeoe acknowledged.
That simply means that this is one of the products which Britain asked Canada to consider in the trade agreement, made first I think in 1932 and renewed in 1936 and when it came up again at the end of the three-year period. Britain has been concerned about our permitting vegetable oils to come in under that agreement, because of the fact that she takes so many of the farm products and other products of Canada, and she desires to have this volume of these oils continue coming into Canada in order in a small way to help balance the trade as between Great Britain and this country. Why does my hon. friend year after year and session after session say that the only reason why this is done is that some packers are making a lobby on parliament and importuning hon. members and succeeding in that lobby as he said with as many as sixty members of this house? My hon. friend knows better than that; he knows that the calibre of this house is different from that. Lobbyists may approach sixty members of this house and argue with them as to whether this or that ought to be done, but 'hon. members have sufficient intelligence to come to their own conclusions and act accordingly.
But I think my hon. friend gave the real reason why this question concerns him so much, why he continues to talk about it here session after session and why he lays the blame on someone rather than giving the real reason. He stated a moment ago that

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there had been a change during the last decade in soap making and in the substances that enter into the production of soap. That may have something to do with the matter. I do not think any business man in Canada engaged in any line of business the earnings of which may be changed because of changing world conditions and scientific developments, should lightly, under the protection of this house, attack others because they present their case to members of the House of Commons. When they do so, it should not be intimated that hon. members can be influenced in any manner otherwise than in the interests of all the people of Canada. The only argument that has ever been presented in this house on the part of the government in favour of continuing to maintain these vegetable oils on the free list is the argument that it is written in the agreement with Great Britain, and Great Britain considers it of value to have it there and wants us to trade with her in these oils, while at the same time she has been prepared to take the very farm products, in regard to which we are said to be acting in a manner detrimental to the farmer, into her own market in considerable volume.
I wanted to say that on behalf of the officials of the department that I have administered during that time. This was a matter which was dealt with in London by the Minister of Trade and Commerce and by the Minister of Finance at the time and, I presume, was dealt with by the previous government in the treaty negotiations of 1932, although I have not traced it back to see whether that is the origin of this question. In any event it has been dealt with from time to time as that trade agreement was renewed.
I am in agreement with my hon. friend when he says that during this period of war as well as at all other times we should use Canadian farm products as far as possible, not only in feeding our people but in conducting any of the other activities of this country. I believe it was a mistake-and I do not know whom I am blaming when I say this-for anyone to place in a requisition the statement that tenders would not be accepted for lard. On behalf of the officials of the department I administer, I say that those officials made representations to that effect immediately that requisition came out. Hon. members will realize that, working as we are under pressure in connection with war services and attempting to obtain food products for the many camps being operated in Canada, all details of that kind cannot possibly come before the ministry and do not necessarily come before the departments. We are attempting to do what the public has said we ought to do. I do
not know who is responsible for requisitions of that kind; I have not been able to trace the matter back that far.
But we have been asked to place as many of these matters as possible in the bands of men who have been carrying on business. We selected the best men we could find. They have administered the affairs of the branches of which they have had charge, as the Minister of Finance said, in a most commendable manner, and they would be the first to say that, having been associated with business all their lives, having had to do mostly with the things that concern themselves and their companies, they might occasionally make a mistake in dealing with a matter than concerns the public generally. I venture to say that if it was one of those very successful bakers who thought he always ought to have vegetable oils on his shelves and use them, he would continue to use vegetable oils. Take some of our housewives who like to have a carton or can of some of these shortenings on the shelf and be able to use it knowing it will be good at any time, whether to-morrow or six weeks from to-morrow; if you had one of them putting out these requisitions they probably would continue to do just what they have been in the habit of doing. When these things happen in connection with building up camps and supplying food; when a requisition goes out which is drawn to the attention of the government or any minister of it, the matter is referred back for further consideration in the light of conditions as they exist to-day. I have no hesitation in saying that it was a mistake on someone's part to issue a requisition for the supply of shortening for a camp at Trenton and to specify that tenders on lard would not be accepted, particularly at this time when it is most difficult to get rid of our hogs in Canada.
As I said a moment ago, I wanted to make this statement in order to clear the officials of my department of the charges made a few moments ago by the hon. member for Danforth. I would also point out to him that the officials of this department probably have received as much criticism from packing houses throughout Canada as they have received from anyone else, if not- more.


Richard Burpee Hanson: They cannot satisfy them.


James Garfield Gardiner: No, I suppose they cannot; and they cannot satisfy a great many other people, either. As a matter of fact, it is difficult to find people whom one can satisfy 100 per cent, but they are doing their best. I want to leave it with this committee that the reason suggested by the hon. member for Danforth was not the reason for any action

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taken in regard to vegetable oils. The contract is written into the agreement with Great Britain, and we are carrying out that contract. We do not think this is a very good time to start breaking any agreements we may have with the United Kingdom.


Joseph Henry Harris: I should like to make an observation with regard to the last few words spoken by the minister. No one is asking that any agreement be broken. The agreement specifically declared, I think in article 13, that these matters may be arranged by consultation. I have not the agreement before me, but the minister had it during the previous debate to which he has referred. There is also on record, I believe, a letter from the British authorities stating that they would like to meet our wishes if some other means of doing so could be found.
In regard to the second last point raised by the minister, I appreciate very much the quick action that was taken; but when the minister is surrounded with economists being paid $100,000 a year, I suggest to this honourable assembly that they should be on their toes to see to it that in all these matters the minister is properly advised so that accidents of this kind may not happen again.
The minister referred to Great Britain; then, in the next few words, he was careful to say Great Britain and the colonies. They do not grow palm trees in England, Ireland or Scotland. They do not grow peanuts there, either. They are grown in India and in China, while palm trees are grown in Nigeria. They do not grow coconuts in the British isles; they are grown in Ceylon and the Straits Settlements.


James Garfield Gardiner: But most of it is refined in Great Britain.


Joseph Henry Harris: I am coming to that. It is quite true that it is refined in Great Britain, for the reason that they want the residue for cattle feed, and so on. That is what the residue is used for. Subsequently a great deal of that product, to the extent of
250,000,000 pounds, finds its way into Canada. I said, and I repeat, that it will still find its way here, but perhaps not quite to the same extent. If we could increase the consumption of dairy butter in Canada by 25,000,000 pounds a year, and reduce our imports of vegetable oils by a similar amount, we still would have coming into Canada each year 225,000,000 pounds of these oils. To the farmers of Canada I say that if we could remove the overhanging surplus on our butter market which each year tends to depress the butter

market to the point where our price is on an export basis, we would be doing something real for Canada.
Then we come to lard, of which we did produce some 90,000,000 pounds annually. In the last few years, of course, that production has changed considerably, on account of the export of Wiltshire sides, so I do not want to be held to this average figure of a few years ago. Our annual consumption of lard is about
40.000.	000 pounds, and there is no place to send the surplus. As the minister knows, it is difficult to obtain an import licence in order to permit the shipment of Canadian lard to Great Britain. Certainly it cannot find its way into the United States, unless it goes in at the price of inedible oils. As a result, lard to-day is depressed to a price of about six cents per pound, for which it cannot possibly be produced. The net result has been that it must find its way into consumption largely in Canada. The great spread between the price of vegetable oils and the price of shortening permits high-pressure, intensive advertising. On the other hand the farmer who produces lard cannot afford to advertise his product to anything like the same extent, because the spread is not there. As a result, there is no place for the lard to go except into consumption at low prices. Supposing the Canadian people were able to consume all the lard they produced. That would be a pretty good thing for the Canadian people, because of the natural vitamins contained in this product of the temperate zone in which we live. In my opinion as a scientist this lard, with these vitamins, is far better for us than the nascent, inert, highly refined shortening products coming from Africa.
Even if we were able to consume our entire production of lard that would mean only about another 25,000,000 pounds, and there could still be brought into this country to supply the consumer demand about 200,000,000 pounds of the vegetable oils, as against our own production of 250,000,000 pounds of creamery butter, about 90,000,000 pounds of lard, and perhaps
60.000.	000 pounds of inedible products. That would not be unfair to the colonies.
The minister said something about the processors. I admit that the big oil crushers are in London; I admit that they are very closely associated with a certain Big Five, and I admit that their influence in the economy of Great Britain is strong. In the face of the findings of the tariff board it would be interesting to see the correspondence which passed between them and the high commissioner's office, and between them and this government, in connection with that problem. I am not going to delay the committee in order to go into that

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matter now. I still maintain that the observation made by the minister with regard to the agreement did not go far enough. We can reach our objective by consultation. The difficulty has been removed.


James Garfield Gardiner: The consultation took
place.


Joseph Henry Harris: Quite; and since that time the British government in its wisdom has seen fit to demand an import licence before it would allow our lard into Great Britain. The condition has changed. Since that time we have had no place to go with our lard. Previously to the consultation, as the minister well knows-and I have not the figures before me at the moment, although if I took the time I could find them in the volume in front of me-in the same year large movements involving many millions of pounds of lard found their way on to the British market, thereby relieving the pressure on the Canadian market, and replacing lard from Chicago which for the last forty years had been sold in Great Britain. The British housewife sticks to lard when she makes her piecrust. She still does that. But when in its wisdom, probably in order to conserve exchange, or for some other reason with which I am not familiar, the British government demanded an import licence and shut off
40,000,000 pounds of lard a year entering England, our market was demoralized. So far as that market was concerned, it was demoralized to such an extent that tank cars of edible lard produced from hogs off Canadian farms found their way to the soap factories, and that lard went into the soap kettles to make soap. At the same time we were importing a vegetable oil substitute to take the place of that product. That lard went to the soap kettle at prices as low as five and a half cents per pound. Farmers within the sound of my voice who are listening to what I say must know that they cannot put that lard on a hog's back for five cents a pound.
The condition has changed since the consultation mentioned by the former Minister of Finance. This again emphasizes the fact that some consideration should be given to the matter. I have no apologies to make to this assembly or to the minister for discussing this question. I have discussed it on former occasions, and possibly some of the arguments I made then have been made again to-night. But on this occasion I am impressing upon the administration the necessity for action, so that they may see to it that the farmer in Canada is given every possible protection.
At this time I would answer the other question, respecting the sixty members of parliament. The minister has been in the house 95826-111
long enough to know that members of parliament receive letters from constituents. In the present instance they received them from bakers. What did they do? Well, they just sent those representations to the minister. Is that not what we all do? We just unload on the minister; he has plenty of staff, and he can answer that sort of thing. I have done that; we have all done it, and we will do it again.
The circular went out from manufacturers of shortening to all the bakers in Canada. On the face of it the circular said, "If application 99, dated December 10, 11 and 12, 1936, results in a decision favourable to the applicants, the price of your shortening, Mr. Baker, will be increased by four cents per pound." They had no right to say that, because the application did not ask for four cents a pound. Yet the innocent baker on the street corner was told that immediately effect was given to application 99, the baker would be put to an extra expense, to the extent of four cents a pound. As a result, bakers became nervous.


James Garfield Gardiner: That did not go out from the government.


Joseph Henry Harris: It went to the bakers of Canada.


James Garfield Gardiner: But not from the government of Canada.


Joseph Henry Harris: No.


James Garfield Gardiner: The hon. member has been saying that letters came in here, and that then some notification went to the bakers. I want a clear understanding on what did take place.


Joseph Henry Harris: The minister
spoke about sixty members of parliament. He asked a question, and I am going to answer it. I am going to point to the origin of that propaganda. Bakers of Canada by the thousand were told that their shortening was going to cost them an additional four cents a pound. That allegation cannot be substantiated, because the application did not ask for that increase in price, and any such suggestion was in the nature of pure propaganda. The last paragraph of that communication said, "Write your member of parliament right away and have him protest against this iniquitous processing tax." In pursuance of that they wrote members of parliament. I received a letter from a baker on Danforth avenue, Toronto, who said, "If this iniquitous tax"- as he called it-"is placed on, in accordance with application 99, I will go out of business and into bankruptcy right away. Please stop the tax on shortening." It will be understood that bread consists of shortening to the extent



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of two per cent. Previously bakers were using lard, but the high-pressure salesman of the other product sent expert bakers to the different bakeshops to show the owners how they could bake bread containing vegetable oils rather than lard. Bakers had their bread baked free for a month by the people who were selling oils, and as a result those bakers changed their formulae to one including vegetable oils. That is an illustration of the system, and the propaganda used.
The bakers wrote their members of parliament who, in turn, deposited the letters on the desk of the minister. The minister in turn looks at our signatures and observes that a member of parliament is protesting. But it must be remembered that those protests came from the bakers, and that they, in turn, were prompted by the industries who, in the first instance, refined the oil. That is the history of the situation with respect to vegetable oils.
We will let it go at that. But before resuming my seat I say that, despite all the picayune interpolations of the minister respecting charges, and so on, in the interests of Canadian agriculture serious consideration should be given this problem. In the second place, in the interests of Canada I say that the economists in the Department of Agriculture should not only give consideration to the problem as presented to them, but also give a lift to the farming communities in Canada, and bake off the Canadian market by legitimate means an overhang of 50,000,000 pounds of lard a year.	.


Thomas Clement (Tommy) Douglas: Would the minister give the committee some information respecting the marketing of pork products, under the bacon board.


James Garfield Gardiner: I wonder if the hon. member would follow the suggestion I made a few moments ago, and ask his question on the item respecting live stock, when the officials of the board will be here to assist me.


Thomas Clement (Tommy) Douglas: I am prepared to do that.


Some hon. MEMBERS:: Carried.


Richard Burpee Hanson: No; I want to say a word before the item carries.


Mr. WOOD:: Mr. Chairman, I think there is considerable misapprehension in connection with the administration of the bacon board.


John Ritchie MacNicol: Would the hon. member mind speaking a little louder so that we can hear him?
(Mr. J. H. Harris.]


George Ernest Wood: I appreciated the technical
address given by the hon. member for Dan-forth (Mr. Harris), and I am glad the other member from Toronto, the hon. member for Davenport (Mr. MacNicol), is anxious to hear my remarks. I have a kindly feeling toward the members from Toronto, and I am glad to hear them champion the cause of the farmer. But I have always been taught to beware of gift-bearing Greeks.


Richard Burpee Hanson: It is, the Greek bearing gifts.


George Ernest Wood: My knowledge of the classics may not be as up to date as that of the leader of the opposition, but as long as he understood my meaning it is all right. 1 can remember in 1937 when ladies in Persian lamb coats paraded in Toronto protesting against a price of forty cents a pound for butter. I always look upon any advice from Toronto with a certain element of suspicion, and I am inclined to take that view to-night with regard to the hon. member for Danforth. There is no question about what he said with regard to the consumption of vegetable oil having a bearing upon agriculture. But this matter is closely associated with the bacon industry. The hon. member and his desk-mate, the hon. member for Haldimand (Mr. Senn), 'have been championing the cause of the farmer from the point of view of the production of vegetable oils and bacon.
If I remember correctly, under the empire agreements vegetable oils were put on the bonded list on the understanding that the other countries of the British empire were to take Canadian farm products. I was led to believe that these were closely associated, but now there seems to have been a change of heart on the part of some hon. gentlemen who are prepared to be quite vicious in their criticism. To me that seems to be hardly consistent. Let that be as it may, I suppose time will change anyone. I think it was Sam Weller who said that all changes were not improvements, referring to the time he married his second wife. Apparently there has been a change of heart on the part of some hon. gentlemen who supported the putting of vegetable oils upon the bonded list in 1932.
I want to say a word or two about the marketing of Canadian bacon. The hon. member for Haldimand said that in 16 months a total of 46,000,000 pounds of this product had been imported. I shall accept his figures because I assume he obtained them from the bureau of statistics. That importation would probably represent a value of about $2,500,000.

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But we should remember that we exported about $15,000,000 worth of meat products in the form of beef, dairy cows and calves. I have before me the live stock marketing report which states that in 1939 up to December 28, we exported to the United States 178,102 beef cattle, 13,000 dairy cattle and 80,173 calves.


Karl Kenneth Homuth: What would be the value in dollars?


George Ernest Wood: I assume about $15,000,000.


Karl Kenneth Homuth: Surely not.


George Ernest Wood: I think that would be an approximate figure; there is no tabulation given here. The Canadian market was relieved of that amount of beef products, which naturally created a demand for other meat products in the form of bacon. By reason of that fact the Canadian farmer enjoyed a price of three cents a pound additional to that obtained by his American cousin just across the border. In my opinion that one fact should justify the existence of this bacon board. It is true the price received is not as good as we should like to see it, but I think the hon. member for Haldimand will admit that the Canadian farmer has received more for his bacon than was received in the United States, where the farmers had to meet world competition. I think this fact ought to be kept in mind. Considerable propaganda is sent out among the farmers, and this has a tendency to embitter them against the bacon board. That board is human and is liable to make mistakes, but in the last analysis I believe their action has put millions of dollars into the pockets of our farmers.
There is another aspect to be considered. It is true that we did import a certain amount of United States bacon, but what did that mean? It meant that the consumer was placed in the position of getting his bacon a little cheaper, and we were able to export our Canadian bacon. We had at higher prices the paradox of the farmer getting more and the consumer paying less. It is difficult to legislate to have that condition of affairs exist, but I think the bacon board has been successful because of the accomplishment to which I have just referred. I only hope that the next deal put through by the bacon board will be equally advantageous. I must admit that I have not been able to see just how the disposition of our surplus can be handled. I expect to continue to raise bacon and I hope to participate in the benefits next year, even though I did not get any this year. Sometimes criticism gives only enough of a story to make the people believe what we want them to believe.
In March the hon. member for Haldimand spoke over the radio and condemned the 95826-1111
administration of the bacon board quite vigorously. I had an opportunity of making a reply to his remarks. I think he said some of the things which he did because he was not familiar with the operations of the board. I believe it is our duty as members of parliament not to try to undermine the government in these serious times. I believe every effort is being made to help agriculture, and our farmers have been getting more because of the actions of this bacon board. I remember that during the last war, despite the protests of the hon. member for Danforth, oleomargarine was placed on sale in this country. While I am not trying to justify the present condition of affairs by relating that fact, I do want to say that certain hon. gentlemen who criticize the administration should first see that their own doorsteps are absolutely clean.
I am interested in the problems of the farmer. But I think it is an unfortunate thing to undermine his confidence when to-day, as I know just as well as anyone, he is struggling with low prices. He is supplying the needs of the nation at less than cost. We should like to get more for our bacon, but the old country drives a hard bargain, and we have to compete with United States bacon. In going into the bacon industry, farmers have probably made the same mistake of overexpansion as was committed by the fanners of the west in connection with wheat growing, because, for every hundred hogs raised a year ago, a hundred and fifty are raised to-day. Eventually the law of supply and demand must prevail, and I hate to think what might happen to the farmer in the bacon industry if the bacon board had not been in existence.


Richard Burpee Hanson: Mr. Chairman, I have no desire to engage in any acrimonious debate over this question of vegetable oils. The hon. member for Danforth, no matter how many times or in what form he has raised the question, has served a useful purpose in keeping it before the minister and the public.
I think I know a little about the matter, although not as much, perhaps, as I might. I know that the British government were anxious that we should take a certain portion of this product, under the Ottawa agreements, to assist some of the British crown colonies, but I suggest that it never for a minute was imagined that importations would grow to such dimensions as they have done during the intervening period of eight years. No one ever anticipated that the consumption in Canada of vegetable oils from the British crown colonies would equal our butter, consumption. If we had, I am satisfied that no one would ever have agreed to an unlimited quota.

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What I think the minister ought to do-and I believe that by judicious handling of the proposal he could secure some concessions from the British government even though Mr. Dunning failed in 1939-is to arrange with the British government to have a quota placed on these importations into Canada at this time because of the economic conditions surrounding the production of butter in this country. We all know that if Canada produced only enough butter for home consumption the farmer would get, except perhaps in the case of a scarcity, a better price than he receives under present conditions. Just as soon as there is a surplus of Canadian butter, down goes the price to the primary producer, and we hear about it from one end of the country to the other. We heard about New Zealand butter in 1930. I ran an election that year upon that issue and it brought me a good many votes; the government of the day heard about it, too.
If this is a practical suggestion I offer it as such, and in the utmost of good faith. Something must be done to cure the situation with regard to the consumption of vegetable oils in Canada. I have no antipathy to the packers as such, but I do not think that anybody needs to defend them. It has been my experience that they are quite capable of looking after themselves, and they have done it very well, much better than the unorganized farmer can do. We need not care about them; they can look after their own interests. But it is the duty of the minister and his department to protect so far as circumstances will permit the marketing and consumption of animal fats in Canada, whether in the form of butter, lard or what-not.
The minister has-very fairly, I am bound to say, from my knowledge of the situation- stated what the difficulty is. It is the provision in the Canada-United Kingdom agreement. But inasmuch as the British government have limited the importation of some of our products to a quota basis, have put on a licensing system, I think the time is opportune for the minister to apply to the British government to place a quota on vegetable oils coming into Canada and so greatly to reduce the quantity. Two hundred and fifty million pounds of vegetable oil is an astonishingly large quantity to be absorbed by a country which is a butter and lard producing country. If the volume could be reduced to somewhere near the amount of the importations in 1932 or 1933, the whole question would disappear. There is no doubt that by intelligent propaganda and instruction and by putting this commodity on the market at a price
(Mr. R. B. Hanson.]
greatly below that of animal shortening, the consumption of vegetable oil has been stimulated, but I defy anybody to say that it is as good for the health of the men, women and children of Canada as animal fats.
I remember a debate in this house in 1932 on the question of oleomargarine. The hon. member for Brant, I believe, referred to it to-night. It was a rather free-for-all affair, but a very interesting debate; oleomargarine was called a spread or a smear. As a new member and not an agriculturist, and coming from a section of the country where, at any rate up to the time of the war, I do not suppose we ever imported any oleomargarine, and never to my knowledge having seen oleomargarine either then, before or since, because I never had it in my house, I decided that as for me, as a matter of principle I would have to stand by the old Canadian cow. I have never removed myself from that position, and I am with the Canadian cow to-night.
I do not want to see this descend to a political dogfight between the hon. member for Danforth and the Minister of Agriculture. It is too serious a matter from the point of view of the Canadian farmer. The suggestion I make to the minister is that the time is opportune to approach the British government, having regard to what they have been obliged to do in the way of restrictions on some of our exports, and ask them to take such action as will lead to lessening in substantial degree from year to year the quantity of this product which will be imported into Canada, I confess that I have not perused the 1939 agreement, but I believe that it contains a provision for the approach by the one party to the other to adjust just such matters as this as and when they arise. I know that between 1932 and 1935 adjustments were made at the request of either party. They sat down round a table, discussed the matter and usually arrived at an agreement. The minister had a chance, I believe, to do something for the Canadian farmer and the Canadian cow.


Mark Cecil Senn: I do not want to take very much time in a further discussion of this subject. It may come up again at a later date when another item is under discussion. I did, however, listen with a good deal of interest and attention to the exchange between the Minister of Agriculture and my desk-mate the hon. member for Danforth. I thought that the minister paid him rather a compliment in mentioning the number of times the hon. member had brought this matter before the house. In the first place it shows that he is persistent. In the second place it shows, as a good many hon. members on all sides of the

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house believe, that the subject of the importation of vegetable oils for use as shortening, in place of lard and other animal shortening, is one of major importance.
The minister rather criticized the hon. member for his suggestion that the officials of the department had been subjected to representations by the packing houses. I do not think there is any doubt that there is a systematic lobby of the Department of Agriculture. There is no doubt a certain amount of lobbying among the officials of the department from farm organizations of different kinds. Both are perfectly legitimate and no fault can be found with them. However, I am in accord with what the leader of the opposition has said, that undoubtedly representations made by representatives of the big packing interests are much more carefully prepared and are much more thorough in every way than representations made from time to time by various farm organizations.
There is another phase of this matter so far as the recommendation of the tariff board is concerned. It was not proposed to put a direct import tax upon the importation of vegetable oils. The proposal was rather to put a processing tax on these oils after coming into the country, and that is a decidedly different matter from the imposition of a tariff of three cents a pound.


Karl Kenneth Homuth: And it does not interfere with the agreement.
Mr. 8ENN: It would not interfere with the real terms of the agreement as they appear on the surface. Of course, it might be interpreted by the British government or by the people of Great Britain as a substitute for such a tax. I have no doubt representations were made to the British government last year as to the desirability of obtaining their consent to some such action, but I have often wondered to what extent those representations were carried. Were they insisted upon, or was the proposal merely put up to the British authorities without any particular argument in its favour or any pressure being brought to bear? I am inclined to doubt that any pressure was exercised, because, had there been, the British authorities, I believe, would have acceded to the request. There is no doubt that the use of vegetable oils to the extent to which they are used in Canada to-day has a bearing on agriculture. Even the hon. member for Brant will agree with that. In fact, he did agree that it has a detrimental effect upon agricultural production particularly in the matter of live stock.
The minister had something to say about a requisition for the use of vegetable oils rather
than lard and he spoke as if it was some isolated matter. My hon. friend the member for Souris placed on the order paper a question asking whether vegetable oil shortening was furnished the Canadian army in place of lard and other animal fats and the answer was, "Yes." He asked a second question: "If so, to what extent?" And the answer was, "One hundred per cent." Therefore that same requisition must have been going on for some length of time. I do not know to what length of time that 100 per cent refers, but unquestionably it has been for a considerable time.
Something was said about the large consumption of vegetable oils and the growing favour in which they are held, and this was attributed to intensive advertising. I will offer a suggestion to the administration and particularly to the marketing branch. It is this, that some kind of intensive advertising should be carried on by the department, or at any rate initiated by the department, in favour of lard and animal fats of different kinds. I have in my hand a certain amount of advertising which is being done by the national live stock and meat board of the United States along that line. They recognize the seriousness of the encroachment of vegetable oils and are undertaking a campaign in favour of animal fats. I throw out this suggestion to the marketing board in the hope that they will consider it and do something along that line, because it would be of great benefit. This particular line of advertising shows distinctly that lard is just as good a baking product as vegetable oils, and in many respects better.
May I now refer to one or two other matters that were mentioned by the hon. member for Brant. I must deny one of the statements he made. He said that I was on the radio during the campaign and accused the bacon board of certain things. That is hardly correct. In a way it is offensive. I did criticize the importations of United States pork into Canada, but I never charged the bacon board with responsibility for that, because they are not responsible for it. They had nothing whatever to do with the matter. It came as a matter of course because it could be brought in more cheaply. But I do criticize the administration, and I did criticize them at that time, for not taking advantage of the very method they adopted later on in getting a quota established and keeping cheap pork out of the dominion, as it should have been.


George Ernest Wood: Does the hon. member know that the change had already been made when he made that speech?

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Mark Cecil Senn: Yes, and I mentioned it in the speech, but I said it should have been done earlier. I remember distinctly the discussion that took place on oleomargarine. My leader has referred to that discussion. At that time there was a quantity ranging from five to ten million pounds, in the two or three years from 1921 to 1923, which was imported into Canada and used here; and yet that small quantity was regarded as a sufficient menace to the live stock industry of the country to have the product finally prohibited in any form. That is vastly different from the quantities of vegetable oils used in Canada to-day.
My hon. friend said something about the law of supply and demand governing prices of agricultural products. That is quite true. It is true, unfortunately, because when the supply is great, the farmer gets less than cost of production for his goods, and he gets a high price when the supply is small and he has not much to sell. He therefore loses out both ways, and I am beginning to think that some other method will have to be employed sooner or later to assist the farmer in the marketing of his products, and along general lines, because in almost every other line of industry in Canada to-day prices and the return to that industry do not depend upon the law of supply and demand. They are under control in some form or other, and the time will come when something of that kind will have to be done in connection with agriculture if that industry is ever to come into its own.


Mr. McNEVIN:: In connection with the distribution of the fund which has been accumulated by the bacon board from these deductions made in connection with the export of bacon and other hog products to the old country, I believe the hon. member for Souris made the suggestion that in the coming month or six weeks this fund might be distributed. To my mind that is inadvisable. We are now entering the last month or six weeks in the operation of this year's business by the board. From the point of view of the producer I believe the most satisfactory method of distributing that fund would be, after this year's operations have been completed, to distribute it on a pro rata basis among the hog producers who have delivered hogs to the board during the past twelve months. It is admitted now that it is unnecessary to offer additional inducements to increase hog production in the coming twelve months. That matter can well be left with the producers to take care of in the coming year. I believe that the rank and file of hog producers in Canada will be quite satisfied so long as none of this fund finds its way into the pockets of the packers. As I discuss this question with farmers in my district, that is 
the point on which they are definitely interested. They are prepared to take their full responsibility in connection with keeping up the production of hogs. But with regard to this year's operations they are of opinion that, as a definite agreement, under the supervision of the bacon board, was entered into by the Canadian government with the British government, to ship a certain amount of hog products to the British market for twelve months, at the conclusion of that year's operations the packers have received their fair and reasonable share and the producers want to be satisfied that they as producers get their full share. May I repeat that in my opinion the most equitable method to distribute this fund would be upon a pro rata basis among the producers who delivered hogs during this year's operation of the agreement.


James Arthur Ross: I do not think I made the suggestion that the fund should be distributed in the next few weeks. In fact the suggestion of the hon. member for Victoria, Ont. (Mr. McNevin) has my approval. I agree that the hog producers of Canada should not be encouraged to continue producing hogs as was done last fall. I believe the bacon board or the government were responsible for a situation which might be serious if this war lasts for some years, and I am inclined to agree with what the hon. member has just said.


Alfred Johnson Brooks: Not being a farmer, of course I am not supposed to know much about this problem. But since it has been brought up, and because I represent one of the best dairy counties in eastern Canada, and because the town I come from is known as the dairy town of the maritime provinces, I wish to say a fetw words. This matter is of vital interest to daily producers throughout Canada. The thought occurred to me when the hon. member for Haldimand mentioned the processing tax on vegetable oils-and I intended to mention it myself-that this might possibly be a way to protect our dairy farmers and lard producers. I understand it has been tried out in the United States, that a processing tax of three cents a pound was placed on vegetable oils entering that country, which had the effect of greatly reducing the importations of that commodity, with the result that the dairy farmers of the United States received much benefit. I believe that such a tax would have an excellent effect so far as our farmers are concerned.
The minister mentioned trade agreements, and the desire not to change the British empire trade agreements. We in the maritime provinces are 100 per cent in accord with what he said in that connection, because if there have

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been any trade agreements which greatly benefited the maritime provinces they were the British empire trade agreements made in 1932. They gave us an opportunity to sell our lumber and many other products. But the government was not so considerate when the matter of the trade agreement with the United States was under consideration a few years ago. We all remember that as far as apples were concerned, there were made to the United States concessions which, even if this war had not come upon us, would, I am satisfied, have been detrimental to the apple producers in Nova Scotia.
The matter of pork and pork products has been discussed here at great length, and it is not my intention to delay the committee by any further discussion of that. There has been very little said on behalf of the farmers of the maritime provinces in that connection. But if the Department of Agriculture and the minister are serious, as I am sure they are, in wishing to assist the dairy farmers and others in the maritime provinces, there is one way in which this can be done perhaps more effectively than any other, and that is by a reduction in the cost of mill feeds which come from western Canada. We pay anywhere from thirty-five to fifty per cent more than they do in western Canada, and even much more than they pay in Ontario and Quebec. This places our farmers at a great disadvantage. Anyone looking at the production of hogs in different sections of Canada will note that while we in the maritime provinces have the milk and other products which go to the feeding of hogs by reason of this matter of the cost of feeds from the west it is almost impossible for us to compete with the rest of Canada in hog production. I ask the minister to use his influence with the government to persuade them to give us that concession, to which I am sure we are entitled. I sometimes wish that we in the maritimes had the enthusiasm and persistence of hon. members from western Canada who for the last six years have risen in this house day after day, and session after session, arguing for assistance to western Canadian agriculture. I feel safe in saying that per capita the benefits which have been received by the western provinces would be about ten to one compared with those received by the farmers of the maritime provinces.
As I listened to hon. members from the west the other night, I remembered that in one year alone some S60,000,000 I think went out in benefits to the farmers in the three western provinces. We have sympathized with western Canada in her troubles in the way of drought and other serious problems, but we also have our problems, and I am safe in saying that they have not received the attention
nor are they to-day receiving from the Department of Agriculture the attention which the problems of the western farmers are receiving.
As I listened to one hon. member speaking the other night, the thought occurred to me, as it often does when I hear the vociferous utterances of the western members, that very often in their voting they are not consistent with their speeches in this house.


An hon. MEMBER:: Not all of them.


Alfred Johnson Brooks: No, not all; I am referring to some to whom I have listened this session. Some time ago I read a saying that "the wheel that does the squeaking gets the grease." The truth of that saying has never been better exemplified than here in this house. The western wheel is squeaking most of the time, and as far as I can see, it is the western wheel that is continually getting the grease.


George James Tustin: I am in agreement with a good deal that has been said to-night, and I am sure we all recognize the patriotism being shown by the Canadian farmer in doing his part to prosecute this war to a successful conclusion. I make that statement because our farmers are producing at less than the cost of production. The prices of most of their products are fixed by the government. I was interested to hear the minister say that he expected a goodly sum of money to be distributed among the farmers at some future date in connection with the bacon sold through the bacon board to the United Kingdom. I wonder if the minister realizes the staff that will be required to distribute these small amounts among the producers of hogs in this country.


James Garfield Gardiner: It will not take any staff at all.


George James Tustin: A good many times I have heard it said that something will not require any staff at all, but in all the time I have been in this house I have never seen that statement borne out. There is a fixed price for bacon. When the agreement was entered into, the farmers in my community received about nine cents a pound for pork. During the last few months they have received as little as $7.75 per hundredweight for their pork.


James Garfield Gardiner: That is still 2J cents higher than the price across the line.


George James Tustin: That may be so. I was interested to hear the hon. member for Brant state that at least the consumer had been able to buy his pork a little more cheaply because United States pork had been allowed

Supply-Agriculture-M arketing
to come into this country in such great quantities. I ask you, Mr. Chairman, and every member of this house, if you have been able to buy a pound of pork more cheaply because of the importation of United States pork. I say that is not so. There has been no difference in the price the consumers have had to pay for pork in the butcher shops throughout this country.
My purpose in rising, however, was to suggest that if the government is going to fix a price on pork or bacon, then the government should go further and say to the packing industry that they must pay the farmer a set price for his product, instead of allowing a discrepancy of a cent or a cent and a quarter a pound to exist.
I might refer to the agreement in connection with cheese, under which the price is fixed at fourteen cents a pound f.o.b. Montreal or other point of shipment. Since that agreement was entered into a fairly constant price of about 13| cents a pound has obtained on the cheese boards. If that price holds at around 13f cents, I cannot see why the same thing should not apply to the hogs produced by our farmers.


James Garfield Gardiner: Britain is taking more cheese than we can supply.


George James Tustin: That is true; but there is no difference between the price of cheese for Canadian consumption and cheese for export, while there is a difference in the prices paid for hogs by the packers of this country. I suggest to the minister that if we are going to fix prices for bacon exported to the United Kingdom, at least the government should set the price which must be paid to the farmers- by the packers.


Mark Cecil Senn: It has been suggested by the hon. member for Victoria, Ont., and I think supported by the hon. member for Souris, that the deductions from the amount paid for bacon shipped to Britain should be divided pro rata among the farmers. Will it be possible to ascertain the number of hogs shipped by each farmer during the period of this deduction?


James Garfield Gardiner: I do not think it would be possible to get the necessary information in order to make a distribution in that way, even if it were possible to find out how many hogs each farmer sold. A great deal of inquiry would be entailed, involving a considerable cost. I doubt very much if one could even associate -the number of hogs a farmer sold with the bacon delivered either in Canada or in Britain, because such a large percentage of the hogs is consumed in some

other way. I believe the only way in which a distribution could be made to the producers would be on the basis of the hogs sold in future. Probably the same persons would sell hogs, although perhaps not exactly the same number as in the previous year, but I think that would be as close as one could come to it in dealing with the bacon industry. I do not think there should be any great difficulty in arranging at each marketing point for the distribution to take place in connection with hogs coming to that point, although I think it would be impossible to deal with butcher shops and so on all over the country. I believe a distribution could be made on the basis of the sales next year, which would approximate the sales made by producers last year. Most farmers will go on producing hogs, although of course in some instances they may produce fewer or more. However, I think that is as close as we can come to it.
I had intended earlier to make one other observation, which I think I should make now in case I overlook it when the appropriate item is under consideration. Some five or six weeks ago Great Britain announced that the amount of bacon to be used in British homes was being reduced from eight ounces to four ounces per week per person, and a report went across Canada suggesting that this was due to the fact that Britain could not obtain sufficient supplies of bacon from Canada and other countries. We cabled immediately, asking the position and suggesting that we were able to supply considerably more bacon than Britain was taking at that time. We went further and stated that we would not insist on Britain paying the price called for by the agreement. We did not set a price for any further bacon to be supplied; we asked Britain to set a price if she were interested. We received a cable stating that she was not interested; that she was taking all the bacon she could take; that the quota then being imposed had been planned early in the war, or perhaps even before war was declared at all.
While I was home to dinner this evening I heard over the radio an announcement from the department of agriculture in Britain to the effect that they had on hand supplies sufficient to meet their needs for a considerable time to come. But they said they hoped that by winter time they would be able to increase the consumption of fats in Great Britain during the winter months under the quotas provided, in which case I presume they may be able to take more of our bacon supplies at that time than they can take at present.

Supply-A griculture-M arke ting
I say this only to show that every attempt has been made to supply Great Britain with all the bacon she can take. We have even asked her to state a lower price, if she would be interested in a lower price. She said she would not be interested, and has indicated she would not be interested even in further discussion until the month of August. That was agreed to at the time the agreement was signed. I believe I ought to make that statement to hon. members, in order that they may understand that every effort has been made to place at Great Britain's disposal all of the bacon that she can use, even if it were placed there at a lower price.
The other point I wish to make is this: In respect of United States importations I would point out that we took action in that connection just as soon as it was possible to take action, after all the information necessary for action of that kind was available. The figures given by the hon. member for Haldimand at the beginning of the discussion were correct. There were large importations in January, and I believe they ran into the month of February. Just as soon as we were able to secure information upon which to base an appeal to the United States to permit of the setting of a quota, that appeal was made, and after some discussion the United States government agreed to it. The quota set has seldom if ever been reached, since the date it was set. In other words, there has been cooperation on both sides of the boundary line which has kept the importation of the United States product down to at least the quota-and I believe it has been below the quota every week since the arrangement was made.


Ernest Edward Perley: I have listened with keen
interest to the discussion respecting the marketing of bacon, and the vexatious question connected with the importation of vegetable oils. I would be remiss in my duty if I did not make some observations at this time. Westerners have received a crack or two from some hon. members this evening, even from one of my own associates on this side of the house, although I do not think he was referring particularly to me. I intend at this time to come to the rescue of the westerner.
We understand of course that Saskatchewan is not as keenly interested as the other provinces in dairying, but we are intensely interested in the production of live stock, and in the marketing of cattle and hogs. I can assure hon. members that the farmers of western Canada are keenly interested in and greatly concerned about the huge importations of vegetable oils which, we are told, amount to about 250,000,000 pounds a year. Last year
I attended a meeting of dairymen, and the subject of the importation of vegetable oils was discussed at great length. I learn that at a picnic in Saskatchewan held recently and attended by dairymen of that province this question was discussed, and I received letters containing resolutions passed at that picnic in connection with the matter before us.
May I express myself as being in accord with my leader who suggested to-night that a quota might foe arranged. We realize that trade agreements can be changed, and I suggest that the minister would be well advised if he were to consider a change in connection with the importation of vegetable oils. The further suggestion respecting a processing tax is in my opinion a good one. May I briefly associate myself with hon. members who tonight have stated that the importation of vegetable oils is a serious matter and one deserving honest and sincere consideration. I would point out that some of the suggestions made to-night have been worth while, and I should like the minister to consider them carefully.


Mr. WRIGHT:: Mr. Chairman, I should like to take exception to the observation of the hon. member for Royal (Mr. Brooks) who said that the squeaky axle gets the grease. If he would look at the Sirois report he would find that the average income of the farmer in Saskatchewan for the past three years has been just two-thirds that of the farmer of New Brunswick.
However, that is not the only point at issue. This playing one group of farmers in Canada against another group is what is putting agriculture where it is to-day. We in the west are just as interested as are the people of New Brunswick in seeing that the latter get their mill feeds and other feeds at a lower price. The reason why they are not getting the advantage of that price is found in the fact that freight rates on export grain are much lower than rates on domestic grain. If those rates were regulated we would sell more of our grain to the eastern provinces and to British Columbia, and all would be better satisfied.
There have been times when corn could be imported from the Argentine to British Columbia and used by the poultry men of that province, because they could get it cheaper than they could get our wheat. That condition arose because of freight rates, and I suggest that this is a matter which should be carefully considered.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-Agriculture-Marketing
Marketing service.
25. Agricultural economics, $97,895.
George Hugh Castleden: I note at page 73 of the estimates that ten officials of the department are described as agricultural economists. These men are receiving something over $32,900, and despite the fact that this is a war year, some of them are receiving increases in salary. I presume those are statutory increases. Would the minister outline the work of those economists?


James Garfield Gardiner: The increases are of course statutory increases. Such increases have been made all the way through the service this year. Agricultural economists are the men who make inquiries into costs in connection with agricultural production in different parts of Canada. I presume the statement made a moment ago respecting information contained in the Sirois report, and in connection with agriculture in different parts of Canada would be based upon inquiries made by departmental economists. They make inquiries in all parts of Canada respecting costs of production, and returns received by farmers in different sections of the country.


James Alexander Marshall: Was a conference of agricultural economists held last year? If so, who were the representatives from Canada, and where was the conference held?


James Garfield Gardiner: There was no international conference last year at which there was any representation from this department. However, there was representation at a conference held in 1938.


James Alexander Marshall: Where was the conference held?


James Garfield Gardiner: At Macdonald college in Quebec.


James Alexander Marshall: Is it the intention of
the department to hold such a conference this year?


James Garfield Gardiner: That conference of course was not called by the Department of Agriculture at Ottawa. It is held in different countries in different years. In view of the world war I presume there might be some difficulty in connection with arranging an economic conference of that kind at the present time. Last year an invitation was sent by the Canadian government to the international organization to hold the conference in this country, and as a result representatives from different countries gathered at Macdonald college.


[Stage Direction]
Item agreed to.

Marketing service.
26. Dairy products, $355,452.
George James Tustin: A moment ago I referred to the bonus price on cheese. As I understand it now, the United Kingdom government are ready to purchase a considerably increased quantity of cheese. I should like to know what endeavour is being made to encourage a greater flow of milk to the cheese factories in order that we may be able to produce more cheese. I should like to know also what score applies on grade one, which I understand is quoted at fourteen cents a pound f.o.b. boat, Montreal.


James Garfield Gardiner: The basis of that price is score 92. A premium of one cent a pound is paid by this government for score 93, and a premium of two cents a pound for score 94, which increases the price of those grades of cheese. Information and publicity have been given out to the effect that Great Britain is prepared to accept more cheese. Encouragement was given by the act last year to improve factories, and the government agreed to pay a premium on the higher grades. I may say that we are a little hesitant to drive the matter as far as it might appear to be advisable at the moment. Great Britain has persistently insisted that she will not state a quantity which she will agree to take. We had some experience in connection with bacon. Great Britain agreed to take
5,600,000	pounds a week, and she actually took as high as 11,000,000 one week and 10,000,000 pounds in a number of other weeks. Some of our people became a little too optimistic and began to think that she was going to continue to take that amount throughout the whole year, and they went on to make arrangements accordingly. We do not expect to have the same results with cheese, but we hesitate to encourage the farmers to produce more. It does look as though cheese will take care of itself much better than any other product with which we are dealing at the moment.


Major James William Coldwell: The farm broadcast at noon to-day stated that an inventory of the cheese resources of the dominion was being taken, to be divided between the amount available for export and the amount being held for domestic consumption. I wondered if some arrangement had been made with Great Britain to furnish an additional quantity of

Railways and Shipping-Second Report
cheese over a period of time. If that could be done, it would obviate the difficulties which we ran into in connection with bacon.


James Garfield Gardiner: We have been making an effort to get an arrangement of that kind. As a matter of fact, the initiative to get the amount increased came from here rather than from the other side. We have been suggesting to them from time to time that we could increase the quantity, and we have now had word that they are prepared to take greater quantities. But they decline to state any specific amount, even for a month's time. They tell us to keep on sending cheese, to increase the amount, and they will be prepared to take it. But they are not prepared to enter into an arrangement to take a larger amount for any specified time. That is one of the things which makes us hesitate a little about preparing unduly for that market. At the same time, we would hesitate at the moment to do anything which might stop our farmers from increasing their production.
The representatives of all provincial departments of agriculture met to-day in the Chateau Laurier with representatives of the dominion Department of Agriculture, and meetings will be held for some days this week. These questions have been discussed, the idea being that the officials of the different departments will go back to their provinces and circulate any information which it is found possible to give them at this time in connection with farm products, and particularly those which we have been discussing to-night.


Major James William Coldwell: Great Britain has
entered into agreements with other countries in connection with sugar, coffee and so on. I feel sure it is the wish of everyone in Canada to supply Great Britain with what she needs in the quantities she needs, but in fairness to the agricultural producers I think that government should adopt some system in older that our economy may not suddenly find itself faced with large surpluses. These would cause a certain dislocation in this country and render a disservice, not only to Canada but to the whole commonwealth. I am glad to know that the first suggestion came from this side, but it seems to me that this government should impress upon the British authorities the need for a careful study and understanding in order to protect our own economy as well as theirs.


Ernest Edward Perley: What cheese was imported into Canada during the first six months of 1940, and where did it come from?


James Garfield Gardiner: The only cheese coming into Canada particularly at this time is fancy
cheese which we do not produce. The quantity is small, and I understand it is even smaller than usual this year.


Ernest Edward Perley: In the July letter which was in our mail boxes this evening it is stated to be about 800,000 pounds.


James Garfield Gardiner: That would be a small amount.


Robert Fair: When entering into agreements with the British government in connection with cheese, pork and other products, does the government take into consideration the cost of production?


James Garfield Gardiner: We take that into consideration as far as possible, but at the present time we feel we are fortunate if we can sell at the prices we are receiving, in view of conditions existing. We feel this is better than trying to press up the price. In connection with cheese, we feel it is to our advantage to have a greater volume, and the same would probably be true about bacon at the moment.


Robert Fair: The minister suggested a little while ago that the government had been negotiating with the British government to take more pork, even at a lower price. I was wondering whether they are getting too much at the present time.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, July 19, 1940

[Stage Direction]
Third report of standing committee on banking and commerce.-Mr. Moore.
First report of the joint committee of both houses of parliament on printing.-Mr. Dupuis.