1958-07-17

[Stage Direction]
Second report of standing committee on railways, canals and telegraph lines.-Mr. Fraser.
Third report of standing committee on mines, forests and waters.-Mr. Murphy.

Hon. Donald M. Fleming (Minister of Finance) moved: for leave to introduce Bill No. C-39, to amend the Income Tax Act.
Motion agreed to and bill read the first time.



EMERGENCY GOLD MINING ASSISTANCE ACT


Hon. Paul Comtois (Minister of Mines and Technical Surveys) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to amend the Emergency Gold Mining Assistance Act to extend its application to the years 1959 and 1960 and to provide for a 25 per cent increase in the amount of assistance for the years 1958, 1959 and 1960.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of Ihe Opposilion):: Mr. Speaker, I should like to ask the Prime Minister whether he is in a position to make a statement on the new and serious developments of the last 24 hours in and around the Middle East, and whether in view of those developments the government will give strong support at the United Nations, as a matter of extreme urgency, to the immediate formation and dispatch to Lebanon and Jordan of an emergency police force to help preserve order, stability and independence in those territories. This, Mr. Speaker, is the declared purpose
of the United Kingdom and United States forces which have been sent to these countries until, so their governments state, a United Nations force is able to take over these peace and freedom-preserving functions.


Righi Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I think the proper way to answer that question might be to outline in general what has taken place and then in my concluding words make particular reference to the question asked by the Leader of the Opposition.
Hon. members already will be aware of the further grave turn of events in the Middle East which has led to the dispatch of United Kingdom airborne forces to that area "to protect the government of Jordan from a military coup", to quote the words used today by the Prime Minister of the United Kingdom in the British House of Commons. I was notified in the early hours of this morning of the United Kingdom government's decision to take this step and will, of course, remain in constant and continuing touch with that government in regard to events as they occur.
The Prime Minister of the United Kingdom told the House of Commons that the decision to air-lift forces to Jordan had been made in response to an urgent appeal which King Hussein had addressed to both the United States and the United Kingdom for military assistance to forestall a plot to overthrow by force the legitimate government of Jordan. The conspiracy against the king, he said, was external in origin and threatened the independence and territorial integrity of Jordan. The United Kingdom government, fully conscious of the gravity of the decision they were taking, concluded that if law and order were not to collapse entirely throughout the Middle East the appeal of Jordan's king had to be met and the position held until the United Nations could devise some alternative system of security for that area. I am sure that members of the house will fully appreciate that in the circumstances the United Kingdom government had no alternative but to act as it has done, and in that connection it had the full support of the United States government.
With respect to the question asked by the hon. gentleman, I have been assured that the security council will be informed at the earliest opportunity of the interim steps the United Kingdom has found itself obliged to take in the interests of Middle East stability, and that the United Kingdom troops will
2316	HOUSE OF
Inquiries of the Ministry remain only until the security council has itself taken the measures necessary to maintain peace and security in the area.
It is clear, therefore, that in responding to the appeal of King Hussein the United Kingdom has acted, as did the United States government a few days ago in respect of Lebanon, with due regard to the ultimate authority and responsibility of the United Nations. Mr. Macmillan said:
We are making it clear that if arrangements can be made by the security council to protect the lawful government of Jordan from external threat, the action which we have taken will be brought to an end.
This question will doubtless come before the security council later today. As in the case of the discussions on Lebanon, the Canadian representative to the United Nations is being instructed to consult urgently with the United States and United Kingdom representatives and other members of the security council with the object of devising some formula for United Nations action which will achieve stability in the Middle East, which objective the United States and United Kingdom are seeking to uphold. On being notified of the action the United Kingdom government had taken I gave an assurance of Canada's support in the security council for any resolution which would meet those United Nations aspects which, from the outset, have been an important element in the United Kingdom decision to intervene in Jordan.
With respect to the question as to the urgency of action to be taken on the part of the United Nations to send a force to that area, the stand taken by the government will be that every encouragement and assistance to the council to arrive at a favourable decision in this regard will be advanced by our representative at the United Nations council. Of course, as the Leader of the Opposition knows, there are difficulties in the way. It is not quite as simple as it would appear on its face. There is the possibility, if not the probability, of a veto in the security council. Then when the matter is turned over to the United Nations assembly the decision on the question will depend on whether or not a two-thirds majority can be secured in support of a United Nations force or other direct action being taken by the United Nations.
I might add that the Secretary of State for External Affairs is now on his way to Washington, there to consult with the foreign secretary of the United Kingdom and the Secretary of State of the United States. On Saturday, he will proceed to the United Nations to meet briefly with Mr. Hammarskjold, the secretary general, with a view to further discussing that matter. I need hardly add


that everything that Canada can do as a member of the United Nations will be done to assure early action at the United Nations on this matter, to the end that the forces of the United Kingdom, in accordance with the expressed will of the United Kingdom, will be withdrawn as soon as action is taken by the United Nations.


Mr. Hazen Argue (Assiniboia):: If I might, with the permission of the house, be allowed to make a very brief comment, I would say that we in this group are exceedingly disturbed by the action that has been taken to which the Prime Minister has referred. As we are aware of the very grave events occurring in the world today, we express the hope that all countries, particularly those with atomic weapons, will consider the future of the world and will at the United Nations, by discussion amongst themselves, resolve all their differences.
I think intervention by any country in the affairs of any other country, even at the request in some instances of the established government, is a very grave step which must, of course, be taken only after the most serious consideration.
We again express the hope that Canada will use its prestige and good offices at the United Nations to support a settlement through that organization. We acknowledge that the United States and the United Kingdom, in the action it has taken, said that it is interim or temporary action until such time as the United Nations may deal with the situation. We express the hope that United Nations action will be forthcoming soon and that there may be a United Nations police force, which I know is the method that all members of this house would support wholeheartedly as the means of solving this very difficult situation and preventing bloodshed in that area.


Hon. Paul Martin (Essex East):: May I ask
the Minister of National Defence whether any consideration is being given or has been given to making available a unit of the Canadian navy, a ship, if necessary under circumstances best known to hon. gentlemen opposite, for the purpose of providing for the safe return to Canada of those Canadians in this troubled area?


Hon. G. R. Pearkes (Minister of National Defence):: No request has been made for such a ship to date.


Paul Joseph James Martin: My question was whether any consideration has been or is being given to the dispatch of such a ship.


George Randolph Pearkes: Ships of the Royal Canadian Navy are available at all times for emergency purposes.


Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I refer to the matter which was discussed earlier and ask the Prime Minister if he or the government were informed in advance of the decision of the United Kingdom government to send forces to Jordan?


John George Diefenbaker: Mr. Speaker, the Canadian government was informed, and that brings me to something on which I secured some information this morning with reference to the attitude that should be taken by the United Kingdom government with respect to matters affecting the commonwealth.
In 1946 Mr. Attlee defined the arrangements which apparently were satisfactory to the then prime ministers of the various dominions in these words:
It is our practice and our duty as members of the British commonwealth to keep other members of the commonwealth fully and continuously informed of all matters which we are called upon to decide but which may affect commonwealth interests. The object is to give them an opportunity of expressing their views in confidence if they so desire. These views are taken fully into account but the decision must be ours and the other governments are not asked and would not wish to share the responsibility for it. Dominion governments follow the same practice.
I mention this because that statement was made in the British House of Commons during the commonwealth prime ministers' conference of 1946, but I would also add that it was made before the arrival there of the late prime minister Right Hon. Mackenzie King.


Lester Bowles Pearson: Mr. Speaker, a supplementary question, if I may. Could I ask the Prime Minister whether there has been any exchange of views between Canada and the other nations of the commonwealth on these matters?


John George Diefenbaker: Mr. Speaker, there was, in so far as Canada is concerned, nothing in the nature of an exchange of views.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of Transport. Has the minister taken cognizance of the protests from small plane operators with respect to the announcement he made in this house the other day allowing wide open competition in the granting of class "C" licences? Will he comment on the statement of a top air line executive who, according to the Financial Post of today, said that "this plan will mean a return to the dirty thirties when almost every company went bankrupt in the price 57071-3-146A
Inquiries of the Ministry war, and safety standards were thrown to the four winds"?


Hon. George H. Hees (Minister of Transport):: I wish to thank the hon. member for advising me of his intention to ask this question. The answer to the first part of the question is yes. The answer to the second part of the question is no.


Lionel Chevrier: May I ask a supplementary question. Has the minister given any consideration to the possibility, as outlined by these operators, that because of this easing of licences the insurance rates will be increased substantially?


George Harris Hees: This whole matter was very carefully considered by the government before the decision was made, and I believe it was the proper decision.



FEDERAL-MUNICIPAL CONFERENCE INQUIRY AS TO PROVINCIAL REPRESENTATION

[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavista-Twil-lingate):: I should like to ask the Prime Minister whether there have been any recent developments with respect to the proposed conference with the municipalities, and particularly whether the government now contemplates having representation at that conference from the provincial governments.


John George Diefenbaker: Mr. Speaker, yesterday a group of representatives of the association of municipalities again called on me with a view to ascertaining when it was considered by the government appropriate and convenient to call together an informal conference of municipal authorities. I then pointed out the fact that the president and other representatives fully realized that it was to be an informal conference and that having regard to the commonwealth trade and economic conference and also considering the rate at which the legislative program of parliament was being implemented, I felt there was no possibility of such a gathering before October 6. That is as far as we were able to go.
With respect to the latter part of the question, this being an informal conference for the purpose of ascertaining the views of the municipalities it is in no way to be considered as a dominion-provincial conference, and there will not be representatives of the provincial governments, as such, present on this informal occasion.


John Whitney Pickersgill: May I ask as a supplementary question if the Prime Minister could say whether the government has advanced its

Inquiries of the Ministry plan for the resumption of the formal federal-provincial conference?


John George Diefenbaker: Mr. Speaker, it would be impossible to answer that question. When we are in a position to advise the house with respect to that matter hon. members will immediately be made aware of the date fixed.


Hazen Robert Argue: May I ask
the Prime Minister a supplementary question. At this informal conference will the federal government be presenting any briefs or any research material having to do with this general problem? I am asking this question on the basis that this would be material different from concrete proposals but nevertheless, I am sure, would be helpful at such a conference.


John George Diefenbaker: I am sure the hon. member must have misunderstood the request made on the part of the municipalities association. The request which was accepted by myself in February was that the municipalities should have the opportunity of presenting their ideas and their conceptions of the problems and, having received the benefit of their advice, whatever steps should be taken thereafter would be for future consideration.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. J. R. Garland (Nipissing):: May I direct a question to the Minister of Finance, of which I was unable to give him satisfactory notice. Would the minister advise the house of the approximate increase in interest charges to the taxpayers which is likely to result from the reconversion of victory loan bonds?


Donald Methuen Fleming: That would depend entirely on how many of the present outstanding victory loan bonds are turned in for new bonds of the conversion loan, and also which of the four maturities of the Canada conversion loan of 1958 are selected. I am afraid it is not possible, therefore, to give my hon. friend anything more definite than that.


John Richard Garland: Would it not be fair to assume that the government, before making a move of this kind, would have estimated what it was expected to cost the Canadian taxpayers? Surely in a project of that size-


Donald Methuen Fleming: Of course we could figure out, as could my hon. friend, what the increase will be in any particular maturity which is chosen among the four new ones, but we do not know what is going

to be the proportion of conversion applied to each of the four maturities that are offered.


John Richard Garland: Am I correct in assuming that there was no estimate made of what this would cost the Canadian people?


Donald Methuen Fleming: My hon. friend is not correct in his assumption, Mr. Speaker.



HIGHWAYS


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: Mr. Speaker, may I direct a question to the Minister of Northern Affairs and National Resources. Could the minister advise the house if, in the allocation of $11,700,000 to New Brunswick for its roads to resources program, consideration has been given by the federal government and the government of the province of New Brunswick to the construction of a highway to provide a direct road link between Saint John and Fundy national park, and also for the long advocated Plaster Rock link-up across the central stretch of New Brunswick to connect the north shore and the potato growing Saint John river valley by direct highway route?


Hon. Alvin Hamilton (Minister of Northern Affairs and National Resources):: Mr. Speaker, I will follow the practice I have laid down in the house with respect to these matters. I shall look into the question, ascertaining the location of the roads; and if any of the roads mentioned by the hon. member have been agreed upon by the two governments I shall give a yes or no answer.



PRAIRIE FARM ASSISTANCE


[Stage Direction]
On the orders of the day:
Hon. D. S. Harlcness (Minister of Agriculture):: Mr. Speaker, yesterday the hon. member for Drummond-Arthabaska asked this question, as reported at page 2289 of Hansard: I should like to direct a question to the Minister of Agriculture or in his absence to the acting minister. Has he any announcement to make to the house in view of the statement attributed to the premier of Manitoba in a report appearing in the Montreal Gazette of July 11, that he expects the federal government will immediately make several changes in the Prairie Farm Assistance Act to bring it more into line with Manitoba conditions?
I should like to point out to the hon. member that on many occasions in speeches during the last six or seven months I have stated that at this session of parliament we would bring in amendments to the Prairie Farm

Assistance Act in order to remove as far as possible the inequities and anomalies that have been complained of for years as far as that act is concerned, and particularly as far as damage from hail and flooding are concerned.
I would point out to the hon. member that there is a resolution appearing as item No. 9 on today's order paper which reads as follows:
Resolved, that it is expedient to introduce a measure to amend the Prairie Farm Assistance Act to extend the benefits of the act and to provide further for certain changes in connection with the administration thereof.
I presume the premier of Manitoba, knowing these facts, has stated that the type of damage they have sustained in some parts of Manitoba this year is likely to be covered after the amendments which this resolution precedes have been put through.



DEFICIENCY PAYMENTS


[Stage Direction]
On the orders of the day:
Hazen Robert Argue: Mr. Speaker, I rise on what I believe to be a question of privilege affecting this house. On Thursday of last week, July 10, in reply to questions of mine about deficiency payments and crop conditions in western Canada, the Prime Minister made the statement that discussions were going on with the western provinces as to how a working program could be arrived at, and he had this to say, as reported at page 2093 of Hansard of that date:
When a decision is finally arrived at the Minister of Agriculture will place before this house the nature of those agreements to meet the immediate situation.
I have in my hand a newspaper clipping taken from the Regina Leader-Post of Saturday, July 12, in which a statement by Mr. Errick Willis, agriculture minister of the province of Manitoba, is reported as follows:
Mr. Willis said the assistance will be given under a federal-provincial agreement signed this week in Ottawa. The agreement is effective from June 23 to March 15, 1959.
The report goes on to spell out in exact detail how certain costs will be divided, and I do not intend to refer in detail to that part of the newspaper report.
It would seem to me that the Minister of Agriculture owes it to this house to make a statement in the house as to any agreement that may have been signed, if such an agreement has in fact been signed, in the normal course of events, but more particularly because of the Prime Minister's statement to the effect that as soon as an agreement was
Inquiries of the Ministry signed an announcement would be made in the house. I wonder if the minister would tell us if such an agreement has been signed, and whether the report is accurate?


Douglas Scott Harkness: Mr. Speaker, I think that Mr. Willis must have been misquoted in this article, because no agreement has been signed.


Hazen Robert Argue: Mr. Speaker, since the Minister of Agriculture has now seen this report, I wonder whether I could ask him if there is any substance whatever to it, and whether the federal government has made any offer to the provincial governments to share the cost of freight on moving fodder to the prairies at this time on a 50-50 basis, and so on, as detailed in this report?


Douglas Scott Harkness: Mr. Speaker, the report to which the hon. member refers actually is a summary, as nearly as I can make out, of an offer which the Manitoba government, I think, has already made to the farmers in Manitoba. In regard to assistance in moving fodder, cattle and so on, Mr. Willis and I discussed this matter and consideration is being given to it.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. R. Tucker (Trinity-Conception):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Is the minister aware of the intention of the United States air force to deactivate the Pepperrell air force base at St. John's, Newfoundland, and, if so, has the government or the R.C.A.F. considered the possibility of having any of these facilities used by the R.C.A.F.?


George Randolph Pearkes: Mr. Speaker, I understand that the personnel of the United States air force who have been stationed at Pepperrell are being transferred to other United States air force stations in Newfoundland. The Royal Canadian Air Force have no immediate requirement for the accommodation at Pepperrell, but they do know of the facilities that exist there and these are constantly being reviewed.



STATEMENT ON REPORTED INTERFERENCE WITH PHOTOGRAPHERS DURING NAVAL REVIEW

[Stage Direction]
On the orders of the day:
George Randolph Pearkes: Mr. Speaker, may I answer a question which was directed to the acting minister of national defence yesterday by the hon.

Inquiries of the Ministry member for Skeena, as reported at page 2288 of Hansard, who asked if an investigation might be made respecting a report that 13 newspaper photographers were locked in a small room aboard a naval vessel for three and a half hours on July 15 during the naval review near Victoria, British Columbia.
I have made inquiries, and I find that there was a party of 13 press photographers who were granted facilities to see the naval review on H.M.C.S. Crescent, which was the reviewing ship upon which Her Royal Highness Princess Margaret was travelling. At no time during that tour was any member of the press locked in any room. On the contrary, these gentlemen were accommodated in the mess of the chief petty officers of H.M.C.S. Crescent. All had been advised previously of the limited facilities which would be available because the Crescent is an operational ship, a destroyer escort, and there are only limited facilities.
During the period of the cruise all the press photographers were given ample opportunity to take pictures of Her Royal Highness, and were also granted two periods of seven minutes each when they could take photographs of the ships which the Crescent was passing in review. Unfortunately, those periods had to be taken in turn owing to the limited accommodation, and three photographers at a time were given the opportunity.



LEBANON


[Stage Direction]
On the orders of the day:
Mr. Egan Chambers (St. Lawrence-St. George):: Mr. Speaker, may I ask the Minister of National Defence whether there are any of our troops in the United Nations emergency force at leave camp in Lebanon? If so, how are they affected by the present situation?


George Randolph Pearkes: Mr. Speaker, there is a United Nations leave camp established in Lebanon. When the situation deteriorated about two weeks ago instructions were given that no more Canadians were to be sent to that leave centre until the situation stabilized. To the best of my knowledge there are no men on leave at the centre at the present time.



CANADIAN PACIFIC STEAMSHIPS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Minister of Labour which arises out of the reported interest and dissatisfaction in many quarters regarding the stoppage of service


by the C.P.R. steamships on the west coast. Can the minister indicate whether any additional steps are being taken in an attempt to resolve this dispute?


Hon. Michael Starr (Minister of Labour):: Mr. Speaker, at the moment no definite steps are being taken to resolve this dispute, but the matter is under very serious consideration in order to arrive at some definite action.

The house in committee of supply, Mr. Rea in the chair.



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
391. Departmental administration, $739,086.
The Deputy Chairman:: Order. The house in committee of supply, Department of Trade and Commerce, vote No. 391; this item will be found on page 73 of the blue book, with details on page 512. Shall this vote carry?


Hon. Gordon Churchill (Minister of Trade and Commerce):: Mr. Chairman, I propose giving on this occasion a fairly lengthy review of our trade position and our commercial relations with various countries, with some comments on the work done by the Department of Trade and Commerce. It is impossible to cover every detail, but any omissions in the general statement may be filled in at the appropriate stage as the estimates are considered.
The most important feature of our trade at the present moment is the over-all strength shown in our commodity exports, despite weaknesses in some particular items. For the year 1957 a new record total was established in our commodity exports, amounting to almost $5 billion, or about 2 per cent above 1956, which in turn had been a peak year. Preliminary figures for the first five months of 1958 confirm a further improvement in our foreign trade, with total commodity exports for this period amounting to almost $2 billion, or about 1 per cent ahead of the corresponding period last year.
Some of the reasons for this good showing have been increased exports of wheat to overseas countries and uranium ore and beef cattle shipments to the United States. On the import side there has been a decrease, and the deficit on commodity account in 1956 of $842 million was reduced in 1957 to $689 million, or by 18 per cent. This trend has continued in 1958, with the rate being more rapid. During the first five months of 1958 Canada's trade deficit on commodity account was further reduced to $174 million, or about one-third of the deficit it incurred in the corresponding period of 1957.

Foreign trade is vital to Canada. One out of every five Canadians derives his livelihood from international trade, and Canadians in fact are more dependent on export trade than are the people of any other industrialized nation. Indeed, there can be no prosperity here without a high level of exports, nor can we enjoy continued development without expanding world opportunities for multilateral trade.
Over the years periods of prosperity have been associated with high levels of export trade. At one time agricultural and fishery products were of overwhelming importance, and Canadian prosperity was geared closely to overseas demands for our foodstuffs. Exports of foodstuffs are still of great importance, but with industrialization and discovery of new resources many new export items have emerged. Today forest products lead and comprise about one third of our export trade. Next come minerals, metals and bulk chemicals, which account for close to two fifths of our sales abroad, and then agricultural and fishery products which are one fifth of our total exports. Our leading exports, ranking in order of importance, are as follows, and the values indicated are those for the year 1957: newsprint, $715 million; wheat, $380 million; wood pulp, $292 million; planks and boards, $282 million; nickel and products, $248 million; aluminum and products, $230 million; copper and products, $169 million; iron ore, $152 million; crude petroleum, $141 million; fish and fish products, $130 million.
Canadian exporters, with the assistance of our trade commissioners and other officials, are constantly on the lookout for new markets for established export items or for new outlets for new products. Under present competitive world trading conditions we must seize every opportunity to develop new sales, and Canadian exporters are on the whole facing up to their great responsibility with vigour and imagination. More of them are travelling abroad to meet prospective customers and to follow up trade leads personally. Our trade commissioners last year received over 4,000 visits from Canadian businessmen, and many millions of dollars worth of new export business has been obtained directly as a result of these visits.
We have been encouraging greater exports of fully manufactured goods and more processing of raw materials in Canada. Exports of machinery and other highly manufactured products last year amounted to over $500 million, and this figure does not include the increased value added to materials exports by the further processing which has been undertaken at home. Canadian farm machinery, industrial machinery, motor vehicles,
Supply-Trade and Commerce aircraft, ships, locomotives and railway cars, to take only a few examples, are well known in many countries. Our foreign sales of manufactured goods can be maintained and increased provided, of course, that costs here can be kept within reasonable levels and that our businessmen take advantage of every sales opportunity.
Our pattern of trade has undergone some changes. In the more recent period we have been selling more to the United Kingdom and the commonwealth countries and somewhat less to the United States and some other foreign countries. For example, commodity exports to Great Britain in the January to May 1958 period rose from $285 million to $291 million or by 2 per cent, and to other commonwealth countries from $94 million to $130 million or by 38 per cent. Sales to the United States declined only moderately to $1.1 billion or by 2 per cent.
In the same period imports from Great Britain rose to $222 million or by 2 per cent, and imports from the United States amounting to $1.5 billion fell by 17 per cent. Declines also showed up in imports from the rest of the world.
The trade figures that I have given are indicative of three developments. First, Canada's foreign trade with the world as a whole has been maintained at a high level notwithstanding the recessionary influences prevailing in North America. Second, a certain measure of diversification and expansion of trade has taken place leading to a better balance in our trade pattern. Third, Canadian industry has been able to supply a greater share of domestic requirements, thus assisting in reducing our deficit, that is the excess of imports over exports. These developments are in line with the government's trade policy.
Our main objective is to expand our level of trade with all the nations of the world, because we believe that the greatest economic benefits for Canada can be derived from the efficient use of our abundant resources based on multilateral trade relations. Through diversification of our trade a better balance may be achieved. The basic premise of our commercial policy is that the continued prosperity of our major export industries, forestry, mining, agriculture and fisheries, is essential for Canadian well-being and growth.
At the same time our secondary manufacturing industries also require expanding foreign sales if they are to use modern production techniques to the fullest extent. The relatively small size of our domestic market, serving 17 million people, is not a broad enough base for our manufacturing industry, which is efficient and capable of great expansion. Consequently we aim at the expansion

Supply-Trade and Commerce of foreign trade and the opening up of markets for Canadian raw materials and manufactured products everywhere in the world.
We are ready to co-operate with all other trading nations and to seek world-wide solutions for problems that are international in character. We are prepared to support all efforts to remove discrimination and restrictions in trade. For this reason we continue to support the general agreement on tariffs and trade. This international trade treaty receives the support of over 40 countries which together are responsible for 90 per cent of world trade. It provides an effective instrument for international co-operation and the most appropriate forum where current issues of commercial policy can be considered and dealt with on a world-wide basis in a practical manner.
For the same reason we are intensely interested in our commonwealth trading relations. We are looking forward to the commonwealth trade and economic conference in September in the hope that there will be a further expansion of markets within the commonwealth, a removal of trade restrictions and the development of a new approach to some of the major trade and economic problems facing the world today.
The commonwealth is the most important and influential group in the world trading community. Trade by commonwealth countries, including Canada, accounts for about one-third of total world trade, and sterling finances an even greater percentage of all transactions. Our exports to commonwealth countries in 1957 were valued at close to $1 billion, and represented 20 per cent of our total sales abroad. Shipments to the United Kingdom were primarily basic materials and foodstuffs such as wheat, flour, lumber, metals and minerals. Our sales to other commonwealth countries also included these materials to some extent, but manufactured goods were much more important relatively than in our trade with Britain. Canadian exporters of manufactured products are now finding new markets within the commonwealth.
Our trade relations with the United States are of paramount importance. We were privileged to have with us just recently the President of the United States accompanied by the Secretary of State, Mr. Dulles. Trade and economic matters were among the main issues discussed in our talk, and a broad basis of understanding and mutual appreciation of each other's problems was established. There are a number of fields in which our views differ from those of the United States government, but we did discuss our problems frankly and freely and we are determined on both sides to reach satisfactory solutions. We have welcomed the clear indication given to us


by the President of the United States of the importance attached by the United States to sound and amicable trade relations with Canada.
The United States is by far our largest trading partner, supplying over 70 per cent of our imports and taking about 60 per cent of our exports. Last year Canadians sold goods to the United States worth $2.9 billion and imported in return almost $4 billion worth of United States products. Our trade deficit of $1.1 billion was, however, somewhat smaller than during the previous year. The United States economy will continue to be in growing need of many of the goods and materials which we can produce efficiently and sell on a world competitive basis. It is in the interests of the United States itself that nothing should be done to impair the access of our exports to their markets. Indeed, in the light of the substantial deficits in Canada's trade with that country it is particularly important that the United States should ensure continuing opportunities for the expansion and development of Canadian export trade.
There is some evidence that the government and public in the United States are becoming more keenly aware of the importance of good relations with Canada. It has been a common and frequent complaint among Canadian exporters that too often the United States has failed to give due recognition to Canadian trade interests, and we feel that it is in the national interests of both countries that this situation be corrected. Quite apart from the importance of the United States in Canada's trade, we all recognize that the United States is the world's major creditor and trading nation and as such has special responsibilities in giving positive leadership and providing initiative in world trade. This is particularly the case today when the world faces so many uncertainties and dangers. We have reason to believe that the United States is increasingly conscious of the urgent need for forward-looking policies in trade and economic relations. We were gratified to hear the declaration by the United States President in this house reaffirming the fundamental United States policy of fostering trade through the trade agreements program. Strong, constructive leadership by the United States in the field of world trade is indeed essential.
Our trade with Europe continues to develop to the satisfaction of both Canadian and European businessmen. Exports during 1957 rose 4 per cent to a new record of $549 million, and imports by 5 per cent to $313 million. Wheat sales worth $158 million accounted for close to half of our total exports to Europe, and were mainly

responsible for the over-all percentage increase in this trade. Other important commodities shipped were nickel, flaxseed, asbestos, copper and aluminum.
Our principal imports from Europe were industrial machinery, rolling mill products, automobiles and electrical apparatus. The largest percentage increase in our purchases occurred in the iron and steel category, with some items being up as much as 40 per cent to 60 per cent.
Important developments have been taking place in Europe which undoubtedly will affect our trade. My colleague the Minister of Finance has already indicated some of the government's views with respect to the European common market. Canada enjoys friendly and mutually beneficial trading relationships with each of the six countries of the common market. We will make every effort to continue them. We have every sympathy with the broad objectives of these European plans. We are hopeful that our trade with the countries concerned will greatly benefit. However, we know that this depends basically on the character and direction of the trade policies which will be followed by the six countries, and on the nature of the detailed arrangements which will be made under the common market.
We are concerned about many features of these arrangements as presently envisaged and will continue our efforts to obtain firm assurances and safeguards for Canadian export trade. The European common market is still in the process of developing its policies and its institutions, and much remains to be done to establish full co-operation between that group and the rest of the trading world. In this connection, some encouraging progress has recently been made in the detailed discussion of this step being conducted by GATT. Agreement has been reached between the six countries of the common market and their other trading partners that the multilateral procedures and arrangements of GATT should be used for joint consultation between them, and for the solution of practical trade problems that may arise.
As for the proposed European free trade area, it is our understanding that the negotiating countries are expecting to reach some concrete agreement by the end of this year. We have welcomed the firm undertaking given by the United Kingdom that commonwealth agricultural interests in the United Kingdom market will be fully safeguarded. The government will continue to give constant attention to the current negotiations in Europe.
No review of Canada's trade relations would be complete without a special reference to
17, 1958	2323
Supply-Trade and Commerce Japan. Japan is one of Canada's major export markets and trading partners. Last year the Japanese purchased $139 million worth of Canadian goods, principally bulk foodstuffs. The most important commodities were wheat, $54 million; barley, $14 million; flaxseed, $11 million; and wood pulp, $11 million. The total purchases were 9 per cent greater than in 1956.
On the import side, Canada's purchases from Japan were worth $62 million, only slightly greater than in 1956. Clothing, pipes, tubes and fittings, canned fish and cotton fabrics were the leading items. Under our commercial agreement with Japan a number of our most important exports are granted non-discriminatory treatment with respect to import licencing. This means that while many of our other exports still face dollar restrictions in Japan, these products which form the bulk of our trade are assured an equality of access on a competitive basis in the Japanese market.
Like Canada, Japan must export to live. We know that Japanese authorities and exporters are keenly conscious of the need to develop their sales in our market on an orderly and mutually acceptable basis. We are appreciative of the efforts they have been making in this regard. We are very much aware of the importance of our trade with Japan, and have every intention of continuing to develop our cordial relations with that country.
Another area where we have important trade interests is Latin America. Many of the countries in that area are in the process of rapid economic development and are in need of the kinds of products and materials with which we can supply them. In common with other countries in the same stage of economic development, including many of the new commonwealth nations, they are anxious to see greater stability in world commodity markets. We are sympathetic toward these desires and are conscious of the serious problems raised.
I would add that our trade relations with Latin American countries are close and friendly, and are based on mutual confidence and good will. Latin America is a market of great promise. Our exports to the area last year increased by 27 per cent, more than to any other major trading area. The total export sales amounted to $225 million and included a high percentage of partially or fully manufactured items. The leading exports were newsprint, $27 million; ships, $27 million; industrial machinery, $15 million; synthetic plastic materials, $11 million; wheat flour, $10 million; and locomotives, $10 million. Our imports from Latin America are mainly crude petroleum and were valued at

Supply-Trade and Commerce $242 million last year. Other sizeable imports were coffee, bananas and unrefined sugar. The total imports of all products were valued at $380 million, leaving us once again in the position of purchasing substantially more from our Latin American friends than we sell to them.
Our trade relations with the West Indies are also very important. These relationships are especially close, and they have grown out of a long tradition of trade which was important to Canada even before our confederation. Recently the establishment of the Federation of the West Indies, and the opening of their parliament in April marked the most important step which has been taken so far in the progress of these islands toward fully responsible nationhood. It was an important event also in the political evolution of the commonwealth. This progress of the West Indies is welcomed by the Canadian people. Many of the initial problems of the West Indies bear a close similarity to those which confronted our own country; problems of transportation and communication between the units, the rights of local governments, as well as providing for continued economic development.
I think these common problems of nationbuilding give us a special appreciation of the circumstances of the West Indies. The importance of the West Indies to this country as a trading partner is sometimes not fully appreciated in Canada. Taking the British Caribbean as a whole these territories are Canada's second commonwealth market, tenth world market, third market for manufactured products and, on the import side, Canada's fifth supplier. In 1957 exports to the whole area amounted to $51 million. Traditional imports such as fish and flour are important in this trade, but in more recent years manufactured products have increased rapidly. The West Indies is a valuable market for Canadian exporters of manufactured goods. Canadian imports from the British Caribbean in 1957 amounted to $80 million. In this trade traditional products such as sugar, rum and molasses are important, but newer products have entered the trade in very considerable quantity in recent years, notably bauxite, alumina and petroleum.
The West Indies federation consists at present of Jamaica, Trinidad, Barbados and the Leeward and Windward islands. The federation has not as yet established a customs union within its own territory or a common external tariff. It is, however, one of the major economic objectives of the federation to achieve such a union. A commission has been studying the problems involved in establishing a customs union, and we understand

its report will be ready during the next few months.
As the West Indies makes progress toward the establishment of a customs union and decides upon the nature of its future economic relations with other countries, it will be possible to review the trade relations between that country and Canada. Canadian trade relations with the area are governed by the Canada-West Indies trade agreement which was entered into in 1927. This agreement provides for the exchange of preferential tariff treatment between the two countries. Through this agreement Canada extends preferential tariff treatment on sugar and the West Indies extends bound preferences to Canada on a wide range of products.
I believe there are important opportunities for the future development of Canada-West Indies trade. The expansion of Canadian exports to the area depends in part on the progress in economic development the federation will be making in the next few years, and in part on liberalizing dollar import restrictions. We are hopeful that it will be possible for the West Indies to introduce over a period of years additional measures aimed at further liberalization of trade between our two countries.
I now come to Canada's trade with China. Last year we bought a good deal more from China than we sold to that country, with imports amounting to $5.3 million and exports to $1.4 million. However, in the last few months we have been able to improve our balance of trade with China. Since March alone sales of wheat to this area involve close to 3J million bushels of wheat valued at $5J million. Following the visit of the Canadian government trade commissioner in Hong Kong to China in November, 1957 we learned that the Chinese were interested in a wide range of Canadian commodities including pulp and paper, wheat, fertilizer, aluminum, chemicals, plastic raw materials, synthetic fibres and non-ferrous metals. Canadian suppliers were asked to submit prices and specifications on such commodities available for export to China. We obtained a good deal of information as to the best method of dealing with the Chinese market, and we made this information available to Canadian business in the form of a report entitled "How to Trade with the Mainland of China" published in our departmental publication Foreign Trade on February 1, 1958.
Hon. members are interested in our trade with China, and particularly in United States foreign assets control regulations affecting Canadian subsidiaries of United States firms. Every effort is being made to find an appropriate solution to the difficulties in this

field. The Canadian government has attached such importance to this question that it was raised at the recent meetings with President Eisenhower and Mr. Dulles, and we expect to have continuing consultation with the United States authorities on these matters. We will continue to encourage Canadian businessmen to do business with China provided, of course, that the commodities in question are of a non-strategic nature. It is our objective to ensure that Canadian firms, regardless of ownership, be placed in a position to handle these export inquiries on a purely commercial basis.
To a large extent export control problems with China come down to reaching an agreed definition with the United States government and the governments of other free countries-


The Chairman:: Order. I regret to interrupt the hon. member, but I must inform him that his time has expired.


Some hon. Members:: Go ahead.


Joseph Pierre Albert Sévigny: Is it the pleasure of the house to permit the hon. member to continue?


John Whitney Pickersgill: Go ahead.


Some hon. Members:: Agreed.


Joseph Pierre Albert Sévigny: The hon. member may continue.


Gordon Minto Churchill: 
Lester Bowles Pearson: Would the minister permit a question? Is the $15 million which he just mentioned to be taken out of the Colombo plan funds or is it in addition to the appropriation for the Colombo plan?


Gordon Minto Churchill: I am glad the hon. member raised this question. It is in addition to the normal allotment for the development program under the Colombo plan.


Lester Bowles Pearson: It is in addition to the appropriation made for the Colombo plan?


Gordon Minto Churchill: That is right. There is a $35 million loan under the Colombo plan and $15 million as an outright gift.


Lester Bowles Pearson: In addition to the $35 million?


Gordon Minto Churchill: In addition to the $35 million for normal Colombo plan operations.
The government has accomplished other things of importance in the field of wheat marketing. At the last session of parliament the Export Credits Insurance Act was amended to increase the limit under this legislation from $100 million to $200 million. At the same time a reduction was effected in the cost of financing wheat the sale of which was insured under the Export Credits Insurance Act. The government has been ready at all times to utilize the facilities of this legislation in effecting wheat sales on insured credits up to a period of three years.
Before leaving the export side of the wheat situation I would like to say a few words about port activities during the present crop year in the handling of grain. The Pacific seaboard is having a very good year. From August 1 to July 9 shipments of wheat and other grains from Pacific coast ports amounted to 163 million bushels, compared with 132 million bushels during the same period in the previous year.
The port of Churchill in northern Manitoba had a good season in 1957. In the comparatively short shipping season out of Churchill a total of 46 cargoes of wheat were loaded. The bushelage shipped through Churchill was 16.7 million bushels, a new record for the port. The outlook for the 1958 shipping season at Churchill is just as good.
In the first half of the crop year Pacific coast ports and Churchill received a relatively high percentage of export shipments of grain. The movement through St. Lawrence ports last fall was substantially lower than in the previous year. However, the situation as far as St. Lawrence ports are concerned improved with the opening of navigation this spring, and the St. Lawrence movement is now slightly ahead of last year. Our Atlantic seaboard ports have had an active year, and our shipments to the United

States are considerably higher. By the end of the crop year, that is July 31, I feel that all our shipping routes will have given a good account of themselves as far as the movement of grain is concerned.
I would now like to deal with the activities of the department in so far as trade promotion and related objectives are concerned. One of the major functions of the Department of Trade and Commerce is the promotion of Canadian trade on a world-wide basis. Although almost all the branches in the department share in this promotional activity, some are more directly concerned than others. The activities of the department have been covered in the annual report for the year 1957 which was tabled in the House of Commons on May 22 last. I shall not now go over the ground covered in this report, but I shall single out a few activities of the department which are of particular interest to hon. members and to the Canadian business community.
One of these activities is the work performed by our trade commissioner service. The major job of a trade commissioner is to direct trade promotion, and in this field he acts as a valuable link between Canada's exporting community and the markets in his local territory. From modest beginnings over 60 years ago the service has extended the size and scope of its operations to its present strength of 127 officers. A small number of these are stationed in Ottawa, but over 100 officers are serving in 58 posts located in 45 countries.
The trade publicity branch was set up to perform a wide range of promotional activities. Chief among these are the publication of the periodicals Foreign Trade and Commerce Exterieur, the promotion of trade fairs, publicity in local and foreign media, advertising, supplying trade commissioners with literature and producing a multitude of general publications of a trade promotional nature.
The work of these organizations is largely made possible by the members of the commodities branch who provide a liaison with industry and the business community in Canada. This involves the collection and exchange of information about trading opportunities brought to light by the department's activities at home and abroad. As part of their trade promotion work commodity officers are called upon to visit plants, to attend meetings of business associations, to prepare trade studies and market surveys, and to arrange for the display of Canadian goods abroad. Similar work is carried on by the agricultural and fisheries branch in its field of operation.
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Another developing activity in trade promotion is through trade fairs or exhibitions abroad. Participation in foreign trade fairs is regarded by Canadian manufacturers, as well as by this department, as one of the more effective and inexpensive ways of advertising Canada and Canadian products abroad. Trade fairs play a significant role in our export trade promotion activities. They enable us to exhibit Canadian goods in the very markets we want to reach, directly before interested buyers and traders who have assembled purposely to view, compare and consider offerings in their particular merchandise fields. In many markets, particularly in western Europe, trade fairs are an accepted part of international business activity, and accordingly we are virtually compelled to take cognizance of their significance.
Through trade fairs we can accomplish initial promotion of Canadian goods not sold in a particular market heretofore, or we can strengthen the market coverage of lines already introduced. We can assist the Canadian trade commissioner in his special duties. Both the department and Canadian firms participating acquire further knowledge about export prospects and market requirements, including what foreign competitors are doing; and where the public is admitted to the fair we perform an effective information job for Canada under advantageous conditions.
For many Canadian firms our trade fair program bridges the gap between no participation by that firm at all, and the time when the firm will be able to exhibit by itself. There is evidence that our efforts to assist exporters in the use of the trade fair technique are bearing fruit. Certainly the majority of firms that we have introduced to this sales method are enthusiastic about its value.
Our participation in trade fairs is a growing program. Our activities definitely have the endorsement and support of Canadian exporters and those interested trade associations with whom we maintain liaison for advisory purposes. There is no doubt that Canadian industry appreciates our assistance in this method of export trade development. In 1957 a total of 255 Canadian companies participated in the 16 Canadian exhibits abroad sponsored by the Department of Trade and Commerce.
Early in 1959 we will see the culmination of work now on foot to stage a practical businessman's trade show of Canadian products in Jamaica and Trinidad, to mark the first year of the Federation of the West Indies. These particular shows may have special significance to our future operations

Supply-Trade and Commerce where trade fairs are concerned as they involve a sharing of costs between the government and private firms. Later in the spring we hope to stage a Canadian trade show and a Canada Week in Boston, Massachusetts. On present indications the West Indies effort and the Boston trade fair will have the keen support of the Canadian export community and we anticipate their success accordingly. In themselves they will provide an effective demonstration of the value that Canadian business places upon trade fairs.
During the balance of 1959 we propose to take part in a number of international trade fairs of both general and specialized nature in the commonwealth, Europe, the United States of America, the Far East and in Latin America. In fact we are being pressed by Canadian manufacturers to go into fairs new to our post-war experience, for example, Sweden, Iraq, Australia and Rhodesia, and have also been asked to participate in more of the specialized shows concerned with individual industries such as the food trade and the building trade in important markets like the United Kingdom, United States, Germany and The Netherlands. This program is being worked out in co-operation and partnership with interested industries and trade associations.
The department is convinced that participation in trade fairs becomes more and more effective as we gain experience. We are gratified at the evidence of increasing support that we get from Canadian firms. Based on past results and the expressed interest of businessmen, we are convinced that this activity is an extremely valuable one.
And now a word about export financing. Another effort which facilitates Canadian export trade is the operations of the Export Credits Insurance Corporation, which protects Canadian exporters on certain types of foreign sales against non-payment by foreign buyers and against certain other contingencies. Canadian exporters have represented to us that in some respects export financing facilities available in Canada are not sufficiently broad and flexible to permit them to compete against some other countries which offer more far-reaching and longer term credits. The point is being made that in some instances Canadian exporters have been competitive in respect of price, quality and delivery but have been unable to get the business because they were not competitive in respect of credit. The department has been looking into these reports and in co-operation with other governmental departments we are examining thoroughly all suggestions for additional export financing facilities.
A note with regard to trade missions, Mr. Chairman. We believe in the principle that if Canadians want to sell more abroad they have to go to foreign lands and negotiate and, where possible, do business there. Early last fall I accompanied representatives of the wheat board to western Europe on a get-acquainted visit with a number of important grain buyers in several countries. Then on October 7 and 8, I attended a meeting of the joint United States-Canadian committee on trade and economic affairs in Washington. We discussed a number of our common trade problems and we found the exchange of views useful. Later in the month, I attended meetings of the 12th session of GATT in Geneva. In November 1957, a group of 50 outstanding Canadian businessmen visited the United Kingdom on an extended trade mission under government auspices. More recently, I participated in the inaugural proceedings on the occasion of the founding of the Federation of the West Indies. This visit provided me with an opportunity to discuss a number of trade matters with the appropriate officials of the new federation.
Our trade visits abroad have been reciprocated in kind, and we have had an increasing number of visits of both officials and businessmen from other countries to explore ways and means of increasing trade. Foremost among them has been the British trade mission which came to Canada under the distinguished leadership of Sir William Rootes on April 24 spending a month touring our country from coast to coast. We are confident that these various trade missions-a Canadian mission going abroad and foreign visitors coming to Canada-cannot help but create a favourable climate conducive to the expansion of Canada's trade.
Mr. Chairman, that concludes a summary of the business of the Department of Trade and Commerce. I have endeavoured to outline the policy of the government, our trade relations with various countries and areas with some comments on particular matters and on trade promotion. Canada's export trade is of major importance to our entire economy and the Department of Trade and Commerce exists for the purpose of promoting that trade.


Mr. Mcllraiih:: Mr. Chairman, I should like to make my very first words on this occasion words of congratulation to the Minister of Trade and Commerce for having at long last given this house a comprehensive statement of the government's attitude and policy concerning trade. I am one of those who are very critical of the fact that in respect to this very important matter which the minister himself described as being vital to Canada the government has made no statement of

policy since it took office on June 21, 1957. I believe that omission was an improper way of treating the public business of this country particularly when we remember that trade is so highly vital to Canada and has such a direct and immediate effect on employment. I was particularly pleased, therefore, to hear the minister today, as I said, at long last come forward with a comprehensive statement on this subject.
The minister spoke about the many aspects of trade. As a matter of fact I thought he was slightly apologetic at the opening for the length of his remarks. I must say he has no need whatever to apologize for the length of his speech on a subject as important as this. We have been waiting for this statement for some 13 months and we welcome it. The minister is to be congratulated for having come forward with it at long last.
Trade is a wide ranging subject and perhaps in making a statement on the first item of the Departmental estimates it is necessary to approach it in a general way and at times be guilty of some generalities in which one would not always wish to engage. Last evening I was interested in examining what was done last year with respect to this subject. The estimates were introduced but there was only some brief discussion on item No. 1 and nothing further was done about the estimates prior to dissolution of the house and therefore, unfortunately, the house was denied the opportunity to examine this subject.
The minister in his brief statement on that occasion did not deal with the subject of trade at all other than to make a very short reference to Canada's excellent foreign trade service. I am very happy to join with him in those congratulatory remarks to the foreign trade service of this country. I believe we have a splendid foreign trade service serving Canada. One has only to deal with commercial matters and attend conferences on trade or finance matters with other governments to appreciate what a highly efficient and fine foreign trade service Canada has. My hope is that during his term of office the minister will support that trade service and continue to treat it in such a way as to enable it to occupy the prominent position it now occupies in our public service.
In looking at the figures it is interesting to see the expansion of our trade in those postwar years. In 1946, our imports were some $1,927 million, and our exports some $2,339 million, making a total trade of $4,266 million. By 1956 the trade had increased so that those figures for the year 1956 were: imports, $5,711,700,000; exports, $4,862,900,000;
57071-3-147
Supply-Trade and Commerce or a total trade of $10,574,600,000, a tremendous expansion, placing us in the fourth position among the traders of the world.
I think the minister will agree with me that when he took over the portfolio our trade, as a trading nation, was indeed in a very healthy state. There were problems, some serious problems, but generally speaking it was in a very healthy state. There had been a tremendous expansion of trade. I think he will also agree that when he took over his department it was a well-staffed, well-managed department, and it had a degree of esprit de corps and efficiency that would commend it to him.
He spoke about the trade pattern as we now see it, and I should like to make some comment on his remarks. There is undoubtedly a good deal of uneasiness about international trade at this time owing to several world forces which will be readily apparent to hon. members, some of which should be mentioned in particular here. But before doing that I would like to make some reference to some parts of the minister's speech.
I noted with interest his reference to the wheat exports for this year, 1958, being an increase over the year 1957- I think he will see, if he will check his own speeches in Hansard, where he referred to some of the factors entering into that, in the last session of parliament and he did not mention them today at all. He did mention one factor entering into it, namely the higher protein content of Canadian wheat, and he did mention something about European wheat production. But he did not tell us anything about the Australian crop failure last year and the sharp reduction in the Argentine production last year. It seems to me that if the House of Commons is to discuss a matter as vital as this to our economy, all these factors should be put forward by the responsible minister. We all realize and we are glad that wheat exports are up, but no useful purpose is being served in discussing the subject if we omit all the relative data and the reasons for the increase.
Then, there is the matter of beef and meat exports, particularly to the United States.


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


George James McIlraith: Yes.


John (Jack) McIntosh: Will he touch on the question why Canada had 40 per cent of the wheat market prior to world war I and has only 25 per cent of the world market now?


George James McIlraith: I am sorry; I did not get the question. I will come back to the question and deal with it when I can get the point; I am sorry, I did not get it.

Supply-Trade and Commerce
As to beef, the farmers of this country particularly will rejoice-some of the consumers may regret the price increase-in the fact that our cattle exports to the United States have been very heavy indeed. The reason for that is the drought in the southern states for several years until they had to sell off their cattle and get rid of them. I hope a good part of that market can be retained. It is only confusing the issue however if you lead farmers of the country to believe that that was just a new market readily obtained in competition with cattle production in the United States.
In his discussion of his estimates the other night the Minister of Agriculture completely omitted to deal with that aspect of it and I think to that extent he was doing a disservice to the country's farmers. I do not want to refer to the remarks of the Minister of Agriculture on that subject but I noticed that in dealing with this particular aspect of the estimates of the Department of Agriculture the Minister of Trade and Commerce did not deal with that subject at all.
Then there were some other remarks about commodities that were of interest. Exports of uranium are up pretty sharply over the last year. The story of uranium exports is rather interesting. It is due to the very far-sighted policy adopted some years ago by the minister's predecessor. The policy to which I refer was the policy of the atomic energy authorities in this country announcing a fixed price for uranium ore concentrate so that prospectors could go out and prospect for uranium and develop that natural resource. When I hear my hon. friend talking about the development of natural resources I do not know of any better example of what has been done in that field than that far-sighted policy, because of which our present Minister of Trade and Commerce is now able to come into committee of supply and show the results in increased export figures. That policy, of course, was followed up by the firm contracts for the sale of the concentrates as the mines were ready to go into production and that export will, as I understand it, continue and increase until 1962 or 1963.
There is some uncertainty about the market after that and at this stage it is perhaps not useful to crystal-gaze on it. But I wonder whether the minister would give us any information he can on the subject of uranium exports, if he is in a position to do so. He may not be in a position to give much information that is of a firm nature but if he is I would appreciate very much if he would do so.
It is interesting that these three circumstances which I have pointed out in relation to wheat, beef cattle and uranium have rather tended to conceal a situation in our export
[Mr. Mcllraith.l
trade that would cause genuine concern to careful thinkers on the subject. For instance, there is a decline in the exports of base metals and aluminum which I think must concern the minister greatly. It is quite true that so far as the total figures are concerned the increase in uranium exports has done much to offset that but I think that we should discuss these matters.
Then there is the question of the export of oil. I think we are all genuinely concerned about the voluntary 15 per cent restriction on the import of oil into the United States applicable to Canada as well as to other countries. There is another aspect of that situation, of course. I for one am of the view that it is highly essential for defence reasons that we develop all the oil resources we can on this continent and I am quite unable to understand why, if one accepts this viewpoint, it is desirable that the oil wells should be on the United States side of the line. If they have the strategic military significance I believe them to have, then surely oil wells in Canada are in as urgent need of development as are oil wells in the United States. I would hope that the government would continue to make every effort to remove this obstacle.
I am also a little critical of the government with regard to another aspect of the matter. Oil wells cannot always be developed without dealing with gas as well because it is just not possible to shut the gas in and take the oil out. I hold the view that damage has been done with regard to development in the whole field of oil and gas production, both from the point of view of export as well as internally, by reason of the failure of the government to announce any policy since it took office in June, 1957. As many of the government supporters, particularly the new ones, were speaking in the throne speech and budget debates they seemed to indicate that all history began on June 10, 1957 and I could not help but wish that they would say something about matters affecting the welfare of the country and that they would analyse, as they undoubtedly could and would if they had thought about it, the damage done to the economy by the failure of the government to enunciate and put forward a policy.
The appointment of the royal commission on energy was announced very early in the last parliament but the commission did not begin its sittings then and I for one was never able to understand how the government could not have known of the expected absence of the chairman from the country until December and the long delay that would be involved. I can only hope that the government will formulate and announce its policy soon before more damage is done through

delay. The effect of the setting up of the commission, of the lack of any statement of policy by the government and the uncertainty regarding its policy has been to prevent and delay expenditures necessary for the development of that industry.
It was rather interesting to hear the minister speak today. I recall very well watching television in 1957 and seeing and hearing that wonderful announcement by the Prime Minister about the 15 per cent trade diversion from the United States to the United Kingdom. The government was going to divert imports from the United States to the United Kingdom. It was interesting to note the attention that announcement received at that time and it is very interesting today to find the minister making no direct reference to that great mission in his speech. I think the reason is obvious. It is up to the minister, of course, to exercise his judgment whether or not he should mention it but I think he had political judgment in mind when he failed to do so. That policy was completely in error, unworkable and damaging to the country.


Lionel Chevrier: It fell flat on its face.


George James McIlraith: Yes, it fell flat on its face.


Gordon Minto Churchill: Like the Liberal party on June 10, 1957.


George James McIlraith: If I understood the minister correctly, he said in his remarks that he was ready to co-operate with all countries in removing restrictions and seeking to expand trade. As he was saying that I wondered whether he was thinking about the statement made at Mont Tremblant last year by the British chancellor when he put forward a proposal of free trade with Canada.


Mr. Pallelt:: What would your answer be to that proposal?


Lester Bowles Pearson: We have answered it half a dozen times.


George James McIlraith: It was a rather startling proposal, something very new involving far-reaching changes. The minister spoke very correctly today about the trade with that country and claimed improvement of the United Kingdom and commonwealth markets but when this most definite proposal was made by a responsible minister of the United Kingdom government our trade minister never came into this house to discuss it at all. He never submitted his policy with regard to it. He never brought the matter forward. What is his attitude to it? He does not say and he will not say.
I respectfully submit that a proposition of that sort requires responsible treatment, consideration, attention and the establishment of a policy on the part of the government.
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Trade and Commerce A commonwealth conference is to be held in September of this year but the minister does not tell the house what the attitude of the government is going to be on that very important proposal put forward by the United Kingdom authorities. Surely if we believe in the parliamentary system at all parliament is entitled to know the policy of the government on this important aspect of our foreign trade. That is particularly so in view of the fact that the present government took office, as they are so fond of saying, for the first time after 22 years in opposition.
Mr. Pallet!: Twenty-two years of no policy.


George James McIlraith: Twenty-two years that is exactly what I was seeking to say. After 22 years with no policy on the subject the opposition came into power and they now decline to deal with the matter.
Mr. Pallet!: You had better check your answer on that.


George James McIlraith: The hon. member for Peel has the advantage of sitting very close to the Hansard reporter and he puts interjections on Hansard which it is not always possible to hear. That one I did hear.
I was glad to hear the minister make reference today to the European common market. I hope he will develop that subject a little more because there are many people in this country who fear the direction it may take and who are anxious that the government should co-operate closely in that development to see that it does not take a trend that will be harmful or restrictive so far as the trade of the area with Canada is concerned.
I think probably the aim with respect to it is not objectionable. I am not speaking about the aim or criticizing the minister at the moment, but I wish he would inform us more fully on that subject, just what information he has as to the factors that might affect us favourably and adversely, and the attitude and actions of the government with respect to them.
Then at long last we got a statement from the minister about trade with China. I was particularly interested in that because of the many statements made by the Prime Minister, particularly during the recent election campaign, as well as other supporters of the present government. The Prime Minister's language seemed to indicate an expectation of sharply increased trade with China. I should like to ask the minister if he would clear up in a precise way the exact situation concerning the export to China of materials that might not be considered strategic, in view of the apparent confusion arising out of the attempt to get this information by a

Supply-Trade and Commerce process of questions and answers on orders of the day. This subject is too large, perhaps, to be dealt with properly on orders of the day. There is a great desire to obtain that information.
I would ask him if he would consider working out a precise statement on this subject and putting it on the record during the consideration of these estimates, so we could have it as an authoritative statement as of this date. In this statement I would hope he would clarify the confusion that now exists in connection with Canadian subsidiaries of United States owned companies. The apparent conflict arises because these subsidiaries are subject to Canadian law, but at the same time the United States owners may be subject to United States law. I am aware of the fact it is a subject of some difficulty, but I believe it is a subject on which we should have a precise statement.
On the subject of trade with China, I read with some interest Mr. Forsyth-Smith's article in the publication Foreign Trade. It was a very good article, as far as it went. In view of the minister's statement today about the willingness of Canadian exporters to go abroad in an effort to sell products, and his own interest and statements along that line, would he say whether or not he has in immediate prospect any trade trip to China? There was a small item about that in the newspaper the other day, with which I think he is familiar, indicating that he was going. However, it seemed to me to be one of those vague items that left one in considerable doubt as to whether he was or was not going. I hope he will clear up that point.
I was not quite clear as to the position of our trade commissioners in China. Have we a trade commissioner now in China?


Gordon Minto Churchill: Just in Hong Kong.


Lester Bowles Pearson: Does he cover China?


George James McIlraith: What is his exact position?


Gordon Minto Churchill: We have a trade commissioner stationed in Hong Kong, Mr. Forsyth-Smith. He spent two weeks in China last fall on invitation of the Chinese government.


George James McIlraith: Does his territory cover
Hong Kong?


Gordon Minto Churchill: His territory covers Hong
Kong and adjacent countries.


George James McIlraith: Does it include China?


Gordon Minto Churchill: Yes.


George James McIlraith: As the minister correctly expected, I have a considerable interest in the subject of trade with the West Indies. As he will have noticed, there is a resolution on the order paper standing in my name which
IMr. Mcllraith.]
deals with the subject of trade with the West Indies. It is not my purpose to elaborate it here, particularly, because I expect that on Monday, or one of the Mondays very shortly, we shall have an opportunity of debating that subject in a specific way. While this will not give an opportunity to ask questions, my remarks could probably be more properly left until that stage.
There is one aspect of this matter, however, arising out of the minister's statement, with which I should like to deal now. He spoke about the importance of this market and the growth of the trade with the West Indies over the last number of years. It has a historic background, and it has a tremendous importance to an area of this country, which I think I can say with propriety needs help in its development at this time to a degree that is equal to or greater than the need of any other part of this country. I refer, of course, to the maritimes.


Charles Edward Rea: I am sorry to interrupt the hon. member, but his time has expired.


Mr. Herridge:: I listened with great interest to the minister's recitation of the activities of his department, the first he has made since he has taken office. While a great deal of what he had to say was informative, I must frankly say it was not inspiring. You know, Mr. Chairman, the minister does not talk like a salesman. I could not imagine anyone selling very much with the minister's approach to this question. He reminded me of the old-fashioned storekeeper who used to sit on an apple box and say, "Come and get it." I was reminded also of an early schoolmaster of mine, nearly 60 years ago, who used to lecture on history. I thought the minister gave us a good lecture on history this afternoon, but I do not think there was very much insight into the future. He did not sound much like a prophet.
I was interested in his reference to trade with the United Kingdom, the European common market, trade with Japan, Latin America and the possibility of developing further trade in the British West Indies. I was interested, too, in his brief and somewhat noncommittal statement with respect to China. The minister stated the trade commissioner learned last fall that the Chinese people were interested in trading with Canada, and in purchasing some of the commodities we have for sale in the export market. I was amazed to hear him say that. You know, Mr. Chairman, we in this group have been trying to tell governments that for five years. The minister has sent a trade commissioner into China surreptitiously, up the

backstairs as it were so they could disown him if he did get into trouble, and he comes back and informs us that there are possibilities of trade. Well, you know, it does me good to repeatedly be able to get up in this house and finally find that the things this group have been saying for years previously have been proven to be correct and have been accepted by the government in power.
Then, coming to British Columbia, I am particularly interested in the problems of trade which affect that province and, more particularly, those which affect my constituency. I do not usually enter into local and parochial matters and things of that sort. However, this is such an important subject that I must deal with one or two matters that concern employers and employees in my constituency. However, I must turn to some capitalist sources to support my arguments on behalf of this group and with respect to surplus commodities we have for sale in Canada. There is no doubt that we have a great deal of surplus commodities in this country at this time. At the same time we have hundreds of thousands of unemployed. I want to deal briefly with some of the things we have in surplus based on information from capitalist sources, strong supporters of free enterprise. Then I want to deal briefly with some of the support for trade with China and the attitude of prominent industrialists and organizations in British Columbia. I am going to deal with this question particularly because while we are all for the development of trade with the other countries that have been mentioned, there are limitations to the possibility of that development. We are moving in that respect into fairly well harrowed fields. We in this group may believe that the greatest possibility for the cultivation of a market in Asia is to a great extent in China. Therefore, Mr. Chairman, on that account I am going to confine my remarks this afternoon to that country.
Before doing so, however, I want to put on the record a few facts which indicate the things we have in surplus in Canada at the present time and the situation with respect to the mining, lumbering and smelting industries and with respect to agriculture. However, I am going to leave the question of dealing with the problems of the lumber industry to another colleague of mine who is also greatly interested in this question, and the problems of the wheat producers and their requirements with respect to the sale of wheat to another colleague of mine, namely the hon. member for Assiniboia who on occasion has been known to rise in his place in this house and have a few words to say on the
Supply-Trade and Commerce marketing of wheat. I now want to quote from the Financial Post of February 15, 1958. That paper has this to say with respect to copper:
It becomes increasingly evident that the copper industry needs an increase in consumption, particularly in North America.
Copper producers are fighting hard to build up demand. Now that they have cut back output by about 10 per cent on a world basis (excluding Russia), they want to improve their markets . . .
Canadian producers are in a difficult position, depending on both the United States and United Kingdom markets since domestic use isn't a vital factor.
They have got to find some other markets than the United Kingdom and the United States before their problems are going to be solved. Then the Financial Post of March 8, 1958, commenting on the copper situation, states:
Canadian copper is largely produced in conjunction with other metals like nickel, lead, zinc and gold. It is difficult to reduce production of copper since often the "other" metal is the one sought and copper is the byproduct.
That is the situation that exists in British Columbia in a number of mines.
Thus Canadian mines-ranking fourth as suppliers-so far have largely been forced to ride along the bumps of the confused world copper picture. They could not readily reduce production, conserve ore and generally pull in their belts.
Instead they have had to go on producing the metal ... at substantially reduced prices.
Then, Mr. Chairman, I want to deal briefly with the comments of the Financial Post with respect to the situation concerning the marketing of lead and zinc. The Financial Post of March 8, 1958 comments as follows on the lead and zinc situation, and this is an extremely important question to the mining fraternity, both employers and employees in British Columbia:
Lead and zinc are among Canada's troubled minerals. They are riding out the storm of falling prices that also hit copper, and the general slump in lead and zinc business occurred for the same basic reason as in the case of copper-an oversupply of metal in relation to the market . . .
The world squeeze out in the two metals resulted in some casualties in Canada. In British Columbia, giant Consolidated Mining and Smelting closed down two mines. Galkeno Mines in the Mayo district in the Yukon suspended operations. Consolidated Sudbury Basin, a potential supplier of lead and zinc, cancelled its plans to get into production.
The same Financial Post notes as follows:
It is estimated that some 68 per cent of Canada's zinc production is sold in the United States and some 25 per cent of lead.
Then the Financial Post deals with the wheat situation and gives an analysis of it but I am going to leave that question to the hon. member for Assiniboia. Then we come to the question of lumber and fertilizers. This

Supply-Trade and Commerce is what Canadian Business Week of October, 1957 has to say:
Canada, again remembers its best pre-war Asian customer. In the late twenties, this country shipped as much as $29 million worth of B.C. lumber annually to China. This is a market which the depression, World War II and post-war ideological divisions have completely dried up. Today, with the B.C. coast lumber industry in the worst slump since the depression-bound thirties, the cry has gone up from several senior west coast lumber company executives that China should no longer be excluded as a trading partner of Canada.
The article goes on to say this:
"It's the only fresh lumber market left", said one of them last spring ...
During the last 18 months, senior Canadian and American businessmen, including Henry Ford II, Canadian-born multi-millionaire Cyrus Eaton, H. E. MacMillan, chairman of the board of Vancouver's MacMillan and Bloedel Ltd., and James S. Duncan, OBE, former president of world-selling Massey-Harris-Ferguson Ltd., have all come out for a realistic Red China trading policy. Last January, Ford called for a 'realistic decision' where China is concerned and Eaton warned the western powers to 'stop goading Red China'-
Then the article goes on further to say this:
The largest market on earth, perhaps already overcommitted to the Russian economy for industrial heavy equipment and to a limited degree for consumer goods, is virtually closed to the products of the west in any volume. Before it's too late and before it forgets what it once could buy from us, China's traditional consumer goods trade with us must be restored, say western businessmen and manufacturers.
Then in my few brief remarks I want to quote some statements favouring trade with China which now rise on every hand. Mr. W. C. Mainwaring, vice president, British Columbia Electric Co., Vancouver, B.C., had this to say:
Canada's exports to China dropped from $37 million in 1947 to $1 million in 1954 . . . there is every indication that China has dollars to pay for increased trade with Canada-
Mr. C. M. Forsyth-Smith, Canadian trade commissioner in Hong Kong had this to say: There is a "promising market" in Red China for Canadian goods-
Hon. Earle Westwood, British Columbia provincial minister of trade and industry Victoria, had this to say:
The Chinese demand for fertilizer is so great that the annual requirements for the Shanghai area alone would absorb the total production of the Trail plant of Consolidated Mining and Smelting Company.
Yet here we are having to cut back production and men are being laid off while we have this large potential market for fertilizer and that fertilizer is badly needed in the Asiatic countries and in China.
Then again, Mr. Chairman, there is another statement I wish to quote. I may say that I am just summarizing and more or less taking statements from here and there so as not [Mr. Herridge.l
to take up the time of the committee unduly in quoting these capitalist authorities to support the arguments we have made in this house for a period of five years. I have here in my hand a page from the Montreal Gazette of June 28. In it there is an article which is headed "Canada Losing 'Legitimate' Trade; Muir Finds Others Grab China Market". I just want to quote Mr. Muir briefly. In this article Mr. Muir is quoted as saying this:
"It was galling to meet (in China) and to talk with the selling forces of other Western powers, not only obviously getting business but enthusiastic about it, while our people seem to sit back and wait for a silver platter deal,"-
By our people he means the exporters of Canada and this government. He goes on to say:
The Canadian government should see to it that, "if any Canadian enterprise should be induced by outside influence to deviate from its responsibility to the Canadian worker and the Canadian economy by declining legitimate and clean business, drastic and immediate steps should be taken to discipline it"-
The minister sent a trade commissioner to China last fall and he informs the house this morning very briefly and in modest and mild tones and terms that there are "some possibilities" with respect to a market in China. I think it is obvious, however, that the leading industrialists in this country and the organizations to which they belong are not satisfied that this government is moving fast enough in this direction in order to take advantage of this great potential market. In concluding my references to these persons I wish to quote a resolution passed by the British Columbia chamber of commerce at its recent meeting in Vancouver which clearly indicates that this chamber of commerce was not satisfied with the government's policies in this respect, otherwise they would not have passed a resolution in these terms. This resolution was, I am informed, adopted unanimously and reads as follows:
Whereas Canada's volume of international trade is of vital concern to the economic welfare of all Canadians; and
Whereas the diversified product of its natural resource industries requires that trade should be conducted on a multilateral basis; and
Whereas exchange of trade and closer persona] relationships are an essential factor for the development of international understanding and goodwill;
Therefore be it resolved that the British Columbia Chamber of Commerce urge upon the federal government the need for establishing trade relations with communist China, subject to the imposition of such conditions as would safeguard the movement of strategic materials.
It is obvious from that resolution that the British Columbia chamber of commerce is not satisfied with the actions taken by the government to date with respect to the development of trade with red China. Why

did they take that view? Because that convention would have been attended by a large number of men interested in the primary industries of British Columbia and would have surpluses to sell.
Another thing to which I wish to draw the attention of the minister is the fact that in that resolution are the words "closer personal relationships". It is quite obvious from those words that they do not consider the sending of a trade commissioner to Hong Kong a close enough personal relationship. As I and others in this group have said before, we believe that such a close personal relationship can only be realized by the recognition by this government of red China. In doing so we do not recognize a system; we do not agree with their policies, but we cannot expect a great nation like that, with a population of over 600 million, to carry on a satisfactory trade relationship unless we recognize the government of that country. We do hope, therefore, that the Canadian government will cease riding on the coat tails of Mr. Dulles and will show a little courage and do what the majority of the Canadian people want them to do, that is, first to recognize China and, secondly, to take a much more positive approach to the development of this great market which would, without doubt, provide an immense outlet for our surplus commodities and employment for many persons who are now unemployed in this country.
It is quite obvious that the, shall I say, snail's pace which the government is adopting with respect to this matter at the present time is unsatisfactory to the industrialists and to their employees both capital and labour in British Columbia having expressed their discontent and their opinions in various ways. I do urge the minister to recognize the feeling in the country. I think the government and possibly the minister himself are somewhat out of touch, particularly with the feeling in British Columbia, with respect to the development of trade in Asia, recognition of red China and the development of trade with this great country.


Mr. Broome:: Mr. Chairman, I would like to take a few moments to address the house. It is rather unfortunate that I should follow the hon. member for Kootenay West because my subject is very much the same as his. I do not agree with his contention that the government is out of step with public thinking on this matter; I believe the government has moved faster and with more effect than any other government has done, and in this respect I would like to quote a few figures.
Canadian exports to China in the first five months of this year totalled $2.75 million, whereas in previous years Canadian exports, firstly in 1954, totalled $70,000, while in 1955
Supply-Trade and Commerce they totalled approximately $1 million, in 1956 $2,400,000 and in 1957 about $1,400,000. So that if the rate of exports is kept up during the balance of the year we will export to China this year as much as we have exported in the preceding four years. In addition to this, the government has sent a trade commissioner to China and has taken action in consultation with the United States with a view to freeing trade with China. During the consultations which the minister and the Prime Minister had with the President of the United States, as we have been advised through press reports and in other ways, steps were agreed upon so that this trade can be made open to us on the same basis as it is available to other NATO countries. I think that is a pretty good record and, coming from British Columbia, I do not minimize the value of trade with China. I know how important it is not only to British Columbia but to all of western Canada.
I would like to refer to the trade pattern in the United Kingdom since that country recognized China. The U.K. recognized red China on January 6, 1950, and in that year trade with China totalled approximately $10 million; it dropped by over a quarter in 1951, came back to $12 million in 1952 and from that point on it has steadily risen to a total export trade of $34 million approximately in 1957. United Kingdom imports from China have followed pretty much the same pattern and stand at close to $40 million in 1957.
This is a sizeable trade picture but we should not inflate the importance of it in regard to United Kingdom trade or trade with other countries. The value of trade with China is in its future potential, in that this is a pattern of increasing trade which will rise at a very fast rate from year to year with the development of that country through industrialization and through the measures which its government has been taking to increase living standards which, even now, are fantastically low compared with our own.
The hon. member for Kootenay West has quoted rather extensively from the report of Mr. James Muir, the chairman and president of the Royal Bank of Canada, and I must say that the statement of a leading businessman such as Mr. Muir must not be ignored. I believe that Mr. Muir has helped to correct some of the misconceptions we perhaps have had as a result of previous reports of activity in red China. I do think, however, in respect of his remarks about the exporting fraternity who, he says, should shake themselves, should get busy and should visit China either individually or as a group and keep at this job in order to develop trade, what the government has done and is doing had to be done first. Hon. members know that there is an

Supply-Trade and Commerce embargo on certain goods and that CONCOM, a subcommittee of NATO, has been sitting in Europe and has brought the strategic control lists in regard to the U.S.S.R. and China into a state of conformity. A great many articles and commodities which were formerly embargoed have now been freed from that list.
The trouble with our industrial setup is that the United States has taken the stand that it will not trade with red China and that that decision of the United States government will apply to the operations of United States plants in other countries. Because approximately 60 per cent of the industrial capacity of Canada is controlled from the United States we cannot establish free channels through Hong Kong for material and commodities for sale to red China. This does not assist us in respect to those industries which are in the main under United States control or ownership. That is the reason why the recent meeting between the President of the United States and the government of Canada is of such importance because it frees these channels of trade so we can participate in trade with China on somewhat the same basis as the United Kingdom. If it works out as it is supposed to we should see an increase in trade with China.
There are a couple of questions I should like to ask the minister in regard to the new trade pattern and they relate to how the setup will work. Will a China trade section be established in the Department of Trade and Commerce? It would seem inconceivable to me that a Canadian company subject to United States regulations because of ownership should have to go through the U.S. state department for a permit or relaxation of regulations allowing it to make shipments to China. I would think the way it should be handled would be for the company to go to some section of the Department of Trade and Commerce which would have clear lines of communication with the proper officials in Washington so that an answer could be given in a relatively short time. I can see businessmen going grey with frustration if they have to wade through the intricacies of the United States state department in order to secure a permit to make a shipment. If a China trade section is established in our own Department of Trade and Commerce the headquarters should be located at Vancouver and this should work out very well.
I have been told that within the past few weeks agents have tried to buy quantities of bleached sulphite pulp for shipment to China but have not been successful. This commodity is produced only in mills on the coast that are United States-owned. The question I have is this. To whom should the agent

go if he wished to get clearance to make a deal with Rayonier or Crown Zellerbach, subsidiaries or whatever company it might be, to get that trade moving?
In conclusion I simply wish to reiterate that it is easy enough to criticize in these matters. In working out relationships such as these, and particularly with the United States, and in setting up a Canadian agency in Hong Kong to make contacts with a government which at the present time we cannot recognize, a considerable amount of work and planning is involved. To my way of thinking the record speaks for itself and indicates that the government is working along lines which will give us a fair share of the China market in the future.


Frank Howard: Mr. Chairman, I wonder if I could direct a question to the hon. member who has just spoken? If I understood him correctly, the hon. gentleman said that we cannot at the present time recognize China. Would the hon. member care to elaborate and say why we cannot?


Ernest James Broome: No.


George James McIlraith: Mr. Chairman, I should like to take a moment or two of the committee's time in order to complete two points that I had not concluded when my allowance of time expired earlier in this debate this afternoon.
I was speaking near the conclusion of my remarks about the minister's statement with respect to West Indies trade. I agreed with him about the importance of that subject and made reference to the fact that I have a notice of motion standing in my name on the order paper dealing with this subject and that I proposed to make my main remarks pertaining to it on that occasion.
I did, however, want to say something about the minister's remarks in this connection which were important for two reasons. He outlined the historical development of that trade, told of its growth and stressed its importance but he did not elaborate on the policy with respect to the development of our trade with that area. I had hoped he would do so not only because of the general importance of the subject but because of its particular importance to the maritime region.
The one point I want to make clear is the significance of his omission to deal with Canada's part in that trade. We have a trade agreement dating back to the twenties and have participated in the West Indies trade liberalization program. The minister mentioned those things but did not mention the one really significant step we have taken since the government of which he is a

member took office and that is the withdrawal of the tremendous aid we have been giving that area through providing shipping for the major part of the trade between Canada and that country. It did not apply to bauxite and certain items of that nature. I refer specifically to the Canadian National Steamships vessels which operated for years.
It is perfectly true that they were not operating at a profit and had to be subsidized. If I remember correctly the Minister of Transport said that the subsidy we were paying was $200,000 a year and that it would rise to double that amount this year. I have not checked that figure today and stand to be corrected by the minister if I have misquoted the facts. But the real crux of the matter is this. As was stated by the Minister of Trade and Commerce, the Federation of the West Indies has just come into being. They are encountering all the difficulties inherent in a country achieving a new status and entering a new period of development. At that strategic moment in the development of that area Canada discontinued the one form of aid it had been giving the West Indies. No satisfactory explanation was given in this house for the discontinuance of the aid when the Minister of Transport discussed the withdrawal of the Canadian National Steamships service and no reference was made to it whatever today by the Minister of Trade and Commerce. I respectfully suggest that it is of such importance to the trade to warrant better treatment than that. Many people in this country hold the view that this action was taken without mature and careful consideration.
It may well have been that as time went on something different would have had to be done about the arrangements than was being done but surely the time to take the decision to discontinue that service and sell the ships was not at this period in the history of the development of that area. Canada is providing a new ship which is now under construction, I believe, for trade within that area but while it is needed and represents a good gesture it is as nothing compared with the foreign trade aspect of shipping being serviced by the Canadian National Steamships lines.
In the relationship to trade this is not a subject that should be brushed aside. I have the strongest condemnation of the government for their arbitrary action. When the Minister of Transport was dealing with this-and I wish he were here now so that he could answer these remarks-I rather got the impression that he lost his patience rather quickly because of some labour difficulties that management of the steamship company were having at the time and he 57071-3-148
Supply

Trade and Commerce took precipitate action which the facts did not warrant. I rather got the impression, due to his characteristics in answering the questions that were put to him, that he did not adequately consider the question of disposal of those ships and the method of disposal, to what area they would be sent, and so on. I do not know whether he considered the question of disposal of them to the West Indies federation, or to any of the component parts of the federation, or even the gift of one of them to the federation or to one of the component parts of the federation.
The other point I wanted to deal with very briefly was the minister's remarks pertaining to the balance of trade and the figures he quoted with apparent satisfaction. He gave the figures of exports to the United States. Our exports to the United States were down in May a bit. He spoke about that subject. There is a problem of imbalance of payments between Canada and the United States. He dealt with the imbalance of commodity figures-trade-between Canada and the United States. But one very significant factor in what he quoted is the apparent improvement, in that he said there was a lessening of the deficit, and that is this. If he will analyse figures he will find that one of the reasons for that apparent improvement, or what I took from his remarks on trade as an improvement, is the sharp decline in the import of heavy capital goods to develop this country. The reason for that sharp decline in the imports of heavy capital goods is that we in this country, unfortunately, are suffering a business recession and the development that we would all wish to see going on, requiring heavy industrial machinery and the like, is not going on. To quote figures, to refer to that fact in a way that would indicate approval is to do something that is regrettable or, should I say, not to quote the figures, to omit to quote them, is to do something that is unfortunate.
Then there was another aspect of the matter of balance of trade that concerned me. The minister, when he spoke, made reference to the exports to the United Kingdom and to the commonwealth, and so on. There was the question of the exports to Asia and to India in particular. The regular exports of wheat, and the exports of wheat under the Colombo plan and the exports under that special agreement where there was a loan providing for repayment over a seven-year period were a substantial factor but it is quite wrong, Mr. Chairman, to mix up the problem the country faces concerning balance of payments with the difference in exports and imports in commodity trade figures and
2338	HOUSE OF
Supply-Trade and Commerce use the two terms as if they were synonymous because the Colombo plan figures show in the wheat aspect as exports but there is no payment in cash. That is a contribution properly made by the taxpayers of this country for a very laudable purpose and objective. It should not be lost sight of when one is speaking about the difficulties we have in the balance of payments, and the same thing goes, to a lesser extent, with these figures where the trade is financed by long-term loans.
Incidentally, there was another matter in using the wheat figures and I wish the minister had gone a little farther and completed the subject. There was the matter of the export of wheat to Russia, which was reflected in this year's figures. As I understand it, the export of wheat to Russia was under a 3-year agreement. I believe that the
1957	portion was not taken but is in the
1958	figures. If we are to discuss wheat exports intelligently those factors have to be acknowledged and dealt with. Wheat export is of tremendous significance to the economy of this country and I would hope that in its discussion those aspects could be brought forward fully and completely. Because shipments are made at a certain time under a certain laudable aid program and show in the export figures, that figure should not be used as an argument in dealing with the balance of payments problem which is another very real problem we have to face.
I will not encroach on the time of the committee further at this time. I am grateful to the committee for hearing me so soon after my earlier remarks, but I did want to complete that portion of my remarks at an early stage because they related directly to the minister's statement.


John Whitney Pickersgill: Mr. Chairman, I want to talk about the trade in one particular commodity, but before doing so I should like to say how heartily I agree with the hon. member for Ottawa West in welcoming the omission in the statement of the minister of any reference to trade diversion. I hope we have heard the last of that fallacy and I believe it will be remembered in history as the great diversion which became the great deception.
The commodity that I want to talk about is fish, and particularly salt codfish. In his statement the minister passed rather lightly over the difficulties being experienced by the salt codfish industry at the present time. I want to be quite fair. The minister did say difficulties were being experienced but he expressed the hope-which he has expressed before during this session-that


those difficulties would be overcome. However, the minister gave us no information as to any plans he had for overcoming them, nor did he give any real appreciation of the vital importance of this particular export which is, of course, the oldest of all our exports and which I believe is still, so far as the proportion of the total production which has to be exported if there is to be found any market for it at all, one of those which enters most largely into world trade.
I do remember being somewhat surprised about 20 years ago when I first came to Ottawa from Manitoba and first began to hear about salt codfish when someone from the maritime provinces pointed out that in the old Canada before 1949 the proportion of salt codfish exported to the total production was exactly the same as it was of wheat. Of course, now that Newfoundland is a part of Canada the proportion of salt codfish which has to find a market abroad if it is to find any market at all is much higher than the proportion of wheat. Salt codfish to many parts of the Atlantic provinces is every bit as important as wheat is to western Canada, and I am sure the minister will agree with that view.
But we have had very little evidence so far in the house that the government has taken action consonant with the importance of the codfish industry to a very considerable section of the country. I remember I read with some surprise in the St. John's News of July 8, 1957, just over a year ago, the first statement about the famous diversion policy that the Prime Minister made when he came from his aircraft to the press gallery without previously consulting his colleagues on his return from the United Kingdom, a statement which I think will rank in history as one of the most foolish statements ever made by a Canadian prime minister.
In the course of that interview, as reported in the Canadian Press dispatch which appeared in the St. John's News, the Prime Minister was being asked some questions about the proposed British adhesion to a free trade area which would surround the European common market which had, at that time, just been agreed upon by six European nations. I quote part of the article as it appeared in the paper:
Discussing Britain's participation in the proposed European free market, Mr. Diefenbaker said Canada would take a "benevolent" view of this so long as commonwealth farm products were not included. He added that Britain also is inclined this way, though some of the continental countries are not, and that the U.K. realizes such inclusion would be serious not only for Canada but also for Australia and New Zealand. He was asked whether he

would include fish in the commodities that should be excluded. ''I don't think that's a very serious matter," he said.
I know that the Prime Minister did not mean, and I do not want to misrepresent him by suggesting he meant that he did not think fish was a very serious matter. What he meant was that he did not think fish was a very serious matter in relation to the proposed European free trade area. That is a view with which I cannot agree and I certainly hope that the Minister of Trade and Commerce will tell us before the debate closes on his estimates that he does not agree with it either.
The common market, as the minister very well knows, includes France and Italy and, as the minister also knows, France has a base for its salt codfish production in North America in the islands of St. Pierre and Miquelon. Now that there is to be a common market between France and Italy and certain other European countries there will, of course, be a common tariff and the difficulties we have experienced over the years in disposing in Italy of a proportion of our Newfoundland salt fish production are likely to be increased if the greatest care, forethought and attention are not given to every aspect of this problem by the government at all times. That is why-I do not intend to transgress the rules by debating this now; I merely point it out-we on this side of the house were so shocked when the Minister of Finance announced the other day in his budget that he was hoping to negotiate with GATT to increase the most favoured nation tariff on woollen cloth.
Woollen cloth has become one of the increasingly important exports from Italy which is, of course, one of our best customers not only for fish but also for wheat, flour and a considerable number of other products. It is also a country where we sell a great deal more than we buy. We do not feel, particularly at this time, when, because of the common market, the Italian market for fish needs to be safeguarded more jealously and carefully than ever, that anything should be done by the government to affect the exports of Italy to Canada which might invite retaliation or the possibility of retaliation. I can assure the minister that all of us who represent fishing constituencies in eastern Canada will feel very apprehensive about this aspect of that particular situation.
I read yesterday in the St. John's Telegram of July 9 that NAFEL, the sales agency for Newfoundland salt fish, had signed a contract for the sale of 40,000 quintals of salt codfish to Italy this year which is the same quantity as was sold last year. The article goes on to point out that it is very important 57071-3-148J
Supply-Trade and Commerce that fishermen should deliver fish of Italian quality and in sufficient quantity early enough to make possible a shipment to Italy in August. There were certain unfortunate events, of which I am sure the minister is aware, in connection with our shipments to Italy last year which no one wants to see repeated this year.
It is true, because the fishermen are no longer making fish themselves in the quantities they used to make it and more and more of it is being sold to fish plants that the amount of fish of the quality required in the Italian market has been decreasing. The more it decreases and the more fish of a quality which has to be sold in the Caribbean market is produced in its stead the greater are the difficulties of selling our fish and the greater is the possibility of having overhanging the market a surplus of the kind of fish that can be sold in the West Indies but cannot be sold in Europe, together with a shortage of fish to satisfy the European market.
I know it is not directly the problem of the Minister of Trade and Commerce, because of the peculiar division of responsibilities we have in this field, to provide incentives for the production of the kind of article we have to sell. That is his responsibility in the case of wheat; it is not in the case of fish. But I would urge the minister, and I intend on an appropriate occasion to urge the Minister of Fisheries too, to urge his colleagues to consider very carefully whether it would not be in the over-all interests of our fish exports to consider for a few years at least incentive payments for the kind of fish which will satisfy the Italian and Spanish markets until such time as that quality of fish can be produced efficiently and economically in the fish plants so that we will not lose these markets, so that we will tide ourselves over this period of transition with which I am sure the minister is familiar.
There was another very serious blow to our fish exports this year of which, of course, the minister is thoroughly aware. As long ago as November 8 in the last parliament the hon. member for Burin-Burgeo asked the minister about this matter and at that time the minister expressed the hope that something could be done to avert the loss of the Jamaican market. Unhappily the minister was not successful in his efforts and we have lost that market completely for the six months which began on July 1 of this year. We have lost it because the Icelanders have underbid us in that market.
I am not sure whether or not the minister is familiar with the degree to which the Icelandic production is subsidized. It is subsidized at a rate which it is hard to believe

Supply-Trade and Commerce a country as small and as lacking in material wealth as Iceland is, could possibly carry on for any considerable length of time. But the fact remains that the loss of the Jamaican market, which has been one of the best and most stable markets for Newfoundland fish since time immemorial, is a very serious blow to the whole industry. The loss of this market is the result of non-economic competition of a character at least as objectionable as the competition from another country in the wheat market, to which hon. gentlemen on the treasury benches have taken such strong exception in times past.
I do suggest to the minister that, if it is necessary to do so, extraordinary means should be adopted by the government to recover this market. If it is not recovered, if the Canadian producers of salt codfish have to try to find a market in the remaining Caribbean areas, then the results will be serious because we are having to meet subsidized competition from France and Norway in particular in those markets. As the minister knows, for many years we have not been able, because of currency restrictions and exchange controls that he mentioned, to sell fish in Brazil or the other places. The minister indicated another effort was being made to get back into that market. I wish him every success in this effort.
The fact of the matter is that in this salt fish industry, because of the current high levels of unemployment in the Atlantic provinces and because also of the action of the previous administration in inaugurating unemployment insurance for fishermen, we have had a considerable number of men return to the fishing industry. It is estimated that in Newfoundland perhaps 2,000 additional fishermen are engaged in this industry this year. It is of the utmost importance, if the industry is not to face a very serious condition with a very large surplus overhanging the market, that something be done not merely to hold the markets we have but to recover the market in Jamaica and to get back, if we possibly can, into the market in Brazil. Above all, everything should be done to hold and expand the more lucrative European market.
It is for the purpose of drawing to the attention not merely of the minister and the government but of all hon. members, the plight of this industry, the oldest industry in our country, that I speak at this time.
This industry does not rank as high as many others in total monetary value of exports, but it is fair to say that for every thousand dollars of exports more employment is probably created by this industry than any other industry that we have in the country.


A special effort should be made to meet the big problems which this industry faces. One of those problems, as the minister knows, is that the price which is received for fish is set in a world market. There is no way in which the fishermen can get any protection, and yet for most of the things our fishermen have to buy, they not only have to pay the price of goods produced in a protected market but in many cases the price of goods that are produced in the central part of Canada which, in many cases, is higher than the price of those goods in the markets in central Canada. I am sure the minister is very familiar with this argument, coming as he does from the part of the country in which he and I lived for so long.
The minister said he hoped we could get back into the Jamaican market if we could meet the prices which our competitors might be willing to quote in that market. It may be that we will not be able to meet those prices any better on the 1st of January than we were on the 1st of July, not because our fishermen are not producing as efficiently as they could, not because we are not trying to cut costs wherever we can, but because the government of another country is subsidizing the exports, as is certainly the case now with Icelandic exports to Jamaica. As the minister knows, we in Canada are a very considerable customer of Jamaica. I should be very surprised indeed if the people of Iceland provide a very large market for Jamaica. It does seem to me, and I am not suggesting any kind of threat or anything of that sort, that this is a rather powerful argument for the minister's officials to use in any discussions of this subject in the West Indies.
I think some of us, on this side of the house at least, will have something more to say about this subject when the motion standing in the name of the hon. member for Ottawa West comes up for debate, we hope next Monday. In the meantime, I wanted to bring the minister's attention to this problem as forcibly as I could. This minister said, quite correctly, that the market was very good at the moment for fresh and frozen fish. Experience tells us this condition will be influenced by the price of meat generally, but the price of beef particularly. I am told by people with long experience in the fish trade that when the price of beef goes up, the market for fish rises. If the price of beef falls, the market for fish generally falls too, in areas like the United States where consumers can readily shift from one product to another. I think all of us, not only the members from the Atlantic provinces and the minister himself, but from the greater part of Canada, are very apprehensive about that question, the shortage of fodder in western

Canada; the danger of mass sellings and mass slaughterings of cattle, and the danger to our cattle trade. I would add thereby also to our fresh fish exporters. Then again, if the quantity of fresh and frozen fish we could export declined, there would be that much more pressure on the salt fish market.
All of these things are tied together. I do hope the minister will use his influence with his colleagues, and I am sure he will in this case, to take every precaution, including if necessary increasing our imports from the United States, in order to assure an adequate supply of fodder so we can maintain our cattle, maintain orderly markets for cattle in the United States which are important, not only to the farmers who produce cattle but also to the fishermen who sell fish in the United States.


Mr. Macnaughlon:: Mr. Chairman, living as I do almost 1,000 miles from the sea, I could certainly not claim to be a salt water fisherman or know too much about codfish in general. However, I have listened with a great deal of interest to the remarks made by my colleague the hon. member for Bonavista-Twillingate, and listened to him point out the danger to the fishing industry on the east coast of Canada. It so happens that the other day I did receive a little bit of detailed information on the trade between this country and Italy and it seems to fit right in now. I think it might be interesting to consider that the deficit of Italy in her trading balance with Canada appears to be steadily growing and that certainly is not what we desire if we wish to increase our trade with all nations, as the minister so ably outlined this afternoon.
But there is great concern, I know from the correspondence I have received, in Italy at this steadily growing imbalance of trade between Italy and Canada. For example, it has increased from $9.1 million in 1955 to $12.8 million in 1956 to $16.1 million in the first half of 1957 and I suppose that as of the present the imbalance of trade between the two countries is even greater. This growing imbalance of trade between the two countries is causing a great deal of concern in Italy itself. In fact, my correspondence indicates to me that they are considerably disturbed about the protectionist tendencies that this present government seems to be formulating in its general trade policies. This is being given considerable display in the trade papers in Italy itself. I am advised that it would hardly be surprising if this did not lead to a reappraisal of Italian policy concerning Canadian imports, especially with respect to the import of codfish. That is all I want to say on that point at the moment.
What I should like to bring to the attention of the minister is a subject which he, for one
Supply-Trade and Commerce reason or another, did not include in his speech. I am very glad that at long last he has decided to make a report to parliament. I believe this is the first one since the present government took office some time ago. In any event, if you will refer to the throne speech given on May 12 of this year, you will see that in one paragraph it refers to small business and states as follows:
In order to assist small business, there will be established a small business section within the administrative machinery of government. The functions of this organization will be to provide liaison between the government and small businesses, to study the problems of small business and to advise on measures necessary to meet them.
The Minister of Justice on June 11 of this year was speaking to the retail merchants association of Canada at Vancouver and a report published in the Toronto Telegram of June 11 reads:
Justice Minister Fulton has outlined to retailers federal plans to help small businessmen solve their problems.
Then it goes on further to say he was speaking to the Retail Merchants Association of Canada and that he said:
-the government is proceeding "at once" to set up a small business section in government.
And so on and so forth.
Mr. Fulton said the government's new section will provide a liaison between government and business and recommend measures to help small businesses including the terms of a loan fund.
If we go back to some of the promises that were made by the Prime Minister in the recent campaign-and I am dealing only with the recent campaign, not the first so-called campaign-we find that according to a Canadian Press dispatch in the Montreal Star of March 18, 1958, the Prime Minister speaking at Selkirk, Manitoba, on March 17 last said the government would set up a special branch to help small business obtain a fair share of government contracts and financial aid to expand.
There was no mention of any particular measure which the present government proposes to take with regard to assisting small business and certainly not with regard to giving any financial assistance. Yet that was one of their major points; and certainly according to the evidence that we have, and according to the minister's own statements on various occasions, I believe that small business accounts for about 50 per cent of domestic trade in this country. If that is true, it seems to me that now is the time for the government to live up to its promises with regard not only to acting as a liaison between small business and government-I am not suggesting that the government indulge in wholesale handing out of contracts except by

Supply-Trade and Commerce tender-but to advancing some proposal as it promised to assist financially small business.
As we well know, the previous government set up a small business department. I believe it was started under the department of reconstruction many years ago and it has been of material assistance to small business throughout Canada by the providing of information, by bringing people together and by assisting generally small businessmen who wanted to make an approach to government and who wanted to get certain research facilities without being obliged to go to the considerable expense of doing the research themselves. So I ask the minister what about this pledge given to the people of this country in the throne speech. What does his department propose to do with regard to assisting small business in his country? There will be ample opportunity, I hope, to ask various leading questions of the minister in an effort to try to get some information which is not necessarily political in character but is with regard to trade itself.
We have heard ad nauseam this proposal to divert 15 per cent of Canada's trade from the United States to the United Kingdom and it has been expanded into an expansion of or increase in export trade for this country; but the basic fact remains that the statement was made that this government proposes to divert 15 per cent of our trade with the United States to the United Kingdom or in other words $650 million per year. That is a disturbing statement or a disturbing fact, if it is true. If it is not true, I think the time has come to deny it once for all. Certainly the minister's words were these, as I took them down today, when he said that what we want is diversification-of course we do-because it will mean a better balance of trade-of course it will. He says we want expansion of foreign trade, that we want to co-operate with all, and that we want to remove discrimination. Yet at the same tune when we hear rumours throughout of a proposed imposition of a dumping proposal, needless to say traders and businessmen in this country are considerably disturbed.
We have dealt with the question of trade with Canada and the United States at some length on other occasions; 70 per cent of our imports from the United States, 60 per cent of our exports to the United States with a deficit of $1,001,000,000. But the minister in a statement given to the Boston Post, I think it was, said that in spite of our desire to diversify our trade, we must do nothing to lessen the over-all total. As I say, this ridiculous suggestion of diverting trade from one country to another, when we as the fourth

trading nation in the world should be bending every effort to expand our trade, should be scotched once for all.
Frequently in this house we have heard the suggestion advanced by the present government that trade should be decentralized from the central provinces to the west and to the east. Has the minister anything to say with regard to that proposal? Has he any policy to advocate in that regard? We also heard a great deal about the trade mission to Britain and all of us wish to increase trade with Great Britain. I hope no one will misunderstand me on that score.
We have, however, received no report from the minister himself in this particular respect. We have had a mission sent over to England, which mission has submitted its report, and that report is very interesting. Under heading No. 6 of the conclusions of the report, "factors affecting British trade in Canada" it refers to the proposal of protection. This is in the last paragraph, namely No. 24, and it says that undoubtedly a number of United Kingdom manufacturers are uneasy about dumping regulations and fair market value and that some do not entirely appreciate the procedures involved.
What we want to know is how the minister is able to get on his feet in this house and propose that we must take every possible step to increase trade with other countries, and at the same time talk about diverting trade from the United States to the United Kingdom, and also at the same time imply that there may be levied subsequently certain dumping duties which, as anyone knows, will only bring about a measure of restriction to trade and will do nothing to increase trade with other countries. We think we should have an explanation of the present government's policy from the minister at this time.
The minister himself referred to the necessity for exhibitions and how they have brought Canadian goods to the attention of foreign purchasers. I am assuming the minister has already visited the Canadian exhibition at the current Brussels trade fair and I think the time has come for him to tell us something about his impressions of our exhibit at that fair. My own opinion is that we ought to go into the fair business on a much larger scale, that it is a measure used by European traders to display their goods and to procure contracts for trade between themselves and other countries. I believe we are lagging in this respect and, as I say, I would like to hear the minister's impressions of our exhibit at Brussels.
There are many other things which I propose to raise in due course but at the present time I wish to thank the minister for having, at long last, brought down a report on his

department and I wish to state that I hope before long he will outline his policy so that the businessmen of our country may know in which direction we are going.


Mr. Eudes:: There is just one question I would like to raise in view of the remarks of the hon. member for Ottawa West. I would like the minister to comment on articles which have appeared recently in Montreal newspapers to the effect that oil refineries established in Montreal for some years, having spent millions of dollars to expand the industry in that area, are being forced to go west in order to gain supplies of crude oil. Would the minister also explain how this movement of the oil refineries from the city of Montreal and area will help to solve the acute unemployment problem which exists in that metropolis and will improve the declining economic situation?


Gordon Minto Churchill: Mr. Chairman, in reply to the hon. member, this is not a subject which is of immediate concern to the Department of Trade and Commerce. We are dealing with estimates and I have no supervision over the oil refineries or where they are situated in this country.


Mr. Peters:: There is only one small point which I would like to raise which has been raised by other members of this group in previous years, particularly the hon. member for Kindersley. This concerns the standardization of weights and measures and sizes of products manufactured in Canada.
I am quite sure that every hon. member has gone downtown and has purchased or has intended to purchase a pair of shoes or a shirt or particularly children's clothing. When they walk into a store they expect that if they buy a child's shirt size six it is going to fit a child aged six but when they get it home it will fit a child three years of age or a child of eight or nine. This has, for a number of years, caused a good deal of concern to every housewife and, I am quite sure, to other people. When you enter a store to buy a pair of shoes, for example, and you recall that the last time you bought a pair of size nine it was a good fit, you expect that that size will still fit. If it does not, it does not necessarily mean that your feet have grown bigger, it simply means that the manufacturer did not use a standard measurement for his product. This has been a big problem in respect to our trade, particularly in connection with items of wearing apparel, and also in relation to imported goods. I am quite sure that the people of Canada would appreciate something being done to standardize many commodities.
There is another aspect of standardization to which I would like to draw the attention
Supply-Trade and Commerce of the minister and that is with respect to Canadian produced goods. Shirts, for instance, are sometimes labelled 100 per cent wool while in many cases they are made of fabricated material and have no connection with sheep. Similarly, when a product is labelled washable or unshrinkable the Canadian people, in my opinion, have the right to assume that that product will meet with the standards implied by its label. We all know that this is not always so.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at eight o'clock.
Frank Howard: Mr. Chairman, before I proceed to make any formal comments about the general question of trade, I should like to express my thanks to the hon. member for Vancouver South for the rather timid endorsation he made of C.C.F. policy a while ago, and also express my appreciation for the few statistics he placed on the record regarding the total amount of trade with China in terms of dollars. It is most unfortunate, however, that he used only figures relating to the last few years for if he had gone back farther than just a few years we would have had a much clearer picture of the trading relationship between Canada and China in terms of dollar value.
One important statement the hon. gentleman made which I believe requires a great deal of amplification or explanation was to the effect that we cannot now recognize in a diplomatic way the government of red China. Hon. members will recall that I asked him if he would care to elaborate on why we cannot and he declined my invitation. If there was any reason behind his making the definite statement that we cannot now undertake to recognize China in a formal and diplomatic fashion I would appreciate it very much if at some future time in this particular vote the minister would undertake to explain whether or not the attitude expressed by the hon. member for Vancouver South represents the policy of the government, and I make that request being fully cognizant of the fact that this is not a debate on external affairs nor a discussion of the estimates of that department.
If it is the policy of the government that we cannot recognize China diplomatically I believe this country is entitled to a clear explanation of this position. Although this is not the time for a discussion on external affairs, as I have said, I think we should be allowed a bit of leeway in discussing the question of the diplomatic recognition of a
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Supply-Trade and Commerce country because it has a direct bearing on our trade relationship with the countries of the world and in this case with China. I hope, Mr. Chairman, you will allow us to pursue the question of diplomatic recognition to the extent of permitting the minister to explain the position of the government and the reason for its taking that position with respect to expanded trade with red China.
The general tenor of the minister's opening remarks was that Canada is a trading nation and depends on export markets for a great deal of its economic stability-or instability, whichever it happens to be at a given moment-and I believe he said that one out of five persons employed in Canada was employed because of export trade, or if you prefer having it expressed in this fashion, 20 per cent of our economy is dependent upon our export markets.
I intend to confine my remarks on this vote to the attitude of the government-as hon. members may have expected-as it relates to our trading relations with red China. I do so for a number of reasons, probably the most important of which is that China embraces 25 or 30 per cent of the world's population and if the birth rate continues at its present level it will constitute an even greater percentage of the world's population in years to come.
Another important reason for confining my remarks to our relationship with red China is that coming from British Columbia and having some familiarity with the lumber industry-having worked in and around it for eight or ten years-it naturally has a strong personal appeal for me. Lumber, as many hon. gentlemen know, accounts for 35 to 40 per cent of the total economy of the province of British Columbia. That percentage is an indefinite figure. I do not know if anybody can come up with an absolute figure to represent the percentage of the economy of British Columbia that is dependent on the lumber industry because of its extensive ramifications but I believe that 35 to 40 per cent is a generally accepted estimate of the relationship of the lumber industry to the balance of the economy of the province of British Columbia.
One of the best known persons in the lumber industry in British Columbia is Mr. H. R. MacMillan who was head of MacMillan and Bloedel a lumber firm which is one of the largest integrated lumber concerns in the world, I believe second only to the Weyerhauser interests in the United States. For a number of years we in the C.C.F. have been insisting upon formal recognition being given by Canada of the Peoples' Republic of China and secondly upon the expansion of our trade with that country. We


were ridiculed on many occasions for having taken that stand. We were accused of being fellow travellers and merely wanting to support the communist ideology which is an accusation, I think, very few people would make today. Nevertheless that was the accusation that was made against us some years ago.
Mr. MacMillan would not, I think, be one who would have such an accusation directed against him. He made a visit to China not too long ago and upon his return one of his statements was that China is in need of lumber, that we can sell lumber to China and that we should expand our trade to China in terms of lumber. By confining my remarks in this context to lumber I do not want it to be construed that I am implying that wheat and other commodities should not be sold to that country or that the same amount of effort should not be put into selling other products there.
Reference has been made to Mr. Muir, president of the Royal Bank of Canada, who recently returned from a tour of China. His remarks and opinions have become well known throughout the nation and have been mentioned in this house on a number of occasions. I do not believe it is necessary for me to reiterate them or point out the great emphasis he placed on the necessity of expanding trade with that country and I shall refrain from doing so with the exception of re-emphasizing Mr. Muir's comments to the effect that it was galling to see other western nations drumming up business in China while we sat back and were not participating in this. It is significant to note that Mr. Muir made no mention of who these other western nations were but I think we can take it that one of them naturally would be the United Kingdom who extended the diplomatic courtesy to China some years ago and as a result of that has been increasing its total amount of trade with that country almost ever since it first extended diplomatic recognition. These figures were put on the record today by my friend from Vancouver South. I wish that he had undertaken to make some reference to the dollar trade that existed between Canada and China prior to the war.
An article in Canadian Business of October, 1957, plumped for two things: one, extended trade; and, two, the question of diplomatic recognition. It pointed out that prior to the war Canada's trade with China, only as it related to lumber and lumber products, averaged $29 million a year. That was the average of our exports to China prior to the war compared with a figure of $1,700,000 for the total of all products, most of which I understand was ammonium sulphate. This

figure was mentioned this afternoon. It gives some indication to the committee of the great need which exists in China for lumber. I should like to refer to some figures which I have prepared and some figures which have been quoted. China's minister of forestry, whose name is Liang Hsi, commented upon China's needs for timber. This is the statement:
By the end of the second five-year plan China will need 47 million cubic metres of timber a year.
To convert cubic metres into understandable terms so far as we apply them in British Columbia or in Canada, and thinking in terms of a thousand feet board measure, we can use two methods to turn the 47 million cubic metres into Canadian measurement units. It depends on whether he was talking about ordinary log measurement or about processed, finished lumber measurement. If he was referring to the requirement of 47 million cubic metres in terms of whole log measurements and if we convert that to board feet we find that their annual requirements would be 10,340 million board feet per year; that is, in whole log requirements. Incidentally, that is twice as much as the total average annual cut for the entire province of British Columbia in any one year over the past four or five years. If he was talking in terms of finished lumber, then we have to use another conversion factor and we come up with approximately 19J billion board feet requirement a year for China. In China they have a bit more accessible forest acreage than we have in British Columbia but they certainly have far less than Canada has in terms of accessible forest acreage, and their total production is far less also, even if they were fully exploiting their timber resources, which they are not, they would not come anywhere near filling the requirements of that nation.
Quite frankly, Mr. Chairman, the minister is still missing the boat in promoting the sale of goods-not only lumber but other goods as well-to China. I merely mention lumber because of its proximity and its value to the province from which I come.
Today a delegation from the united electrical workers met the cabinet and presented a brief suggesting a number of ways to overcome what they can foresee to be a more serious slump than exists now in the electrical goods manufacturing industry. Part of their suggestion related to expanding trade, and China was one of the countries mentioned by the united electrical workers in their brief to the government.
In his comments upon returning from China Mr. Muir mentioned the tremendous hydro electric projects which are taking
Supply-Trade and Commerce place in that country in the gradual electrification of that nation. I asked the officials of the united electrical workers whether they had made any surveys or studies from a statistical point of view of the requirements of China in as much as they suggested we should trade with that country. They said yes, they had made such a survey and that there was a tremendous market in China for goods made and produced in Canada by their members; that is, electrical goods in the heavy electrical field and in the smaller electrical field. They pointed out that China had on its own-and this is an anomalous situation-been able to produce some types of electrical equipment required in their electrification program to the point that they were now exporting those things themselves, but there was still a vast amount of electrical commodities that could be sold to China if we would only attempt to do so.
During the throne speech debate reference was made to the necessity of trading with China, not only by myself but by some other hon. members in this house and they all do not sit with the C.C.F. It was pointed out that unless Canada stepped into the field of attempting to trade with China, unless we break our ties in this regard with the United States, unless we follow the lead that was shown a number of years ago by the United Kingdom in extending formal diplomatic recognition to that country's government, unless we embark on an extensive trading relationship program with them, we are going to be left behind the eight ball when the United States government and industry get ready to move on the question of recognition and on the question of trade. Many people may laugh and say that they have laws down there that prevent trading with China; they cannot sell anything over there. In fact those laws are so fierce that they even extend beyond the boundaries of the United States and affect Canadian companies as well so that those Canadian companies cannot trade with or sell goods to China. But a number of very interesting things have happened in recent years. The attitude of the federal government of the United States has begun to soften from its previously unalterable stand of not recognizing China. John Foster Dulles, their secretary of state, has backwatered a little bit.
This would bear some pretty extensive investigation by the Department of Trade and Commerce which 1 am sure the minister would instigate to see just what steps are being taken in the United States to expand their trade with China. Not too long ago a corporation was established there called The
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Supply-Trade and Commerce Two Continents Commodities Corporation of New York. I do not know whether "of New York" merely means where it is located or whether "of New York" is a part of its incorporated name, but this New York firm was formed in the hope of being able eventually to participate in import and export trade with China. It is of the opinion that at present China is very short of lumber. It points out that the United States was formerly China's main source of supply but that no lumber has gone to that country from the job-short west coast ports since the state department imposed its embargo. They are talking about the west coast of the United States and that part of that country produces precisely the same type of lumber that we in Canada produce on our west coast in the douglas fir, hemlock and spruce belt.
There is a move afoot among businessmen and trading people in the United States to expand trade with China. We know that to a great degree the United States is dependent upon its export markets for the stability of its economy. We know that we are also. I say to the minister with all the sincerity I can possibly show that this is not just a question of attempting to blow some ideological horn but simply a straight question of economic facts and in our opinion we have got to extend diplomatic recognition to that country first so that we will be in a position to capitalize on our great need to expand our export trade with that country.
If we do not take these steps the United States will and when they do we will find ourselves in the usual position of then complaining about some action of the United States as we have been complaining about actions of that country in other fields recently only to find that it is too late. I hope that if and when the minister rises to reply to the general remarks that have been made he will undertake particularly to explain the position of the government as it relates to the definite statement by the hon. member for Vancouver South that the government cannot recognize red China. I hope he will explain why it cannot when he rises to reply to these comments.


Mr. Carter:: Mr. Chairman, I should like to join with the other members who have congratulated the Minister of Trade and Commerce on giving us a long awaited statement on the trade policy of the government. I want to go even a little farther and thank him for his assurance that the present policy of the government is to expand trade with all parts of the world in contrast to the diversionist policy about which we heard so much in the past two elections. If there is one tenet of political faith that has distinguished the Liberal party from all other


political parties it certainly has been our stand on world trade. The Liberal party has always stood for the expansion of world trade in all directions and to all parts of the world so as to build up as far as possible a great world trading community. The statement of the minister this afternoon in which he gave us the assurance that this was now the policy of the government has gladdened not only the hearts of my colleagues on this side of the house but I am sure of all the people of Canada.
The minister emphasized quite rightly the importance of trade in the economy of our country and its impact on the employment situation. If trade is important to Canada as a whole it is doubly so to the maritime provinces which had to sacrifice their trading position in the markets of the world in order to make Canada a nation. What is true of the maritime provinces is even more true of the province of Newfoundland which since 1949 has become a captive market.
Prior to 1949 we were able to trade in the world markets and take advantage of the best bargains that we could obtain but since 1949 we have been compelled to make the bulk of our purchases from mainland Canada. If the trade of Newfoundland were to be compared with our trade with foreign countries I think it would be shown that Newfoundland would be the equivalent of Canada's second or third best trading customer because the value of our trade as a province with mainland Canada must run somewhere around $200 million or more a year.
In Newfoundland we have some small industries we are trying to develop and which, as in other parts of Canada, we must develop if we are going to provide jobs for the increase in our population. But the development of those industries depends almost entirely upon our ability to sell our products either on the mainland or in world markets. In that respect we are very greatly handicapped because of our geographical position and the terrific transportation costs which are a greater handicap to us than to any other part of Canada. At other times in the house I have stressed the importance of helping these local industries where possible by making defence purchases locally and by granting them defence contracts in products which we are able to supply.
I have pointed out on earlier occasions how we are not able to compete on tenders because our transportation costs more than offset our lower factory prices. I brought up this matter in the defence committee and asked if some special preference could not be given to local industries in the maritimes and Newfoundland. I was told that if this were done it

would be as much a handicap as an advantage. I then discussed the problem with Mr. Donald Gordon in the railway committee and he pointed out that his hands were tied by certain laws which prevented him from discriminating between one part of Canada and another. Whatever rate he made for Newfoundland would have to apply to the same commodity everywhere in Canada.
We seem to be getting up a blind alley but nevertheless there is a definite need for some form of preference if our local industries are to thrive and develop. I know that the minister is a very ingenious person.
I hope he will bring his ingenuity to bear on the problem and try to find some way of according preferential treatment to our small local industries in the maritime provinces and Newfoundland.
Since nearly all my constituents are fishermen, Mr. Chairman, like my colleague, the hon. member for Bonavista-Twillingate, I shall confine my remarks mainly to the marketing of fish. Last year Canada produced 1.9 billion pounds of fish. I should like to emphasize that that figure is the landed weight because obviously the processed weight would be very different. That figure was slightly lower than the 2 billion pounds landed weight for the previous year. This volume of fish had a landed value of $93 million. I should like to draw hon. members' attention to the fact that this is the landed value as compared with the $132.5 million which the minister mentioned in his speech this afternoon which, of course, would be the market value of that fish.
Now, of that 1.9 billion pounds of fish landed, 548 million pounds or 28 per cent represented the production of Newfoundland and had a landed value of around $13 million or roughly 14 per cent of the total value. When we compare these figures, even when allowance is made for the different market values of the different species, I think the figures prove that the Newfoundland fisherman is still getting far less than the average landed value of the product he produces.
Of that 548 million pounds, 52.6 million pounds were processed and sold as frozen fillets. This figure represents a decline of 16 per cent from the 62.8 million pounds of frozen fillets which were produced in the previous year. All of these 52.6 million pounds of fish were sold in the United States market. Hon. members will, therefore, appreciate our delight at the minister's statement this afternoon when he stressed that trade relations with the United States were of paramount importance. If they are of paramount importance to the whole of Canada, then that statement is doubly true in so far as Newfoundland is concerned. Any worsening of
Supply-Trade and Commerce these trade relations which would motivate reprisals in the United States market, such as the establishment of quotas or setting up tariffs against our fish, would be a tragedy to the fishermen of Newfoundland.
The remainder of that fish was processed with salt and sold in the salt fish markets of the world, either as dried salted fish, wet salted fish or pickled fish. About 100 years ago Newfoundland produced 1.5 million quintals of dried fish. For the benefit of hon. members who might not be familiar with this term, I should explain that a quintal is a hundredweight, 112 pounds of dried fish. From 1930 to 1949 our production of dried salted fish hovered around the one million quintal mark. Some years it went a little above, and some years slightly below. If one averaged it, it would average out at a little more than one million quintals a year.
Since confederation in 1949 that figure has steadily declined until today our production of salt fish is a little over 600,000 quintals, which represents a reduction of about 40 per cent. This reduction has taken place in the face of an increase in world production, and an increase in world consumption of salted fish. The decline has been caused by two factors. One factor was the Marshall plan which came into effect after the war and enabled our customers in the European markets to build modern fishing boats and to produce part of their own consumption. Part of the decline was the result of the impact of confederation on our trading position. Prior to confederation Newfoundland enjoyed the advantage of the best of two possible worlds. We had a dollar currency of our own, we had a surplus of dollars and we had a sterling deficit. Consequently it was possible for us to sell our fish in the sterling markets, use the proceeds to reduce our sterling debt and take the equivalent of that out of our surplus dollars to pay the fishermen.
The marketing machinery which the government had set up made it possible for the fishermen to know exactly how much they were going to get for their catch before they even produced it. After confederation that set of conditions was changed entirely. As a result our salt fish market has steadily worsened, and the position of our fishermen of being able to tell just what the prospects of the fishing industry might be has steadily deteriorated. When we produced a million and a half quintals of dried fish we were able to sell half a million quintals of dried salted fish in the Brazilian market. Last year we sold 27,560 quintals in that market. If we go back to 1953 we see that the market has fluctuated from 17,000 quintals in 1953 to 59,000 in 1954; down to 681 quintals in 1955; down even lower to 446 quintals in 1956 and
2348	HOUSE OF
Supply-Trade and Commerce up to 27,500 quintals last year. That is a long way from the large market that we used to enjoy in Brazil. We know, as the minister pointed out today, that a large part of this decline was caused by the currency problem from which Brazil is suffering now. But surely, it should be possible for us to do something to help Brazil purchase more of this fish because it is an old and established market. I am not satisfied that we are making any special effort to regain this market which could be of tremendous value so far as Newfoundland is concerned.
Our best market last year was the Caribbean. It took about 48 per cent of our production of salted fish, I think it was about 325,000 quintals. However, we have lost, as the hon. member for Bonavista-Twillingate pointed out today, the valuable market of Jamaica.


Gordon Minto Churchill: Just temporarily.


Chesley William Carter: I hope it is temporary, but it will be permanent unless some special measures are taken to safeguard this market and to ensure its recovery. This afternoon, the minister said nothing at all about that.


Mr. Bigg:: What are your suggestions?


George James McIlraith: Has the government no policy?


Chesley William Carter: You make me Minister of Trade and Commerce and I will give you plenty of suggestions.


Gordon Minto Churchill: The hon. member is doing very well now.


Chesley William Carter: The Mediterranean market which used to be one of our greatest markets has now dwindled because of the factors which I mentioned a few minutes ago down to about 15 per cent of our catch. Last year we marketed only 120,000 quintals in the whole Mediterrannean area. Of that amount 7J per cent or 50,000 quintals went to Italy. That fact points up again the necessity of watching our tariff policy so that we do not do anything by way of tariffs to prevent that market in Italy from expanding. As to Portugal, in 1953 we sold there 34,000 quintals of dried fish. In 1954 the amount was down to 25,000 quintals and in 1955 it was 40,000; but in 1956 and 1957 we sold nothing, not a pound.


Mr. Browne (Si. John's Wesi):: That is not right.


Mr.   Carier@: Those are the figures.


John Ferguson Browne: Those figures are not right.


Mr.   Carier@: The minister can give the correct figures. What we sold to the Portuguese in the last two years is negligible
[Mr. Carter.)

and that in spite of the fact that Portugal would not be able to compete with Newfoundland if we did not provide them with harbour facilities, bait facilities and many other advantages which we give to them. I think we have a bargaining point that we could use with Portugal to better advantage than we are doing at the present time. Thirty-three per cent of our fish was sold in North America, and most of that went to mainland buyers who bought the fish wet salted or in salt bulk condition, reprocessed it and resold it again mainly to the Cuban market.
But here in Canada we have another opportunity of expanding our market for fish. I should like to see a great joint advertising program conducted by the government and the fish trades-possibly the provincial government may come in also but certainly the industry and the federal government- directed towards making this product better known across Canada. Salted fish can be a great delicacy if it is properly cooked. However, I will say that very few Canadians know how to cook it. Nevertheless there are people who are specialists. You can find them in Brazil and in Portugal. I think it would be worth while to bring a few of them over here and to have them travel around Canada cooking a bit of salted fish for our Canadian brothers and getting them to develop a taste for this delicacy.


Mr. Baskin:: Where is your apron?


Chesley William Carter: I am not a cook, I am a connoisseur. I think that winds up what I wanted to say about salted fish, Mr. Chairman, but there is much more that could be said because there are many factors to be taken into consideration when one comes to discuss the trading policy of a country like Canada. I refer to such factors as exchange rates and problems in connection with conversion of currency. I might say that the premium on the Canadian dollar at this present time is an additional hardship for the fresh fish processors who are obliged to sell their fish wholly in the United States market. There is the problem of stability of currency, of transportation costs to which I have referred and subsidies, indirect and direct, which my friend the hon. member for Bonavista-Twillingate dealt with this afternoon.
Before I sit down I should like to say one word about trade with China. I do not know whether or not we should trade with China and I do not think any one here tonight has enough wisdom to know whether or not we should do so. Certainly if there is one point on which we need divine guidance, this is it. A very good case can be made out for trading with China and a very good case can be

made out for not trading with China. As Macaulay once said, I wish I could be as cocksure about one thing as my hon. friends to my right are about everything.
When we come to consider a matter of this kind I think it really boils down to a question of motive: Why do we want to do it? The rightness or the wrongness or the ultimate good cannot be divorced from our motives, no matter what our action is. I know we have a very popular doctrine which is called enlightened self-interest; and selfinterest, as it implies, is based on some selfish purpose, some selfish benefit. If it is selfish, if an action is based solely on something that we are going to get out of it for ourselves, then in the long run it is not in our best interests; and if it is not in our best interests, it is not enlightened. Hence enlightened self-interest is, in my opinion, a term that is contradictory. But whether we do so or whether we do not, I should like to point out this fact. Our friends the red Chinese and our friends the Russians do not act on the motive of self-interest. They are not one bit concerned whether it is going to increase the prosperity of their country, increase their volume of trade, reduce a surplus or anything else. That matter does not count at all with them. Only one thing counts and it is this: Will it further their objective of winning the cold war? Will it further their goals of spreading their philosophy all over the world and enslaving the peoples of the world? We should be equally anxious not only to frustrate that objective but to see to it that we on our part are motivated in the direction that is going to support the way of life to which we all subscribe.


Mr. Nasserden:: First of all, Mr. Chairman, I should like to congratulate the Minister of Trade and Commerce and the government generally for their efforts to correct this tendency with regard to trade which has reached such great proportions in recent years as to cause the Canadian people in the space of approximately ten months twice to endorse the policy of this government and to turn a house of about 170 Liberals into a house of approximately 200 Conservative members. This political upheaval in the history of our country is significant, particularly when you consult the record in respect of trade in agricultural products.
Something has been said in this house during this debate about wheat marketings and the wheat marketing policies of this government. I think the hon. member for Ottawa West tried to a certain extent to take some of the credit away from this government for the magnificent job it has done in increasing marketings of grain from this
Supply-Trade and Commerce country in world markets. I would like to say a few things in that regard. One thing this government did was to appoint a wheat committee to study this situation and endeavour to take those steps necessary to increase the marketing of grain in the world markets.
During the election campaign I had the pleasure of a visit to my constituency by no less a person than the Leader of the Opposition in this House of Commons. In speaking in one of the towns there he dealt with the problems of trade and agriculture. Among the things he said, as outlined in a press report given wide distribution, was the following:
I want to mention, finally, one other specific measure that would be of direct and immediate benefit to farmers in western Canada. Liberal governments in the past did their best to ensure the maximum possible sales of Canadian grain, but large surpluses accumulated despite all our efforts -and nobody has been able to show that his efforts would be, or are, any better than ours were,
In this connection I would point out that in 1956-57, 260 million bushels of wheat were marketed and in 1957-58-that is to say, to July 9-296.7 million bushels of wheat were marketed and there still remain 21 days of the marketing season to be taken into account. When he was in my constituency the Leader of the Opposition had other things to say on this subject and I would like to give a further quotation as follows:
In terms of over-all measures which will aid farmers, next to maintaining a strong domestic economy, is an aggressive sales policy for wheat. While there has been much difficulty in maintaining and increasing farm exports, we assert that Liberal policies of reciprocal removal of trade barriers and of international co-operation hold the greatest promise-and are indispensable in expanding export markets for wheat, other grains, for apples and potatoes, and for livestock products. Because of the present and potential opportunity of our farmers in the great American market, we would propose to encourage and develop that market- and not destroy it by hostility to the United States. Every livestock producer in Canada knows what damage can be done to his sales and prices if he is cut off from the American market and that danger is increased by some of the policies of the present government-
All I can say in that regard is that when this government took office, the sales of livestock to the American market were practically nil. The fact is, if you take a close look at the statistics you cannot help but realize that about the only kind of cattle going into the United States market were purebred cattle at that time, and in regard to his allegation that we were stirring up hostilities I would like to point out that sales to the great United States market have reached proportions unmatched and at prices unmatched in many years.

Supply-Trade and Commerce
The hon. member for Burin-Burgeo also had something to say in regard to trade, particularly with respect to China. He did not know whether we should trade with China or not, but his leader knew what he wanted to do. During the election campaign at Cud worth he had this to say:
We should also press hard to develop more markets-in Asia for instance-including China.
The interesting thing about that, so far as I am concerned, is that I believe he thought we could not sell wheat to China, but hardly had he left the hall before it was announced that wheat sales were being effected to China.
There are a number of things which could be said in this regard but all I wish to say at this time is that with respect to free trade, and I believe every member in this house believes in free trade although the Liberal party thinks that they are the only ones who do. The Liberal party was in power for 22 years and we must remember that when they left office the Canadian government was receiving more revenue from tariffs through the treasury of this country than at any time in this history.


Lester Bowles Pearson: That is true.


John Whitney Pickersgill: Because of the volume of
our trade.


Edward Nasserden: This is something we
should consider. If I have a cow for sale and you want to buy that cow, free trade ends right there. This is because I am going to try to get as much for that cow as I can and you are going to try to pay as little for it as you can. All we could ever hope for is the freest possible exchange of goods as between nations willing and able to trade with each other. I believe this government will endeavour to formulate plans and put into practice patterns of trade which will bring about the freest possible exchange of goods with those nations willing and able to trade with us. Proof of this can be found in the fact that we are going to have a commonwealth trade conference in Canada this fall. This is something which is very much overdue and which, not only in the realm of trade but also in the realm of discussion with a view to seeking out peaceful solutions for world problems, will be of the utmost value.
Among the remarks made this afternoon was one to the effect that the Liberal party is a party which will work with all nations in respect of their trade programs. In this connection I would recall to the house the United Kingdom wheat agreement, which seems to me to have been an agreement which excluded some of the other countries in the world and which left Canada in
rather a bad position with many of those other countries.
I will conclude my remarks at this time although many other things will come up during the estimates on which I may wish to say a word or two. I just want to congratulate the Minister of Trade and Commerce and the wheat committee and to assure them that the farmers of western Canada appreciate what they have done and what they are trying to do at the present time.


Mr. Cresfohl:: Would the hon. member
permit a question? Are we to understand the hon. member has just announced that he and his party are in favour of free trade?


Edward Nasserden: I will be very glad to
answer the question, Mr. Chairman, and if the hon. member will look very carefully at what I have said he will see that the words I used were "the freest possible exchange of goods with nations willing and able to trade with us". No party can do better than that.


Mr. Cardin:: Mr. Chairman, I readily
agreed with the Minister of Trade and Commerce when he said this afternoon that international trade was of vital importance to the Canadian economy and it is because I feel this is so and because I feel that the estimates of the Department of Trade and Commerce are also so important that I believe it is all the more regrettable that the leader of the house and the government did not deem it necessary to give the house adequate advance notice of the fact that these estimates were to be brought forward today. This practice of not giving sufficient notice is becoming more and more frequent and I think it is an unfair practice. As a matter of fact we might consider it as a sneaky form of closure.


Some hon. Members:: Oh, oh.


Louis-Joseph-Lucien Cardin: International trade, of course, has played in the past and is now playing an extremely important part in our economy. And because, of course, Canada will always have a greater capacity for production than for absorption we can expect that exports of Canadian products will continue to play an increasingly important role in our economy in the future. The maintenance and increase of our international trade will not be any easier for this government than it was for the previous government.
The field of international trade is now occupied by all the nations of the world who feel more keenly than at any other time in their history the importance and the necessity of international trade, and because of the differences in the standard of living of the different countries of the world and because
UVEr. Nasserden.]

of the low costs of production and transportation of, I would say, the majority of our competitors, markets willing to pay Canadian prices for Canadian products will be more and more diificult to find in the future.
There is a factor, of course, that will also make our trade more difficult in the future and that is that in the evolution of trade we have seen the creation of economic blocs such as the European customs union and the proposed European free trade area. I believe we can expect to see more of these economic blocs in the future in different areas of the world and I do not doubt that a day may come when Canada will have to be part of one of these blocs.
The fourth reason why international trade for Canada may be more and more difficult is the fact that the U.S.S.R. and the satellites have now engaged in an economic war against the western world. There is no doubt in my mind that in the military field the western world is really capable of defending itself. There is a question in my mind, though, of the ability of the western world to defend itself in the economic field. I sincerely hope we do have all the requisites to adequately defend ourselves in the economic war that Russia is now waging and as a result of which Canada may find it still more difficult to find an increasingly prosperous share of the international trade field.
There is no question of the importance of international trade for Canada nor is there, I believe, any difference of opinion about the difficulty that exists in our being able to achieve for Canada this increasingly important economic factor. We were all very interested to hear the statement made by the Minister of Trade and Commerce this afternoon. We all listened very attentively but I am afraid it was impossible to detect in the words the minister spoke any indication of what the government's trade policy might conceivably be. Listening to the minister one gets the impression that the Conservatives still labour under the illusion that they can talk their way into the markets of the commonwealth, of Europe and of the world. The Conservatives have indeed done a lot of talking and have succeeded in confusing every one concerned. They have also contradicted by their actions all the talk in which they had previously engaged.
For example, in the short space of one year we saw the government enter into a 15 per cent diversion policy under which 15 per cent of Canada's trade was going to be diverted from the United States to the United Kingdom and that, of course, certainly did not please the people of the United States. Later during that year the government decided to send a trade mission to Europe and
Supply-Trade and Commerce there the government of Canada assured the British traders that it would indeed buy a great deal more from Britain than from the United States. Finally, just a short time ago, the government decided to raise the British preferential tariff on wool and that, of course, did not please the British traders. Indeed, it confused them and caused them a good deal of concern. In the brief period of one year it would appear that the government has succeeded in antagonizing its two very best customers. That, as a policy of international trade, could not possibly be worse.
The Conservatives have frequently accused the Liberals of having lost Canada's markets overseas. Many speeches were made by hon. gentlemen opposite on that subject but not once did any speaker say what markets in Europe were lost, how they were lost or why they were lost. It is only when we read the budget speech that we begin to realize that the Conservatives have begun to appreciate some of the problems affecting our overseas markets. In his budget speech, as recorded at page 1250 of Hansard of June 17, 1958, the Minister of Finance is reported as saying:
Moreover, I confess my concern over costs of production and prices in Canada. Only by keeping our costs of production in line with those of our competitors can we hope to achieve expanding employment and progressive improvement in our standard of living.
We are in danger of becoming a high-cost economy. Such a prospect is particularly perilous in the case of a country like Canada which must sell so much of its production in markets abroad. Moreover, Canadian producers are encountering increasing difficulty in retaining their domestic market in the face of keen competition from abroad. Many of them under these circumstances turn to the government for a solution of their cost problem.
One would get the impression that the minister has come to the conclusion that these problems suddenly arose since the time the Conservative government came to power. That is, of course, not true. This high-cost economy has existed in our country since world war II. It is one of the reasons why markets may have been lost in that period just as in this period under the present government they are still continuing to be lost.
However at no time during the Liberal regime did the Liberals either by their policies, their words or their actions ever jeopardize foreign markets let alone the markets of our two very best customers as the Prime Minister did by engaging in the 15 per cent trade diversion in his never-ending quest for sensational legislation.
I think it is ridiculous, if it were not so pathetic, to hear the Prime Minister trying now to deny his trade diversion policy of a year ago. This afternoon in his speech, the Minister of Trade and Commerce also appeared to be seeking to deny it when he
2352	HOUSE OF COMMONS
Supply-Trade and Commerce stated that trade with the United States was of paramount importance. That is a very strange statement coming from one who not so long ago was so very sold on the 15 per cent diversion concept. This international trade policy based on sensationalism or on half-thought-out ideas can be extremely dangerous. In his budget speech, as recorded at page 1237 of Hansard of June 17, the Minister of Finance said:
Perhaps most troublesome of all are the uncertainties arising from the many escape clauses in United States legislation and administrative practices. Hon. members do not need to be reminded of the recent restrictions imposed against Canadian oil and the continuing threat to our exports of lead, zinc and copper-notwithstanding firm trade agreement obligations.
A little farther on he said:
We find it difficult to understand why the United States should treat its best customer and friendly neighbour in this way.
Well, Mr. Chairman, I got the impression on reading those words that the minister was engaging in his own brand of arrogant whining after he himself had thrown the first stone.


Gordon Minto Churchill: The hon. member is not referring to me?


Louis-Joseph-Lucien Cardin: No, to the Minister of Finance who had spoken so highly of the 15 per cent diversion. Of course, the government has tried to justify this 15 per cent diversion policy because of the very unfortunate and formidable trade deficit between Canada and the United States. Neither the previous government nor any Canadian was indifferent to the Canadian trade deficit with the United States. It was certainly not considered by anyone on this side of the house to be an ideal situation at any time, but it seems to me that the whole foreign trade problem was at that time and still is so vital to our Canadian economy that it would have been foolish indeed, as it has been proven to be, to try to change a natural trade pattern which the prevailing world trends, competition, prices and standards of living have now forced on our economy.
I respectfully submit that this increased competition in world markets today is a sufficient challenge to our economy without having the government embark on a half-baked, half-thought-out policy of repudiating existing markets no matter where those markets may be.


Frederick Johnstone (Jack) Bigg: There is nothing more half-baked than that.


Louis-Joseph-Lucien Cardin: Perhaps not. It is very difficult indeed to understand the logic or the lack of logic behind the government's action on

the question of trade, but it is absolutely impossible to find any definite government trade policy. It is also difficult, Mr. Chairman, to understand the attitude of the Minister of Trade and Commerce. I really do not know of anyone whose personality has changed so rapidly in the short space of one year. From a very genial, very loquacious, very affable member, he has indeed, I am afraid, turned into a more or less taciturn and even at times a cynical member of this house. One has only to read or, better still, to listen to the Minister of Trade and Commerce answering questions on trade to get the impression that the minister greatly resents being queried as to what is actually going on in his own particular ivory tower.
I had the temerity to ask the minister a question on trade and I as the rest of my colleagues, also received the minister's usual supercilious and evasively empty answers. On June 11, as reported at page 1033 of Hansard, I reworded a question that I had asked the minister previously. The question read:
1.	What was the total amount of Canadian dollars paid to the United States in 1956 for imports of farm tractors manufactured in the United Kingdom and assembled in the United States?
2.	Was this amount taken into consideration by the dominion bureau of statistics when compiling its figures regarding the Canadian trade deficit with the United States?
3.	Are other products manufactured in the United Kingdom and imported into Canada from the United States? If so, what items?
4.	Has the government taken any steps to encourage British companies to assemble farm tractors and other British products in Canada rather than in the United States? If so, with what results?
I received the following answer, as recorded at page 1034 of Hansard:


Gordon Minto Churchill: This question, Mr. Speaker, is a refurbished edition of the one asked by the hon. gentleman last session on January 29, 1958. My answer on that occasion will be the one I give now. It is as follows:
"Mr. Speaker, no records such as are asked for by the hon. member are kept, and the information is not easily obtainable as it involves tracing the country of origin of components in manufactured articles coming from the United States."
I can hardly conceive the very brilliant, very efficient and alert Minister of Trade and Commerce not being aware of an article that appeared in the Gazette concerning the trade mission in Britain about which we have heard unfortunately far too little since its return to this country. I am quite sure this article had been given to the minister by the very efficient officers of his department and I cannot understand why the minister was so evasive. I should like to quote the article that appeared in the Montreal Gazette of November 29, 1957:
Coventry, England, November 28-(CP)-Members of Canada's trade mission learned with surprise

today that Britain's trade deficit with Canada is not as large as officially reported.
Officials of the Massey-Harris-Ferguson tractor firm said that a large portion of the $150 million Canadians spent last year for so-called United States tractors and parts actually flowed back to Britain.
Many of the component parts of the Massey-Harris tractors sold in Canada were assembled at Detroit but produced in the big Standard Motor Car Company in Coventry.
William Perlin of St. John's, Newfoundland, a mission member, observed that if this is the case the mission has been labouring under a misconception. The Canadian bureau of statistics had reported that last year, for example Britain had a deficit of some $330 million in Canadian trade. Canada was reported to have a deficit in United States trade of some $1,300 million.
If a proportion of the money Canadians have spent on Massey-Harris tractors imported from the United States actually came back to Britain, then it apeared that Britain's deficit with Canada and Canada's deficit with the United States were not as large as were reported.
James Patterson of Winnipeg, president of the interprovincial farm union council, said he would like to see steps taken to have the Canadian statistics corrected.
The 50-man mission was split up to visit the various motor car companies in this area. Some went to Standard, others to the Rolls-Royce, Jaguar, Rootes and Rover plants.
Ian Wallace, a director of Massey-Harris-Ferguson, joined Alick S. Dick, managing director of Standard, to show some of the members the motor car and tractor production there. Standard produces the Massey-Harris tractor under contract in what was described as the biggest tractor plant in the world.
Wallace explained that the reason why Britain ships tractors to Canada by way of the United States is because Americans are not fond of buying foreign-made goods. If the tractors, for example, were assembled in Canada and sold in the United States, there might be some American sales resistance.
On the other hand, Canada allows tractors in duty free. Tractors could be assembled conveniently in the United States to supply both the Canadian and American market. The parent company of Massey-Harris-Ferguson is in Canada. Subsidiaries are located in the United States, Britain and other countries.
Dick, whose company produces the Vanguard and Triumph motor vehicles, said vehicle production runs about 350 units a day. Tractor production, running at 380 units daily, now is being boosted to 415 with expansion concentrated on a new model of some 50 horsepower. The well-laid-out $50 million plant employs 10,500 workers.
At a luncheon of lobster, steak and wine, Dick urged Canadians to buy more Massey-Harris tractors "for the good of British trade".
Well, Mr. Chairman, that is one for the book. British industrialists are encouraging members of the Canadian trade commission in Britain to buy more tractors from the United States for the good of British trade. I am beginning to see why the Prime Minister is backing away from his 15 per cent trade diversion and why his Minister of Trade and Commerce is now feeling that trade with the United States is of paramount importance. I must say that we on this side of the house have certainly no objection in
Supply-Trade and Commerce helping British trade and in trying to promote more British trade. But I also feel that if we are going to do that the British would also be willing to help us when we are in a very difficult economic situation.
There are two items at least in this article which I think should be noted. First of all, the trade deficit between the United Kingdom and Canada and between Canada and the United States was less by at least $150 million for 1956 and, of course, there may be other items imported from the United States which are manufactured in Great Britain. I understand the minister's point of view when he says it is difficult to obtain information as to the origin of some of the machinery or parts of machinery that are brought in from the United States but surely it would be in keeping with the tradition of the dominion bureau of statistics not to allow a $150 million error to slip into its figures as to the real trade deficit.
Like Mr. James Patterson of Winnipeg, the president of the interprovincial farm union council, I too should like to see steps taken in order that the dominion bureau of statistics figures may be changed with respect to this matter. I also think it might be well worth while, if at all possible, to check to see just how much material coming into Canada from the United States is being manufactured in Great Britain.
There is another point I should like to make. A while ago I said I felt sure that Great Britain would be willing to help us while we were in a difficult economic situation because of the good will we show Great Britain and, of course, to me, aid is always a two-way affair. It is mutual. I see no reason why the $150 million worth of tractors bought for Canadian consumption in 1956 from the United States could not have been assembled in Canadian plants where there is far more unemployment at the present time than is usual at this time of year. I do not see why this could not be done now. I feel that by doing so we would still be helping Great Britain. The money would go directly to Great Britain but we would be employing our own people. If the minister is embarrassed about trying to find a suitable plant for the assembling of such tractors, may I remind him that in my own town we have Sorel Industries where if no work is given to the company within a relatively short time it will have to close its doors and let out a substantial number of employees.
Before taking my seat may I say that I should very much like the minister to give the house a clear briefing on the results achieved by the trade mission to England. I agree with the minister that international
2354	HOUSE OF
Supply-Trade and Commerce trade is of the utmost importance to Canada, and if we are to take our part in the very difficult international picture it is equally important that the government should have a very definite trade policy, particularly if the government does not want to repeat at the trade conference to be held in September the fiasco of the last trade conference.


Mr. Fisher:: Mr. Chairman, I have a number of questions I want to put to the minister that could be answered later when we get into the details of the estimates but because of their general nature I think it might be fairer to ask them now. The first one could be answered tonight. A few weeks ago a magnificent criticism was presented in the house of the fair at Brussels and the Canadian exhibit and I wondered whether the hon. member for Restigouche-Madawaska had been dispatched to Brussels again to improve the whole tone of the Canadian part in the exhibition.
One of the questions I want to ask reaches ahead to 1961 and the next census. As the minister is aware, I am interested in the problem of redistribution. The census will be taken in 1961 and I understand that normally the results as to population for use in redistribution are available in March of the following year. With its experience in the census of 1956 I should like to know whether the bureau of statistics will be in a position to give us an answer more quickly this time so far as these figures are concerned because I think it might be quite important if the political situation is projected four years ahead. If we do not get these results in March and if redistribution is to be carried out by parliament it could be very rushed should the Prime Minister in his wisdom decide to have a summer election. By pushing the thing ahead six weeks or two months we could conceivably save ourselves from fighting the 1962 or 1963 election on the basis of the 1951 census. I suggest to the minister and to other members of the house that that would be very unfair to a great many voters of the country although it might also, if there are changes, be a little unfair to some of the present members.


Gordon Minto Churchill: Would you like another March election?


Douglas Mason Fisher: I think March is a splendid time to have an election-the ides of March. I also wanted to ask the minister for a bit more detail on the small business set-up foreshadowed supposedly by the appointment of the new associate deputy minister of trade. Perhaps at some point later in the discussion of the estimates the minister might be able


to spell out for us a bit more of the framework of that organization and what its scope is going to be.


Gordon Minto Churchill: I wonder whether I might reply to that immediately. No decision has been reached yet as to which department will have the responsibility for the proposed small business section. It may be the Department of Trade and Commerce but it is a bit premature to discuss the matter at the moment because a decision has not yet been reached.


Douglas Mason Fisher: It would seem to appear then that my question was very hypothetical, as must have been much of the press speculation on this matter. Another question which I think the minister could deal with more fully before we leave this part of his estimates is the campaign that such distinguished gentlemen as Stuart Armour are trying to get under way to buy Canadian. I think we should have a fuller explanation of the part the minister's department might play in that regard and, if we are going to go out to persuade people to buy Canadian, especially what ramifications that may have upon our external trade policies. I think the "buy Canadian" theme is something that our people should literally buy at the present time.
In the remarks of opposition members so far in the debate today it has been noticeable that there has been quite a bit of jollying the government with respect to its reaction to the Thorneycroft proposals and even more jollying on its reneging as to the absolute clearness of the 15 per cent trade diversion suggestion. From what I have read and have been able to learn about the matter I actually think the government was quite smart to give the Thorneycroft proposals the brush-off and I also think they were very clever in going slow on the 15 per cent diversion plan.
I wonder whether or not the minister is conversant at all with a report that has been put out in the United States by the Rockefeller Brothers fund, entitled "Economic Policy for the Twentieth Century". This particular report has received a great deal of analysis in the United States periodical press, much of it favourable. The report, of course, concentrates upon the communist threat to free world trade.
One of the suggestions made in the report is that we build up regional groups of trading nations. One gathers from the reactions to the report one finds in the Congressional Record that it has been favourably received. Another suggestion is to establish an interAmerican trade authority. The report contains some reference to Canada, and says: The United States should participate in calling as soon as possible an inter-American economic conference in which Canada would be invited.

The conference should be called for the joint consideration of an action to-
Find workable procedures for moderating extreme price fluctuations in commodity trades.
Devise ways for the co-operative promotion of general economic growth and development, including consideration of an inter-American development authority.
Work toward international agreement to set up a common market of hemisphere wide scope or of regional common markets with merger as an eventual goal.
Of course, we would have to understand that any idea of merger would be a long-range development.
Establish an inter-American payments union to provide for the full convertibility of currencies among all nations subscribing to a common market arrangement.
Facilitate other inter-American arrangements for co-operation upon common purposes and social objectives in such fields as education, low-cost housing, health and technical assistance.
Assure that such arrangements shall be so conceived and executed as to promote high levels of multilateral world trade and the general economic growth of the entire free world.
The idea of a number of regional trading groups in the free world it seems to me, so far as Canada is concerned, is quite as sensible as Canada trying to place itself within a commonwealth trade group. It almost seems to me that we are allowing sentiment and patriotism, of the kind that I am sure most of us feel, to confuse what are our real interests so far as trade is concerned. While the government and all the rest of us are associated with, and stuck with the problems of United States investment in our economy, I do not think we can shy away from the fact that it is the United States economy, the inter-American economy, within which our destiny largely lies. This suggestion put forward in the Rockefeller Brothers fund report seems to me to be a good one. I should like to see the minister take some action to follow it up after what I am sure will be a dearth of results from the commonwealth conference that we are having later this year. I would suggest to him that, now that the election is out of the way and we do not have to worry about it for three or four years, we get away from these favourite slogans that pop up in elections and become much more realistic in our attitude towards United States trade.
There is one thing in the Rockefeller report that may give the minister a bit of a lever. It relates to the amount of United States foreign trade and its effect upon the United States economy. I quote:
Within the free-world trading system. United States exports account for 20 per cent of all exports, and its imports for 14 per cent of total imports. But in terms of our domestic economy,
Supply-Trade and Commerce combined imports and exports represent only about eight per cent of annual output. This relatively small proportion often leads us to underestimate the importance of that trade to other nations. What is a small item on our import list may be a major source of revenue for an exporting nation, for example our imports of Swiss watches, Scotch whiskey, or Latin American coffee and copper.
The report goes on to say that between nine and ten per cent of all the durable goods produced in the United States is sold abroad. Significantly enough, these sales provide the margin between profit and loss for a large segment of American industries. About 4,500,000 workers, or seven per cent of the entire United States labour force, are directly dependent upon foreign trade for their livelihoods. Foreign trade provides more direct employment in the United States than the automobile, steel, chemical and textile industries combined.
This picture of the powerful role that that portion of foreign trade plays within the United States economy should give the minister, with his idea of the Canadian nation's trade with the United States, a powerful lever to use in future meetings he might have with United States authorities.


Mr. Kindt:: Mr. Chairman, I should like to add a word or two to what has already been said, and deal specifically with the dollar balance of payments between countries in relation to our international trade. If we are to analyse the position of Canada in world markets, and also tackle the job of analysing Canada's foreign trade, we must know something about the dollar exchange balances as they exist between Canada and the countries to whom we wish to sell our products. If we do this, then we have within reach a very good measure of the effective demand of that particular country in relation to the products which we have in Canada and wish to sell.
I say, Mr. Chairman, it is only to the effective demand that we can look at this time in our analysis. In other words, if a country to which we wish to sell products has not the dollar exchange with which to buy our goods, you may have all the demand that you wish in that country but it still will not be effective demand. A proper analysis of foreign trade connotes a study of the dollar exchange balances of the various countries around the world in relation to that of Canada. This enables the demand of a country to be effective. Anything else is non-effective demand. In other words non-effective demand means that the country has not got the dollars with which to buy our products. This further means we either have to lend that country money, give them the goods or take their currency and write off whatever loss that

Supply-Trade and Commerce may entail. It is by means of their dollar exchange balances that they are able to buy, and we must look to their exchange balances to understand if they are in position to buy the goods and services which they desire from us and other countries.
This desire to purchase may cover wheat or other products. Our position, of course, would be to try to sell as much wheat and other Canadian products as possible. But I submit that the Minister of Trade and Commerce no doubt has at his elbow an analysis of the dollar exchange balances between this and other countries. With this information he is in a position to arrive at a close approximation of the trade possibilities of any foreign country.
I do not wish to extend my discussion in this debate except to point out that if we were to come directly to the point and to a discussion of those factors which will add to the exchange balances of those countries and to the expanding of those balances, we would have the most rational approach to an understanding of the present trade position of Canada.


Leon David Crestohl: Mr. Chairman, I was wondering why the earlier portion of this debate centred so much around fish or the export of fish. I was wondering whether it was not because the government's trade policy or the minister is all at sea fishing for a firm trade policy for Canada. Like all other members of the house, I was most interested in the fine dissertation or thesis presented to the house by the minister which consisted of wishful thinking as to what a trade policy for Canada might be. But for all that wishful thinking in that splendid thesis that he laid down, we did not learn from him precisely what the Canadian trade policy is.
After he had spoken for 30 minutes, and we were certainly expecting some firm statement, we heard nothing from the minister and we allowed him almost 30 minutes additional beyond his regular time hoping and waiting for an announcement from him as to what that trade policy is. As far as we are concerned I have found nothing that could tell me with any degree of precision that: this is our trade policy on this subject or on that subject. We heard a great deal of what we should like to see or what we are hoping it might be but we heard from the minister not a word as to what the policy actually is. I interpret his efforts as that of one genuinely and honestly searching, groping and even stumbling along from one inconsistency in our trade policy to another.


Let us take, for example, the reference that has so frequently been made to the trade mission to the United Kingdom. The minister speaks so ardently, so seriously and so hopefully about our export trade and of the urgency and the importance of increasing it. Yet with great pride he comes into the chamber and presents the story of the United Kingdom trade mission not to increase our export trade but, peculiarly enough, to increase our import trade from Great Britain. We are in favour of it. We support it. But I should have liked to see the reverse also take place, namely a reciprocal arrangement with the United Kingdom that there should be on their part an obligation to take 15 per cent more or at least to increase by 15 per cent their imports into the United Kingdom from Canada.
Then you have the minister's very sanguine hopes and his expression of his dreams about our export trade to Europe. The hon. member for Richelieu-Vercheres has already quoted the Minister of Finance. The house knows how increasingly difficult our export to Europe is becoming. We certainly cannot burn the candle at both ends.
The Minister of Finance has told us that we are pricing ourselves practically out of the European market. Our cost of production is high. We know that the European cost of production is low. Russian slave labour production, Japanese low-cost labour and other forms of production are now flooding all the markets to which we made appeals during the past number of years. Therefore how can we on the one hand maintain a high-price policy for production in Canada and with that high cost of production expect to get into the markets of Europe where the cost of production is so low? We find there a definite inconsistency.
Then also the Minister of Finance makes an extremely important statement to which I should now like to refer. It is to be found at page 1231 of Hansard of June 17 and is as follows:
Population growth of itself does not ensure progress, but in a country such as ours it has a special significance. It provides a greater market for our agricultural produce and for the products of our factories-
Here we have a situation where the government accepts the fact that if our export markets are dwindling and possibly largely disappearing, the only remedy for our production in Canada is to increase at least our home consumers' market; and with the increase of the home consumers' market certainly we might be able to keep our people more employed. Instead, what do we find?

We find that factories are closing and people are being thrown out of jobs only because of the fact that we have no market for the products we make in Canada. We do not have them abroad and along comes the government with an immigration policy that certainly does not encourage immigration into this country in order to help us to grow and to develop a home consumers' market.
I therefore suggest, Mr. Chairman, that all this groping and uncertainty with regard to a trade policy for Canada is perhaps something that should be expected. The government, perhaps somewhat new in this business, is searching as far as it can but it is focusing most of its attention on its desire to do those things which will enable it to keep election promises. I should like to see the government more courageously take the position of fixing a trade policy irrespective of whether it meets election promises or whether it does not do so. I think the government should take its eye off keeping election promises made last year and this year. I think the government should place the interests of the country far ahead of its interests in hoping to keep election promises which might support its own political party.
I should like to ask the Minister of Trade and Commerce to quote to the house what new industries have been brought to Canada in the last year or two or what new factories have opened up? I think the minister should concentrate all his attention on the expansion of industry. We have heard, for example, in previous years of new industries. With great pride the minister would report to the house from time to time that a new industry had opened up giving employment to so many people. I have not heard-certainly during the past year-of a single new substantial industry that has opened up in order to expand our production and our work in Canada.
I should like to draw the attention of the minister to the needle trades industry. This industry, which employs perhaps close to 200,000 people across the country, is steadily on the decline. I do not know whether it is the result of tariffs or whether it is the result of other difficulties which exist in the industry. However, one thing is certain. The complaint we hear is that they are having difficulty. There are no new markets.
At one time our country enjoyed a fine export market for clothing, including sports and ladies' clothing, in the British West Indies, but today we do not hear of a dollar's worth of the products of the needle trades being exported to that area. Markets are declining and, what is more, the speed of production is being accelerated so that the
Supply-Trade and Commerce same volume of work is now being produced in half the time. We must build up markets to keep our people at work, but we can readily see that only 50 per cent of the needle trades are required to produce what it took 100 per cent to produce in prior years.
I therefore want to impress upon the minister the fact that the government should present to the house at the first opportunity a courageous trade policy; one that will be consistent and one with which the country can wrestle; something that will enable Canada to go forward, extend its trade and provide employment for our people.
I appeal to the minister especially, following the question raised earlier by the hon. gentlemen who spoke before me, to enlighten this house either during the course of this debate or at a later time with respect to the position of the small businessman. We were hopeful that some relief would be given to small business, but I think we have had a setback in the minister's answer -at least it gave me that impression-when he said that while there may have been some talk about it and while an assistant deputy minister may have been appointed, the government does not yet have a plan ready to be announced. I think the government should at least confirm that the plan previously announced to this house with respect to relief for small tradesmen will be a firm policy and not a wavering policy which fluctuates with the times or swings with the wind, as necessary. I think the country is completely at a loss and will remain at a loss until such time as the minister will make a firm announcement on the trade policy of this government.


Gordon Minto Churchill: Mr. Chairman, I cannot let this opportunity pass without correcting my hon. friend with respect to the statement I made on the setting up of the small business section. There has been no withdrawal from the plan to give such assistance as may be possible to small business in Canada. All I said was that a final decision had not been reached as to whether or not the Department of Trade and Commerce would have that responsibility and I hope within a very short time an announcement will be made to this house as to the setting up of a small business section.


George James McIlraith: Just on that point, could
the minister indicate on what departmental estimates we might ask about this question of small business, if not on the estimates of his department? What I am getting at is with respect to the remarks of the hon. member for Cartier about the needle trades and about small business, or many small businesses

Supply-Trade and Commerce in that industry. Most of such small businesses would be directly related to the foreign trade of Canada. I do not see, therefore, how we could rule out small business from the trade and commerce estimates if they are related to the foreign trade of the country.


Gordon Minto Churchill: That is all right, but what I was objecting to was dealing with something in anticipation of the supplementary estimates and with items which would concern the setting up of a small business section.


George James McIlraith: But there is more to it than that, Mr. Chairman. The small businesses being talked about are directly related to the external trade of the country. Surely from that aspect at least they are properly before the committee on this item.


Gordon Minto Churchill: I have sat long enough on the opposition side to know the value of debate and I am not suggesting any restriction of debate whatsoever.


Joseph Pierre Albert Sévigny: Shall item 391 carry?


George James McIlraith: There are many many questions to be answered and I presume the minister intends to answer them on this item. With only a minute or two to go I assume he does not want to open up his answering speech at this time. I do not think therefore that the item can carry.


Gordon Minto Churchill: I have no objection at all to answering questions discussed this afternoon but obviously time does not permit of that tonight. I might, however, take 30 seconds to thank the hon. members who have participated in the debate on the first item. They have shown their interest in the activities of the department and in the expansion of Canada's trade and their comments generally
have been very worth-while. I am even grateful to the hon. member for Richelieu-Vercheres for depicting me in the light in which I now appear in this House of Commons. It reminds me of the Burns' line, "Oh wad some power the giftie gie us to see oursels as others see us!" I take full note of the alteration that has taken place with my passage from the opposition benches to the government side and I wish the other type of alteration had transpired with my hon. friends who passed from the government benches to the opposition ranks. I wish I could say of them as my hon. friend said of me that when I was sitting there 1 was congenial, easy to get along with and very good natured.
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I ask the
house leader what the business is for tomorrow and Saturday?


Mr. Green:: Tomorrow we shall continue with the estimates of the Department of Trade and Commerce, then we will take those of the Department of Agriculture, followed by the estimates of the Post Office Department and the Department of Veterans Affairs.
Monday will be private members' day and on Tuesday we plan to commence with item No. 3 on today's order paper, which is the second reading of an act to amend the Prairie Grain Advance Payments Act, and then item No. 9, which is a resolution concerning the Prairie Farm Assistance Act, and then take the budget resolutions.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.

[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. Bourgei: 1. Has an appointment been made to replace Mrs. Valmore Bienvenue at the Canadian pavilion of the Brussels universal and international exhibition?
Question
2. If so, (a) what is the name of such person; (b) in what capacity; (c) what are the functions and responsibilities related thereto; (d) what are the qualifications of such person; (e) what salary does the said person receive?
Answer by: Hon. Gordon Churchill (Minister
of Trade and Commerce):
1.	No. A temporary arrangement has been entered into whereby an official of the exhibition branch at London, England, is at present in charge of the residence.
2.	Answered by No. 1.


Friday, July 18, 1958



COMMITTEES OF THE HOUSE

[Stage Direction]
Second report of standing committee on railways, canals and telegraph lines.-Mr. Fraser.
Third report of standing committee on mines, forests and waters.-Mr. Murphy.