1957-12-07

[Stage Direction]
On the orders of the day:
Hon. James Sinclair (Coast-Capilano):: Mr. Speaker, I would like to direct a question to the Minister of Finance. When the minister next brings his estimates before the committee of supply will he table for the information of the members and the public a breakdown of the $64 million savings, economies and shortfalls claimed in his budget speech last night, the breakdown to be by departments and numbered items in the blue book of estimates?


Hon. Donald M. Fleming (Minister of Finance):: Mr. Speaker, I indicated yesterday and I think on one previous occasion the method by which this information will be given to the house. As the estimates of each department are brought before the house the minister of the department will indicate where the particular reductions are to be made. As I also mentioned, the work of review is continuing and will continue throughout the balance of the fiscal year. The figure I gave last night is the estimated saving as a result of that total effort up to March 31.


James Sinclair: Mr. Speaker, I would like to point out again to the minister that he included other tables in his account last night, and this one table would be very helpful to the members of this house and the general public and would not be unnecessary work for his department. Will the minister not reconsider and agree to this very modest request?


Hon. George C. Marler (Si. Anloine-Wesi-mouni):: Mr. Speaker, may I ask the Minister of Finance if he does not appreciate that having these figures beforehand would enable us to consider the individual items in the estimates much more easily and, I would say, much more intelligently if we had that information. The hon. gentleman from his own experience would realize the difficulties in a situation where a number of items may be subject to reduction during discussion. Does the minister not appreciate that 96698-129
there would be great advantage to the committee if this information were available before it?


Some hon. Members:: Question.


Mr. Speaker:: I take it that it is appropriate to discuss the arrangements of the house at this period of the day. The hon. member is not asking a question but is seeking to discuss the arrangements of the house. As 1 said yesterday, I think it appropriate that these arrangements be discussed between the spokesmen of the parties so we do not have a general debate on arrangements. Is there any more to be said on that subject?


Mr. Sianley Knowles (Winnipeg North Cenire):: Mr. Speaker, may I ask a supplementary question. Would the Minister of Finance indicate some time soon what items in the estimates will be reduced by actual motion made by the minister?


Donald Methuen Fleming: Mr. Speaker, I thought I had already dealt with that. The opinion is that this should be done on the estimates of each department by the minister of that department.


James Sinclair: We have not seen it yet in five departments.


Stanley Howard Knowles: Just to be clear, Mr. Speaker, will there be some items concerning which the present committee of supply will actually be asked to make a reduction?


Donald Methuen Fleming: Yes, Mr. Speaker.



INQUIRY AS TO REFERENCE OF PROPOSED RULE CHANGE TO COMMITTEE

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, because of the absence of the Prime Minister may I direct this question to the house leader. In the matter of any changes in the rules of the house, including any change in the rule which was badly abused last year, notice of which has been given, will the government have parliament follow the time-honoured tradition of referring any such change to a committee of the house to be presided over by His Honour the Speaker?


Hon. Howard C. Green (Minister of Public Works):: Mr. Speaker, I believe there is a notice of motion in Votes and Proceedings

Inquiries of the Ministry today which would have the effect of abolishing closure. It is not the intention to refer that motion to a committee.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. T. S. Barneti (Comox-Alberni):: Mr. Speaker, I should like to ask a question of the Minister of Transport. In his absence I will direct my question either to his parliamentary assistant or to the Acting Prime Minister. My question is based on a telegram I received this morning, a copy of which I sent to the office of the Minister of Transport.
Will the minister act on the request of the Lasqueti island chamber of commerce that a ship be sent from Vancouver to replenish their supplies, which are now running low, in order that the inhabitants of this island may continue to exist while he completes the investigation into the possibility of restoring regular steamer service which he promised some two weeks ago?


Howard Charles Green: Mr. Speaker, we will be very glad to look into this situation at once.



BRITISH COLUMBIA


[Stage Direction]
On the orders of the day:
Mr. F. C. Christian (Okanagan Boundary):: Mr. Speaker, I should like to direct a question to the Minister of Northern Affairs and National Resources. What has the government undertaken or what does it contemplate by way of emergency federal assistance to the British Columbia government to launch a forest access and fire protection road building program to give winter work to loggers?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, I was given a copy of this question just as I came into the house. All I can say at this time is that no request for assistance has been received from the British Columbia government for such a program in connection with the forest resources of the province.


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, may I ask a supplementary question. If such a request is received will it receive favourable consideration?


Mr. Speaker:: Order. I think the hon. member for Kootenay West knows that we do not spend time on hypothetical questions. The hon. member for Rosthern.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
James Sinclair: Mr. Speaker, I wish to direct a question to the Minister of Justice. Can he report any progress in the matter of the Britannia mine?


Hon. E. D. Fulion (Minisier of Justice):: Mr. Speaker, as I said on a previous occasion in this connection, it is necessary to receive reports and hold consultations with a number of interested people-the company management, the provincial government, and the men; and each step must be reported back to cabinet. As I explained before, this slows matters somewhat, but it is sometimes better to make haste slowly than to reach a precipitate conclusion. We are doing everything we can to find a solution to this problem, but I cannot make a report at the moment.


James Sinclair: The minister says it is sometimes better to make haste slowly, but with Britannia time runs out in two weeks.


Edmund Davie Fulton: The minister understands that perfectly.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. W. A. Tucker (Rosihern):: Mr. Speaker, may I ask the house leader whether the government soon will be making an announcement in regard to the proposed royal commission to investigate agricultural price spreads, which was promised quite a long time ago?


Howard Charles Green: Mr. Speaker, we hope to be able to make an announcement at a very early date.



REQUEST FOR FURTHER REPORT ON MISSION TO COMMUNIST CHINA

[Stage Direction]
On the orders of the day:
Mr. H. A. Bryson (Humboldi-Melfori):: should like to direct a question to the Minister of Trade and Commerce. I wonder whether the minister is in a position to further advise the house as to the possibility of trade with China resulting from the visit of the trade mission to that country.


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Speaker, I gave all the information that was available to me when I reported to the house yesterday.


Walter Adam Tucker: May I direct a supplementary question to the Minister of Trade and Commerce. He indicated yesterday that the report he had received from our trade commissioner in Hong Kong on his mission to communist China was a preliminary report. Can the minister indicate to the house when the final report will be received, or when he will be able to make a statement to the house as to the possibility of increasing trade with communist China?


Gordon Minto Churchill: Mr. Speaker, some time will elapse before I am in a position to make that report. I read the preliminary report of Mr. Forsyth-Smith, and I was very much impressed with the care and attention he gave to his trip to China and his consultations with the people in charge of import and export trade in that country. After the report on each of his visits with these persons he listed a number of follow-up matters that should be attended to, and under one of them I think he listed 12 additional things that would have to be done by way of correspondence, visits or the obtaining of extra information. It is a very comprehensive outline of what he thinks needs to be done before he can make his final report. I think some time will elapse before his detailed report is available to us.


Mr. Pearson:: May I ask a supplementary question. Was the trade commissioner in Hong Kong accompanied by an officer of the Department of External Affairs on this mission to Peking?


Gordon Minto Churchill: That was the information I gave the house some considerable time ago.


Mr. W. M. Benidickson (Kenora-Rainy River):: May I ask a supplementary question. Did the Canadian representatives when visiting China raise the question of the unpaid liabilities under part II of the Export Credits Insurance Act?


Gordon Minto Churchill: I did not notice anything of that nature in the preliminary report.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
George Carlyle Marler: Mr. Speaker, I should like to direct a question to the house leader in connection with the royal commission on energy. Is the government yet in position to state when the 96098-129J
Inquiries of the Ministry first meeting of the committee is to be held? I might point out that I asked this question of the Prime Minister several weeks ago, and I cannot say an answer has been given to what seems to me to be a question of public interest.
Hon. Howard C. Green (Minister of Public
Works): I cannot answer that today, Mr. Speaker.


George Carlyle Marler: I appreciate that.


Howard Charles Green: I will make inquiries, and if it is possible to give an answer in the course of next week I shall be glad to do so.


Lester Bowles Pearson: I
should like to direct a supplementary question to the minister. Will the hon. gentleman make inquiries as to whether the chairman of the commission is still in Brazil?


Mr. Mcllrailh:: He is due back next week.


Howard Charles Green: It seems to me that the hon. member for Algoma East already knows the answer to the question.


Mr. Gauthier (Portneuf):: Never mind;
answer.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, may I ask the house leader, in the absence of the Secretary of State for External Affairs, whether the government will consider making representations to the Indonesian government, perhaps through diplomatic channels, in regard to the threat to peace and security in that area involved in the action being taken in Indonesia against Netherlands nationals and Netherlands interests?


Howard Charles Green: Mr. Speaker, as all members of the house will realize, this is a very serious and difficult situation. I will be very glad to draw the suggestion of the hon. member for Algoma East to my colleague's attention.


MR. PEARSON    BEST WISHES ON LEAVING TO ACCEPT NOBEL PRIZE
[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, in view of the fact that the hon. member for Algoma East (Mr. Pearson) will leave today for Oslo to receive an honour which brings credit to him and to this country, I wonder whether it would not be appropriate for you, sir, to express on

Supply-Trade and Commerce our behalf in the House of Commons, as you did in another place the other evening, the fact that he carries with him the good wishes of us all.


Some hon. Members:: Hear, hear.


Mr. Speaker:: I am sure the response which hon. members have made to that suggestion will convey to the hon. member for Algoma East the good wishes of the house on the occasion of his trip which we all applaud so much, and which we recognized the other day in the dinner we tendered to him. I thank the hon. member for bringing it to the attention of the house.


Lester Bowles Pearson: Thank you, Mr. Speaker. I shall regret my absence from the house next week.

The house in committee of supply, Mr. Rea in the chair.
DEPARTMENT OF TRADE AND COMMERCE General administration-
414. Departmental administration, $672,473.


Mr. Carter:: Mr. Chairman, there are one or two observations I should like to make before this item carries. First of all I want to support fully everything that was said by my colleague the hon. member for Trinity-Conception yesterday with respect to the marketing of fresh fish.
I should like to say this word to the minister. While we commend his energy and enterprise in trying to promote increased trade with the United Kingdom and with the commonwealth, we are very much alarmed at the announced policy of diverting trade from the United States. We realize only too well that this policy is fraught with tremendous danger to our fresh fish industry, because it is supplying the powerful fish lobby in the United States with ammunition in their efforts to have our fish exports placed under quota and the tariffs against us increased. On two occasions they have almost succeeded in their attempt, and by announcing this policy of diverting trade from the United States we are cutting the ground completely from underneath the President of the United States, by whose efforts our situation has been saved on earlier occasions.
We have been awaiting the announcement of the Minister of Trade and Commerce with a great deal of interest, because in the speech from the throne we were told that the Conservative government would make every effort to expand markets for our fisheries products. I note that the list of members of the trade mission indicates that the people

who have gone abroad are interested chiefly in buying and not in selling. Their main interest is in purchasing, I would gather, machinery such as could be used in the processing of fish or in the production of fish.
In this connection I should like to point out that there should be a very good field in the importation of marine diesel engines for our small fishing boats. This is one area in which the United Kingdom should be able to compete very successfully with the United States. The minister might also bear in mind that the federal government itself is quite a large purchaser of marine motors for the various patrol boats they have in operation. I can speak with some experience about the efficiency of the English-made marine diesels, because I have been using one myself for a number of months and have found it very satisfactory.
There is just one point which I think should be brought to the attention of the manufacturers, and that is that a marine diesel, however efficient and simple and however well engineered it may be, is only as reliable as the accessories. A marine diesel, however good it is, is no better than the water pump, because if that gives out then the engine is useless. I have found that there are some minor details in the accessories on these engines which could and should be improved.
We have heard a great deal in this house during this session about the marketing of wheat, and some of our colleagues from the west have put forward the claim that the wheat farmer is entitled to special consideration because his product happens to be marketed by a government agency, namely the wheat board. They have also gone on further to maintain that if the government has done a poor selling job in the marketing of that product, then the government should take the responsibility and provide special measures to protect the farmers from any resulting hardship. The measures which we have already passed this session would indicate that the government admits the validity of this argument.
I should like to take this opportunity of pointing out to my friends from the west that the wheat farmer is not unique in this respect, because the marketing of salt fish in Newfoundland is also done by a federal agency. Newfoundland Associated Fish Exporters, Limited is an organization that has the responsibility of marketing salt fish, and it is an agency that operates under the Department of Trade and Commerce and is responsible to the department for its functioning. Such strict control is exercised by this organization, which is commonly known

as NAFEL, that Newfoundland salt fish cannot be shipped even from one province to another in Canada without its permission.
Some fishermen have asserted that losses have been suffered owing to this control, which forces them to accept from local buyers lower prices than they could have obtained from buyers on the mainland. Be that as it may, it is my duty on behalf of my constituents, most of whom are fishermen, to remind the government that their responsibility and obligation to the Newfoundland fishermen in respect of marketing salt fish is no less than their obligation to the prairie wheat farmers.
There has been over the years some evidence to indicate that NAFEL is not a particularly welcome child in the family of the Department of Trade and Commerce. At one time I think it was under the Department of Fisheries, and for some reason was transferred to the Department of Trade and Commerce; but it has always appeared to be somewhat of an unwelcome and unwanted child. In addition, from time to time rumours have cropped up that NAFEL's days are numbered.
In view of the promises made in the speech from the throne I was disappointed to note that the minister in his opening statement, to which I listened very carefully, had not a word to say about the marketing of fish. Nor did he say a word with regard to the status of the organization responsible for this. I hope when the minister replies he will clarify the situation and let us know exactly what the plans of his department are, whether NAFEL is going to continue or whether any changes in organization, status and functions are contemplated.
With respect to the marketing of salt fish, it would appear to me that there should be some opportunity in the British West Indies federation. That little family of colonies is now federated, and they will be faced with a hard struggle to stabilize their economy. If Canada could do something to help them, either as a Caribbean plan or as part of a minor Colombo plan, it is possible that by so doing we might indirectly be helping the marketing of our fish in that area.
I remember that prior to confederation Newfoundland had access to the Mediterranean markets because of a combination of circumstances which may be described as follows. We had in Newfoundland a surplus of dollars and we had in London a sterling debt, so we were able to sell our fish for sterling in the Mediterranean markets and use the money thus acquired to offset our sterling debt, while the government paid our Newfoundland fishermen in Newfoundland dollars.
Supply-Trade and Commerce
It is possible that the West Indies may also have a sterling debt, and I am wondering whether anything could be done to see whether Canada could afford to take responsibility for part of that sterling debt and use it in the same way as the Newfoundland sterling debt was used prior to confederation. I do not know whether or not this is economically feasible, but I think it is something which should be explored.
There should be more opportunity for selling our fish in the Brazilian market. In the old days Brazil was one of our main markets for salt fish and they consumed about half a million quintals of salt fish a year. That trade has now shrunk to practically nothing, although cod is still regarded as a delicacy in that country. We know that Brazil has been having economic troubles, but here again it is possible we might be able to do something to help stabilize Brazil's economy and thereby increase the sales of salt fish in that country.
I heard some reference to a trade mission this morning. If a trade mission is already in South America it might explore this possibility. I also wonder whether the minister could not intruct part of the trade mission now in the United Kingdom to extend its tour to the Mediterranean to see what can be done about expanding our sales of fish in that area.
There is another thing which the government should do as part of an effort to expand our market for fish, and that is to assist in increasing the domestic market. This requires an expenditure on promotion and advertising which is far beyond the capacity of the individuals and individual firms engaged in the industry. The government could help in this respect either by outright grants or by making income tax concessions in respect of money spent for this purpose, in the same way it has helped the shipbuilding industry.
Although all hon. members of this house who have been here for some time have enjoyed delicious meals put up by the fisheries laboratory, the good results do not, unfortunately, become widely known in the country, and the effort does not have the advertising value it should. I think this effort would be more effective if the government would sponsor an expert cook who would travel around the country and give demonstrations in the large department stores such as the five and ten, the supermarkets, and general chain stores such as Loblaws. I believe something along this line could tremendously expand the sale of our fresh fish.
Another matter which I think might be profitably explored is the question of a freight subsidy on the Canex container, the

Supply-Trade and Commerce special shipping cointainer developed by the research department of the Canadian National Railways. This is a container capable of keeping fresh fish in good condition for longer than 72 hours. As everyone knows, unfrozen fresh fish is much superior to frozen fish, and in the large domestic markets such as Montreal and Toronto unfrozen fish command the most ready sale. If we could use this container to push the unfrozen fish as far west as Winnipeg it would be greatly to the advantage of the industry, but the companies engaged in the marketing of fish have shown little or no enthusiasm about this container, though the fact that it does ensure a superior product has been demonstrated over and over again in the increased sales which have resulted at Eatons in Toronto and other places where the Canex brand product is marketed.
Finally, Mr. Chairman, I should like to speak of the use of trade as an ideological weapon. A few days ago we were discussing defence and the Soviet policy of using trade as an ideological weapon. I think we could take a leaf out of Russia's book and note how their trade is conducted so as to attain ideological objectives. For example, Russia bought rubber from southeast Asia at a price which was higher than the market price, and sold them goods at less than market price, and by doing so tied the economy of these countries to that of Soviet Russia. At the same time they earned a great deal of good will. In their trade with Egypt, Russia has managed to secure a mortgage on the cotton crop for a number of years, thereby tying the economy of Egypt to her own and at the same time posing as Egypt's best friend. There are infinite possibilities in this direction which could be used to advantage by the democratic countries in this ideological struggle, and I should like to ask the minister to make sure that every opportunity in this respect will be fully explored.


Mr. Hansell:: Mr. Chairman, before the item carries I would like to say a few words with respect to this first item in the minister's estimates and offer some observations on trade which I have been able to make in the last little while, particularly since the present government took office some few months ago. 1 am putting on record my impressions respecting the endeavours of the government to promote foreign trade, which impressions I believe are held by a great many people in Canada.
The other day we listened to the Minister of Trade and Commerce tell us something about the 50-man trade mission that is presently in the United Kingdom. The minister

headed the mission initially, and I understand he is soon to return to the United Kingdom. However, when the minister came back to the house following his first visit it was only natural for us to expect that he would make a statement as to how the mission was getting along over there. Well, I listened, as I am sure other hon. members must have listened, waiting with some interest for a report as to how Canada was actually going to benefit as a result of this trade mission. The minister made a nice little speech, a pleasant and innocuous little announcement, but what did it amount to in the end? That was what I asked myself. He told us about the wonderful reception the trade mission received from the British industrialists and the British people in general, and I told myself that was only natural. He told of the intense interest that was taken by British manufacturers and industrialists in this trade mission.
I could not help but ask myself, "Why should they not take an interest in this trade mission? After all, they have something to sell and this trade mission is visiting that country with a view to buying". I am quite certain that if any hon. member were in the market for a car there is a strong possibility that every car dealer in his community would be very congenial with him. They would fall all over themselves to give him service if he went to the garages, simply because they had something to sell.
The minister also told us that the mission had received approximately 700 letters from British firms desiring some consideration. Well, once again I had to ask myself, "Why should they not write in?" Once again, those 700 British manufacturers have something to sell, and here was a Canadian trade mission going to the United Kingdom to see what they could buy. The minister told about the marvellous recovery the British had made since the war by way of overcoming the damage that had been caused. That was a courteous observation, but I fail to see that anything was accomplished by his making that comment, because it is something we all know. He also told of the progress that had been made in industrial areas by reason of automation. That too, is general knowledge.
The minister spoke to us as though he had returned to his family and were reporting on a fine trip he had made, telling us what he had seen on his sightseeing tour. He described the wonderful apprenticeship system they have in England and about the courses that are given to managerial staffs and so on. That was all very well, but I think we awaited something different from that. He

spoke of the very warm feeling there was in respect to this mission. Here again it is understandable. The British people have everything to gain from the mission being there, because they have something to sell. We are potential customers, and a warm feeling is to be expected.
All I can say with regard to the minister's report is that we had good reason to look forward to a different kind of announcement than the minister made. We should ask the minister at this time what this mission is actually going to accomplish in the long run. We are going to watch the minister very carefully in the future with high expectations, because if he does not come through with a better report than the one he gave the other day we can only conclude that somebody went over to the United Kingdom on one big joyride at the expense of the taxpayers. I say this because a great deal of publicity has been given to this 50-man trade mission.


William Moore Benidickson: The taxpayers helped to provide that, too.


Ernest George Hansell: I have no doubt they did. The amount of publicity that has been given to what I would describe as these concocted schemes and excursions is even more than my imagination could have been stretched to comprehend a few months ago.
Not so long ago the Prime Minister attended a conference and blasted United States trade policy. I do not know how he expected that blast would assist in keeping us on good terms with our United States friends. When 1 read accounts of it in the newspapers it appeared as though he was a very courageous man, but I asked myself why he was not equally courageous a year or two ago, because the same policies have been in existence in the United States for quite some time.
After taking office the government called a conference with our United Kingdom friends who came to Canada to discuss trade, and much publicity was given to that conference. I am afraid I had to conclude it was just a lot of window dressing, because I failed to see what was accomplished in concrete terms by that conference. We are advised that there is going to be another conference next year. Well, this means more publicity and more carrots being dangled in front of the taxpayer donkey in order to hopefully lead it to believe that some day it might get a little nibble at the carrot.


Mr. Maclnnis:: Is that the way you regard the taxpayer of Canada?
Supply-Trade and Commerce


Ernest George Hansell: If the taxpayer falls for it he deserves to be called that.


Mr. Smith (Calgary South):: You are in
trouble now.


Ernest George Hansell: That is the situation as I see it, and some day or other the Canadian people are going to wake up to the fact that there has been a lot of window dressing. This trade mission and the conferences to which I have referred are big deal stuff and constitute a great show, but what we want to see is-


Mr. Cardiff:: Tax reductions?


Ernest George Hansell: -what volume of Canadian goods are sold as a result of these undertakings. That is what the Canadian people are looking for. A short time ago during the question period I asked the minister when we might expect him to say something about the tangible success of his trip to the United Kingdom some months ago, when he went over there to try to sell some of our wheat. He said he would be making an announcement shortly.
Well, I waited shortly; I waited a little longer than shortly, and we did not hear anything. I thought well, of course, he is going to make his announcement when his estimates come up for discussion. Well, he talked about his 50-man trade mission and gave us a few facts and figures which, of course, can always be made to look rosy if you present them in the proper way, although I do not think they were so rosy. But I expected him then to say something about the success of his trip to the United Kingdom to sell some of our wheat. What did we hear? Nary a word.
The minister owes it to the people of Canada, particularly to the three prairie provinces, to tell us something of the success of his trip to the United Kingdom some months ago when he went there to sell our wheat. After all, some of us come from wheat-growing sections of this country, and I believe it is time that we heard how successful the minister has been in the disposal of the vast surpluses of grain which we have out west.
To get back to this 50-man trade commission that is in the United Kingdom now, I say it is a lot of window dressing. I say that for this reason. It is pleasant to say that a 50-man trade commission is there. Oh, it is a big mission; it surely is. Fifty men go over there to buy something. To me that indicates that somebody has failed. We have our embassy there; we have our trade commissioner there. Even some of the provinces have offices there. They are attempting to carry on a bit of trade and to promote proper relations between our country and another.

Supply-Trade and Commerce
Well, what have those trade commissioners been doing if it is necessary now to send over 50 prominent people from Canada to see what we can buy from them? Not only do we have our trade commissioners and our embassies, but we have other things as well. Very often we spend money on international trade fairs. What for? To put on a show so that people can come and see what we have to sell and we can see what they have to sell us. Some of these things have been done in the past. Industrialists and manufacturers here have their advertising matter, and people in Great Britain have their advertising matter. Frankly, I do not see why 50 men have to go over to England to discover what there is there that we can buy.
I say once again it is a great big show, big deal stuff, something to try to indicate to the people that this government is doing things. Well, we will just bide our time; we will wait for a little while and we will just see what is actually accomplished beyond the big deal, the big show stuff.
There is one thing that strikes me in respect of foreign trade that is extremely important. After all, Mr. Chairman, when you boil this foreign trade business right down to what it actually is it means nothing more or less than swapping goods because when we buy from England we give them dollars in payment. They use those dollars to buy our goods. Therefore in the end it is only an exchange of goods. Might I interject here, Mr. Chairman, that even though we buy several million dollars worth of goods from the United Kingdom and pay them in our dollars, there is no guarantee that those dollars are going to be used to buy our goods. But suppose they are used to buy our goods. In the end it is only a matter of swapping Canadian goods for British manufactured goods.
The one important thing that is necessary is whether our own people in Canada have the purchasing power to buy those goods when they arrive here. Whether it is Canadian goods or goods that come into the country, have our own people the purchasing power to buy them? That is the important thing, and that is the one thing the government will have to answer for, because today the purchasing power of the dollar is less than it has been in the past. Furthermore, because of the problems of unemployment and reduced incomes, the people have less money with which to buy those goods, whether they are British manufactured goods or Canadian manufactured goods, and that is the thing that this group is interested in. Foreign trade will very largely take care of itself if our own people have the purchasing


power. In this group our whole monetary concept is that if the people themselves have the required purchasing power, the money with which to buy the goods, industry will be cared for. If there is that continual supply of purchasing power going into the hands of the consumers our standard of living can be just as high as the productive capacity of the nation can make it.
These are the very few words I wanted to say. We are reminding the minister that he will have to come before parliament again sooner or later and give an answer for the big show they are putting on at the present time. Things are not too well in Canada, Mr. Chairman. They are not too well because of the surplus of agricultural products; they are not too well because of growing unemployment and reduced incomes. What the people of Canada want is more than show. They want action that will put money in their pockets in order that they might enjoy the highest standard of living.
The government may not like the policy that has been adopted by the United States. Well, I do not know. I have never been able to bring myself to the point where I can seriously criticize the United States for their trading policy in respect of their surplus agricultural products. I have never been able to do that. The Prime Minister can criticize and let off some blasts. The Minister of Finance can go down to Florida and talk to the investment dealers there and again blast our good neighbours to the south. They can do all the blasting they wish, but what the United States has done can be summed up in two ways. They brought into existence their commodity credits corporation. They decided to take all the agricultural products that were in surplus off the hands of the farmers and pay the farmers for them.
Well, they piled up large agricultural surpluses. They had them. What were they to do with them? Well, they simply went out into the world and asked the needy nations to take them if they wanted them, take them now and talk about paying for them afterwards. That is all they did. It may not be just as orthodox as some of our own people in the government may want, but two things were done. One was that the farmer was reasonably satisfied. He was paid for his surplus products. The other thing is that somebody bought those products and some of the border-line nations were evidently the recipients of foodstuffs. There is nothing wrong with satisfying your own people and helping to feed the hungry.
You can talk about U.S. trade policies all you like; you can talk about them hurdling

agreements all you like; you can talk about them taking advantage of escape clauses all you like, but two things stand out in my mind. United States farmers were reasonably cared for in the face of the surplus problem, and some of the hungry nations were fed. I do not think that would have been a bad record for any Canadian government, whether Liberal or Conservative, to have hung on it. Our farmers would be satisfied too if they were paid for their production that is in surplus, and they would be very pleased to know that those surpluses had been used to feed some of the hungry nations of the world.
I realize that the minister has his problems, and I do not want to be too harsh with him. We are going to give him time; but once again before taking my seat I say that rather than the "big show" we want to know what results are actually accomplished, and whether or not the people of Canada are going to have the purchasing power to buy that which is available.


Mr. Harrison:: Mr. Chairman, it is a pleasure for me to rise in a debate that is very important not only to western Canada but to Canada generally, and discuss some of the policies being followed at the moment to generate more trade. The difference between prosperity and the reverse is our ability to trade successfully with other nations. When we are able to do that successfully we have prosperity in the country, and when we are not able to do so we have difficult times. Maybe that is why in the past we have always thought of Tory times as hard times. In years gone by the Tories have not been too successful in trading with other nations.
When I look at the program we have before us now it strikes me as very similar to some we have seen before. To summarize, as I see it, this is a five point program. First the Prime Minister went to England to a prime ministers' conference, where he indicated to the British that he wanted to increase trade with that country, and in order to do so he would naturally have to remove at least some of the barriers that exist. If you want to increase the flow of anything you take away any impediments that may be in the way, whether it is a question of rivers or trade. That was the first point.
Second, the Prime Minister invited a British delegation to Mont Tremblant to discuss these proposals and to make arrangements for a commonwealth conference next year. Third, we had the Canadian trade mission of four cabinet ministers who went to Washington to discuss trade with the United States. The fourth step was the three-week
Supply-Trade and Commerce visit to Great Britain of the 50-man trade mission in order to buy British goods. Fifth, there is the commonwealth trade conference next year. We can discuss the first four because they are all completed or nearly so but the fifth, the commonwealth trade conference, we can only discuss on a crystal ball basis.
With regard to the first, the Prime Minister's trip to Great Britain, I think his speech there to the effect that he wanted to increase trade was very laudable. I am sorry that what he said there has not been backed up by what has transpired since. He said he wanted to increase trade with that nation and th^y took him at his word. When they came to the Mont Tremblant conference later they said that if he wanted to remove restrictions-and that is the only way you can increase trade- why not have maximum trade by removing all restrictions? There is every indication that both he and the Minister of Finance, who attended the Mont Tremblant conference, took to the woods as soon as that was mentioned. Two or three days later Mr. Thorneycroft and the other members of the British delegation came to Ottawa, and they got a very cold reception as far as that proposition was concerned.
Knowing the Conservative tradition of being a high tariff party 1 can understand that, but I think there has to be some revision of thinking on the other side of the house. We are entering new phases as far as trading is concerned, and one that should give them pause is the new European free trade area comprising six countries, Great Britain, West Germany, France, Holland, Italy and Belgium. I understand that their free trade agreement goes into effect on January 1, 1958, and involves a 10-year process before complete free trade is assured among them. But once this European free trade community is in operation it will mean a market of 160 million people, very similar to what we have across the border in the United States, which is regarded as the best market in all the world. Possibly the 160 million people in the European market are not as prosperous as those south of the border, but still they are prosperous indeed.
When the new concept of trading comes into effect in Europe one thing we will have to look at is the fact that the old Tory practice of increasing tariffs, for instance, against British textiles or anything else will at once affect this large free trade area and any counter measures that may be taken by them will be taken as a unit. In other words, if we take measures against West German products coming into this market we will incur the ire of Great Britain and all the

Supply-Trade and Commerce other nations in that union. In one way or another these six countries have pooled their sovereign rights as far as trade is concerned, and they are going to permit goods to move freely among them.
This sets up an altogether new concept. It makes the old Conservative idea of imposing high tariffs as obsolete as Sputnik makes our military equipment. I think there has to be some revision of thinking on the other side of the house.
I come now to the Canadian trade mission to the United States, and I am not going to waste too much time on it because I think the futility that accompanied it is quite evident. However, I should like to say something about the manner in which the United States was approached. I refer to the big stick attitude of telling these people what they are going to do. The United States is Canada's best customer, and this is a strange attitude to use with a good customer. I used to be in a mercantile business myself, and I never tried to attract people into my establishment by waving a big stick and telling them what they were going to do. It must be remembered that the customer is always right, and that is something you have to keep in mind if you want your business to be satisfactory or to increase your trade.
I believe the present Minister of Trade and Commerce would be a fairly good salesman if he were not placed somewhat within a strait-jacket by the policies of his party. He has to make some display of trying to obtain some business, for instance in the United Kingdom from whom he wants to import goods, but when it comes to actually accomplishing that he runs into the policies of his own party. It is rather difficult for him to carry that attempt to any conclusion.
I would suggest that if any future mission to a nation with which we are trying to improve our trade relations includes the Minister of Finance-I do not mean this in any sense derogatory to the Minister of Finance, because I appreciate many of his good qualities -he should go in an advisory capacity. The minister's good qualities do not include those that are required of a good salesman. A good salesman must possess the ability to meet the public in an affable way and not, should I say, with the belligerent attitude the minister often displays. He would be an excellent man on one of these missions as an adviser, but he should not be allowed, in my estimation, to meet the actual customers.
The wreckage of the trade effort so far as the United States is concerned is apparent to anyone. Instead of giving us any concessions they have gone out since and bored still further into our grain markets. One of


the outstanding examples of this has been the recent trip of the United States secretary of agriculture to Japan.
I come to the fourth matter, and that is the 50-man trade mission to Great Britain. I listened to the hon. member for Macleod, and I agreed with much of what he said. In fact he stole some of the things I intended to say with regard to the mission. However, if one looks at this window dressing, as the hon. member for Macleod called it, what does one find? A list of the members of this trade mission was printed as an appendix to Hansard of December 2. This list does not mean very much to me, but I find there are 14 people who say they are interested in textiles.
I find some strange people who are apparently interested in textiles. The minister told us that the purpose of this mission was to buy goods from Britain, not to sell goods. It is interesting to see the list of those who apparently show a marked interest in buying textiles. I find, for instance, that the president of Shawinigan Engineering Company in Montreal is interested in textiles. I do not know whether or not his company wishes to deal in textiles or whether he might be more likely a director of some textile organization. Perhaps there is a reasonable answer to that; I do not know.
Then going down the list we find the president of the Canadian Manufacturers' Association. I have never heard that the Canadian Manufacturers' Association advocated bringing British goods into the country. They are interested only in shutting them out. Then there is the president of Marsland Engineering Company Limited and Marsland Precision Equipment Limited. He is interested in textile manufacturing. Perhaps there is a good reason why he is interested; I do not know. However, in my opinion there is some suspicion that he may be connected with some textile mill somewhere.
I do not want to bore the committee with the details, but according to the list there are 14 people who claim to be interested in textiles. I find it difficult to believe they are interested in bringing textiles here from Great Britain. Consequently the minister has not been able to tell us one thing that was purchased as a result of this junket of 50 men over to Great Britain.
There is, however, one member included in this mission, the chairman of Ontario hydro, who would seem to be a sensible inclusion. Before he left he said he had already purchased quite a lot of electrical equipment in Great Britain for Ontario hydro, and was interested in purchasing more. People in this category are sensible inclusions in such a mission.

I understand, too, that three heads of agricultural organizations in Canada were members of the mission. This would seem to be a sensible inclusion. In making his statement to the house the other day the minister told us that these three gentlemen had been able to talk with their counterparts in Great Britain, in other words with the heads of some agricultural organizations in Great Britain. If I know the heads of Canadian agricultural organizations they would be interested in only one thing, and that would be selling some of their agricultural products. I do not know what good it would do them to talk to their counterparts in Great Britain.
The other day the hon. member for Dauphin asked the minister if he had talked with Sir David Eccles during his trip to Great Britain concerning the free trade offer. The minister said he had not talked with Sir David Eccles. In his announcement to us previously the minister said that Sir David Eccles had arranged this whole trip and, as I understood him, they had been accompanied by Sir David Eccles. If the government is really as interested in doing business with Great Britain as this window dressing would indicate, one would think the minister would discuss this free trade deal with Great Britain with Sir David Eccles at the first opportunity, since he is his British opposite and the head of the Board of Trade.
As I understand it the door is still open on that proposal. I feel that the government should take another look at getting in that door before it is closed. We have never received an offer like this before. With the possibility of this new European free trade area being established, and the fact that this may change the trade pattern, we might not be given too many opportunities to take advantage of a proposal of that nature. These events indicate that tariff walls have had their day and are a thing of the past.
I should like to mention the commonwealth trade conference that is to be held next year. As I said, this is something concerning which one would have to look into a crystal ball. The only thing by which we can judge this forecast is the fact that previous Conservative governments, on assuming office, have always held out great hopes for commonwealth trade conferences. I think the last one was a British trade conference.	Forecast benefits of these conferences, however, have not materialized. It is doubtful, in view of the attitude now being shown, whether any material benefit will accrue from this proposal.
In order to get the opinion of the rank and file of the Conservative party and what
Supply-Trade and Commerce they think of any proposals for actually increasing trade with Great Britain, I was interested in the remarks of the hon. member for Lincoln yesterday. He is the Conservative member who spoke for that party at the beginning of the discussions on trade. As reported at page 1990 of Hansard of yesterday he said in part:
We are buying too much from abroad and causing unemployment in our own country.
Then he went on to say this:
I have great confidence in our new Minister of Trade and Commerce. I wish him well and I am sure that if he approaches matters, as I say, in a sympathetic and realistic manner, we shall have success.
He also pointed out their road to success, namely to keep out goods from any other country.
I would suggest to you, Mr. Chairman, that as to all these items I have mentioned, this five point program that is supposed to increase our trade goes just so far and no farther in doing actual good and in doing what it proposes to do. The program is prevented from going any further by the ideas of the hon. member whom I have just quoted, and I do not doubt that those ideas are entertained by a great number of other supporters of the government. But some show must be made to the country as a whole that tney are doing sometmng. Hence you have what the hon. member for Macleod calls window dressing; and it is window dressing in some instances, such as the 50-man mission to Great Britain, which is a rather expensive facade but is not likely to do much in the line of bringing goods from Great Britain to Canada as it was sent there to do.
In his remarks the minister said-and I obtained this from Hansard-that they will assist Great Britain to attain more markets here in Canada. There is only one way by which they can attain more markets here in Canada, and that is by reducing the tariff we have against Great Britain to an even lower point. That would bring more goods into Canada.
That brings us, then, to the point of this trade switch which the Tory party thinks is a great idea. I have wondered why more people have not taken a hard look at this side of it. When you start to switch $600 million of trade from the United States, which is what the 15 per cent amounts to which the Prime Minister wants to switch and which he announced was the amount they would switch; when you superimpose that amount on the trade we are now doing with Great Britain of something over $400 million a year, you are asking Great Britain to deliver us $1 billion worth of goods in a single year.
2038	HOUSE OF
Supply-Trade and Commerce
In his remarks to us the minister told of his trip to Great Britain; that he found that Great Britain was fully recovered from the war; that business was humming along in high gear, and that there was a great advance in automation over there. He did not tell us that he saw any unemployment there. Hence we understand that every man in Great Britain is fully employed, that their industry is running along at a good clip, and that they are making all the goods they can possibly make. They have no surplus of goods at all. They have a backlog of orders at all times over there waiting to be filled.
To ask them to increase their shipments to Canada is one thing, but there must be some reason why they are not doing that now of their own accord. I would suggest that maybe the reason is that they have markets where competition is not as keen as it is in Canada, and that they are selling more beneficially as far as they are concerned possibly in some sterling areas. I suggest that this is the main reason they are not shipping more to us at the present time. They just have not the productive capacity to handle the extra trade that our Prime Minister suggests.
This is something that should be obvious even to the man in the street. Certainly it will be obvious to the man in the street in Great Britain that they are producing to the utmost at the present time. When somebody offers them $600 million more of a market, while it sounds very good, maybe they have not the goods with which to supply that market. In order to supply it they would be obliged to take trade away from some other areas where, as I said, they are already doing business on a very satisfactory basis and against less competition than we have in this country.
I think I have fairly well covered what I intended to cover, but I should like to make these further observations with regard to the minister's opening remarks yesterday. He indicated that we are suffering from a down trend in some of our trade which includes lumber, copper and aircraft, and that we have an adverse trade balance with the United States as compared with last year of $100 million. Our exports to Great Britain are down $55 million.
Before concluding I should like to ask him this question. If, as he says, he wants to assist Great Britain to gain more markets here in Canada, something which I think there is some doubt that he will be able to do for the reasons I have just given, does this mean a lowering of the tariffs against Great Britain?

I might say also that we are very much interested in uranium. I wonder what he has in mind as a forecast for the uranium industry. I know that in Great Britain it has been indicated that uranium is going to be a considerable import, as far as they are concerned, for the next generation. I wonder whether he would indicate, when he replies, just what the position of uranium is going to be, having regard to our world exports.


Mr. Montgomery:: I had no intention of taking part in this debate on this item, Mr. Chairman, and I do not propose to take very long. But having listened to some of the remarks of hon. members, may I say that it sounded as though there was a great deal of frustration among many of the members who were speaking, or else they were trying to make political capital out of something at this stage which might or might not be justified.
There is another reason that I should like to say a word, and it is this. I should like to congratulate my long-time personal friend the minister and compliment him on the efforts he has been making in his new office in the short time he has occupied it. The Department of Trade and Commerce for which he is responsible is a very difficult one to administer, I am sure, and one at which the people all over Canada are looking. A great many people are ready to criticize him. A great many expect him to pull rabbits out of a hat. But having roomed with him, lived with him for a while and worked with him, I want to say that I do not know of a more sincere and honest man or a better one to be in charge of this department. I wish him all success. He is not going to have an easy road. Even from listening to the speeches made this morning I suspect it is not going to be made any easier by a great many members of this house.
I pick up a newspaper, and I should like to refer to it because it reflects my own feelings. This was written by George Bain and it is printed in the Toronto Globe and Mail of December 4. Many of the members of this trade mission did not know the minister before they started on their mission. This is what Mr. Bain says:
To most of the businessmen in this group, the minister beforehand was largely unknown. The opinions they have formed of him in the time they have been here have been unanimously good. They like the quiet way in which he has been putting across the purposes of the mission. Mr. Churchill falls somewhat short of being a spellbinding orator, but his hosts in this country-
-referring to the old country-
-have been impressed, and they have said so, with the good sense, sincerity and friendly good humour of his speeches.

I think that is a great compliment to a member of our government, and I am glad it was paid by the people of Great Britain to a friend of mine and to a minister of the Conservative government.
A lot has been said about this trade mission. As a matter of fact I rather liked the way in which the hon. member for Meadow Lake, who has just resumed his seat, criticized this mission. He did not speak with bitterness. He was sceptical, but at the same time his remarks did contain some suggestion of constructive criticism compared with those of the hon. member for Macleod who spoke previously, but who could think of nothing good which might come out of a trade mission sent to Great Britain or, for that matter, to any other country.
As a matter of fact one might infer from some of the speeches which have been made -speeches which, to me, cannot sound sincere -that they would like to see this government sit down and do nothing so this country might sink into a depression out of which they might make political capital and win success when the next election comes. I am sorry to say that some members of this house sound, though they may not think it themselves, as though they want to see the efforts of this mission end in disaster instead of success.
Surely it is too soon to expect the minister to be able to tell us or the country of any success which this mission may have by way of increasing trade. Though these people went on this mission primarily to investigate and to buy products made in the United Kingdom, I am sure that a significant result will be a two-way system of trade; and I believe the committee must agree that if a country is going to survive, if it is going to be prosperous, it must develop trade. We cannot close a wall around ourselves and keep quite separate from everybody else. We cannot live within ourselves and be prosperous in the world of today. We must have trade and, as the newspapers have said, this mission has been the greatest success, the greatest thing which has happened in the old country in the history of Canada, creating as it has new ties and new acquaintances. Canadian and British businessmen are getting together.
I should like to say at this point that though there has been a great deal of criticism in this house with regard to certain people who belong to certain industries in this country taking part in the mission, and though it has been suggested that they went over there with personal interests in mind to try to buy things which would put people out of employment in this country, I myself cannot think such a thing about the businessmen of Canada.
Supply-Trade and Commerce
It may be true that businessmen are interested in their businesses, but I invite hon. members to look at the names of these gentlemen who have been selected across Canada. I believe they were selected because they were Canadians first, and that they are on this mission in the interests of Canada as well as in the interests of any business with which they may be connected.
I remember that the former government sent a mission to South America, I think it was. I remember that some time later there seemed to be good results from that mission. There may have been some criticism of it, but I do not think you will find in Hansard a record of any speech of mine where I have ever criticized such a mission as that. I think any government which undertakes such projects as these is doing something which is for the good of the country in the long run. If we do not undertake to do something we will never succeed in anything, and I believe that with the initiative and the youth and the energy of some of the younger members of this government, this country will receive great benefits from this trade mission.
It may be that some trade will be shifted from the United States to Britain, but is not competition the life of trade? If we continue to trade with one source all the time, even with our neighbour to the south, a monopoly begins to develop. I say that even in Canada some of these companies which have been allowed to build up and become great institutions-and I will mention the automobile industry-of which hon. members across the way were complaining bitterly a few days ago, there is evidence of this. Why should these companies need to raise their prices? I believe they could stand a little competition. I do not think they are suffering. I think competition is good, and that is why I believe that the more contacts we can make in Great Britain and in any other country, in order that competition with our neighbour to the south may be provided, the better business will become, not only with Britain but also with the United States.
The hon. member for Meadow Lake made a good statement, and one with which I am inclined to agree, when he said that in talking trade the customer is always right. All right. Who is the customer of the United States? Canada has been a customer of the United States. Then if that statement is true-and, as I say, I am inclined to agree that it is-is not Canada in a position to say to the United States that we do not think we are getting a square deal? I do not mean to be nasty, but are we not in a position to talk solid, sound business? That is what I believe our Prime Minister and the members of his government have been doing. They

Supply-Trade and Commerce have not been insulting the United States or any other country, as tar as I can see; they have been talking as straightforward businessmen, and I am sure this is not going to hurt the trade of either country. I would gather from some of the speeches that have been made that some hon. members feel there should not be an exchange of trade, or that this mission at best is only going to create one-way trade. I do not agree with that statement. I think the more contact we make with any country the more business we can do without hurting our own country, and the more we are likely to sell to them.
Not long ago when I was fortunate enough to spend a few days abroad I heard it said that if we would accept British currency we could do a lot of business with that country. Obviously, if this is true, they must be prepared to do business. Another way of looking at it is that if we can buy from them we can also extend trade and we should be able to sell them more.
I think there are many good prospects, and much of value can come as a result of the trade mission visiting the United Kingdom. No one should expect to see great results within the next month or two. Miracles do not occur in the business world that fast. The minister should not be expected to be one of those who pull rabbits out of a hat, and I do not believe the Canadian people expect him to do so. They do, however, expect this government to busy itself in an attempt to increase trade, which is exactly what the government is doing and in time its efforts will bring success.
If I understood him correctly the hon. member for Meadow Lake said he concluded that the new government has a five point program, although he did not think it was being implemented in the right way. I was very pleased to hear the hon. member say that in the last five months he has come to realize that the government has a five point program, because I am afraid if one were to go back over the last 15 years under the Liberal administration one would not be able to find even a one point program. Perhaps I am a little unfair in saying this; one might find a one point program under that administration, but it will be good news for the people of this country that the hon. member for Meadow Lake observes a five point program in the present administration even though he criticizes it. This government has a dynamic program which it is rapidly implementing, and that is what the Canadian people elected this government to do.
Another important aspect of trade is that in the next few years prosperous firms in

Great Britain may be able to establish branches in this country. We require capital, and is not British capital just as good as United States capital? One always associates quality with British-made products, and I feel that much good will come about as a result of the contact between the business leaders of Canadian industry and those of British industry as a result of the visit of this trade mission to the United Kingdom. This could very well lead to the establishment in Canada of branch companies of some of the old country industries.
Before taking my seat I wish to speak about the maritime provinces. We have in the Atlantic region good ports which are open the year round. We are well equipped to do business with countries across the ocean. We are all interested in increasing trade with the old country. We have raw materials to ship out, and the cheapest transportation is by water. Nothing but good can come as the result of increased trade between Canada and the United Kingdom, and its effects will benefit the Atlantic provinces.
Anything that will assist in increasing the prosperity of those provinces, encourage the building up of industry there and increase the exports of the many raw materials available should receive our wholehearted support. Perhaps the trade that will result will not be as large in volume as we would like to see, but I am convinced that benefit will come from the trade mission and the contacts and exchange of information accompanying it.
I would not expect to see tangible results before Christmas, and indeed it may be several months before results are evident. Businessmen are inclined to take their time about such things. I am not a businessman, but as a lawyer I have had some indirect connection with businessmen. I have found that they proceed rather carefully and thoroughly investigate the possibilities inherent in each situation, and I am satisfied that is what will happen in this case.
I congratulate the government on undertaking to send a trade mission to the United Kingdom in an exploratory way. If they buy goods from that country they will create opportunities for sales of Canadian goods, and the trade resulting will be a two-way road which will benefit this country. I congratulate the minister as an old friend, and wish him every success in his efforts.


Mr. Gardiner:: Mr. Chairman, I am not going to attempt to enumerate the arguments advanced by the hon. member for Victoria-Carleton or to answer them directly. His address held my attention, particularly the part of it in which he commented favourably

upon those who had participated in the debate and had not introduced anything in the way of a narrow political nature into their discussion.
I thought I would not have to mention anything of that kind when the hon. member took his seat, but letting my memory drift back over the discussion that has taken place up to this point I find it somewhat difficult to remember anything that was said which was more politically narrow than the suggestion made by the hon. member for Victoria-Carleton to the effect that in the 22 years the Liberals were in office they had not produced even a one point program. That seems to me the essence of narrow political comment, and I am only going to leave it with hon. members of the committee to determine how correct it is.
I do wish, however, to join the hon. member in commenting upon the appointment of the Minister of Trade and Commerce. The appointment of the present minister fulfils a long-desired hope on the part of those who live in the prairie provinces. I thought we were never going to be favoured with the appointment of a minister of trade and commerce from the prairie provinces. In my time we have had ministers holding this portfolio come from every other part of Canada including British Columbia, but I do not recall one from the prairies. I want to not only congratulate the minister on his appointment but the prairies in having provided a minister of trade and commerce, because there are so many matters which come under that department that concern the people of the prairie region.
I sometimes had the feeling that because of the many things which come under the Department of Trade and Commerce it was going to be difficult to have a man from the prairie area appointed to the position, but now that we have one there are many people in western Canada who have high hopes about what will be accomplished through his performance while he is in office. I am not going to say anything today in discussing the questions which are before the committee which would be other than of some assistance to the minister in bringing about a condition that will be helpful to Canada, now that we have a minister from the prairie section in this post. I want sincerely to congratulate him on having been chosen Minister of Trade and Commerce.
The questions which have been up for discussion have raised a number of thoughts in my mind, the first one being the high level discussion between representatives of the government of the United States and representatives of the government of Canada. I recall the first such discussion which took
Supply-Trade and Commerce place during the time we were in the government, and that it was suggested by the agricultural representative in Ottawa from the United States. We were discussing at that time matters which are very much in the mind of the last speaker, the hon. member for Victoria-Carleton, namely the shipment of potatoes into the United States. The chief discussion going on in the Senate in Washington was the importation of many potatoes which entered into competition with the production of United States' farmers.


Mr. Macdonnell:: Will the hon. gentleman permit a question? Did I correctly understand him to say that the first negotiations between Canada and the United States on this question took place during the regime of the last government; nothing before that?


James Garfield Gardiner: If I gave that impression it would be wrong, and I think that is the suggestion my hon. friend wishes to make.


James MacKerras Macdonnell: No, please.


James Garfield Gardiner: I was not saying that, no.


James MacKerras Macdonnell: Please; I was asking
purely as a matter of interest. I am ignorant of the matter myself and I wanted to know.


James Garfield Gardiner: What I was saying was that these high level meetings between a committee of four members of the Canadian government and four members of the United States government had their origin in a discussion with regard to the potato question, and it was brought up by the agricultural representative from Washington who was stationed in Ottawa. He made the suggestion that we should have the secretary of agriculture of the United States come to Ottawa and discuss the question of potatoes with us.
Well, he came, and the minister of trade and commerce of that time and I met him. He was astonished to find the quantity of potatoes which were being shipped from the United States into this country. He did not really realize there was any such thing going on. I need only refer to the fact that it was only a short time ago that many more potatoes were coming into this country from the United States than were going from this country to the United States. At that time it was not quite in that position, but when the secretary of agriculture came here he asked us to send him back to Washington all the figures with regard to the matter, and he said, "I can assure you that when these facts are made known to the senators in the United States there will be little further discussion along that line". A result following his ideas was obtained at that time.
2042	HOUSE OF
Supply-Trade and Commerce
A year or so later there developed another question of a similar nature which we were concerned about and which the Americans were concerned about. We were shipping great quantities of oats into the United States; we were shipping them into Chicago, and at that time the state of Illinois and the other corn states around about had enormous surpluses of corn for livestock feeding. Then senators from those states rose in their places in their house and criticized the importation of these large quantities of oats right into the midst of an area where they had such great quantities of corn. Well, the discussions reached considerable heights of criticism, and then it was suggested to the Americans that it might be well for us to sit down and discuss such questions before they got to the floor either of the Senate of the United States or to the floor of this house here, and that we should understand one another's position prior to that.
The result was, as is known, that we did have two of those conferences before this government came into office, one in Washington and one in Ottawa. The same members of the government of the United States took part in those discussions, not the same individuals but those occupying the same positions, and the same departments were represented here.
We had two of those conferences, I think two years apart, before the present government came into office. The discussions which took place with regard to oats brought out the fact that after all there was need for feed oats in the eastern part of the United States, in the state of Maine and in other states in that section of the country where the production of corn was not in competition with oats at all, and where there would be no difficulty. Out of that kind of discussion we arrived at the idea that it would be a good thing to have such discussions periodically in order to settle some of the questions outstanding or to give full information to one another with regard to some of the discussions which might take place.
Well, I remember one of the criticisms made of that kind of meeting by the now Prime Minister when he was sitting on this side of the house. He said that we left Ottawa in silence, we sat in silence in Washington, and we returned to Ottawa in silence. Well, I only wish to suggest that in regard to a matter of that kind and taking into consideration some of the reports that came out about the last discussion, our purposes would have been just as well served if that discussion had been in silence, too.
The purpose of a meeting of this kind is not to have a lot of publicity all over the


country as to what happens or what might happen. The purpose is to exchange information in a meeting which is usually held behind closed doors.
I think at the previous meeting we had there was a time toward the end when it was more or less thrown open and reports were given to the press. But the discussions themselves, at a meeting of that kind, are of necessity carried on behind closed doors and the results will be better if they are.
Therefore I do not take exactly the same attitude toward some of the discussions which have taken place recently as some others who may never have taken part in them. I do think we should fully understand what that kind of meeting was intended to be for when it was first set up and govern ourselves accordingly, in order to keep the records as straight as we possibly can as between this country and the country with which we have the greatest amount of trade.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
James Garfield Gardiner: Mr. Chairman, when the committee adjourned for lunch I had just opened a discussion of some ideas which I wish to present in connection with the estimates of trade and commerce. I suggested at that time that we in western Canada had reasons for being somewhat pleased with the fact that we have a minister of trade and commerce from the prairies. I had also referred to the fact that there had been Canadian missions to Washington and Washington missions to Ottawa for some four years prior to the coming into power of the present government and that during that period there had been two of these missions.
I did wish to say a word or two with regard to the other matter of the mission to Britain and to say what I would judge the minister already understands, that this is not the first occasion upon which missions of a similar nature have gone to Britain. I hesitate to say this because of some remarks made during other debates by one or two of the younger members of the house who seem to have some objection to going back 20, 30, or some other number of years in order to obtain illustrations as to what could happen in connection with similar missions now or anything else similar that happens at the present time. However, since I am the only member left in the house who was in the government when we came into power 22 years ago I think I should mention that we

did something similar to what has been done now. The minister of trade and commerce who was at that time Senator Euler; the minister of finance, who was at that time, Mr. Dunning, and I as minister of agriculture went to Britain. Our reason for going was the fact that in 1932 there had been one of these conferences which had determined many things that had influenced our trade with Britain. We went there to discuss that matter and to try to arrive at some conclusions as to what might be done in order to overcome some of the difficulties created.
One of them affected the selling of apples in Britain, another the selling of bacon and another the selling of wheat and other products. It is sometimes forgotten that we had 298 million bushels of wheat in storage in western Canada elevators and other elevators across Canada at the time we came into power 22 years ago. In other words, this is not the first time there has been a surplus of wheat in Canada. At a later date still we had some 600 or 700 million bushels and now we have about that amount again.
But on this occasion we went over to Britain for the purpose of discussing these problems and we had some rather extended discussions which began on the 14th of August of that year. After our return we sent over a delegation of eight men. Someone has objected to the present delegation having about 50 members, but on that occasion we did send a smaller delegation. They were only dealing with the sale of agricultural products and there were only eight men. I have here a report of that mission which I am not going to read. I brought it with me, however, in order to demonstrate that there is such a report. There is a report that I made personally with regard to agricultural matters and there is a report prepared by the delegation of eight who went over there and discussed agricultural marketing at that time.
Out of that there did grow something which I am going to call to the attention of the minister because it was more or less inoperative at the time the government changed. At that time it was recommended by this group that, apart from the representatives of the Department of Trade and Commerce, there should be representatives of agriculture in Great Britain and that their special mission should be that of seeing to it that more and more agricultural products were sold in Britain. I am not going into detail with regard to it other than to say that until we came to the end of the war that policy had obtained very good results. We did sell more and more products in Britain right down to the end of the war, but at that
Supply-Trade and Commerce time it became necessary for one thing to re-establish the old provisions that had been set up under the conference of 1932 which meant that bacon and many other products had to be bought in considerable quantities from countries other than Canada. That has had some influence, although it has not been the greatest influence in the matter over there.
When the gentleman who was in charge of that set-up in Britain at the end of the war and for some time after the war was superannuated no successor was appointed. He retired not so many months ago and no one has been appointed to replace him. There is provision in the estimates of the Department of Agriculture for the appointment of a head of that organization, some of which is still there. I think that organization did good work and I think it could still do good work.
But my intention at the moment is simply to draw attention to the fact that there have been delegations sent before to obtain trade, sometimes led by the minister of trade and commerce, sometimes led by others. But it has been a function which has been carried out before, and the hon. member for Vic-toria-Carleton referred in his remarks to the mission that went to South America. I would say that some good can come out of these missions, but I think those that were sent before were largely sent for the purpose of selling Canadian products. As was intimated a few moments ago by the hon. member for Macleod should be the case, I believe they were sent for the purpose of selling Canadian products, we always believing that it was necessary not only to buy products from other countries but to sell products to them.
I wanted to bring these two matters to the attention of the house, first, the fact that we have had conferences with the Americans before and, second, that we did have these delegations go out to sell our products before and with considerable success. I also wanted to call attention to two or three statements made by the minister yesterday. The first is to be found on page 1968 of Hansard towards the bottom of the page and is in these words:
Encouraging progress has thus been made toward two of the objectives of the present administration, the reduction of our large deficit on merchandise trade and the expansion of the share of our imports coming from the United Kingdom. We shall continue to pursue both these aims vigorously in the future.
In the next paragraph he goes on to state:
I do not think any government in Canada's history has done so much in such a short time to implement its trade policies. Within a few days of assuming office the Prime Minister went to London-

Supply-Trade and Commerce
We go on from there, and a little farther on in the same paragraph it is stated:
Indicating the importance we attach to our trade with the United States and other non-commonwealth countries, we met with Messrs. Dulles, Benson, Weeks and Anderson of the United States cabinet in Washington in October-
I have already referred to the fact that that kind of discussion had already taken place previously, but in commenting upon these statements I wish to call attention to the fact that our Canadian trade is very considerable. I am not going back to the beginning of the 22 years to point out how low it was at that time nor am I going to say it is only the fact that there was a Liberal government for 22 years that resulted in our trade being so greatly increased over that period. Many things have happened in the world during that period of time that have had their effect upon the trade of all countries. I am only going to say that certainly while we were here we did so guide the destinies of this country in connection with matters of that kind that Canada did progress as much as any other nation in the world.
I was not able to get the tables for the last ten months for both exports and imports, and therefore there will have to be some averaging done of the figures which I am going to place on Hansard. I was only able to get the exports for the last nine months and imports for the last ten months. I think if I use round figures the figure will be close enough to be the average of these two for nine and a half months. During that period of nine months up until September, 1957 our exports to the United Kingdom amounted to $544 million-I think $545 million would be about the correct figure. The exports to commonwealth countries other than the United Kingdom amounted to $165 million; exports to the United States, $2,123 million and to all other countries, $902 million.
I want to say in this connection that it is obvious our exports to the United States are almost four times what they are to the United Kingdom. There is not any comparison between our exports to the United States and our exports to other countries. We have much more in the way of export trade with the United States than we have with any other country.
In so far as imports are concerned, we imported from the United Kingdom commodities to the value of $407 million; from commonwealth countries, $183 million; from the United States, $3,493 million, and from other countries, $881 million. Again, it will be seen that our import trade with the United States
[Mr. Gardiner.!

is very much greater than our imports from any other country, as a matter of fact much greater than our imports from all other countries put together. In other words, there is no question but that the United States is not only our best customer but she also sells a great deal to us.
As a result of this fact many people would have us believe that trade with the United States contains some factors which might be harmful to us. I should like to deal with that question for a moment or two, and the question of the necessity for balances in trade and what is meant when we discuss balances in trade. I want to say that when you are dealing with a country such as ours, which is comparatively young and with a small population, and when you are comparing Canada with a country that is comparatively old, like Great Britain which has a population about four times as great as ours, balances of the kind that are sometimes talked about would appear to be more or less an impossibility. Then when we are dealing with a country as great as the United States, which lies alongside of us and has a population about ten times as great as ours and which, while not an old country is a very highly developed industrial country, talking about annual balances in trade is just a waste of time. It is just a waste of time to talk about balances in trade over a period of 12 months as between our country and either of these two countries; balances of that kind are an impossibility. The United Kingdom has 60 million people, is an old country and must import many of the primary products that it converts into commodities that the nations of the world require. This is an entirely different situation from the situation we have here. If one talks about balancing trade over a 12-months period, with such a country one is just attempting to bring about a condition of stagnation in one or both of these countries.
These remarks would be even more true if we applied them to a country like the United States. By way of illustration, I might point out that when the United States was developing in the sense that we are developing now, towards the beginning of the last century and even after the middle of the last century, a great deal of capital was invested in that country from the United Kingdom and elsewhere.
Not only was capital invested there, but some of the best experts in connection with industrial development, such as Carnegie, for example, went from the United Kingdom to the United States and took a very leading part in the development of the steel industry of that country. The same thing has got to

happen in this country if we are going to develop our natural resources here to the extent they should be developed. We must get capital from the outside. We must get experts from the outside. We must get technical experience from the outside, and that means bringing capital in the form of machines to this country and bringing all the expert knowledge here, to the extent it is required. I repeat that we are wasting our time when we continue to discuss the possibility of having balanced bilateral trade between two countries that are so entirely different as these countries, both in their development and in their populations.
We talk about balancing trade over a 12-month period. It will be very fortunate for this country or any other country if that trade balances over a 10-year period. It is more likely it will not balance in less than a 25-year period and, in connection with many aspects of trade, it may be even 100 years before there is a balance. In other words, the investment we are making now and the development that is taking place now will not be producing the commodities that are going to be sold for some considerable time, so I think we should keep that in mind when we are talking about these balances and when we are trying to arrive at conclusions that may be helpful.
I mentioned earlier that in the west we were somewhat pleased because we have a Minister of Trade and Commerce who is from the west. I say that because I want to call attention to the figures in connection with agriculture as they relate to these countries. The United States and Canada are located on the same continent. We are on the northern half of the continent, and the United States is on the southern half of the continent. We must, therefore, trade with one another in agricultural products and in the feed that is necessary to feed the livestock we have on this continent. If our continent were divided from north to south instead of from east to west, this type of trade would not be a necessity.
When we look at the figures we realize how important that trade is. The last year for which I was able to get figures before coming into the house shows that imports of agricultural products from the United States amounted to about $300 million and exports of Canadian products to the United States, $235 million. For most of the years one might look at they are almost in balance. We ship agricultural products to the United States to about the same value as the products the United States ships to us. We get from the United States citrus fruits and juices, cotton and that kind of thing. We get
Supply-Trade and Commerce other products that we are not able to produce in this country. We send down there largely feed grains and livestock. Incidentally, their livestock enters into competition with our own livestock on American markets. We do send, too, a very considerable quantity of livestock products. The exports of feed grain amounted to $107 million and $87 million for livestock products. We have to be very careful in our discussions of matters of that kind that we do not give offence because that might result in shutting off some of that trade.
For example, the Minister of Agriculture, in replying to me yesterday, called attention to the fact that they had 360,000 cases of eggs when he took over. I did not say so in the house but I asked him outside the house if he thought I planned to turn them over to him.
As a matter of fact, I expected to head the organization that was going to sell them and I am very pleased to know that organization functioned so well even after I left the department as to sell them all before December 1 and leave us in exactly the same position as that in which we had been in the previous two years. This is not the first time we have had 360,000 cases of eggs under the control of the agricultural prices support board and on every occasion those eggs have been disposed of without giving any more difficulty than in 1957. That brings me to a remark that was made the other day by the hon. member for Lincoln. I just want to refer to that remark while I am on my feet. As reported at page 1989 of Hansard he said this:
Canada's most unfavourable trade balance with the United States and other countries coupled with our tremendous surplus of farm produce was one of the main reasons that brought about the change of government on June 10.


The Acting Chairman (Mr. Rea):: Order. I am sorry to interrupt the hon. member for Melville but I must advise him that his time has expired.


James Garfield Gardiner: I have a little bit more to say but it would take me a minute or two to do so. I can do it later.


Charles Edward Rea: Is it agreeable to the committee that the hon. member should be allowed an extension of time?


Some hon. Members:: Agreed.


James Garfield Gardiner: Just to finish this one point. The statement I have just read was made. With regard to that I would say that there is a possibility-and I think a very decided possibility-that the idea people had that there were great surpluses of agricultural products was one of the reasons some members lost their seats and that others won their seats. But I

Supply-Trade and Commerce want to point out that neither at that time nor at any other time in recent years has there been any troublesome surplus of these farm products in Canada at the end of any particular season during which the products were being produced and sold. The only one with regard to which there has been a troublesome surplus was wheat and it, of course, affects largely agriculture in the western part of Canada.
But as I pointed out a few moments ago, there is considerable trade between Canada and the United States in fruit products and vegetable products and other agricultural products and while they balance in total over each year there are periods of the year when, because of seasonal conditions in the two countries, the producers on this side of the line have some difficulty. We have attempted in the past to deal with that difficulty by having what we call seasonal duties. It depends on how well those are adjusted from time to time as to what effect they really have. You cannot set any definite date because the weather is not the same in different years and you have to adjust them from time to time. Some adjustments had to be made in connection with our trade with the United States just before the election. We made some of them in the early part of the spring.
I want to refer to this matter in order to answer another suggestion that was made by the Minister of Agriculture the other day. He told us that they brought in the provision that puts fowl under the Agricultural Prices Support Act. In order to be absolutely fair, I think what he intended to convey was that they really applied it. It was there before they came into office in the form of an order in council setting out the date on which it would come in as August 1.


Mr. Harkness:: The fifteenth.


James Garfield Gardiner: And that was marked up to the middle of July, I think. I would still maintain that that was something that was done previously, and it was done for a purpose. The reason was that we had too many grade A large eggs in Canada. Grade A large eggs are mostly laid by old hens. The older they get, the bigger the egg tends to be. That trade in fowl with the United States had developed into a position where old hens were selling in this country at higher prices than they were selling in the United States. Therefore something had to be done about the matter if we were not going to have this market flooded with United States old hens. The first thing that happened was what our soup makers in this country did. When you eat chicken soup, you may think you are eating young chicken, but you are really eating fowl or old hens. The soup makers


found they could buy old hens in the United States more cheaply than they could buy them here because our price support system kept the price higher here. Therefore they bought old hens from the United States.
When our old hens were coming on the market a year ago it was found to be already supplied by United States old hens. Our old hens were left alive to lay grade A large eggs. In the spring of this year we undertook to deal with that situation. Old hens start to come on the market about August 1. So we said there was going to be a support price on Canadian old hens or fowl, that we would take them off the market and so deal with the situation as to lessen the number of grade A large eggs that were produced in this country. Apparently it has worked because it would not have been possible for all those eggs to be disposed of by December 1 if it had not worked. I therefore assume that it has worked. My hon. friend shakes his head. From that action I take it that he means there are still some of them around that are frozen; that is some of the eggs but they are not grade A large eggs. The eggs that are frozen are B grade eggs. We set a floor price on B grade eggs. It was that floor which took those eggs out of the way of the others and made it possible to sell the eggs that should go on this market.
I could go on and enumerate a number of cases of that kind but it is only to illustrate one point. We have this $235 million or more of exports of farm products to the United States annually and we import things like cotton, citrus fruit juices and so on to the extent of something between that and $300 million from year to year. One of the dangers of doing things which some people think you ought to do in connection with a matter of that kind is that you may. actually kill the goose that lays the golden egg.
The biggest trade that the farmers of this country have with the United States is in cattle. What happened two or three weeks ago only goes to show how people are concerned about that trade. There has been an arrangement in connection with our cattle that has existed ever since 1947 under which cattle of 700 pounds or over can move into the United States at a duty of 1J cents. Then when we get up to a certain number the duty goes up one cent. It went up the other day, or at least some cattle were being bought with that extra cent on and immediately every cattle producer in the country became concerned that there was going to be another cent duty on his cattle. Of course that was not the situation, as the minister explained to the house the other day. But it could very well become the situation.


Douglas Scott Harkness: It is on now.


James Garfield Gardiner: Yes, it is on now. It stays on until January 1 and then goes off, and again you have 120,000 cattle that can go down to the United States in the first quarter of the next year and in all probability there will not be any more than that go, if that many; so the dealers carry on until you get into the last quarter of the next year. If the extra amount is put on any cattle that it did not need to be put on, that money will be paid to the producer as time goes along.
All I am pointing out is that you have very important trade between the United States and this country in farm products and one of the products is cattle. Another is the lower grade of wheat, oats and barley, perhaps lower priced barley; because the barley that is used for malt does not go down for the purpose of feeding. But most of the barley that goes to the United States, most of the oats and much of the lower grades of grain go there to feed livestock. Anything that we do on this side of the line should not interfere in any way with that trade or should not give reason why the Americans may retaliate because of something that we do and bring about a condition in which that product could not be sold.
I have just one remark to make with regard to wheat. Not much has been said about wheat, but I want to say this. Our sale of wheat must be carried on, if it is going to be carried on successfully, in very much the same way as the sale of anything else is carried on. You must find somebody who wants it or needs it. You must find somebody who can pay for it, whether it be within the country or outside the country. It must be paid for if the board is going to be able to pay the producer.
But what I want to call attention to at the moment more than anything else is this: we have a system of our own of assembling our wheat. We have an elevator system, which is a costly way of storing wheat-a cent a bushel a month-and when we are paying out that much it is easy to run into a position where the highest cost to agriculture in the wheat growing country is paying storage on that grain. Two years ago we did something about this position and undertook to pay half that cost. It is an expensive way of doing things, but it is our way, and there are reasons for it.
But it is not the way in which grain is handled elsewhere except in a very few countries. And then, again, we have our own way of marketing wheat. We have a wheat board, and 90 per cent of the farmers in western Canada think that is the way in which it ought to be marketed. But I would call
Supply-Trade and Commerce attention to the fact that when you get outside Canada and start selling you are dealing with customers who have not got these arrangements at all, who do not understand them, and who probably do not want to understand them.
For example, in every other country on the other side of the ocean you find men who earn their living selling grain. It is their livelihood, and if this grain is placed in such a way that these men cannot help to sell it we may find them competing with us; they are going to sell somebody's grain, because they cannot make a living without doing that. And so I think that when we send over delegations to promote sales of any commodity on the other side we should take these matters into consideration. I understand that the members of the commission now in the United Kingdom are not over there for the purpose of selling something but for the purpose of buying something, but I know that under this government or under some future government we will be sending over a mission to try to sell products, and they should take into consideration when they are doing that the methods which are used in those countries.
Belgium, Great Britain, the Scandinavian countries and other places where we sell our wheat have their own way of handling this business; we must work in with their plans in order to sell our products. So I would suggest to the minister that he should not only have commissions going overseas to buy, but have others going over to sell, and that these should always take into consideration both the methods of financing and the practices used in handling the product on the other side. I am sure the wheat board has been doing this to a very considerable extent over the years, and I am sure they should be encouraged to continue to do so, and if they continue this work we will be able to dispose of considerable quantities of our wheat.
I am not going to prophesy that all the wheat we have at present will be sold inside 12 months. I am not going to say that, although I did prophesy in 1940, when we had some hundreds of millions of bushels on hand, and when we were threatened with a total surplus of 600 million bushels, that when the war was over, or a year after, we would be 100 million bushels short. I was laughed at because of that statement; pamphlets were distributed all across Canada questioning the prophecy, but within a year after the war that is exactly the position we were in.
I will not attempt to prophesy again, because I was right that time and I might
be wrong the next time. But, nevertheless,

Supply-Trade and Commerce that is a situation which is going to develop from time to time, and I think if we handle the situation as it should be handled, and if the wheat board promotes the selling of our wheat in co-operation with the people we are going to deal with we will eventually be able to dispose of our crop.
But up to the present time, since the present government came to office, we have not been too lucky or, shall I say, too fortunate, in our handling of wheat. I think that as time goes on we will be able to sell greater quantities, and I think we can only do that by developing the greatest possible co-operation with the two great countries with whom we are so closely associated in trade. First, the United Kingdom. We can find the best agencies in the United Kingdom to dispose of our wheat that there are anywhere in the world. Britain is a trading nation; they must trade if they are going to exist.
With regard to the United States, there is a difficulty which I must call to the attention of the minister, and about which I hope he can do something. I tried to take some action, when I was in the government, and the former minister of trade and commerce also discussed the matter, but we did not accomplish anything. Up until the middle of the last war there was no embargo on wheat going to the United States, but since 1941 or 1942 there has been an embargo; we are not allowed to sell any wheat for human consumption in the United States or, at least, our maximum is 800,000 bushels, which goes in on the first day.
The two greatest agencies outside Canada for marketing wheat are in the United States and Great Britain, and I think we must cooperate with both in order to dispose of the quantity of wheat which we have for sale. I suggest that the next time a group of high level men goes down to Washington they should take up this question. I know it has been discussed there before, but it could be discussed there again. There are arguments on both sides, I know, but the men who produce the wheat are anxious that the government should take advantage of every opportunity there is to sell their product. And one of the opportunities, particularly in years when our wheat has a high protein content and the United States wheat has a low protein content, is that of marketing a very considerable part of our wheat through the mills of the United States-maybe not in the United States, but in other countries. At other times we should be able to market a considerable part of our wheat through the mills of the United Kingdom as flour to be sold elsewhere. We must keep these two things in mind if


we are to sell the enormous quantities of wheat which we produce in the west.
I am not going to say anything further than that now. When we are discussing some of the items in the estimates of the department I may have something further to say.


Douglas Scott Harkness: Mr. Chairman, I wonder if I could say a few words now with regard to what the hon. member for Melville has just said?


The Chairman:: Would the hon. member for Mount Royal mind allowing the Minister of Agriculture to speak?


Mr. Macnaughion:: Mr. Chairman, I was indeed interested to hear the short report the minister made, in particular the commendation of the trade commissioner service. It seems to me that the minister is lucky to be heir to a legacy left him by the former minister of trade and commerce, the Right Hon. C. D. Howe.
I should like also to take the opportunity of expressing my feeling of gratitude for the services of the trade commissioners. On many occasions during the past few years I have found it necessary to call upon them for assistance, and they always knew the proper quarters to which to refer me and others interested in trade matters. At all times they provided the highest form of service with regard to securing and developing of the foreign trade of this country. I wish to pay a personal tribute to this service, which is among the best in the world.
The Minister of Trade and Commerce spoke of the trade mission. Some people have called it a junket to Great Britain but I will not be so unkind as to refer more than once to that. We have heard a good deal about the wonderful reception which the English people, and others in the United Kingdom gave, and are giving to the mission. That, of course, is only natural for English people are by nature extremely hospitable and receptive. Why should they not be when people are visiting them desiring to place orders for the goods they manufacture.
Be that as it may, the British are first class traders. As we know, they live by trade. I make these remarks because I should like the minister to tell us what results he hopes to obtain from this trade mission. I would also ask him to make, in due course, a full report to this house with regard to this matter. The trade mission of course is a matter of extreme interest to the British and naturally so and I think it might serve a useful purpose if I referred to the London Financial Times of November 20, 1957 under

a lead editorial entitled "The Switch of Trade" which says in part:
Within a few days of becoming Prime Minister Mr. Diefenbaker had said that he would like to switch 15 per cent of Canada's imports from the United States to Britain.
That figure has subsequently become a source of embarrassment in Ottawa. Nevertheless, the desire to achieve an increase in trade with Britain, to offset dependence on America, is both genuine and keen. The first major proposal for implementing such a policy which the British government put forward was the Anglo-Canadian free trade area. For political reasons that went much further than Mr. Diefenbaker's administration-which is protectionist in character-could accept. Indeed the Liberal party has given it such welcome as it has had. The Canadian government has found that it could only rely on voluntary exhortation and organization to try to increase Canadian purchases in the United Kingdom. The principal means of achieving these ends has been to send a trade mission to Britain.
I suppose we all want to assist the United Kingdom. Traditionally it is the thing to do and sentimentally it conforms to the desire of all of us here; but when we are considering a potential change in general policy I think we should also consider the consequences of such a change and what those consequences could be with regard to the United States, with regard to Canadian industry, with regard to the various nations in the group called GATT and also NATO, and with regard to the United Kingdom itself.
Let us take a look first at the reasons for our tremendous volume of trade with the United States. Over the years there has been a change in consumer demand in Canada and that change has been away from the United Kingdom. The United States makes the kind of things we have and like and moreover she is able to get them to us quickly and also economically. Secondly, and perhaps even more important, there has been a great increase in United States investment in Canada during recent years. It is an economic truism that an export of capital is generally accompanied by an export of goods. Canada's industrial development since the war and the development of our natural resources would not have been nearly so impressive without that inflow of capital from the United States.
The United States has invested in our national future and as we all know that investment has paid off. Therefore we find that by virtue of geographical proximity, national buying habits and fundamental economic forces, Canada now buys the bulk of her goods and services from the United States. If we are going to attempt to divert 15 per cent of our national business, in approximately the amount of $600 million, perhaps the consequences of that diversion could be quite different from what we may anticipate.
Supply-Trade and Commerce
We all know that the Americans are hardfisted traders. In fact, their trading attitude is that they will give a concession for a concession, they will give a dollar for a dollar. We know that the United States belongs to GATT and that deals made for and on behalf of the United States are subject to the approval of congress. We also know that the attitude of congress-let us state it quite frankly-is that if we are giving you a concession we will certainly demand a concession, too. We can therefore question how the minister will bring about the proposed diversion from the United States to the United Kingdom.
Perhaps there might be at least two ways. If the cost of production rises in the United States which obviously will bring an increase in the prices which Canadian manufacturers would have to pay for their imports it might be possible to divert some of the Canadian trade from the United States to the United Kingdom but I am sure the United States manufacturers will not help us in that regard. And then, of course, if Canada were to impose import licence requirements or were to increase the Canadian tariff on goods being imported into Canada that also might be a means of diverting some of the trade to the United Kingdom. But if we do that surely the same result will affect the other GATT countries who are in that trading arrangement so the net effect to the Canadian government would be no result.
I have just a few words to say concerning the situation of Canadian industry. If the Canadian government by import restrictions or increased tariffs or by a change in policy sets about to prevent United States products coming into Canada and sets about to divert other purchases to the United Kingdom, what is there to prevent the Canadian manufacturer from stepping into the breach and filling the needs of Canadian consumers? If we close the Canadian market to the United States suppliers-it is important to remember Canadians are only second to Americans in the production of general consumer goods- there is nothing to prevent Canadian manufacturers stepping into that void and filling the needs of the Canadian consumers. The net result again is that our attemps to divert some trade to the United Kingdom has failed.
Now with regard to the various nations in NATO and the GATT group it may be possible to divert $600 million a year from the United States to the United Kingdom but it would not be possible without giving the same chance to compete to the other nations in NATO and GATT, because surely to goodness we are not merely political partners in NATO. Surely we are partners in the economic sense as well.

Supply-Trade and Commerce
If we were to succeed in diverting 15 per cent of our trade from the United States to the United Kingdom I suggest that it might not be the United Kingdom which would step in and supply the consumer goods that we want in this country. It might, for example, be Germany. Germany might pick up most of the business for the following reasons. The Germans do produce excellent goods and they produce them at competitive rates, probably better competitive rates than is the case with the English. Along with their sales they provide first-class service and the type of consumer goods that Canadians would perhaps prefer. If this proved to be the case the objective of the minister would again be defeated.
I think it is quite true that many years ago the United Kingdom controlled most of the Canadian market. However, since that time we have had a tremendous development in Canadian industry and United States power has come to the fore. I think it follows that observing these results Great Britain decided to divert her own trade to the more natural channels of the sterling area. The United States is dominant in the dollar group and the United Kingdom is dominant in the sterling group and I suggest that the United Kingdom would be very jealous about giving up control of the sterling group if that control were threatened to any extent.
If Canada offers $600 million to the United Kingdom in the form of trade it seems to me that the United Kingdom is faced with the problem of investing in capital goods and plant in order to produce the type of consumer goods that this country wants and I doubt very much if the United Kingdom is prepared to invest in plant and capital goods without some assurance of a secure market in Canada. Whether or not this means that the United Kingdom will demand a long-term trade agreement, I do not know, but it seems to me that their reference to opening a free trade area between the United Kingdom and Canada obviously followed from that reasoning. They must have some assurance if they are called upon to invest in capital goods and plant that they will have the opportunity to sell in this market.
The natural trading area for the United Kingdom is of course the sterling area. Sterling is the means of payment and British manufacturing capacity has been directed to supply the needs of this area. The sterling group needs are consumer needs whereas Canada's needs are capital goods. Canada belongs to the dollar group.
I wish now to make a few general observations. It occurs to me that any policy of trade


diversion from the United States to the United Kingdom could easily deprive us in Canada of certain raw materials which we require to keep our factories going, and let me refer just in passing to certain metals, clays, oil, gas and coal. Again, this proposed diversion could certainly invite retaliation from the United States.
Restrictions on the imports of fish and oil from the west and iron ore from the east could very easily be imposed. Again this proposed diversion may create a lack of confidence in the foreign investor; that is to say, the rate of foreign investment in this country might perhaps slow down because if the foreign investor becomes alarmed over or afraid of the present government's financial policy or the present government's trade policy he might stop making investments in this country.
Canadian expansion has been financed to a large degree by outside capital and employment in Canada is geared to an expanding industrial economy. If we do not get the money to build the industrial expansion unemployment will obviously result. Unemployment is increasing every day and in our neck of the woods we fear that by the end of January we may have as many as 560,000 unemployed in this country.
Generally speaking, any nation that starts to restrict imports starts the trade ball rolling down the hill. None of us knows where it will stop. We had an example of that in 1929 and in the subsequent depression and I think we need to view any change in trade policy very carefully in order not to run into the same sort of thing.
I am told that a few years ago James Duncan, through a voluntary effort, tried to induce certain Canadian manufacturers to buy more from the United Kingdom. I understand that a survey was conducted among Canadian firms and they were asked to review the things which they would need and, if possible, to buy from the United Kingdom. So far as I know this effort had very little impact on the Canadian economy for the following reasons: first of all, the Canadian manufacturers would of necessity be buying in the cheapest market in order to reduce their costs. If they were not doing that at the time, then their competitors would beat them out on price. If this proposed diversion to the United Kingdom does not bring about the opportunity of buying materials at a cheaper price it may in turn increase the prices to the Canadian manufacturer and consequently limit his capacity to compete in the over-all world markets.
It seems to me that our trade with the United States has been a natural development of North American economy. It is obvious that

our lines of communication with the United States are very close and very effective. Advertising of American products make us familiar with them in this country. If you look at the Bank of Canada statistics I think you will see that the big import deficit with the United States is in capital goods rather than in consumer goods. That is to say, the large American companies in their search for natural resources have been coming to this country either by way of setting up their own subsidiary corporations or by investing in Canadian corporations and have exported vast capital sums, for example, in the development of the oil industry in the west and in the development of the iron ore industry in Labrador and in Quebec. Capital goods will follow capital investment and it also follows that where you have United States engineers who are familiar with United States industrial equipment needed in the development of those natural resources they obviously will try to spend their money first in this country and, failing that, they will go to the sources of supply which they know.
The world needs our resources and this in turn gives rise to the import flow of capital goods. There is, however, a natural diversion of capital goods which could be brought about by Great Britain. If Great Britain would free more funds for investment in this country, if Great Britain would buy operating factories in Canada as, for example, the A. V. Roe Company did, or if Great Britain would build new factories in this country, it would follow that capital goods and even to a certain extent consumer goods would flow into this country and bring in their train considerable imports from the United Kingdom.
I may be slightly old-fashioned but it seems to me that the onus to sell is on the seller and not on the buyer. Our big deficit with the United States and our surplus with the United Kingdom are a natural development of our free business economy, relatively speaking, free of controls, free of government interference and free of foreign exchange control. In order to try to do something to this free development of trade the government will have to play with or change the rules, such as increasing tariffs and bringing in restrictions, and that is why I have been trying to discuss this problem in a very real way in order to get some explanation now or later from the Minister of Trade and Commerce.
The question arises, why do we have to go to Great Britain? Why can Great Britain not come to us? What will be the effect on local industry, textiles, woollens, and secondary manufacturers? Down our way businessmen and labourers are considerably 96698-130
Supply-Trade and Commerce disturbed by this whole project. In proof of this-although it does not come from the Montreal district-I refer the committee to the Toronto Daily Star of November 29, 1957 in which is recorded an interview given by V. W. Scully, president of Stelco. He said in part:
"In tinplate and sheet generally, the Canadian mills have equipped themselves to meet the Canadian market situation", said V. W. Scully, president of Stelco.
"At the present time we have more than adequate capacity and we cannot see how our economic position is going to be helped if it is going to become more and more difficult to employ that capacity."
Mr. F. A. Sherman, chairman of Dofasco's board, said:
"We fail to understand how Ottawa could agree to cause more unemployment by importing tinplate which already is in excess supply."
In Cardiff, Wales, yesterday, Hon. Gordon Churchill, Canadian Minister of Trade and Commerce, said Canada is a definite market for British steel and tinplate.
I ask again why should the buyer have to do the selling? We know that the whole pattern of Canadian trade is a natural pattern springing out of a multitude of hundreds of individual business decisions. If we alter this natural pattern we will be setting up new stresses and strains.
While it may be possible, by interference, to shift 15 per cent of the trade from the United States to the United Kingdom, in the long run we may lessen the over-all trade. This, Mr. Chairman, is a comparatively free economy and we have got used to this type of economy. To try arbitrarily to change the whole complexity of the trade flow could result in great damage. It could very easily result in a lessening, not in an increasing, of our over-all trade.


Douglas Scott Harkness: Mr. Chairman, I should like to make one or two brief remarks in view of the statement made by the right hon. member for Melville in regard to the duty on cattle going into the United States. I do this so that there will be no further ambiguity in connection with this matter which has been considerably confused in the minds of cattle producers and in regard to which the situation has been somewhat ambiguous over the past two or three weeks. I cleared up the situation here on Monday of this week,
I think, but since that time there has been a further change to which I should like to refer.
The United States government has announced that commencing December 4 United States customs collectors will require a 2| cents per pound duty on imported cattle weighing over 700 pounds per head. This is an increase of one cent per pound over the


James Garfield Gardiner: May I ask a question before the minister leaves that point? I am apparently under a wrong impression myself with regard to one feature. I was under the impression that it operated on the basis of a calendar year and that while they might put on the duty now it probably would not operate after January 1. I would take it from what the minister has said that the year starts on the first of April-


Douglas Scott Harkness: Yes.


James Garfield Gardiner: -and that the duty may be collected from now until then.


Douglas Scott Harkness: The year is calculated from April 1 and there is a total quota of 400,000 head. But that again is broken down into quarters and there is a maximum in any one quarter of 120,000 head. I understand the reason for that is to prevent the whole
400.000	head being thrown on the United States market in one month, say, and disrupting their price structure. Therefore there is this provision that only 120,000 head can go in at the 1| cent duty in any quarter. The quarter we are now in, to which the
120.000	will apply, will be up at the end of December.


James Garfield Gardiner: That is the third quarter.


Douglas Scott Harkness: That is the third quarter, and the fourth quarter will then start, taking in January, February and March. During that quarter cattle can be shipped into the United States up to 120,000 head as long as the total for the year is not over 400,000 head. As the total number of cattle over 700 pounds we have shipped in so far is 141,503 head and as I believe Mexico has shipped only somewhere between 30,000 and 40,000 head, this means that we will still have a quota of 120,000 head for the next three months, January, February and March.


James Garfield Gardiner: But they will not be able to go above the 120,000 at a duty of 1J cents even if it is below the 400,000?


Douglas Scott Harkness: I think that is correct. That is my impression. The maximum we will be able to ship is 120,000 but as the right hon. gentleman is aware it is unlikely that during that period we will be shipping anything like the number of cattle we have shipped

during the past two months, and therefore from a practical point of view I do not think that will have very much significance as far as we are concerned.


Mr. Olson:: Will the minister permit a question?


Douglas Scott Harkness: Yes.


Horace Andrew (Bud) Olson: The figure of 120,000 head per quarter is used and 400,000 head for the year. Would the minister explain why that is so because four times 120,000 is not
400.000.	The two figures do not jibe.


Douglas Scott Harkness: I think I just explained that but I will explain it again. The total number of cattle over 700 pounds, primarily beef cattle, which the United States allows to enter that country under a duty of 1J cents a pound is 400,000 head in a year. As soon as there are more than 400,000 head the duty goes to 2| cents a pound.


James Garfield Gardiner: That is from all countries.


Douglas Scott Harkness: That is from all countries, but at least in recent years the only countries which have exported live cattle to the United States have been Canada and Mexico. There is a further provision which I understand is to prevent the whole 400,000 head entering the United States in one bunch and thereby disorganizing their markets. That provision is that during any three month period of the specified year the maximum number which can enter that country is
120.000.	and that is how the 120,000 figure comes into the picture.


Mr. Irwin:: May I ask the minister a question? Suppose the full quota was filled for the first three quarters. That would amount to 360,000. That would leave a balance of
90,000	in the 400,000 maximum. Would that mean that in the fourth quarter they could export only 90,000 head at the 1J cent rate? Furthermore, does the 400,000 head include slaughter cattle under 200 pounds?


Douglas Scott Harkness: With regard to the first question, if there were 120,000 head in each of the first three quarters that would make a total of 360,000 head and therefore in the fourth and final quarter we could only export 40,000 head at the 1J cent duty, not
90.000.	But you can export as many as you like at the 2J cent rate. There is no limit on the number that can be exported at the 2J cent rate of duty. Calves under 200 pounds are not included in this quota. Just a moment, I will check on that. Yes, calves are included. There is a basic duty of 1J
96698-130J
Supply-Trade and Commerce cents on slaughter and feeder cattle entering the United States weighing under 200 pounds or over 700 pounds.
Now, Mr. Chairman, there were two or three other points which the hon. member for Melville brought up about which I must say I am not in agreement. I think perhaps they are matters which would more properly be discussed on the estimates of the Department of Agriculture rather than when we are dealing with the estimates of trade and commerce. The matters that he raised in connection with eggs, fowl and so forth, I shall therefore leave until a later time.


Mr. McCullough:: I am sure the committee will appreciate the explanation the minister has given. I think the previous explanation he gave concerning exports of beef cattle to the United States was in answer to a question of mine. I asked the question because I appreciated the concern of exporters of cattle in western Canada. I should like to ask the minister a question now in further clarification. I believe he said that a record of the sales would be made and if there was an extra duty of 1J cents it would be refunded to the exporter. Could the minister explain how the producer might avail himself of this rebate or what effect it might have on the farmer who has put his cattle in the hands of an exporter and has been paid. Does he have to wait for a refund?


Douglas Scott Harkness: It would all depend on the way in which the producer disposed of his cattle. If he put them in the hands of a commission agent to ship to the United States and sell for him, of course he would get back the cent a pound duty when it was rebated. On the other hand, if he sold the cattle to a cattle dealer, he would have lost his interest in them and the cattle dealer would get whatever price he could. In some cases, of course, if the duty were charged the cattle dealer would lose money.


Mr. Lewry:: Mr. Chairman, I wish to join with others in this house in extending congratulations to the minister on his appointment, and to express the hope that he will be able to do a more acceptable job of work for our western farmers in the matter of trade than has been the case in recent years. I rise mainly to suggest to the minister that he should get off his big fat surplus of wheat and sell it. I do wish to say that I was somewhat disappointed with the attitude of the minister in connection with the disposal of the wheat surplus.
Prior to the calling of this session of parliament we in the west read on more than one occasion that the new minister was going to follow an aggressive sales policy to assist

Supply-Trade and Commerce the farmers in getting their proper share of the national income. One of my first questions in this house was in connection with the report that the Australian state of New South Wales had suffered a severe drought and a resultant crop failure. At that time it was suggested that Australia may have to import wheat in order to meet its commitments to other countries. I was chided, not only by some in this house but also by some western newspapers. It has now been publicized quite extensively that that condition exists, and that Australia will in all likelihood import some wheat. The news stories indicate that our sister dominion would prefer Canadian wheat. I should like to read in part a Melbourne Reuters dispatch of December 4 which states:
The Australian wheat board has asked federal government permission to import Canadian wheat, it was reported here tonight.
Board Chairman Sir John Teasdale said the shipments would go to New South Wales and Queensland, whose own wheat crops had been hit by drought.
Teasdale said Canadian wheat could be shipped to New South Wales and Queensland at about the same price as western Australian wheat could be transported to those states.
When I asked the minister a few days ago whether or not he had taken any steps to sell wheat to Australia I received the offhand answer that if Australia wanted wheat we would sell it to her. Where is that aggressive policy that was mentioned only a few weeks ago? I suggest to the minister that we cannot sit around and expect customers to come to us. The United States has already announced a new disposal program, and I am afraid unless some direct, aggressive action is taken to obtain this contract for wheat sales to Australia, we may even lose that. I suggest, in all deference, that the minister who, it seems, is quite able to make trips to other parts of the world might at least send someone to Australia, if necessary, to make sure this contract is tied up right now.
The western farmers are looking to this government for the kind of action that was promised, an aggressive sales policy. The farmers have piles of wheat taking up valuable space on their farms, in their machine sheds, cattle barns and expensive granaries. Some wheat has been stored for many years. They are asking for the new kind of aggressive sales policy that was indicated would come after the change in government. When the first story appeared in the newspapers about this Australian crisis it was indicated that possibly 50 million bushels might be required. The latest story indicates that it is already too late to import that amount, so
[Mr. Lewry.f
possibly we have already lost a good part of the amount we could have sent as a result of this lackadaisical attitude.
An extensive program is necessary as our farmers all across Canada are still only getting less than half of the share of the national income to which they are entitled. One out of six Canadians is a farmer, and he should get $1 out of every $6 of national income. But at the present time he is getting less than $1 out of every $15, or less than half of that to which he is entitled.
Under the former Liberal government the so-called Liberal prosperity forced 15 per cent of our farmers off their land. This applies to eastern and western farmers alike. Cattle prices have fallen in the east as well as the west, and at the same time prices of farm machinery have been increasing steadily. A few years ago a farmer could have purchased a new hay baler with the proceeds of the sale of four 1,000-pound steers. It now takes the equivalent of ten steers. In the west a medium sized tractor could have been purchased a few years ago with the money from the sale of 1,600 bushels of wheat. Today it takes 2,800 bushels to buy that same machine.
There are hundreds of farmers who have many thousands of bushels of wheat stored on their farms. Every day they see the foodstuffs required by people in other parts of the world going to waste in their barns. They were led to believe that a new policy would be implemented, but today we still have the same old procedure. It is the younger farmers in the west today who are suffering the most. It takes thousands of dollars to get a proper set-up for good farming. A few weeks ago in my own constituency I found several young farmers who had recently started in business facing virtual bankruptcy, yet they had wheat in storage. It is not thbir fault that the government fails to have the proper sales technique or ability to sell, yet they are forced to virtually subsidize the federal government by storing their own wheat. This policy has another discriminating feature; it is making big farms bigger and the small farmers are being forced out of business. I suggest to the minister that the farmers expect him to do his duty. They are past the stage of accepting any more promises, they want action now and they need action or they will be adding to the increasing unemployment problem across Canada.
May I say that even if this pile of wheat were all sold today, and it is the duty of the minister to sell it, the plight of the western farmer would not be relieved entirely. Depressed conditions would still exist, because

those conditions are brought about by the surplus itself. We were disappointed, therefore, last evening when the Minister of Finance failed to indicate any provision was being made in the baby budget for bolstering farm income. I am sure that if the responsible government officials are aware of the present farm situation, and if they are not aware of it it is time they became fully acquainted with the problem, they would be taking steps to correct the farm price relationship. The factor that will probably cause them the greatest concern is the fear of political revolt on the part of the taxpayers when called to support the farm economy.
Therefore it becomes increasingly more important not only for the farmer but for the government as well that these surpluses be disposed of, because when the surplus is disposed of and no longer has the depressing effect on farm prices then prices will automatically be forced up by demand and the farmer will gradually work up to a parity position in the market place. Consequently, sales are still our basic problem and it will behoove the minister to be as aggressive on this problem as he was before he became the minister. The longer the surplus remains, the longer the taxpayer will have to give direct aid to the industry. Therefore it becomes politically expedient for this government to take immediate action through the Department of Trade and Commerce.


Horace Andrew (Bud) Olson: I too should like to join with the many in wishing the Minister of Trade and Commerce well as he begins to deal with the problems that go with a department as large as the Department of Trade and Commerce. As many other members have indicated, the action taken by the Department of Trade and Commerce is probably more important to the farmers in western Canada than that of any other department. I should like to deal briefly with the general situation and also with the developments that have taken place with regard to the market situation of our wheat and petroleum industry.
I am very happy to hear the minister's high praise of the officers of his department and also to hear his high praise of and favourable comments on the activities of the trade commissioners in the various parts of the world. I too think that they are doing a good job in so far as our trade policies allow.
We are also happy to hear the minister tell us of the trade mission to the United Kingdom. We are happy to hear him say how well it is being received, and to speak about the enthusiasm of the British firms in meeting with this trade mission, about the number of people who have met this trade mission, and
Supply-Trade and Commerce generally the interest that has been shown. But I failed to detect in his remarks any definite or specific corrective policy or anything to indicate just what they were going to do to increase our trade. He mentioned, of course, that they were going to buy or to attempt to place larger orders in the United Kingdom; and of course it follows that that course will possibly lead to the United Kingdom's placing larger orders in Canada. I was greatly interested in the remarks of the hon. member for Victoria-Carleton, I believe it was, who suggested that they had high hopes for this mission, that they would be able possibly to increase this trade and that out of this delegation would come certain things that would in fact increase the trade.
I was, however, under the impression that this government had a trade policy before this mission went to Britain and that it was not dependent on what would come out of this mission. We know, of course, that there has been a declining market with regard to our wheat. I fail to find in his remarks anything that would have a tendency to correct that situation. I admit that this new government inherited a wheat trade problem. But whether they inherited it or not, the fact is that the problem is now theirs, and we look to them to bring about some change in trade policies that will correct it, other than trade missions. It was a declining market before this government took over and it still is a declining market. For example, I should like the members of this committee to know that the flour milling industry in my own constituency is down. Local flour mills are dependent on export markets for full production. This local production is down 50 per cent in the past three months and, according to a committee meeting that was held recently, prospects for increased production are not good.
One thing this new government has in its favour, I think, is that the wheat we have to sell now from this year's production is a more acceptable product to the European countries, particularly Great Britain. The protein content is up. I have seen press reports-although I have not one here with me-to indicate that British millers have indicated that they think this new 1957 crop should be easier to sell.


William Moore Benidickson: May I ask the hon. member a question?


Horace Andrew (Bud) Olson: Yes.


William Moore Benidickson: It is in relation to his constituency flour mill. I also have a flour mill in Keewatin. I was going to ask the hon. member if he had ever been informed

Supply-Trade and Commerce that it was difficult to obtain for the domestic mill wheat of sufficiently high protein content to justify full-time milling.


Horace Andrew (Bud) Olson: Yes. I think that has been the case in the past. However, my information now is that since the new crop has come in, it has overcome this problem.


William Moore Benidickson: I was referring to past years.


Horace Andrew (Bud) Olson: One other thing we must remember is that the Canadian wheat board is the sole selling agency for the wheat in western Canada. Because of that fact I think it is only reasonable that the farmers in western Canada should expect the Canadian wheat board policies and the policies set up by this government for them to follow to be the best trade practices. Along that line I should like to make a suggestion, and it is this. All Selling agencies, regardless of what they are selling, usually have stocks of their product where they are most easily accessible to the purchasers. I think that he should take into consideration storage in Europe and in other countries where our customers are. For the immediate picture, I think perhaps he could take into consideration offering our wheat on consignment to fill whatever unused storage there is in these areas at the moment. Then the customers could pay for this wheat as it is used. The hon. member for Cariboo some days ago suggested that we build some storage in England and in some other countries and I think this is a good idea. Perhaps immediately we could look into the matter and see how much unused storage there is there now and offer our wheat into that storage space until such time as perhaps we can get around these currency difficulties and so on. I think it would be a great deal better if we put this high quality food into this storage space. Whether they can get paid for it immediately or not, it would be better than to have it spoil in outdoor piles on the farms.
I should like to associate myself also with the remarks of the hon. member for Macleod to the effect that the time has come when we should stop complaining about the United States trade policy with regard to agricultural products. Frankly, Mr. Chairman, I do not believe that Mr. Benson has any intention of changing this policy. I think we should stop complaining. As long as we are going along with this horse and buggy policy we should not complain about the United States if they go by us with some new policy which is more fitted to modern requirements.
Now, Mr. Chairman, I should like to deal briefly with the gas and oil export problem. To begin with, I should like to refer to some

newspaper articles to give members of this committee some idea of what our customers, or potential customers are thinking. This quotation is taken from the Fargo Forum, North Dakota, and it says:
The Canadian government apparently has killed, at least for several years, the possibility that Fargo-Moorhead and other cities in the Red river valley will get natural gas from Canada.
The report goes on to say that the attitude of the Canadian government-
-has been Interpreted as an invitation to the United States federal power commission to turn down the application of Midwestern Gas Transmission Company for permission to build a natural gas transmission line from the Canadian border.
Then the writer of this article goes on to say:
Diefenbaker's statement was vague. He didn't actually block the export of gas from Canada, but he created conditions which put the federal power commission on the spot.
The Winnipeg Free Press believes he was deliberately vague and left it up to the federal power commission to deliver the knock-out blow because that won't put the Canadian government on the spot with voters in Alberta.
Further on in this report it says, and I quote:
But it doesn't appear as if North Dakota fields will serve the valley, at least for several years, because a sufficient supply has not been discovered.
Northern Natural Gas Transmission Company of Omaha has announced future plans for serving the Red river valley with gas from the southwest.
Mr. Chairman, this delayed action policy in the eyes of the people who are most concerned, namely our customers for this gas, is no good because they are not going to wait for a year, or two years, or for whatever time may be required by this government to give the signal to go ahead. They are looking to other places for supplies of fuel and while we wait on some power commission or energy commission we are going to lose these markets.
Here is another quotation taken from the Lethbridge Herald dated Washington, November 27:
Francis L. Hall of the federal power commission during the current hearing of an application by an American pipe line, Midwestern Gas Transportation Company, for permission to import gas from Trans-Canada.
Later, the writer says:
Failure of the Canadian authorities to act timely and definitely may well cause the power commission to consider that the Midwestern and Tennessee applications have reached the end of the road.


Arthur Smith: 
Charles Edward Rea: I would ask the minister if this matter of exported gas comes under his department?


Gordon Minto Churchill: The issuing of export
licences for the export of gas does come under this department.


William Moore Benidickson: Also the Pipe Line Act.


Mr. Johnston (Bow River):: On a point of order, Mr. Chairman, it does not make any difference whether this matter is being heard before a royal commission or not. We are not discussing the evidence placed before a royal commission. What we are discussing here is the over-all picture of trade between Canada and the United States, and if oil or natural gas happens to come into that, the question of a royal commission would not affect the issue; it must be perfectly in order.


William Moore Benidickson: We cannot find out yet when the royal commission is going to begin its sittings.


Horace Andrew (Bud) Olson: The point I am trying to bring out with regard to gas exports is that by reason of this royal commission being set up to look into this matter we are losing our markets. I should like to read a paragraph from another news report which also appeared in the Lethbridge Herald under the date November 25. This article is headed: "The Time for Gas Export is Now." It reads:
"Canadian operators," Mr. Loughney said-
Mr. Loughney is senior vice president of British American Oil Company Limited.
-"have gone through many years of developing gas reserves in order to keep alive. Just as the farmer must sell his grain, so must the oil producer sell his production, both oil and gas-it is as simple as that."
In order to make saleable gas from wet-gas fields and solution gas, multi-million-dollar plants were being constructed or planned, and they would produce tremendous volumes of sulphur, propane, butane, natural gasoline and condensate.
High octane gasoline, raw material for synthetic rubber, explosives, synthetic yarn, fertilizer, plastics and many other things could be manufactured in petro-chemical plants.
There was already in Edmonton the nucleus of a petro-chemical industry from natural gas and, as the result of gas, new industries had been announced or were being studied.
With regard to the depressed state of the crude oil industry in Alberta, by which I mean the state of markets for this oil, I should
like to read this extract taken from the Montreal Gazette of December 6, under a Calgary dateline:
K. E. Hill, vice-president of New York's Chase Manhattan Bank, said in an address to Calgary oilmen here:
Crude from western Canada cannot be laid down in Montreal at a price competitive with Venezuelan crude, he said. Canadian producers, he added, should look to the northern United States instead for new markets.
The banker said the depressed tanker rates, which are helping to restrict Canadian oil sales on both the Pacific and Atlantic seaboards will remain in effect for at least the next five years.
Mr. Chairman, I submit that if something does not happen soon to give some impetus to the gas and oil operations in western Canada to continue their development and their explorations for gas and oil we are going to find ourselves in a serious unemployment situation out there. We have a market for this gas in the United States, and we have the gas. The only stumbling block in the way is the federal government. The oil and gas industry is ready to develop. It is ready to build the pipe line, and ready to search for more gas. Prominent operators have indicated that the reserves of natural gas which have been found up to the present in Alberta are only a fraction of the total supply, that the surface has only been scratched. I think they have now reached the stage when they need some inducement to develop further.
In my opinion this royal commission is nothing more than a stumbling block in the way of that development. We have before us an application for a natural gas pipe line from Alberta to California and to many other large markets in the United States Pacific northwest but all of these opportunities apparently are going to have to be set aside while a royal commission makes its investigation. As a matter of fact, I am not quite sure what the commission is going to study but it is clear that until this government gives the green light to the export permits or at least indicates what it is going to do, the gas and oil industry of Alberta is certainly going to suffer.


Mr. Lavigne:: Mr. Chairman, the reason I am taking part in this debate is because I am worried about the future of our textile industry. When I see the name of more than one of our own big textile producers going out on a buying mission abroad I feel I have good cause to concern myself with the results of this because it may have a very bad effect on many of our citizens.
I hope to make it clear that I do not wish to be too critical of this mission until we find out what they really have achieved. I believe that the obligation of the government to the people of Canada is not to sponsor buying
2058	HOUSE OF
Supply-Trade and Commerce missions abroad but rather to seek to encourage the establishment of industry in Canada and I hope that this mission may stir up sufficient interest in our markets to induce some industries to establish branches in Canada. It has happened before in our own community when Courtaulds (Canada) Limited, a British firm, finding a market for its products in Canada established itself in Cornwall and gave security and employment to many thousands of people when you consider all the people employed in supplying their raw materials and other services.
Our municipalities and provinces are spending much money in advertising and promotion in order to attract new industries to their areas. It offers no encouragement to domestic industries to establish themselves in Canada if the government is going to invite and encourage competition which Canadian industries may not be able to meet. It is a case of this government defeating the efforts of our provincial and municipal governments. Competition may be a good thing but this is true only when it is on even terms. We are enjoying a certain standard of living in Canada and I cannot believe that we are in favour of lowering this standard but if we are to meet the competition of low-wage countries we are bound to lower our standard of living which has risen considerably since the former government took office in 1935.
I remember the time when some of our textile companies were operating only 24 hours a week but today they are operating 24 hours a day, five, six or seven days a week. I hope this government will not turn us back to the condition that existed in those years when our textile industry was down to its lowest ebb by bringing in unfair competition even though it comes from a country which we would all like to help. I believe our first obligation is to our own people. If we want to encourage industries to come in from other countries of the commonwealth the first step would be to encourage them to establish themselves in Canada and use some of our Canadian raw materials.


Mr. Morris:: Mr. Chairman, several of the remarks made this morning just prior to the recess by the hon. member for Victoria-Carleton seem to me to require an amplification from some representative member of this house who comes from one of the great Canadian seaports.
In my constituency there is a great and growing interest in the prosperity of the Canadian trade delegation in the United Kingdom and in the results not only of its venture abroad but also of the broad trade policy of the new administration. I was interested to hear this afternoon the remarks made


by the hon. member for Mount Royal who said that some people had referred to the Canadian trade mission as a junket and if I understood him correctly he went on to say that he would not be so unkind as to refer to it as such, more than once. As a new member I have been impressed throughout this session by the ferocity of Liberal attacks upon the government outside this chamber and the relative decorum with which some of the Liberal party spokesmen conduct themselves inside the house.
Whereas the hon. member for Mount Royal said he would not describe the trade mission as a junket, which is surely a term of derision, he is quoted in today's Montreal Gazette at page 23 as having said in a radio broadcast last night:
Tory-inspired junket of Canadian businessmen touring Great Britain with the ostensible purpose of placing orders for British goods.
He then went on to say that he thought it inevitable that purchases made in Britain would be at the expense of Canadian manufacturers. I hope to show in a few moments that this is not a policy or program but merely a whine.
The water-borne cargo tonnage which passed through the port of Hailfax based on tons of 2,000 pounds or 40 cubic feet shows a slow increase in the amount of foreign waterborne traffic but an almost stationary total in domestic export traffic. In 1956 the inward water-borne cargo tonnage into the port of Halifax amounted to nearly 3 million tons and the outward to 2,300,000 tons a total of 5,183,001 tons. The domestic water-borne cargo tonnage in 1956 was 232,612 inward, 1,435,283 outward or a total of 1,667,895. While foreign water-borne cargo tonnages have nearly more than doubled since 1952 through the port of Halifax, domestic tonnage has barely increased. With the unanimous consent of the committee, Mr. Chairman, I should like to include in the Hansard record of my remarks today a table showing the water-borne cargo tonnage through the port of Halifax, both foreign and domestic, covering the period 1952 to 1956.


Charles Edward Rea: May I ask
what is the source of the material contained in the table?


Edmund Leverett Morris: The annual report of the national harbours board.


Charles Edward Rea: Has the
hon. member leave to place this table in Hansard?


Some hon. Members:: Agreed.


Edmund Leverett Morris: The table is as follows:
Port of Halifax-Waterborne Cargo Tonnage (Basis: tons of 2,000 pounds or 40 cu. ft.)
Foreign	Inward	Outward	Total1956 	.... 2,907,904	2,281,097	5,183,0011955 	
2,340,236	1,732,163	4,072.3991954 	
2,048,550	664,666	2,713,2161953 	.... 2,161,694	840,731	3,002,4251952 	
Domestic	.... 2,171,826	823,863	2,995,6891956 	
232,612	1,435,283	1,667,8951955 	.. . . 395,763	1,150,907	1,546,6701954 	... . 306,795	949,806	1,255,8811953 	
329,701	1,070,590	1,400,2911952 	
406,958	1,143,355	1,550,313(Note: Does not include non-revenue	ballast.bunkers,	ships' stores,	mail or passengers'	
baggage.)
Thus while our domestic waterborne cargo tonnage through the port of Halifax is just about stationary, export tonnage is increasing. This is not opinion but fact. What is it that keeps Halifax and other great Canadian seaports alive and busy, the waterfront workers with full pay envelopes? It is surely not domestic cargo tonnage, it is export tonnage.
In Halifax we have three miles of berthing in 23 deep-sea berths and seven coastal berths. We have 18 transit sheds with
1.306.000	square feet of floor area. We have a grain elevator with a capacity of over four million bushels and a loading capacity of
75.000	bushels an hour.
We on this side of the house often hear criticism from opposition members that the government is not finding markets for Canadian produce, including wheat. How can we be criticized for not doing something the doing of which also brings us criticism?
While we have all this cargo capacity in Halifax, the number of vessel arrivals and departures in the last six years of Liberal government was steadily downward. In 1952, there were 3,122 vessel arrivals in Halfiax; in 1953, 3,076; in 1954, 2,922; in 1955, 2,946; and in 1956, 2,887, down from 3,122 in 1952. Vessel departures show a corresponding decrease. This situation has also been true of the port of Saint John. In 1956, 1,608 vessels arrived in Saint John harbour. In 1952 the corresponding figure was 1,834. Last year the tonnage of water-borne cargo handled in Saint John was just over 2| million tons, half of that of Halifax, but the domestic water-borne tonnage in Saint John was only 507,000 tons, only one-third that of Halifax, so that Saint John has at least a corresponding interest in the development of United Kingdom import trade.


Mr. Bell (Saint John-Albert):: Hear hear.


Edmund Leverett Morris: Mr. Chairman, in 1953 we in Canada imported from the United States
Supply-Trade and Commerce $3,221,214,000 worth of goods. By 1955, this had risen to $3,452,178,000. In the same years we imported from the United Kingdom $453,391,000 worth of goods in 1953 and $400,531,000 worth in 1955. Thus, while our imports from the United States continued to grow the corresponding dollar total from the United Kingdom slowly declined. Our exports to the United States in 1953 were nearly $2| billion; in 1955, just over $2?>
billion. For the United Kingdom the figures are $665 million in 1953 and $769 million in 1955. The average of domestic exports, based on 1935-1939 dollars, to the United States during those years was $321 million. This has now increased more than 10 times in dollar value; but the average of 1935-1939 exports to the United Kingdom of $353 million has barely doubled. Thus while exports to the United States have multiplied eight to ten times, those to the United Kingdom have barely doubled.
What is the relationship in percentage terms of our import and export trade, Mr. Chairman? In 1886, the United Kingdom claimed 40.7 per cent of the total Canadian import dollar trade. In the same year the United States had 44.6 per cent of the Canadian import market.
In 1896, when Sir Wilfrid Laurier ascended to power, that total of the United Kingdom share of the Canadian import market declined to 31.2 per cent, while the United States percentage rose to 50.8 per cent. In 1926, by the time Mackenzie King had come to power, the United Kingdom percentage had declined still further to 16.3 per cent and the United States percentage had risen again, this time to 66.3 per cent. In 1955, the United Kingdom could claim only 8 J per cent of the Canadian import dollar total, while the United States had 73.3 per cent.
Our export results show an interesting contrast. In 1886, we exported 47.2 per cent of our dollar total to the United Kingdom and 44.1 per cent to the United States. In 1955, we exported 18 per cent to the United Kingdom and 59.8 per cent to the United States. Thus, as the United States percentage share of the Canadian import dollar total has risen to 73.3 per cent from 44.6 per cent in 1886, the export total has risen only from
44.1	per cent to 59.8 per cent.
Our trade deficit with the United States in 1949 was $601 million. By 1956 it had risen to $1,659,000,000, nearly three times in seven calendar years. In 1953, the now opposition promised Canadians that they would use every available means to maintain and expand Canada's external trade. They did not differentiate between the

Supply-Trade and Commerce United States and the United Kingdom; they said they would expand trade. The sum of this promise was a minus balance of payment last year of nearly $1,400,000,000.
In the report of the Minister of National Revenue on customs and excise, individual income tax and old age security tax results for the fiscal year ended March 31 last, there are interesting possibilities of clarification of the results of the inadequacy of external trade with the United Kingdom. Under the late administration, customs and excise collections, which would include import duties, sales tax and other excise taxes, in the port of Halifax, amounted to $17,401,405.44; whereas individual income tax and old age security tax collections amounted to $19J million, despite the fact that the then administration was collecting individual income taxes and old age security taxes in the four maritime provinces with the seventh, eighth, ninth and tenth lowest average incomes in the country at that time.
In Saint John, New Brunswick, customs and excise collections were just over $11 million; whereas individual income taxes and old age security taxes were nearly $19J million. Compare this with Montreal where customs and excise collections were over $588 million, double the income tax and old age security tax collections of $287 million. When you arrive on the west coast you see a repetition of the east coast position. Once again customs and excise collections were below income tax and old age security tax collections; in Vancouver, $884 million compared with $138J million, and in Victoria, $10J million compared with $22J million. I ask for the unanimous consent of the committee, Mr. Chairman, to place upon Hansard a table derived from the report of the Minister of National Revenue dealing with customs, excise, individual income tax and old age security tax collections at four ports and three other ports of entry.


Charles Edward Rea: Has the
hon. member leave to put this table on Hansard?


George Carlyle Marler: What is the source?


Edmund Leverett Morris: The report of the Minister of National Revenue for the fiscal year ended March 31, 1957 and it deals with customs, excise, individual income tax and old age security tax collections. It is a public document.


Charles Edward Rea: Is it
agreed?


Some hon. Members:: Agreed.


Edmund Leverett Morris: The table follows:
Individual Income Tax Old Age
Security Tax
Customs-Excise
Halifax	
$ 17,401,405.44	$ 19,387,908.41St. John's	
8,564,864.00	14,250,227.88Saint John ....	11,213,573.84	19,573,361.84Montreal	
588,066,108.19	287,422,584.58Toronto	
371,636,137.33	387,059,233.89Windsor	
79,250,615.33	28,576,485.05Vancouver	
88,712,766.97	138,540,265.30Victoria	
10,533,666.80	22,508,986.78
Customs-Excise includes imports duties, sales tax, other excise taxes, excise duties and sundry collections.
Chart for fiscal year ended March 31, 1957.
We are vitally concerned, Mr. Chairman, with the expansion of United Kingdom trade in the Atlantic provinces. We are concerned with the expansion of this trade because we are concerned with the development of our ports and the ancillary services that go in and out of those ports. An increase in United Kingdom import trade would mean more work for our docks and dockers, more work for our longshoremen and shipping companies and more work for rail and truck lines leading in and out of our great ports. We are not unmindful of the great value of neighbourliness and trading with the United States. We are concerned with the impact upon our ports and their workers of having concentrated over a long history too much of our trading dollar in one trading basket.


Walter Adam Tucker: Mr. Chairman, I realize that Saturday afternoon is not a very good time to indulge in discussing what I am about to deal with, but I am very glad that the Minister of Trade and Commerce is here and that he is about to return to Great Britain because I think this is a good time to talk to him particularly. In his speech he referred to the fact that it was not the intention of the present government to interfere with our profitable trade with other countries. Then he went on to indicate that our trade with the United States had grown to such a level that it made the situation rather lopsided. Then he indicated that he endorsed the idea of the Prime Minister that we should seek to switch around $600 million of our purchases in the United States to the United Kingdom and that the mission to Great Britain of which he is the head is designed to further that objective.
I take it that a fair inference from what he said is that it is the intention of the government at the present time to seek to rectify the lopsided situation about which he spoke by persuasion rather than by the method adopted by the previous Conservative government of imposing tariffs against the United States and

giving preferences to commonwealth countries and that it is sought to do the same thing now by persuasion because the results of trying to do it by tariffs in the early thirties were very disastrous for this country. I doubt very much if anything like the objective the Prime Minister had in mind will be attained by persuasion under existing circumstances with the United Kingdom so busy meeting demands on it already, with that country having a condition of relatively full employment, and with a situation beginning to develop in the United States that will result in that country seeking markets even more in the days and years ahead than she has in the past and attempting to dispose of her products on the markets of the world to a greater extent than ever before.
I am quite sure that this is going to give rise to a demand that again we seek to divert trade by tarriffs, controls on imports and various other means of interfering with trade. After the experience of the world in doing this in the thirties many economists and leaders of public opinion throughout the world expressed the view that never again should we return to this business of each country trying to live by itself alone and seeking to export its unemployment because it was realized that the results of that policy had proved disastrous in the thirties. Many people are of the opinion that if it had not been for the high tariff policy of the United States, the Hawley-Smoot and Fordney-McCumber tariff policies, which prevented countries like Germany from shipping their goods into that market and buying the food products they needed, high tariffs would not have been imposed upon export of wheat and other products into the European markets and the great unemployment that arose in those European countries would not have developed.
It is believed that there was a time when the popularity of Hitler before he came to power was beginning to decrease but because of the tremendous rise in unemployment in Germany Hitler, with his appeal to narrow nationalism, became chancellor of Germany, and that the narrow nationalistic attitude taken by the most powerful country in the world had contributed to the rise of Hitler to power and so ultimately to the second world war. I think it was because of some realization of that that the nations of the world agreed to set up the general agreement on tariffs and trade and to take the attitude that in the future they would try to avoid the mistakes of the thirties.
I can see that as we go into a period of levelling off in economic activity following the great demand for goods which was part of the aftermath of the war there is going to be a demand that we repeat all over again the mistakes that were made in the early 96698-131J
Supply-Trade and Commerce thirties. There is going to be a demand for tariff protection in the various countries of the world and particularly there is going to be a demand for tariff protection with respect to the vast areas of the Far East.
I think it is axiomatic and accepted that if trade does not cross frontiers armies ultimately will, and if we have not learned that lesson from the costly experience of the past it is a most unfortunate thing because surely the attitude of all western governments today should be devoted towards promoting more and more trade which will advance not only the economic well-being of the peoples of the world but contribute to world peace.
One thing I was very sorry to see happen was that when our Prime Minister made his suggestion about diverting trade the United Kingdom government, realizing that no amount of persuasion, no amount of good will or no amount of anything of that sort would necessarily prevail to operate against, and to offset, economic factors, suggested that Canada consider entering into a free trade arrangement with the United Kingdom looking towards ultimate free trade with that country over a period of 12 to 15 years. If the government of Canada had really wanted to promote trade with Great Britain in a way that would be effective, it seems to me they would have immediately said that their attitude was that they thought this proposal was a very constructive one and they would have set up a group whose business it would have been to look into this question with a view to seeing what could be done about it.
When I think of the situation in the Atlantic community today, it reminds me very much of the situation that faced the American colonies before they formed the United States of America. The various colonies had competing interests and the suggestion was that if they went together it would interfere with their individual economic well-being. I think everybody in the house today will admit that if they had taken a narrow attitude and not joined together to ultimately set up the greatest free trade area in the world, the United States would not have had the great development she has had. One great advantage she has had has been that within the United States she has the greatest consuming area of any nation in the world. On the basis of this she has been able to build up the great industrial and economic strength she has today. If the tariff barriers between the various colonies had not been removed by the formation of the United States, I do not think anyone would believe they would have had the development they have had.
Some time ago the North Atlantic Treaty Organization was formed. It was designed to

Supply-Trade and Commerce form an Atlantic community in the western world. We recognized the possibility and necessity, through the formation of this organization, for co-operation amongst the free nations. The member nations of the North Atlantic Treaty Organization agreed, under article 2, as follows:
The parties will contribute toward the further development of peaceful and friendly international relations by strengthening their free institutions, by bringing about a better understanding of the principles upon which these institutions are founded, and by promoting conditions of stability and well-being. They will seek to eliminate conflict in their international economic policies and will encourage economic collaboration between any or all of them.
It seems to me that pursuant to that definite agreement between the North Atlantic Treaty nations we should impress every member with the importance of promoting economic collaboration between all members of the organization, including the United States and the United Kingdom. The importance of such co-operation is recognized now in Europe. In spite of all their past rivalries, in spite of all their past troubles, the peoples of Europe are moving towards free trade between themselves. Most people would have thought it impossible that these people, with the background of their history, could have thought of having a common market between them. It seems to many observers that they are moving steadily and surely towards a common market for the peoples of western Europe.
What is Canada's response going to be in this matter? We have not the great consuming area the United States has. Here is a possibility of entering such an area. If a great economic free trade area in Europe is set up and we enter into some agreement with the United Kingdom, ultimately we would share in the benefits of the great consuming area of western Europe. It would put us in a position to make possible industrial and other development.
I suggest to the Minister of Trade and Commerce that there comes a time when people have either got to go forward into the future or back and go through the difficulties of the past. We are now moving out of the period we went through during and following the second world war. Are we going to benefit by this experience? If we realize we have to live together as nations we should move towards freer trade, otherwise we are going to make the same mistakes all over again.
It seems to me this government should have followed the role that has been followed by the Canadian government over the last 20 years. We were one of the main proponents and originators of GATT, the general agreement on tariffs and trade. It was our

government that was one of the originators of NATO. Our government has always tried to stand for an extension of trade, for the opening up of markets. This, of course was the basis upon which we could hope for real development.
I do hope that when the Minister of Trade and Commerce goes back to Great Britain he will realize that if he is going to do what he should do as a representative of the Canadian government in the matter of trade he has to do more than go around trying to place orders with British industries. He has to take a constructive attitude towards this most imaginative proposal of the British government. If he does that, then we are taking a step forward by which there is some real hope for the western world and for us.
I wish to say a word or two about our wheat situation. I suggest that this is all part of the same picture. Undoubtedly the United States is following a policy of getting rid of her billion bushel surplus of wheat by any means necessary. Some of the members may have seen a series of articles written by Jack Stepler of the Herald's London bureau published in the Calgary Herald. He says in one of these articles that he has discussed the .situation as he found it on a trip around western Europe with the Minister of Trade and Commerce. I believe most members would find these articles very informative and very interesting. He went over there to find out what the situation was with regard to our disposal of wheat. One of the things he says, and I think most of us will agree, is that there is nothing wrong with our marketing machinery. Wherever he went he saw evidence of the good work being done by the wheat board, the good work being done by our trade commissioners and by everybody concerned with disposing of Canadian wheat. The trouble they were running into was the subsidies and the various policies of the United States government which was determined, at all costs, to get rid of its surplus wheat. In the article which appeared in the Calgary Herald of November 20, he says this:
A remark by the official in charge of Polish grain imports, made at a cocktail party in Warsaw, was a sharp and cogent introduction to the chief problem facing Canadian wheat exports to Europe.
"We buy from the United States because they sell cheapest and give us 20 to 25 years to pay."
Long-term U.S. credits, barters, price-slashing, subsidized sales and "gifts" linked with international power politics-coupled with strong pressure of the Washington wheat lobby to get rid of U.S. surplus stocks at any cost-are methods by which the United States has upset the world wheat market to the detriment of Canadian farmers and has invaded in recent years markets which have been traditionally Canadian.
The policy has been one which has been costly, because while the U.S. has maintained a high price

to the U.S. farmer it has sold abroad at considerably lower prices. The U.S. taxpayer has footed the bill.
He goes on to say:
They admit the Canadian farmer has been the sufferer. But they commend Canadian determination to avert the chaos which would result from a Canadian move to undercut the U.S.
They have bought U.S. wheat at lower prices, on credits and in barter deals because even nations cannot afford to look gift horses in the mouth. But lower prices have brought the U.S. lower prestige in world markets and with them fear of the consequences of a price war spreading.
It has been said by the previous government and by this government that we cannot enter into competition with the United States, with their great economic power, in these giveaway policies. The United States, apparently encouraged by that attitude that we cannot undertake to compete with them successfully, are following a policy designed simply to get rid of their surplus, regardless of its effects upon their closest ally, Canada.
I have an article which appeared in the Financial Post of November 23 and which indicates that because it was said that the barter deals were the most effective way in which to get rid of wheat, there is now a real pressure on in the United States to have a policy of barter deals again. One official in Washington apparently told the Financial Post:
If your people in Canada had not talked so much about getting rid of the barter deals, there wouldn't have been all this trouble now.
It is forecast that legislation will be brought in at this coming session of congress to reintroduce barter deals. What does this mean to our Canadian farmer? He is in competition today not with other producers of wheat but with the treasuries of the various countries where is he trying to sell his wheat through subsidized competition within the consuming and subsidized exports by the United States.


Mr. Blackmore:: Will the hon. member permit a question?


Walter Adam Tucker: When I am through, if you do not mind. Mr. Graham Spry agent-general for Saskatchewan in the United Kingdom is, I think, an acknowledged expert in these matters. He said this recently when he was visiting in Saskatchewan:
Subsidized agricultural exports are universal. The world wheat market is a taxpayers' market and the subsidy on competing wheats, in some instances, is higher than the average price per bushel to the farmer at his elevator point in western Canada.
Then he goes on to say this:
The United States, under barter arrangement, exports significant amounts of grain to countries to which Canada normally exports wheat. As important as the price-squeeze on prairie net farm income, is the squeeze through trade barriers
Supply-Trade and Commerce erected by importing countries and subsidized sales by exporting countries. The problem of surplus disposal is not just a matter of salesmanship; it is much more a matter of negotiations between governments. Almost three-quarters of United States' exports last year came under provisions of public law 480 but, even in ordinary commercial transactions for the balance, prices to importers were subsidized. Dark and northern spring wheats had a subsidy of about eighty cents per bushel. France, Sweden, Turkey and Argentina all sold wheat in the world market at subsidized prices. The Canadian farmer and the Canadian wheat board are, as a result, competing with taxpayers in other countries, rather than competing with the producers.
If we get the Canadian farmer in the position where he is obliged to compete with people who are subsidized to the extent of as much as eighty cents a bushel, the question every Canadian, regardless of party, must be asking this government is this: "What are you going to do about it?" We are told that the actual net income of Saskatchewan farmers this year will be down 50 per cent from that of last year. I ask anybody who thinks about these matters what would happen if you were to say to the labouring force of Canada, "Your income is going to be cut by 50 per cent"?


Mr. Hahn:: What are you dealing with?


Walter Adam Tucker: I am dealing with the situation as it is today. I deplore this idea of trying to play politics with this most important matter.


Some hon. Members:: Oh, oh.


Lewis Elston Cardiff: Imagine that remark coming from you.


Walter Adam Tucker: Maybe so, but I will tell you this. The people of Canada are not going to be satisfied with politics being played in this matter. They are going to want really constructive action and that is what I am trying to bring forward.


Mr. Bell (Carleton):: That is why you are
sitting over there.


Walter Adam Tucker: Yes; and it is probably why you will be sitting right outside of the house if you do not do something about it.


Thomas Miller Bell: We will be here long after you are gone.


Walter Adam Tucker: You people were elected on promises to deal with this problem and to solve it. We should like to see some evidence that you are going to do something about it. What have you done to date about this matter in addition to what was being done previously? You say that we cannot compete with the United States. Take, for example, what probably our farmers today, on the average, will get for their 1956-57 crop. They will receive about $1.29 on an

Supply-Trade and Commerce average. If you put that in terms of dollar purchasing power of 20 years ago, that is less than 65 cents a bushel. No amount of bickering back and forth politically is going to do anything about this problem. It is a matter that the government of Canada, with the support of Canadians, must do something about.


An hon. Member:: What do you suggest?


Walter Adam Tucker: What I am going to suggest is this. I suggest going back to the principles of the North Atlantic Treaty Organization. As Mr. Spry says, it is something that must be dealt with by government. There is no use in sending delegations to Washington to talk to officials there and persuade them that we are being mistreated, that the wrong steps are being taken when Congress will immediately turn around and say, "We are responsible only to our constituents. If it is a good thing for us to subsidize them to the extent of seventy cents or eighty cents a bushel and to dump our wheat on the markets of the world, we will do it. After all, let the Canadian government look after its people."
This is the sort of thing that goes contrary to the agreement laid down by NATO. What I am suggesting to the government of the day is that the time has come when the western world must realize that it must stick together economically as well as in a military sense. They cannot begin to say to Canada, "We expect you to support us 100 per cent if it is a matter of fighting but not In anything else; if we take steps whereby your whole economy is disrupted, that is not of interest to us". I suggest that the time has come when the members of the Atlantic community must realize that they must work together economically as well as militarily. I suggest that the time has come when our Canadian government must say to the United States government particularly, "Here is the treaty which you signed, we want you to pay more than lip service to this treaty; we want you to live up to it; we want you to take the necessary steps to see to it that, in the words of this treaty, you are doing what you can to eliminate conflict in international economic policies and to encourage economic collaboration between any or all of them."
If we have not the economic strength to keep our producers from being driven to a position where they cannot get along at all and the United States, because of their great economic strength, are doing that, it seems to me it is time that the government says to the United States government: we have taken the attitude up to now that we
tMr. Tucker.]
cannot engage in any price war with you. We, in effect are maintaining the world price for wheat under which, by your policies, you are managing to sell a good deal more wheat than you had in previous years. But this cannot go on indefinitely. If you are not prepared to come to some agreement whereby this matter is dealt with in a fair way between nations we shall be forced, economically and financially weak comparatively as we are, to embark on some similar policy. They know that if ever Canada takes that attitude it will bring about complete and utter chaos in the marketing of wheat in the world. Then perhaps the United States government, realizing that we mean business, will act accordingly.
The situation is the same as that with regard to the St. Lawrence seaway where we took the attitude, "We want you to come in with us". But nothing happened until we said to the United States government, "Whether you come in with us or not, we are going to build it". Then they came in with us.
I think the time has come, Mr. Chairman, when we have got to tell the United States government that we must protect our own consumers; that, if necessary we are going to do something about it. They will know that if we did as they are doing this would introduce chaos into world wheat markets as far as the allies of the United States are concerned, and if this happens with regard to wheat, what will happen with regard to meat products and all the rest of it? If the United States cares anything about the economy and the well-being of the western world they will listen to suggestions that we are bound to take action if they do not agree to a fair policy toward us.


Thomas Miller Bell: You should have said that before June 10. It is too late now.


Walter Adam Tucker: I hope it is not too late. It is a serious indictment of your own government that you do not think you can do anything about it.


Thomas Miller Bell: You should have made that speech a year ago.


Walter Adam Tucker: I was asked by a member on the other side what I suggest we should do. I see, by now, that you are not doing anything to solve the terrible situation affecting the purchasing power of our western Canadian farmers. As far as I can see, absolutely nothing has been done. All you have done is make big promises, but I do not see anything on the order paper which means anything but window dressing, and it

looks to me as if a lot of people in Canada are beginning to think that you want to go to the country before the people realize that it is window dressing and only words.


An hon. Member:: Your party would not have allowed you to make a speech like that a year ago.


Walter Adam Tucker: The time comes when a government has to act or else let things go entirely to pieces, and surely the situation in this regard has developed into a crisis more acute than at any time in the past. We have had promises and assurances from the United States that they would not do anything to interfere with our markets, but what action have they taken? Now we have the right to ask them to live up to these assurances. We have the right to ask this under the NATO treaty which they signed, and if they do not live up to these undertakings we will have to take steps to protect our own people, and they in the United States will know what that means. We can tell them we will be forced to take action under which their policy will not work nearly as well when we are not holding an umbrella over the situation.
If they know that we are obliged to act, and that we will act then, I think, they would follow, and as happened in the case of the St. Lawrence waterway they will decide to get together with us in the spirit of the great North Atlantic Treaty Organization treaty and do something to help solve this problem as allies, neighbours and friends who have the future of freedom in their hands and who will be responsible either for seeing that action will be taken to preserve what is left of freedom in the world, or that each nation will follow a separate, selfish policy and endanger the solidarity upon which alone the future of the western world and freedom can be preserved.


Gordon Minto Churchill: Mr. Chairman, there may be others who would like to speak on the first item of these estimates, but I think that in view of the time element and the fact that I may be away for a few days I should say something from this side and answer some of the questions which have been raised.
Eighteen members have already spoken, so there has been a fairly extensive debate, but I do not wish to curtail the discussion in any way whatsoever. I should like to thank those who have spoken up to this point. Many of the speeches have been quite complimentary, and I have accepted the bouquets and also the brickbats, which I am not going to hurl back. I sat long enough in the opposition to know that it is the function of the opposition to offer criticism of the government, and
Supply-Trade and Commerce the function of the government to offer a defence. That is parliamentary practice as I understand it, and a great deal of what has been said today, and of what was said yesterday, has been in the nature of constructive criticism and I accept it as such. Some of the criticism has been founded on misconceptions, but nevertheless it is the function of the opposition to offer suggestions and criticism and I believe the government has a good defence with regard to the criticism that has been put forward.
Just by way of a preliminary-and I do not propose to deal with each hon. member who spoke because there were so many- the hon. member for Trinity-Conception lamented the fact that I had not given a forecast of Canada's trading position as done by my predecessor when he introduced the estimates of his department. But the hon. member for Trinity-Conception failed to look back in Hansard at the report of this debate last year or he would have discovered that no forecast was made at that time. Other hon. members said my remarks were too brief. They, too, omitted to look back at Hansard of a year ago in which they would see that the remarks of my predecessor occupied only five and a half columns whereas my remarks occupy eight and a half.


William Moore Benidickson: Surely the minister will recognize that when his predecessor introduced these estimates he pointed out that it was the end of a long session and that he had already made a long speech on trade and trade prospects.


Gordon Minto Churchill: Nevertheless, it follows that he did not mention all the subjects which come under the Department of Trade and Commerce. Some hon. members did mention subjects which come under the department, and pointed out that I had not dealt with them. There was particular reference to an omission with regard to the wheat problem. Nothing with regard to wheat was discussed last year, and some hon. members who spoke at length on the wheat problem today did not open their mouths with regard to it last year. However, that does not concern me in the least. I would willingly discuss any of these subjects, I am quite prepared to discuss the wheat problem, and will say something about it this afternoon just as I did yesterday afternoon during the private members' hour.
Some members have suggested that I have not stated the policy of this government with regard to trade. There has not been an opportunity for me to make all the statements here that some members would like to have heard. This has been a fall session. We thought it was going to be a short session, but

Supply-Trade and Commerce it may be a rather lengthy one. However, the opportunity to make these statements has not presented itself. Nevertheless I think the policy should be fairly clearly understood. This government is in favour of increasing Canada's trade. There is no doubt about that. This government-and I stated this at Geneva -favours remaining within the general agreement on tariffs and trade. We think that has been a good agreement and we are subscribing to it at the present time. With regard to other matters, this government thinks that steps should be taken toward increasing our trade within the commonwealth and diverting some of our purchases from the United States to the United Kingdom.
That, surely, is a distinct indication of the policy of this government. We do not want to see any restriction on trade. The hon. member for Rosthern was quoting from my statement just a few minutes ago in which I said we were not intending to interfere with trade with any country-again, a statement of policy-and he very fairly said this must mean that we are not intending to raise high tariff barriers.
With regard to increasing trade within the commonwealth several steps have already been taken. At the conference of prime ministers in London our Prime Minister raised the question concerning a commonwealth trade and economic conference. As a result of that imaginative point of view the finance ministers of the commonwealth assembled at Mont Tremblant to discuss whether or not there should be a trade and economic conference. That was the purpose of that gathering. There were some who doubted that agreement would be reached on that particular subject but by the time the conference was nearing its end there was unanimous agreement that a commonwealth trade and economic conference should be held next year. It is our hope that the conference may be held in Canada. Some of the preliminary steps for that conference will be undertaken early in the new year. That, I think, is an achievement with regard to fulfilling the statement of government policy.
There has been some misunderstanding with regard to the Mont Tremblant conference. I regret that my friend the hon. member for Kenora-Rainy River and my friend the hon. member for Dauphin should have fallen into error with regard to this question but both of them have fallen into error. As reported at page 1974 of Hansard, the hon. member for Kenora-Rainy River mentioned the trade proposal of the Mont Tremblant conference from the British delegates and the hon. member for Dauphin in 
speaking of the Mont Tremblant conference, as reported at page 1976 of Hansard, said:
-an offer was made by the government of Great Britain through its representative, and the Canadian government absolutely ignored that offer.
There were various press comments in which it was said that the representatives of Great Britain had come fully prepared and that the Canadians had not done their homework. Of course, all of this is just utter nonsense. The Mont Tremblant conference was called for the express purpose of determining whether or not there should be a commonwealth trade and economic conference. That was the matter under discussion and it was decided upon. No offer was made by the British representatives at Mont Tremblant. A press conference was held and questions were asked of a distinguished visitor from Great Britain and answers were given that related to a free trade area as between the United Kingdom and Canada.


William Moore Benidickson: With our Minister of Finance present, I believe.


Gordon Minto Churchill: The Minister of Finance was there; I was not. Had I been at the press conference and had those questions been asked of me I would have been compelled to say in truth that I had no knowledge of any such offer. The rumour goes around that this offer was made, the Canadians were unprepared for it and consequently it was rejected. I say that is utter and complete nonsense.
There was also a conference held at Wasnington and four of the cabinet ministers from Canada attended there. We had a two-day meeting of frank and free discussion and although there were many problems bothering the members of the United States cabinet at that particular time they stayed throughout the two-day conference. Again in this case we have had statements to the effect that nothing was accomplished there yet anyone who understands the different constitutions of Canada and the United States would know that documents could not be signed under the circumstances. However assurances could be given and were given and the one in which I was chiefly interested and on which I still place reliance was the assurance that the United States in its surplus disposal program would not continue its barter deals which interfered so much with the sale of Canadian wheat last year.


Mr. Stick:: Mr. Chairman, I do not want to interrupt the minister but he spoke about assurances that were given in Washington. Does the minister have those assurances in writing or were they just verbal assurances?


Gordon Minto Churchill: Verbal assurance was given but it also appeared in the communique and it was the first public assurance that was given as to the restrictive measures placed on the former barter disposal program.
I have not at any time objected to the United States disposal program other than in that field and also with regard to the heavy subsidization of flour. I think the United States deserves credit in its surplus disposal program for its generous treatment with regard to a great number of countries in this world which require food. I can see no objection whatsoever to the gifts that the United States has made to India, Pakistan, Ceylon and other countries throughout the world that are in need of food. There has been no interference there with the normal marketing of Canadian wheat.
The thing to which we raised an objection and which we will naturally watch closely was the barter deal for strategic materials and those barter deals occurred within those countries that are normally cash customers for Canadian wheat. The barter deals of a year ago resulted in the sale of United States wheat to normal cash customers for Canadian wheat in the amount of approximately 92 million bushels and we lost our fair share of that market for 92 million bushels of wheat. Certainly 22 million bushels of wheat would have been bought from Canadian sources by Great Britain had it not been for this type of barter deal. Of the 92 million bushels we might have had at least 50 million bushels and that would have brought our sale of Canadian wheat up to 300 million bushels which is the figure we would like to maintain over the years.
That is the situation with regard to the Washington conference and the barter and surplus disposal programs of the United States. I think it is wrong to say that we are objecting to the generous disposal program of the United States that is designed to aid people in need throughout the world.


Edward George McCullough: Would the minister permit a question? Is there any disagreement between the Minister of Trade and Commerce and the Minister of Finance in regard to the United States disposal program?


Gordon Minto Churchill: No disagreement at all. We understand this problem quite thoroughly. I am simply stating in perhaps more specific terms than appeared in some of the press reports the portion of the United States disposal program to which we raised objection and I have in my turn raised objection to their surplus disposal of flour under a subsidization scheme which has seriously interfered with the sale of Canadian flour in
Supply-Trade and Commerce markets that had long been open to Canadian flour. Other than that I have not raised any objection.


George Carlyle Marler: Would the minister answer this question, Mr. Chairman? It seems to me that frequently during the election campaign the leader of the Conservative party asserted that the United States surplus disposal programs were a direct contravention of the general agreement on tariffs and trade. The attitude which the minister is adopting this afternoon is seemingly just the reverse of the attitude taken by his leader and I am wondering what distinction there is to be made between the very general assertions of the Prime Minister and these less positive assertions of the Minister of Trade and Commerce. Do the surplus disposal programs contravene GATT or do they not?


Gordon Minto Churchill: Mr. Chairman, we think
that there has been some difficulty there with regard to GATT and when I was at the Geneva conference I mentioned our objection to the United States disposal program and particularly drew attention to the fact that commercial markets open to Canada for wheat had been interfered with by their methods. While I was at that conference the representatives of several other countries made similar remarks with regard to the United States program and the general impression was that the spirit, if not the letter, of GATT was interfered with.


George Carlyle Marler: It really was not a contravention?


Gordon Minto Churchill: I have not pinned it down to an actual contravention of some particular article. I did not say so in my speech but I think the general spirit of GATT was contravened.
While I am speaking with regard to wheat may I say that the wheat program of the Canadian government has I think been made clear in answer to questions in this house and elsewhere. I think that some hon. members are overlooking the fact that the sale of our Canadian wheat is in the hands of the Canadian wheat board and is not the sole responsibility of whoever happens to be the Minister of Trade and Commerce.


William Moore Benidickson: That is not what was said during the election campaign.


Gordon Minto Churchill: The wheat board has certainly the direction of the sale of our wheat. Now, I think that a good vigorous selling campaign is under way. I went with representatives of the Canadian wheat board to the United Kingdom and to Europe in September and met with over 200 representatives of the grain trade in the countries there. They wanted one thing. In the first instance they

Supply-Trade and Commerce wanted an assurance and this was what was mentioned by the hon. member for Rosthern, who has a good knowledge of these matters- that there would be no price war. They were holding back on their orders to see whether or not Canada was going to enter into a price war with the United States. I assured them that it was not our intention to enter into any such price war. We thought that stability in the trading in wheat internationally was the desirable factor. A price war is a matter of experience of the past, and when there was a price war in the sale of wheat on the international markets what happened? The price of wheat dropped to disastrous levels and the consumption of wheat over the world declined and nobody benefited. Therefore, I assured them on that point and since then things have been improving.
We discussed other matters during the course of that visit and I was assured by the representatives of the grain trade and by officials of the various governments that they wanted Canadian wheat. They are interested in the higher protein quality of our wheat of this year's crop. They wanted to deal with Canada and continue their dealings with Canada. All told it was a useful visit to the United Kingdom and to Europe.
At the time that we went there in September there was a pessimistic outlook with regard to our prospects of disposing of Canadian wheat. The situation has changed. As of December there is a feeling of optimism that we shall reach and perhaps surpass the objective that was mutually agreed upon, I would say, by the wheat board and myself in general discussions, an objective of 300 million bushels for export. The internal consumption, as I have said before, of feed, seed, and so on, amounts to 150 million bushels. The crop this year was about 350 million bushels, so we do dispose of 100 million bushels of the surplus that has been in the elevators during the course of this year.
Some hon. members will say that that is not enough, that we must sell it all at once which, of course, we cannot do. It just cannot be consumed all at once and it cannot be shipped all at once. The hon. member for Melville, who has had a long experience in this regard, said so this afternoon and he speaks with years of experience behind him. You can dispose of a certain amount of wheat but there has been a limit over the years in the amount of wheat that the world has consumed. As certain populations acquire a liking for flour more wheat may be consumed. In the more advanced countries there is a decline in the consumption of flour, therefore it begins to balance out. You cannot immediately dispose of the large surplus that is here in Canada; but an aggressive sales policy

is being carried on and I am very hopeful that we shall exceed the objective of the export of 300 million bushels of wheat. That does not solve-


Mr. Quelch:: What size of quota will this target permit?


Gordon Minto Churchill: We raised that during the discussion of cash advances. It is certainly six, and it may be more.
What I am drawing attention to is the fact that there is an aggressive sales program going on. Hon. members have suggested that we accept local currencies for wheat. Well, that is equivalent to a loan. Actually, I do not see any difference between making a loan to a foreign country and accepting its local currency. If that appears to be a suitable method of disposing of wheat it might be adopted. Whether or not Canada considers that it should be done is a matter for consideration. The hon. member for Acadia, who makes very thoughtful speeches in this house I think quite properly said that if we are going to dispose of surplus production in this country we must make it possible for other countries less well endowed with wealth to purchase our surplus products. How else can we dispose of them? This brings you back, then, to his suggestion of a loan or accepting the local currencies. All these things I think should be very seriously considered because we are in this position. We have a surplus of wheat. There are countries in the world which are unable to buy our wheat and we have no desire to hold it back and have people go hungry. If ways and means can be found of transferring this Canadian wheat to hungry populations I do not know of anyone who will object.


Walter Adam Tucker: Mr. Chairman, I wonder
whether the minister would deal a little further with the point that he made that the United States is subsidizing the export of their flour and what he said the other day, namely that we have had to cut our prices to meet that competition to our wheat by eight cents or nine cents a bushel. To what extent should the country bear the cost of meeting the subsidization by the United States treasury instead of leaving the burden on the farmers?


Gordon Minto Churchill: It should not be a burden upon the producer, that is the farmer. I think there is an instance where a government, facing that type of competition from another government, must assist. I do not think the farmer should be the one who should carry that load when the circumstances are completely beyond his control. The same thing is true with regard to the storage problem. We have not objected to the policy introduced some years ago and which the hon. member

for Melville mentioned this afternoon. There again the farmer should not be called upon to carry the entire burden.
Now that you have drawn my attention to it, may I comment on certain remarks made in the house by the hon. member for Assini-boia who unfortunately is absent. He referred to a press report in which I was reported to have said that the western farmer did not need a subsidy. I never did say anything like that at all. What I did say on that occasion was that it was to the credit of the western agriculturist that over all these years he has managed without being subsidized, and I said that fact was not understood by a great many people in this country. Well, I was reported in the other way and the matter was played up in a rather cheap political fashion.


Mr. Johnson (Kindersley):: Does the minister mean that in all those years the farmers have in fact managed without a subsidy? Their financial position is a very critical one and is a reflection of their experience in previous years.


Gordon Minto Churchill: The hon. member is trying to twist it again. I was paying a tribute to the individual initiative and citizenship of the western farmer. I was trying to point out that in other parts of Canada that was not fully appreciated. I think that agriculture requires assistance at the present time. The government has stated that fact time and time again and the introduction of the cash advance legislation this fall was an indication of our concern over the plight of the western farmer. Strangely enough that passed without notice by some of my hon. friends who were criticizing our policy the other day and today.
May I say a word or two now with regard to trade with the United States and then mention the trade mission now in the United Kingdom and the relationship between the two. We have been talking about diversion of purchases from the United States to the United Kingdom. It is not anti-Americanism and is not so designed. The trade between our two countries will always continue to be very large. We cannot move Canada off this continent, nor do we wish to set up any barrier against our friendly neighbours. But there is no need for us to have our entire trade with the United States, and that is the point we are rapidly reaching. With 73 per cent of our imports coming from one country there is an imbalance and we think that imbalance can be corrected in a natural way and without government interference.
We thought the natural way would be to encourage greater imports from the United Kingdom. It is a two-way street. Canada
Supply-Trade and Commerce will benefit just as the United Kingdom will, and to my knowledge no one who lives in western Canada has raised any serious objection to the Canadian trade mission which has gone to the United Kingdom because we who live in that part of the country know so well that the more dollars that are earned by the United Kingdom the more opportunity there is for us to maintain our best market for Canadian wheat. The export of 100 million bushels a year over the years is the most stabilizing factor in our wheat economy, and there is the market, the United Kingdom. If dollars are available to the United Kingdom-


Charles Edward Rea: Order. I am sorry to have to tell the Minister of Trade and Commerce that his time has expired.


Some hon. Members:: Go ahead.


Charles Edward Rea: Is it the
wish of the committee that the minister continue?


Walter Adam Tucker: I will ask the minister a question and then he can go on for another 30 minutes. Before he concludes I hope he will say a word on how much money has been paid out under the cash advance policy. I do not want to interfere with what he is saying now but I would ask him to do that before he concludes.


Gordon Minto Churchill: I do not have the figures with me for that but I think that can be answered when we come to the special item in the estimates with regard to the grain commissioners. I was saying that as the United Kingdom earns dollars there is a greater chance for the sale of Canadian surplus products in the United Kingdom. We want to regain our market there for lumber, fish, apples and other things which we used to sell to the United Kingdom in days gone by. The difficulty with the imbalance of our trade with the United States is simply that the United States does not require those very products in the way that the United Kingdom does because they grow their own. For so many years the United Kingdom was our best customer for wheat, lumber, apples and so on.
The mission to the United Kingdom has as its purpose the correction of this imbalance in our trade. There have been some misconceptions with regard to the mission. Some people think they are over there to interfere in some way with Canadian industry. That is not so. The members of the mission are sound and serious businessmen who are concerned with the future of Canada. The mission is interested in attempting to

Supply-Trade and Commerce find in Great Britain those products which can be brought into Canada and take the place of things we are now buying from noncommonwealth countries. That is what they are doing. They are not there to see what can be imported from the United Kingdom in direct competition with the Canadian manufacturing industry or Canadian producers.


William Moore Benidickson: What will they do if they find such an item?


Gordon Minto Churchill: On the other hand, trade is competitive and I suppose there may be- there has been, of course-competition between United Kingdom manufacturers and producers and Canadian manufacturers and producers. But the prime purpose of the mission is not that and it is incorrect to attempt to place emphasis on that.
Let me give hon. members a view from the United Kingdom itself with regard to the mission. Some hon. members have made a little fun of statements I have made with regard to the Canadian trade mission in the United Kingdom. That is all right. It is good parliamentary practice. I have indulged in it myself and I may again because I like a little political infighting from time to time. But at the present moment I will just give this comment rather than any of my own. I have here an article which appreared in the Globe and Mail of December 6. It is a Canadian Press dispatch from London which summarizes articles in the Manchester Guardian and reads in part as follows:
The Guardian, in a leading editorial, says the mission's tour ol British industrial centres, now in its second week, "has been approached by both sides with an enthusiasm and imagination that neither country, perhaps, really expected,"
In past editorials, the newspaper expressed doubts as to the purpose and possible results of the mission, fearing that the Canadians were more interested in selling their own products than in buying British goods. It had also taken a pessimistic attitude towards Britain's ability to satisfy Canadian customers with prompt deliveries and adequate servicing. But the Guardian now says there never was much doubt that Canadians would be glad to buy British goods, "provided they knew that we had the goods they wanted at the right price and at the right time."
It urges British businessmen to follow up the Canadian visit by sending missions of similar calibre to Canada and to counter TJ.S. salesmanship with a more vigorous selling program of their own.
Now that, Mr. Chairman, is a more objective view of the purpose of the mission and the success it is achieving than I am able to give the house because I was there with the mission, and hope to return to it, and you may naturally think my views are a bit biased. The Manchester Guardian, which started out by being pessimistic with regard to the mission, has now changed its opinion and is

urging British businessmen to take a greater interest in Canada. When people ask me what are the results of this mission I think they may be seen there in the comments of the Manchester Guardian. We will have an increase in trade between the United Kingdom and Canada, and without any doubt I think we will see British trade missions coming qver to this country to see what they can buy from us, to see what they can establish in this country in the way of branch industries and so on. They are being better informed with regard to the methods of operating in the Canadian market.
Some people have said that if you send a mission that indicates there has been a failure on the part of your commercial representatives abroad. I do not think the hon. member for Melville would agree with that because he drew our attention to missions in the past which were also successful. The purpose of this trade mission is to raise the thing a little above the level of ordinary commercial dealings, to stir up enthusiasm, build up morale and create greater interest. I think that will be the result of this trade mission, just as it was the result of the ones mentioned by the hon. member for Melville in the course of his speech.
I have endeavoured, Mr. Chairman, to deal with some of the major points that were mentioned this afternoon. I have not intentionally omitted comments on any other matters that were raised. If any member of the committee wants me to comment on some particular point, I am quite prepared to do so. I thought at this stage I would deal with these major matters that have been the subject of discussion during the course of our meeting this afternoon.


Victor Quelch: I should like to ask the minister a question. He referred to the fact that selling wheat is the responsibility of the wheat board, and not so much his. He has referred also to the fact that other countries are subsidizing their wheat producers. I am wondering if the government is giving any consideration to supporting the price of wheat so that the Canadian farmer will not, in the future, have to compete with the treasuries of other nations, but will have the Canadian treasury behind him in the same way the wheat producers of other nations have the treasury behind them. In other words, is the government giving any consideration to meeting the request of the farm union that a deficiency payment be made on wheat for the crop year 1956-57?


Gordon Minto Churchill: I have been giving a great deal of my time to these problems that affect the wheat grower. This question of a deficiency payment is one to which I have

been devoting as much spare time as I have had available. When I was at a meeting at Regina some time in November, I was asked to give-it was one of those neat little questions-my definition of deficiency payments. Two hundred farmers sat there waiting to see what I would say, but they did agree I had defined the thing pretty well by the time I was finished.
I am interested in that. The government has declared that it is interested in trying to correct this difficulty that has faced agriculture right across this country, not only in the western provinces. The first question my hon. friend asked me, or the comment he made, was about my not having responsibility for the sale of our wheat. I am not attempting to dodge my responsibility in this regard. All I am attempting to point out is that I, alone, am not responsible for the sale of Canadian wheat. The wheat board meets every day during the working week and discusses the sales program. I cannot sit in at those daily meetings and determine whether or not a cargo of grain should go from Vancouver or Montreal or should go to this country or that. In so far as the government has a responsibility, along with the wheat board, for the sale of our products, we are accepting that responsibility.


Mr. Zaplitny:: I should like the minister to clear up one particular matter to which he referred this afternoon. I refer to the objections that were raised by his government at the conference that was held with representatives of the United States government concerning the surplus disposal program of the United States. I think the minister set out today what could be regarded in the United States, as well as in other countries, as a very important statement of policy. Certainly, it was at variance with the statement made recently by the Minister of Finance on the same subject. It was for that reason my colleague, the hon. member for Moose Mountain, immediately asked whether or not the Minister of Trade and Commerce agreed with the Minister of Finance on this question.
Today the minister stated, without any reservation, that he has no objection to the United States disposal program, with two exceptions; one, barter deals, and the other the subsidization of flour. Since he is speaking on behalf of the government in this matter he may be sure that the statement will be widely publicized in the United States. Certainly, the Minister of Finance was not taking the same view. As recently as November 6-I will quote the exact words of the Minister of Finance on that question as found on page 814 of Hansard for November 6, 1957-in reply to a question put to
Supply-Trade and Commerce him by the hon. member for Humboldt-Mel-fort, the Minister of Finance said this:
That assurance, or at least the particular undertaking given by the United States secretaries, was confined to the barter feature of the program, as I pointed out in my report to the house; but the Canadian government has made no attempt to disguise the fact that with regard to all features of the surplus disposal program of the United States administration, it regards that program as being very damaging to Canada's interests in reference to the marketing of wheat; and on any occasion we propose to put forward that strong point of view of the Canadian government.
Now, when you read that statement alongside of what the minister stated today I am afraid it is going to give rise to some serious misunderstanding. Obviously on November 6 the Minister of Finance was speaking for the government. He was not expressing his own opinion only because he set forth the point of view of the Canadian government that the whole disposal program of the United States was very damaging to the disposal of Canadian wheat. The Minister of Trade and Commerce informed not only the house but the world that he has no objection to the United States disposal program, with the two exceptions that he specified, barter deals and subsidization. This leaves a wide field between the views of the Minister of Finance, speaking for the government on November 6, and the Minister of Trade and Commerce, speaking again for the government, on this date. Unless that matter is cleared up, I am afraid the statement of the minister today, taken alongside of the statement of the Minister of Finance is going to create a great deal of confusion in the minds of the United States government and of the people in Canada and elsewhere in the world.


Gordon Minto Churchill: I thank the hon. member for drawing my attention to that statement. When the Minister of Finance was making that statement I think he was considering the effect of the United States surplus disposal program on what you might call the normal commercial markets. I think it would be helpful if I put on the record the statement I made at the conference at Geneva where I said this:
I wish now, Mr. Chairman, to refer to a particular problem of concern, not only to Canada, but also to many other countries. It arises from the United States program of surplus disposal, particularly of wheat and other grains. This program has grown enormously in recent years, with increasingly adverse effects upon Canada. The Canadian government has always made clear that it does not object to genuine aid programs. Indeed, within the limits of our country's own capabilities, Canada has done its share and I hope will continue to do so. Our concern is rather with programs for dumping surpluses abroad in such a way as to destroy normal markets.
Our main objection is that, in one way or another, by the payment of subsidies, by barter,

Supply

Trade and Commerce and by sales for local currency, the United States has been disposing of its wheat on world markets in such volume that great damage is being caused to commercial markets for Canadian wheat and flour.
It is that interference with commercial markets to which objection is taken. I mentioned particularly their barter deals. I have not had any instances of their local currency arrangements which have seriously damaged Canadian sales of wheat. But if those local currency arrangements are made in normal commercial markets, naturally that is damaging to Canadian sales; and also long term loans, as I say, of the 40-year variety and so on. What I intended to emphasize was that the barter deal and the heavy subsidization of flour were the two things with which I was most urgently concerned. Any program of aid to the less well endowed countries of the world by the United States could not raise any objection on the part of Canada. For greater clarity I perhaps should have dealt with the subject of long term loans and the acceptance of local currencies. But as I say, at the moment I am not aware of any of those projects interfering seriously with Canadian sales. So long as the normal commercial markets are not interfered with, we cannot object to a generous United States surplus disposal program.


Frederick Samuel Zaplitny: In order to clear the matter up may I say this. I consider this to be of great importance. I do not wish to be unkind to the minister at all but it seems to me that he is dragging something in by the ears at this point. His statement was fairly categorical, that he had no objection to the surplus disposal program of the United States, with two exceptions which he specified. Now he is dragging in long term loans. Are we to understand that that would be his third specific objection?


Gordon Minto Churchill: That will be a third objection, if they interfere with normal commercial markets by that practice. But as I say, at the moment I have no knowledge of any interference along that line.


Frederick Samuel Zaplitny: I am afraid the minister, with his much greater command of vocabulary, can get away with what he is now saying because he qualified his statement by saying "If it interferes with normal commercial patterns or practices". I think the minister will admit that every form of competition in trade interferes in one way or another with commercial transactions. That is a qualification which hardly meets the definition of what he is objecting to. Let me put my question in this way. Let us forget what the Minister of Finance said the other day. He says many things that are better

forgotten anyway. Let us forget that and let us start from today. As of today, do we understand that the policy of the government now is that with the exception of barter deals, the flour subsidy, long term loans and acceptance of local currencies, it has no objection to the surplus disposal program of the United States?


Gordon Minto Churchill: In fairness to the United States may I say this. I think it is sometimes overlooked that a great part of their surplus disposal program has been for the advantage of countries in the Far East. If we talk about and criticize their surplus disposal program without some qualification, quite obviously we are saying that that is wrong. We do not say it is wrong to assist India, Pakistan, Ceylon, Malaya or any of those countries in the Far East.
I do not know whether it is worth while to continue discussion along that line but, as far as I am concerned, it is perfectly clear in my mind that if there is no interference with the normal commercial market for Canadian wheat, that is the United Kingdom and those countries in Europe such as Holland, Belgium and Switzerland; and our market in Japan and other areas in which we have done great trade in flour over the years, there is no objection. If there is no interference with those traditional normal commercial markets how can you possibly object to an aid program to underdeveloped countries?


Victor Quelch: Let me put a specific example to the minister. Suppose a country in Asia wanted to buy wheat from the United States and that country did not possess the dollars with which to pay for that wheat. Suppose the United States then agrees to accept that country's local currency or to make a long term loan. You would not have any objection to that particular deal?


Gordon Minto Churchill: That would be a country with which we had no trade at all with Canadian wheat. There would be no objection.


Frederick George Hahn: I was interested in the minister's statement with reference to the acceptance of sterling. I was going to ask him this question. Did the question arise in the trade mission as to whether or not we were prepared to accept sterling? Did any discussion take place with regard to that matter.


Gordon Minto Churchill: It has been difficult to have many discussions yet. During the course of this coming week opportunities will arise for discussions and it is quite possible that subject will come up.


Some hon. Members:: Six o'clock.
Progress reported.



BUSINESS OF THE HOUSE

Mr. Chevrier:: I presume that Monday will be private members' day, as agreed?


Howard Charles Green: Yes. The program will be as I announced last evening; Monday private members' day and Tuesday a one-day motion to go into supply.
Business of the House


Lionel Chevrier: Is there to be any indication now as to what we shall be taking up on Wednesday?


Howard Charles Green: No. I am very sorry but I am unable to say this evening.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to the order of the house passed on December 2, 1957.
2074	HOUSE OF
Question

[Stage Direction]
The following answer, deposited with the Clerk of the house, is printed in the official report of debates pursuant to standing order 39:


Mr. Christian: 1.	During each of the years 1949 to 1956, both inclusive, what information is on record as to the number and varieties of fruit trees in the Okanagan valley, British Columbia, that have suffered from frost damage or winter kill?
2.	What has been done by the government to compensate fruit growers of the Okanagan valley for such damage?
Answer by: Hon. D. S. Harkness (Minister
of Agriculture):
1. During the years 1949 to 1956, both inclusive, there were two periods of serious frost damage or winter kill in the Okanagan valley of British Columbia, one during the winter of 1949-50 and the other in November, 1955.
According to information provided by the British Columbia department of agriculture, mortality as a result of the severe winter of 1949-50 was as follows:-

1950 tree survey Mortality
	trees	trees
Apples 	1,117,215	107,028Peaches 	343,534	111,313Apricots 	186,364	37,981Cherries 	100,039	18,446Pears 	333,807	22,720Plums 	16,149	5,149Prunes 	200,200	33,9732,297,308	336,610Mortality as a	result of the	November,1955, freeze was	as follows:-	1955 tree survey Mortality	trees	treesApples 	1,067,850	126,162Peaches 	344,579	28,041Apricots 	201,190	17,759Cherries 	149,208	60,272Pears 	383,235	5,092Plums & Prunes 177,951	34,7222,324,013	272,0482. No financial	assistance was provided by	the government of Canada to compensate the	fruit growers of	the Okanagan	valley for
such damage.

Monday, December 9, 1957