1960-08-06

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I wish to table a copy of order in council giving authority for the maintenance on active service of officers and men of the Royal Canadian Navy, the Canadian Army and the Royal Canadian Air Force, not exceeding 500 in number at any one time, as part of or in immediate support of the United Nations forces in the Congo.



EXTERNAL AFFAIRS


John George Diefenbaker: Mr. Speaker, by leave of the house I should like to make an announcement with regard to the government program for assisting NATO countries to set up strategic stockpiles of wheat flour. Hon. members will recall that on June 1 of last year I informed the house of the government's intention to ask parliament for $10 million for that purpose. I stated at that time that I had made this proposal, in general terms, at the meeting of the heads of the governments of NATO countries in Paris in December, 1957, whereby I suggested the establishment of a food bank amongst the NATO countries for use in the event of any outbreak of hostilities. I expressed at that time the willingness of the Canadian government to play its part in the establishment of such food reserves, and these facts were communicated to the house on July 19, 1958.
Negotiations with the NATO allies took longer than was expected. It was not until April of this year that the first agreement under the program was completed, and on April 26 the Secretary of State for External Affairs informed the house of the conclusion on the preceding day of an agreement with Norway under which Canada would provide 20,000 tons of wheat flour for wartime emergency stockpiling purposes in that country.
I am now able to announce the conclusion on August 5 of an agreement with the United Kingdom under which Canada will provide 30,000 tons of wheat flour later this year for wartime emergency stockpiling in the United Kingdom. Provision has already been made by the house in the supplementary estimates of the Department of External Affairs for the expenditures required under this agreement and the agreement with Norway.
The agreement with the United Kingdom took the form of an exchange of notes between the Secretary of State for External Affairs and the high commissioner for the United Kingdom. These notes set out the terms and conditions under which the flour will be provided by Canada and stored by the United Kingdom. With your leave, sir, I now wish to table copies of the notes, both in English and in French.
The agreement provides that 30,000 tons of flour, suitably packaged for long storage, will be delivered to Canadian seaports to be specified by the government. The United Kingdom will inspect and assume title to the flour at these ports, with all expenses thereafter being borne by the United Kingdom government. They will transport the flour to the United Kingdom, where it will be stored for emergency use should war occur. When it is no longer fit for human consumption it will be replaced by the United Kingdom, so as to maintain the original level of the stockpile at the initial amount.


Hon. L. B. Pearson (Leader of the Opposition):: Mr. Speaker, I think it is unfortunate that the NATO organization itself was not able to make arrangements for the establishment on a broad and collective basis of a NATO food bank, an idea which was put forward by the Canadian member of the council I think two and a half years ago.
In view of the impossibility at this time of doing that, I think bilateral arrangements between Canada and NATO members are useful and, as the Prime Minister has pointed out, one such arrangement has been made with Norway. That has been supported in this house, and we also heartily support that which has been proposed with the United Kingdom as a form of mutual economic aid- perhaps in this case modest aid-which is appropriate for Canada and helpful to the countries receiving the assistance.

Inquiries of the Ministry


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, we in the C.C.F. welcome most warmly the announcement that has just been made by the Prime Minister. Our party has long proposed and supported the principle of a world food bank to be available in case of any emergency throughout the world.
We are most happy that an arrangement has now been made, not only for the establishment of the principle of the world food bank but to provide for its utilization and replacement if it is not called upon. We most certainly hope there will be continued success in the extension of the principle of a world food bank to aid in case of emergency in countries in desperate need.


THE LATE RIGHT HON. ARTHUR MEIGHEN ANNOUNCEMENT OP STATE FUNERAL
John George Diefenbaker: Mr. Speaker, I rise on another matter, simply to announce that on Monday morning at eleven o'clock in the forenoon there will be a state funeral for the late Right Hon. Arthur Meighen at St. Andrew's United Church in the city of Toronto.




[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I would like to ask the Prime Minister a question of which I have given notice, and I apologize for the length of it. My question is this. In view of the fact that under the terms of the agreement between the government of Newfoundland and the United States government it is provided that upon termination of the said leases or their abandonment all of the lands granted thereby shall revert to and become the absolute property of the crown in right of the government of Newfoundland, would the Prime Minister table any and all correspondence between the Canadian government and the United States government relative to the proposed abandonment by the United States of lands housing Fort Pep-perrell air force base and the United States docks at St. John's, and advise the house whether the government has taken or proposes taking any steps to discuss with the government of Newfoundland the future disposition of these bases in view of their proposed abandonment by the United States government to the government of Newfoundland?


John George Diefenbaker: Mr. Speaker, as the Leader of the Opposition has stated, he has produced a
TMr. Pearson.]
very lengthy question. I have not yet had an opportunity of examining the file. Any correspondence that may have taken place would, of course, require the consent of the other parties to this correspondence before production.
My information is that there has been no notification to the Canadian government by the United States of the intention of the United States government to vacate the area in question or, indeed, any other area. There has of course been reference in the press to the situation at Fort Pepperrell but there has been no official correspondence in connection therewith, or indeed with the United States government, on any matter arising out of the projected course.
In so far as the lease is concerned, it is a fact that in March the United States embassy informed officers of the Department of External Affairs that the United States government was contemplating the abandonment of the lease covering the Pepperrell air force base. I would point out that the lease agreement provides in article XXI as follows:
The United States may at any time abandon the leased area or part thereof, without thereby incurring any obligation, but shall give to the government of the United Kingdom as long notice as possible and in any case not less than one year of its intention to do so. At the expiration of such notice, the area abandoned shall revert to the lessor. Abandonment shall not be deemed to have occurred in the absence of such notice.
That is the end of the article in question, and as the hon. member knows, in 1953, probably at his request, the question of the reversionary right was referred to the Department of Justice.
In so far as the latter part of the question is concerned, as to whether the government has taken or proposes taking steps, to discuss with the government of Newfoundland the future disposition of these bases, may I say that according to the information that is given me there has been no correspondence between the two governments. There was a reference to this question at the dominion-provincial conference, when the attorney general of Newfoundland pointed out that there were some differences which had arisen. However, the Minister of Finance points out that this was in the private session. None the less the matter was brought to our attention on that occasion, and I am sure I breach no confidentiality of that private session by revealing that fact.
Naturally, when official notice has been received of the amendment within the provisions of the article I have quoted, in due course there will require to be the fullest consultation between the government of Newfoundland and the government of Canada.


Lester Bowles Pearson: Mr. Speaker, a supplementary question. In thanking the Prime Minister for his reply, may I call his attention to the fact that there is urgency in this question because I am informed that some of these areas have become a serious fire hazard due to a sharp reduction in the number of security personnel and the maintenance grant for fire protection.


Mr. J. A. McGrath (St. John's East):: May
I ask a supplementary question of the Minister of National Defence. Could the minister inform the house whether his department has taken any steps with regard to the feasibility or practicability of the armed forces of Canada using some of the facilities vacated by the United States forces at Pepperrell?


Hon. G. R. Pearkes (Minister of National Defence):: Mr. Speaker, when the Pepperrell air base is brought to care and maintenance standards by the United States air force some of the buildings will be vacated. My department has been carrying out a survey to see whether we can use any of those buildings which will be vacated.


ATOMIC ENERGY
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to direct to the Minister of Trade and Commerce what might be considered a somewhat delayed supplementary question. On July 29 the hon. member for Assiniboia asked the minister certain questions with respect to the disposal of United States atomic wastes in Canada's Pacific offshore waters, and the minister answered to the effect that the matter would be pursued. He asked for the source of the information and the hon. member for Assiniboia said he would be glad to supply the minister with those particulars.
Has the minister any further information to give the house with respect to this question asked by my hon. friend from Assiniboia on July 29?


Hon. Gordon Churchill (Minister of Trade and Commerce):: My recollection is that I did give an answer to the question subsequently. The date escapes me at the moment, but I furnished the hon. member with full details about that project at Nanaimo. I will look up the record and inform the hon. member accordingly.


Gordon Minto Churchill: Mr. Speaker, may I complete the answer to the question asked by the hon. member for Kootenay West and direct
Inquiries of the Ministry his attention to Hansard for August 1, page 7326, where an answer was given with regard to the disposal of atomic waste and the problem that has arisen at Nanaimo.


Herbert Wilfred Herridge: Thank you.


FISHERIES
[Stage Direction]
On the orders of the day:
Mr. L. R. Crouse (Queens-Lunenburg):: should like to direct the following question to the Minister of Fisheries. In view of the failure to reach international agreement regarding the breadth of the territorial sea and fishing zone, is the government giving any consideration to remedying the situation whereby Canadian trawlers are not permitted to fish up to the limits of the territorial sea in the maritime provinces in areas where foreign fishing fleets are operating?


Hon. J. A. MacLean (Minister of Fisheries):: I want to thank the hon. member for Queens-Lunenburg for having given notice of his intention to ask his question. Canadian trawlers are under a disadvantage as compared with foreign trawlers because of a law which has been on our statute books for many years, which prohibits absolutely the larger Canadian trawlers from fishing within 12 miles of the coast of the maritime provinces whereas foreign trawlers do operate on occasion up to the limits of our territorial sea.
In the light of increasing foreign operations in recent years, the problem has been accentuated. The government is concerned about this matter and is studying possible means of remedying this anomalous situation.


Mr. J. R. Tucker (Trinity-Conception):: should like to direct a question to the Minister of Fisheries. Would the minister please advise the house whether the same explanation given to the hon. member for Queens-Lunenburg applies to foreign ships seal hunting off the east coast of Canada?


John Angus MacLean: Mr. Speaker, all foreign vessels are required to remain outside of Canadian territorial waters when carrying out fishing or sealing operations. With respect to Canadian ships, there are no restrictions on them as far as sealing is concerned in the area from three to twelve miles off the coast.


James Roy Tucker: I should like to direct a supplementary question to the Minister of Fisheries. Would the minister please advise whether the 12-mile limit applies to Canadian trawlers operating off Newfoundland?

Inquiries of the Ministry


John Angus MacLean: No, Mr. Speaker. In the case of Newfoundland, Canadian trawlers are allowed to operate within three miles of the coast.


UNITED NATIONS
[Stage Direction]
On the orders of the day:
Hon. Paul Martin (Essex East):: I should like to address a question to the Prime Minister based upon the order in council which he tabled today. Am I correct in saying that the order in council deals only with the dispatch outside Canada of forces to the limited extent announced by the Prime Minister the other day? Am I correct in presuming that any decision by the government to send additional troops would be followed, after consideration by the government of its policy, by consideration of that policy by parliament?


John George Diefenbaker: As the hon. gentleman knows, the order in council covering the Congo force expressly restricts the number at any one time to 500 personnel. In the event that there should be at any time an extension and it should be considered desirable to go beyond that number, I think the house would agree that the proper constitutional course to follow would be to place the matter before parliament for further consideration after the government had made a decision in this regard.


AGRICULTURE
[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: I wish to direct a question to the Prime Minister. Is there likely to be any announcement before the end of this session regarding this government's policy to deal with the economic situation as it affects the western grain producers?


John George Diefenbaker: Mr. Speaker, even now there are few who would foretell the day when this session will end. It is all to the good that the items that have been before the house in the last few days have received and the further estimates that will come before the house will receive the fullest and most complete attention so that no one can say this house in a pell-mell fashion failed to deal adequately with the various problems that still remain before it and the estimates requiring consideration.


The government has been giving the position of the western wheat farmer very full and complete consideration. I think it was on March 4 that I endeavoured to continue to speak beyond the hour at five o'clock in the afternoon, but it was impossible to secure the consent of the house at that time to continue with my remarks dealing with the agricultural situation.
Next week the decision of the government in this regard will be brought to the attention of the house.


CANADIAN NATIONAL STEAMSHIPS
[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of Transport and ask him if he could tell the house what is the position of the Canadian government with respect to the action that has been taken in the admiralty court in Halifax against the government of Cuba relative to the seven ships of the Canadian National West Indies fleet, in which the minister through his department was at one time interested?


Hon. George H. Hees (Minister of Transport):: Mr. Speaker, my understanding of the situation is that the Canadian government does not come into the matter at all. The Canadian National disposed of the ships to the company mentioned in the article which appeared in this morning's paper, and the dispute now, as I understand it, is solely between that company and the government of Cuba.


SHIPPING
[Stage Direction]
On the orders of day:
Lionel Chevrier: May I put
a supplementary question to the minister, and ask what consideration the government is giving to trade communications between the maritime ports and the new West Indies federation?


George Harris Hees: Mr. Speaker, as this is a matter of trade I suggest that this question could more properly be directed to the Minister of Trade and Commerce.


Lionel Chevrier: But the minister has already answered a question of mine dealing with ships between the maritime ports and the West Indies federation, and that is why I directed my question to him.

Inquiries of the Ministry


George Harris Hees: If it is a question of	ships car-	separate papers, would the minister considerrying	trade	between Canada and	the West	an immediate investigation by the combinesIndies	I can	tell the hon. member	that there	branch officials to see whether provisions ofare a	great	many ships that can	undertake	the Combines Investigation Act are invokablethe carrying of such trade.	to prevent such a monopoly?


Lionel Chevrier: That was not my question, Mr. Speaker. My question was related to the substitution for the seven or eight ships of the Canadian National Steamship Company formerly operating between the maritime ports in Canada and the West Indies federation. My question was what substitute service between these ports is being provided by the Canadian government?


George Harris Hees: Mr. Speaker, the Canadian government has no responsibility to provide ships for that particular purpose. The trade between Canada and the West Indies federation is being adequately carried by ships of which there are a very substantial number available.


NATIONAL DEFENCE
[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, in view of the statement just made by the Prime Minister to the effect that we may be here for a short time next week, may I direct a question to the Minister of National Defence. Is it the minister's intention to report on the results of the investigations carried on over several months into alleged irregularities in the interservice equivalents board and also with respect to the theft of aviation gasoline at Vancouver?


George Randolph Pearkes: Both those investigations have been proceedings, Mr. Speaker, and the final reports have not yet been submitted.



COMBINES INVESTIGATION ACT


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question to the Minister of Justice. It stems from disturbing reports that have come to the hon. member for Fort William and myself that the independently and locally owned daily newspaper, the Fort William Times-Journal, is in the process of sale to the Roy Thomson chain. In view of the fact that the merger of the Fort William paper with the Port Arthur Thomson-owned daily would deprive our region of competing press media in a market apparently able to support two distinct and


Hon. E. D. Fulton (Minister of Justice):: will be glad to bring the matter, together with the remarks of the hon. member, to the attention of the director at once for his immediate consideration.



TELEVISION


[Stage Direction]
On the orders of the day:
Harold Edward Winch: Mr. Speaker, I should like to direct a question to the Minister of National Revenue. In view of the importance of the matter to the lower mainland of British Columbia, which has a population of about a million people, can the minister advise whether he anticipates being able to make an early report as a result of the investigation into the complaints about certain television channels being blanked out by the Victoria station?


Hon. George C. Nowlan (Minister of National Revenue):: I do not know whether I can make an early report. The matter is in the hands of the engineers, and they are working on it.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Lester Bowles Pearson: Mr. Speaker, I should like to ask the Minister of Labour whether he has yet received the report of the interdepartmental committee examining procedures for estimating unemployment?


Hon. Michael Starr (Minister of Labour):: The report is now in the hands of the government and is under study.


Paul Joseph James Martin: Will the report of the interdepartmental committee be placed before parliament, so that parliament may have an opportunity of assessing the validity of the report, particularly in view of the fact that we will soon be proroguing and that unemployment may continue in the period between the prorogation of parliament and the calling of the next session?


Michael Starr: As soon as consideration is given by the government and a decision is arrived at, the report will be tabled.

Supply-Trade and Commerce ARTS, LETTERS AND SCIENCES



SUGGESTED RECRUITING OF UNIVERSITY


[Stage Direction]
On the orders of the day:
Hon. Howard C. Green (Secretary of State for External Affairs):: Mr. Speaker, on August 2 the hon. member for Port Arthur asked me a question concerning Dr. Luc Gillon, president of University Lovanium, Leopoldville, Congo. The question was whether or not he would be invited to Canada to recruit French speaking university staff through our Quebec universities.
Monseigneur Gillon came to Canada on August 3 and held talks with the rector of the University of Montreal, the vice-rector of the University of Ottawa and senior officials of the Department of External Affairs. He had left the Congo only a few days before, and he gave us a very useful report on the conditions at his university and his needs for staff.
Monseigneur Gillon has in mind an interesting scheme for an exchange of French speaking professors between Canadian universities and his own university in Leopoldville. Under this scheme professors from Canada might serve at Lovanium University and professors who formerly were on its staff there would serve in Canadian universities. I understand that the rector discussed his needs fully with the two universities I have mentioned, and I am informed that these are now under consideration.

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



DEPARTMENT OF TRADE AND COMMERCE

[Stage Direction]
General administration-
390. Departmental administration including fees for membership in the international organizations listed in the details of the estimates, $2,630,716.
Mr. Mcllraith:: Mr. Chairman, when the committee rose last evening I had started my remarks on this item and had referred to what I thought was an unduly rosy picture of the economy of Canada placed on the record by the Minister of Trade and Commerce. I had pointed out that as an example of the active growth of Canada's efforts in the trade promotion field he had drawn a comparison as to the number of trade commissioners or posts abroad between the years 1939 and 1960 as if that were a real achievement when, if you bear in mind the growth of the population of our country in that interval, the facts indicate nothing of the sort. While the trade commissioner service is a splendid one of which all members of the


committee are proud, the picture drawn by the minister was quite imprecise and not in accordance with the facts. The facts are that there has been a very slight growth since 1952, a growth that was no more than inevitable having in mind the growth of our country and the new countries that have gained their independence and come into being in the world.
The minister seemed to have as the theme of his whole speech the idea that Canadian economic prospects for the balance of the year were very good. I want to refer to a few of the statements he made to see if I cannot put the matter into proper perspective. I express the hope that the rosy prospects for the economy for the balance of the year which he indicated will be realized. No one will be happier than I if they are, but at the same time I do not think it is either useful or proper to base a discussion of trade at this time on assessments that are not factual.
For instance, I might refer to the minister's statement that Canada's gross national product is running appreciably above the level of a year ago. If we are to discuss the matter intelligibly the fact that must concern the committee is that the gross national product is running about one third below the increase estimated by the Minister of Finance when he presented the budget to the house over three months ago. That is the situation today. It may be that the Minister of Finance overestimated the increase in the gross national product this year. It may be that he was justified in indicating the increase he did at the time he did, but whatever the reason for the disparity in the figures the fact remains that it appears now that we are not going to achieve the increase indicated by the Minister of Finance at that time.
This fact is just glossed over. It is one that must cause concern to all of us, because the whole budgetary pattern put forward by the Minister of Finance, and presumably the policies of the government, were based on that estimate. The Minister of Trade and Commerce does not deal with that fact at all. He just glosses over the subject with the brief sentence that the gross national product is running appreciably above the level of a year ago. I suppose the words, if one wants to quibble about it, are true, but they give a misleading picture.
Then we come to this matter of employment. The minister said that this year employment was running some 2 per cent above the corresponding period last year. I suppose if you want to quibble about it, those words may be right enough. I did not look up the statistics, but I suspect they are. Again, it does not deal with the problem that most

concerns this committee, and which was debated rather extensively on the labour estimates; I do not wish to reopen that debate at all, but the facts are very simple. The facts are set out in the minister's own publication dated August 2, the Canadian Statistical Review, where it points out that the index of persons without jobs and seeking work fell from 222 in May to 221 in June. Then in the same publication, where it gives the percentage seeking work, it shows for June 6.3 per cent. In a joint publication put out by the minister and the Department of Labour, dated July 19, dealing with the employment situation in June, 1960, the point is made that the June estimate of persons without jobs and seeking work represented 4.6 of the labour force compared with 3.7 per cent in June, 1959.
In other words, there is a labour situation here that causes great concern to all members of the committee, and I am sure that to take an isolated statistic out of the record to show that there are more people working than there were a year ago, without taking any account of the increase in population in the country or any account of the increased labour force, is not the proper way to put this matter forward.
We could go on with the other items in the minister's speech. He continued his attempt to paint this rosy picture by dealing with Canada's output of motor vehicles. He said that Canada's output of motor vehicles so far this year has remained a little above the 1959 level. While that is technically quite true, actually his own publication which we received this morning shows that the increase amounts to some 1,400 vehicles out of a total of some 278,000. You will see that you will have to be really very good at decimals or fractions to work out what a small fraction or percentage it is. There is a very real problem in the motor car industry that is of concern to persons in that business in this country. One of the things that is affecting this industry

of course there are many and this is only one-is the fact that there is a wider variety of models than there were some years ago. A consequence of this is that there is a larger percentage of the component parts of these cars brought into this country than has formerly been the case, and that means that there is more unemployment in that industry than is usual, quite a bit more.
In so far as the motor parts industry is concerned, there is considerably more unemployment in that industry. Actually, employment in the motor parts industry is down to about two thirds of what it was three or four years ago. This industry has been making strong representations and presenting briefs to the government. I do not
Supply-Trade and Commerce agree with some of the solutions offered in the briefs, but in any event no one can read those briefs without being impressed with the seriousness of the situation to the economy of Canada.
The government itself, I think, has been much impressed, if I correctly understood the remarks of the Prime Minister the other day when he announced the appointment of a royal commission to look into that situation. It is significant that once again, with this situation developing rather sharply over the last two years and having reached the acute stage now, the government is offering us a royal commission instead of evolving some policies that would help to meet these problems. While I look forward with interest to the findings of that royal commission, I want to point out to the government once again that they have done exactly the same thing here that they did to the oil and gas industry of this country by procrastination and delay in evolving a policy, and then when the situation became serious appointing a royal commission which will result in more delay. I must say that the appointment of a royal commission is no substitute for the action that the government should have taken by way of enunciating policies over the last two years.
I could go on, for instance, and deal with the minister's statements on the balance of payments. Now, the balance of payments situation in Canada has been of great seriousness. Our unfavourable balance in international payments is very serious for Canada. This subject was debated as the result of an amendment offered on a supply motion by the Leader of the Opposition during this session, and an effort was made by the Opposition to point out the seriousness of the situation. The minister, in dealing with the subject, brought forward no policies to meet it but just brushed it off in this way at page 7672 of Hansard, where he was dealing with the United States:
Even with the growing imbalance on nonmerchandise transactions, Canada's total deficit on current transactions with the United States is $132 million less in the first quarter of 1960 than in the same period three years ago.
This could be true enough. However, he did not point out the real position that we have; a very serious situation developing. In that part of the subject which has to do with bond interest and dividends there has been a sharp increase in the percentage of this imbalance which results from our abnormally heavy payments to foreign holders of bonds and other indebtedness. That perhaps is something that more properly belongs to the Minister of Finance, but there is also another part of it where our situation is worse. There

Supply-Trade and Commerce is that part of it that has to do with the question of freight and shipping charges, where our balance is worsening, and worsening materially.
He does not point out, for instance, the comparative figures when dealing with merchandise exports. He chooses only to deal with merchandise exports, which are only one part of the problem, and merchandise exports to the United States I suppose last year accounted for roughly one quarter of the problem, or one third of the problem. For instance, in his own department's publication, the dominion bureau of statistics report on the estimates of Canadian balance of international payments what was said on this subject was this:
The reduction in the import balance from merchandise trade in the first quarter of 1960 compared with the same period of 1959 was due to a greater rise in exports from the relatively low level in the first quarter of 1959 than occurred in imports.
In other words, in making comparisons we have to bear in mind the nature of the elements that go into the figures making up our exports and imports. He does not point out that we have a situation where, with regard to the imports coming in from the United States, an ever increasing percentage is consumer goods as opposed to capital goods. Those are the kind of problems that are arising.
Actually, on merchandise trade our exports to the United States are up this year, but our imports are also up quite sharply. If you take the six months for which the figures are available-and I recognize and think it is quite improper to pick out very short periods in any of these trade figures; I do not want my remarks interpreted as doing that, because I do not think that is a proper and responsible way of treating trade figures -the facts are that in the first six months of this year, compared with the first six months of last year, there is a sharp increase in the first two months particularly, and in the first quarter. But in the second quarter of this year, in April and June there is a reduction from last year, and a very slight increase in May. Our exports to the United States for the second quarter of this year are down $82.9 million from the same period last year.
As I say, in my opinion three months is too short a period on which to base an argument. All I want to draw from that figure is that there may be a downward trend in our exports to the United States. It is something that will have to be watched very carefully, and it is something that should cause concern to the minister and the members of the committee. It is a very real problem.

While, as I say, I do not want any final conclusion drawn from quarterly figures on export trade, because I do not think it is a long enough term, yet the facts are there. We are discussing these estimates on August 6; we had better have an awareness of the facts as they exist on August 6, and not pick out figures for any past years and use them, when more recent figures are available.
There is one other thing that I want to say about this subject of the unfavourable balance of international payments, and it leads me into another point that I want to develop. The whole picture created by the minister's speech was of a lovely situation for the economy of Canada, and that is not quite the atmosphere in which we should be discussing our trade today. The facts just do not support that picture. Let me illustrate that, for instance, with one example of balance of international payments. The United States has an unfavourable balance of international payments approximately three times as great as ours, but its gross national product is from 12 to 13 times greater. In the light of that fact, our minister does not treat this subject with the seriousness it deserves. He treats it with the lightness that I indicated. But the United States do not treat their problem in that way at all. Anyone following United States publications describing what they have been doing in this field would see evidence of the greatest concern over what they regard as a great problem for their country. We, with a very much more acute problem on the same subject, do not seem to have the same regard for the problem.
If hon. members will turn to the Bank of Canada annual report to the Minister of Finance for the year 1959, they will find on pages 12 and 13 a couple of paragraphs on this subject. After setting out the problem, which is very relevant and very pertinent, they go on to say this, and I will read only part of it. I have given hon. members the reference if they want to read the whole thing. After setting out the nature of the problem in the United States, they go on to say:
United States policy has not sought to restrict the flow of imports for balance of payments reasons, nor to cut the total flow of foreign aid. Rather it has sought to increase exports-by improving competitiveness and strengthening sales efforts, and by pressing for the removal of foreign import restrictions-and to persuade other countries financially able to do so to look after a larger share of the increased foreign aid requirements of underdeveloped countries.
Every trade publication in the United States will give examples of the aggressive methods they are following to attempt to meet their problem in these ways, but we have no such evidence that our government has adopted a Canadian policy to meet a

much greater Canadian problem. That is my criticism. We have not developed the kind of policy we should to meet the more competitive export trade of the United States. We are going to have to compete with them. They are carrying out a more competitive export trade policy, for reasons they consider very valid, yet we are not taking cognizance of the fact that we are trading against our more competitive neighbours. It is something that should be considered, and I would like to know what the Canadian policy is on the subject.


Mr. Pallell:: Mr. Chairman, I wonder if the hon. member would indicate to the committee what particular United States government action was taken, as opposed to that taken by private enterprise?


George James McIlraith: Yes, I can indicate some of those. I do not think I have it here but I had an article, concerning their participation in the British Columbia trade fair, and exactly what the government is doing about it.
You will find also, if you carry out a comparative analysis of their treatment of the GATT negotiations, that while we have a team headed by a very able man, we have not as a government backed that up with the kind of negotiations they have carried on with business and industry in their own country and the kind of arrangements they have made for their potential exporters to be at the negotiations, supporting their representatives. We have done none of those things. Their government have circulated a list of items on which they propose to negotiate.
I put a question in the house, as did my leader, in an effort to get that publication. It was supplied to the Canadian government, but it was not thought important enough to be made available to the House of Commons by the Canadian government. It could be bought at the United States publications office for 30 cents. The Canadian government did not think this important enough to circulate it among the members of parliament, and I venture the opinion that very few of them received it. The Canadian Manufacturers Association circulated it to their members in a confidential way, but the government did not do anything.


Gordon Minto Churchill: It is not a confidential document; it is a public document.


George James McIlraith: Yes; it can be bought for 30 cents in the United States. As I say, the Canadian Manufacturers Association circulated it in a confidential way to its members, but the Canadian government either did not prepare any such corresponding list for our country, or if they did-and they 79951-0-485
Supply-Trade and Commerce have not told us whether they did or not- they did not make it available. Or if they did prepare one but decided not to make it available to the members of parliament before the team left for the discussions, they did not disclose any reasons for not making it available. It may be that there are reasons; I do not know.
These are some examples, and I could give a great many more. However, the subject is a large one and I do not want to go into it unduly.


John Cameron Pallett: I gather the only functions the hon. member refers to are trade fairs and GATT negotiations?


George James McIlraith: No, they are just examples. There is a great mass of activities where their government and the whole department seem devoted to a solution of this problem and have taken it up as a great new problem. Hon. members will notice the references in their press to other aspects of foreign trade, and so on, trying to get other countries to assume their share of the cost of foreign aid. I leave that point there.
I now want to indicate some other matters which show the atmosphere we are in today. I am one who over the last few years has sought by means of private members' motions and other means to have this government become more aware of the situation in regard to our traditional trade relations with the West Indies. We have had a very long trade relationship with that country. We have a good trade commissioner service there, but we are losing our trade position in that market, and losing it quite rapidly in terms of our percentage of their total trade.
If the minister will look at the figures I think he will find that our share in that total market has slipped to something less than two thirds of what it was over the period of the last few years. That is a rapidly developing area. They are getting their independence, and there is one more step to that end being taken on August 16. I think all Canadian members of parliament welcome the achievement of their independence.


The Deputy Chairman:: Order. I am sorry to advise the hon. member that his time has expired.


Gordon Minto Churchill: Carry on.


Charles Edward Rea: Does the committee give unanimous consent to the hon. member continuing?


Some hon. Members:: Agreed.


George James McIlraith: I thank the committee, and I will try not to abuse the courtesy extended to me.

Supply-Trade and Commerce
In any event, in the publication Monetary Times for July of this year there is an extensive number of features on this subject of trade with the West Indies. In fact the minister has written an article in that magazine dealing with this subject. I am glad to see that he is an author now. There is also a very interesting message from the prime minister of the West Indies, Right Hon. Sir Grantley Adams, and I want to quote two paragraphs from the argument he makes in dealing with the status of imports to the West Indies:
Although in actual monetary terms the value of Canadian goods imported into the West Indies has been rising in recent years, this rise has not been proportionately as large as the increase in total imports into the new federation, with the result that Canada's share of the total import trade has actually declined quite substantially.
I think that is an accurate statement on that subject. Then he goes on to talk about the products exported to here, and I want to quote another portion of his remarks. He says:
In pre-war days considerable quantities of citrus fruits, bananas and tomatoes were shipped to Canada in the cold and capacious holds of the Canadian National Steamships and United Fruit Company vessels. Today this particular trade has virtually disappeared, and Canada/West Indies shipping suffers because cargoes are not available in sufficient quantity, a circumstance which in turn has been reflected in the quality of the shipping available.
Well, the Minister of Transport this morning in reply to a question on this subject asked on orders of the day said that our trade was being adequately looked after as far as shipping to the West Indies is concerned. The truth of the matter is that the government wrongly took the Canadian National Steamships out of this trade, and the Minister of Transport must bear the major responsibility for this. He also did it without regard to the significance in timing. They did not have regard to the fact that this federation is just entering into a dynamic period in its development, and that that historical trade of ours promised to develop. By taking off these ships the government is doing something to help us lose our share of that trade instead of helping to increase it. The government has not done anything to help us even hold our share or to provide any alternative shipping method. Indeed, recent figures on the whole question of freight earnings would show how wrong that policy was in addition to its adverse effect on our merchandise trade.
There are other articles which I could quote showing the dynamic development in that federation, particularly in Jamaica, and there is some very good legislation there dealing with the advancement of their export industries. It is not legislation which would be wholly suitable for this country, but it is

legislation which ought to be looked at to see just what can be done by us in this field. Their problems are a little different from ours in some respects, but in any event it is very good legislation on this subject and is something the government would do well to look at. We have no corresponding legislation or policy on this question at all. The government does not advance anything; it just sits back with no policy.
Now I turn to other countries. In the recent period from 1956 to 1959-1 think that is a fair period to take to illustrate my point, but if hon. members want to take other periods they will find figures which show us up in a worse light than these do-our share of total world trade, bearing in mind the growth of the country and the population increase, in percentage figures was some 5.6 per cent. In Germany, however, her share of the world market for the same period increased by 25.6 per cent, five times as much as ours. France increased her trade by some 14.5 per cent and Japan by some 26 per cent. This sharp increase in the share of world trade held by those countries surely indicates that we shall have to develop policies which will be flexible, energetic and appropriate to meet the problems of trade as they arise. The United Kingdom has been developing a very effective trade policy which has placed it in a highly competitive position.
These things are all to the good, but we have to be in a position to maintain our own share of world trade. There is, of course, a good deal of concern felt in Britain about the European common market and the European free trade association. Our own minister dealt with those matters in his remarks, but his treatment of the European common market area, the European economic community, was wholly descriptive. I think he described the situation reasonably well, and I have no quarrel with his description of the situation. It was very interesting, but the hon. gentleman did not enunciate any Canadian policies to meet this change.
We are in a situation where not only are countries in many parts of the world pursuing, as I have shown, active, efficient and energetic trade policies-and some of them are getting a much larger share than we are getting of the increasing world trade- but the European common market and the European free trade association may present us with some very real difficulties here in Canada.
I should like to hear from the minister exactly what Canada's policy is with regard to meeting these problems. The minister mentioned the agricultural policies evolving in Europe, but he did not elaborate. He might

have elaborated on that and given further information as to the effect the entry of the United Kingdom into the outer seven group and her possible relation with the common market area might have on our export of agricultural products to Europe, but the problem is just left in the air.
The hon. gentleman referred also to the announcement made the other day by the parliamentary secretary to the Minister of Finance on the subject of the change of O.E.E.C. to O.E.D.C.; the initials I find confusing at times-in any event the enlargement of that group of 18 countries by the inclusion of Canada and the United States. The announcement which was made in the house was of considerable interest, and I should like the minister to have gone further in stating the policy of the government with regard to that development. The announcement by the countries concerned does not seem to lay much stress on the development of trade relations. It may be too early yet to say what will happen, but the announcement as I read it suggests that the question of handling and co-ordinating economic aid to the underdeveloped countries and problems of that sort will be a major concern. I would hope that we as a country would seek to put forward, in addition, the question of the development of trade relationship in this area and that by now we would have worked out a policy in this respect.
I hope we will hear more from the minister before these estimates pass with regard to Canada's policy concerning the new organization for economic co-operation and development and the other European trading groups which are now emerging. I hope he will tell the committee how the government proposes to handle this matter, and make its views known to those bodies.
I could go on. The subject is a wide one. However, it is perhaps not wise to attempt to cover it all. I do appreciate the courtesy of having been permitted to extend my remarks a little. I wish to conclude by stating that I consider that this country has some quite serious economic problems confronting it at the present time both internally, as I think has been indicated many times this session, and externally, as I believe is clearly shown by the unfavourable balance of international payments as well as by the fact that we are having to export in a highly competitive market in addition to having to meet new types of organizations which are developing across the world. While the objectives of these organized trading blocs are wholly proper and desirable, their operation contains some dangers if not carried out in a reasonable way, and we in this country must 79951-0-485i
Supply-Trade and Commerce be prepared to meet these dangers; we must be prepared to put forward our position.
Up to now this has not been done by the government, as I see it. The minister has not enunciated policy with sufficient detail or clarity. Indeed, I get the impression that the government has no policy with regard to the trade questions and related financial and fiscal matters. Either it has no policy or it has not sufficient appreciation of the seriousness of the difficulties, and I hope that before the end of this debate the minister will try to clear up some of these questions.


Douglas Mason Fisher: Both the spokesman for the Liberal party, who has just resumed his seat, and the minister himself began their remarks with a reference to the fine service which had been accomplished by the late deputy minister, Mr. English. My personal knowledge of him was limited, though I recall that he had extremely pleasant manners. However, I have a general understanding that he was an exceptional civil servant and, of course, our party joins in the tribute to his memory paid by the two previous speakers.
I can with much more force contribute a personal commendation to the minister on his present deputy minister. As a trooper in the army for some years I found very few colonels for whom I had much time. In fact the only one I would bother to give a supreme recommendation to was the colonel of our regiment, now deputy minister in this department. He came to our regiment at a time when I think it was in poor shape in terms of morale, and he turned it into a happy and efficient organization with a great deal of pride in itself. I hope he will do the same for the Department of Trade and Commerce if that should be necessary.
It is our view that there is no greater impending crisis in any phase of Canadian affairs than we face in trade. It may be unreasonable for me as an opposition spokesman to sympathize with the government, but I do sympathize with the minister and the government in this field. This sympathy would have a little more force if it could be supported by some understanding that the government itself appreciated the nature of the crisis. None of us expects at this time to have exhortations to export or die. A previous speaker characterized the minister's remarks in introducing this matter as rather mildish pollyanna sentiment. We are pleased to have his assurance that the policy will be kept flexible, that the department is aware of impending trouble, but I would say we should have developing now on the initiation of the minister, and in the next several days, a real national debate on our trade policy. It seems to me there is very great need for one.
7686	HOUSE OF
Supply-Trade and Commerce
A tremendous number of things are coinciding to make trade a vastly important issue for Canadians, yet the discussion does not have too much coherence or form. One reason may be the optimistic interpretation, in some ways justified, which the government places on the trade figures that are coming in. There are dozens of different starting questions you could introduce in a debate on trade. I think the most controversial one at the present time relates to our agricultural exports. Questions could also be introduced regarding O.E.E.C., GATT, the commonwealth preference situation and indeed the whole tariff situation.
One of the best things that could be done to focus a real debate on trade would be if some political spokesman would come out and campaign for commercial union or unrestricted reciprocity with the United States. I do not say that because I advocate it, but in the early years of this century, around 1911, we did have a national issue raised by this particular question; and with the way our trade is swinging more and more to the United States and with the present imbalance of trade with that country vis-a-vis our exports, it seems to me that commercial union or unrestricted reciprocity is something well worth talking about and considering. I should like to hear from the minister whether his officials have considered it, and what reasons they have given for rejecting it or for going slowly on it as a possible policy.
I hope all hon. members interested in trade have read the two fine pamphlets put out by the Canada-United States committee, one dealing with the growth of trade between Canada and the United States and the other dealing with barriers to trade between the two countries. It seems to me that our future destiny in trade terms so much lies with our United States neighbours that we need to understand and appreciate the situation much more fully than we do. My own sense of what the Canadian people are feeling is that we have a very strong nationalistic desire, if anything, to avoid too close a merger with the United States in trade and other fields, and the government reflected this itself in the last election campaign with the promise of a 15 per cent diversion.


Gordon Minto Churchill: There was no such promise.


Douglas Mason Fisher: There was an indication that the government was interested in a 15 per cent diversion. This latent nationalism which crops up once in a while is a great barrier to any serious discussion of commercial union or unrestricted reciprocity. I recommend to hon. members a book by Ronald B. Mac-Pherson published a year ago on "Tariffs, Markets and Economic Progress". On page 36


the author goes into the possibilities of Canada and the United States entering into planned stages that would lead in effect to commercial union. He points out the practical difficulties in the way and the great danger to Canada because of our relatively small size in relation to the sheer dynamism and scope of the United States market.
Whatever the case, it seems to me that if we cannot have unrestricted reciprocity or commercial union or planned stages leading to free trade with the United States as a policy on the part of politicians, the whole issue of United States trade needs to be gone into and studied much more fully, not least because of this latent antagonism that exists in Canada toward United States influences.
I can give one concrete example from my own particular region, which the minister may know is a great exporter of basic raw materials. Whenever I visit my constituency almost everyone I talk to points to all the tons of iron ore being shipped down to United States steel mills. They ask why we let the Yanks process this raw material, why we do not do it ourselves. I can give them all kinds of answers about the cost, the lack of limestone and the inability to find markets for direct reduction ore, but their point of view reflects both a nationalism and an antagonism toward seeing so much of our basic raw material going to the United States for processing, and often a recognition that the material comes back to us in the form of manufactured goods at a much higher value.
I endeavour to point out to these people that we would be completely dead in northwestern Ontario if it were not for the United States. We have nine pulp and paper mills, the bulk of whose production goes into the United States market. It forms part of the very substantial export business we have, the newsprint, the kraft paper, the sulphite that goes into the United States market. I tremble with apprehension, as I think any hon. member does if the economy of his area is closely linked with the United States economy, that the people in the area will not be too rough or tough with respect to the United States, because the danger of losing those sales and markets is enough to frighten anybody.
I bring up this point because I think it is time we took a close look at our relations with the United States, to see whether the time has come for us to try to back off from going in any deeper; or, if we are going to be remorselessly drawn in, because of the superior drive of their economy in terms of using our raw materials and as our great trading partner, it seems to me we ought to know the dangers and know just how far we can go before our national identity and our control of our whole economy disappears.


John Cameron Pallett: Mr. Chairman, would the hon. member indicate whether he is now reversing his previous statement, in which he advocated free trade?


Douglas Mason Fisher: One of the difficulties in trying to present alternatives in this chamber or in any political forum is that people want to say, "You are for this or for that". All I am suggesting is that one of the great discussions that should be taking place in Canada at the present time is on our trading relationship with the United States. I feel that one way it could be crystallized would be if some political group or the minister could indicate where they stood on a feature of our past such as commercial union or unrestricted reciprocity.


Gordon Minto Churchill: Mr. Chairman, may I ask the hon. member a question? Is that not a function of the hon. member, to indicate his stand? It is not just a matter of raising questions about where the government stands. Let the hon. member state his position.


Douglas Mason Fisher: As the minister knows, our party is having a convention next week which will be dealing with issues like this. I cannot particularly be a pace setter. My own personal feeling is that our destiny is linked inexorably with the United States. I have looked to the Liberal party. Last year I heard the leader of that party say the party was for an eventual movement to an Atlantic free trade area. This is all very nice and sweet. This ultimately would have the effect of free trade or commercial union with the United States; at least that would be part of the picture. But I am suggesting that commercial union is something we may get whether we like it or not if present trends continue, and if we encounter the difficulties in the world trade picture that it seems to me are apparent, especially in relation to the European situation.
In many respects the Canadian internal economy has seen its most fantastic growth in terms of manufacturing and in terms of the service industries, but in the export field the service industries do not provide you with anything unless you want to count what they may provide for tourists who come here. Our manufacturing industries are not getting a remarkably increasing share of our export trade to countries other than the United States. I think in the present position of agricultural abundance in the world and with world markets glutted with raw materials of every kind, Canada must look toward her manufacturing industries to expand, not only to employ the idle labour we have in Canada, or to process further our raw materials and increase their value and so earn more for
Supply-Trade and Commerce us in exports, but also to gain foreign capital with which we can finance our way in the world markets.
I do not believe Canada can continue indefinitely to mine her resources and have her high standard of living. We must industrialize and export more manufactured products whose higher value will enable us to continue the present expansion of our economy and maintain what I, as a socialist looking at what is a quasi-private enterprise economy, agree has been a fantastic growth in the past decade. It seems to me that if Canada is to export manufactured goods it is natural that she should look for markets in those areas of the world which are now less developed and are at present entering a phase of industrial expansion. Asia, Africa, South America, Central America and the Caribbean areas come to mind.
From this point of view it is particularly disturbing for us to see that over recent years Canadian exports to all these areas have been slowly and progressively shrinking in relation to our other export patterns, especially in relation to the United States. While Canada's trade with these areas has never been very large, nevertheless it has been very important inasmuch as it provides a market for a disproportionately large percentage of our highly manufactured goods such as processed foods, drugs, chemicals, clothing, paper products, machinery and appliances. For example, the West Indies federation, which in dollar terms ranks thirteenth amongst Canada's trading partners, ranks fourth as a market for highly processed and manufactured goods.
I think one of the main reasons why we will have difficulty in moving into this particular area is our failure to provide credit facilities. This is one important factor limiting Canadian sales in these expanding areas. Canada lacks adequate credit facilities with which to finance sales of machinery and capital equipment. Countries such as Brazil, Mexico and India lack foreign exchange, in particular they lack dollars. Contracts for large projects and capital equipment for these countries are not let so much on price as on the credit terms which the seller can provide.
Many instances of sales having been lost to Canadian firms for lack of adequate credit facilities are apparent in scanning the financial papers. A recent move on the part of a group of Montreal businessmen to form their own export bank and thus remedy the difficulty has not, as far as I know, had any government support. It seems to have died for lack of adequate backing. Surely the Department of Trade and Commerce should be moving into this field. I should like to

Supply-Trade and; Commerce point out to the minister a paragraph in an article by one of my favourite economic writers, Andrew Shonfield, found in the Observer of July 17, 1960. At the end of an article dealing with Mr. Macmillan's concern over the British export situation he says:
Certainly the government will not obtain the results that we need without spending more money, not just on prodding businessmen, but in giving them favours-like the benefit of some free advertising in foreign markets. There is also a case for adopting a more lavish policy in subsidizing export market research and other costly preliminaries, which a firm has to undertake before it can hope to sell anything abroad.
After all, if we are prepared to devote public money to support firms which set up factories in particular areas where they serve the public interest, why be coy about applying the same method to induce firms to start selling in export markets?
As I understand the situation, the British are ahead of us in supporting long term credit arrangements for their exporters. Here is one of the leading economists of Great Britain advocating that they go even further in accepting responsibility because of the vital importance of exports. It seems to me that the Export Credit Insurance Corporation set-up is a very good one, but the government should have been considering extending it, especially from the point of view of providing credit on a long term basis. We feel there is a desperate need for large amounts of capital at reasonable terms over periods of 10 to 15 years to finance long term capital programs in these underdeveloped areas, which would lead to the sale of Canadian products, especially manufactured products with a high engineering content, and perhaps the provision of engineering assistance.
Another area where we would appreciate more information from the minister has to do with the question of tariff barriers to Canadian trade. It seems to me that as our country becomes more and more industrialized it is natural that Canada in the first instance will look toward her natural and traditional trading areas for markets for her manufactured goods, the United States and the United Kingdom. But the United States and the United Kingdom originally set up their tariff schedules so as to admit freely those raw materials needed for their own industries, and at the same time they have given protection to those industries against competition from imports, including our products. Thus Canada now finds that she is locked out of these markets for manufactured goods.
It is significant to compare the changes that have taken place. The booklet, "Barriers to Trade", issued by the Canadian-American committee has this to say on pages 6 and 7:
On the United States free list, there are 110 specific items for which there were imports of $100,000 or more from Canada in 1957. In contrast, there are over 500 no-duty items in the Canadian tariff lists for which there were imports of $100,000 from the United States in 1957.
That is a very strong argument for reciprocity. On page 7 there is the following:
The general tendency in both the United States and Canada over the past 30 years has been for the free items to decline both in number and in relative importance. Between 1929 and 1931, duty free United States imports from Canada averaged about four fifths of total imports as compared to only three fifths today. A similar shrinking of the relative importance of free items among United States exports to Canada is observable, although the drop is less marked. The fact that the United States tariff act has not been revised in almost 30 years doubtless accounts for the persistence of some items, such as bread, which has recently begun to offer strong competition to some domestic producers near the Canadian border.
These quotations point up our weakness vis-a-vis the United States in getting manufactured items over their tariffs and into their trade economy. It is also significant to note with respect to Canada's trade with the United Kingdom during 1959 that less than 20 per cent of Canadian exports received any tariff preference whatsoever, whereas 80 per cent of United Kingdom exports to Canada came in under preferential tariff treatment. As an example, British automobiles enjoy a tariff preference of 17 per cent over all others, including United States automobiles. This would seem to point up the tariff duties that face our products in the United States and the United Kingdom where strong, sharp and persistent negotiations and pressure seem to be necessary in order to give our manufacturers a chance.
One of the problems we face so far as exporting is concerned is the subsidies given by foreign countries to promote exports. Many countries give tax write-offs and special concessions to industries to encourage their export trade. For example, Germany and Britain both give tax rebates to shipping companies. On page 74 of this booklet published by the Canadian-American committee you have this paragraph:
The Canadian nickel industry is understandably concerned about government subsidies to the Freeport Sulphur Company, which processes Cuban ore. The U.S. government has invested roughly six million dollars in a plant at Braithwaite, Louisiana, which was sold to Freeport in March 1959 for $236,455. Under a purchase contract, the government is obligated to buy 271 million pounds of nickel at 75 cents a pound from Freeport Sulphur-
Then later, on page 75, we have this:
U.S. fluorspar production has, for many years, been greatly exceeded by imports. The major sources of supply are Mexico, Spain, Italy and West Germany. Domestic mines are unable to supply the vastly expanded requirements of United States industries, and the government has resorted

to a combination of tariff protection and purchase programs to stimulate output. Thus, while domestic acid grade fluorspar was quoted in trade journals at about $50 per short ton during 1958, the government was paying $53 under stockpile contracts; and the industry was further sheltered from foreign competition by a tariff of $2.10.
These are two examples of what other countries, countries which are our trading partners, do to protect and develop exports. These actions, incidentally, while not contravening the letter of GATT are certainly doing so in the spirit by providing subsidies for exports. Action along similar lines which is embarrassing us is the dumping duty being levied against Canadian chemicals in the United States and the United Kingdom. We would like to hear from the minister what that situation is and what products in those two markets have had dumping duties levied against them-I refer to Canadian chemical production-and what is the scale of the matter.
Another bar to Canadian trade abroad is the restrictive series of health and sanitation regulations which apply to a good many pharmaceutical lines. It is almost impossible to get approval to market ethical drugs and vaccines in the United Kingdom and the United States. The same thing applies to some varieties of processed foods. These laws are used to delay and discourage our exports.
The final form of bureaucratic stonewalling that is encountered in the administration of customs tariffs is the fact that it may take months or even years to obtain a tariff ruling on a new product that Canada may want to put into the British or the United States market. The whole future of our trade, of course, is complicated by regional associations. It has now become accepted that more and more regional customs unions are being formed in the western nations, and so far Canada does not seem seriously interested in getting into any of them. We have the European common market, the European free trade area, the Central American customs union and the South American customs union, and they are all either well on their way or under consideration at the present time.
The ones that are of chief importance to Canada are the two European blocs, that is the European common market and the European free trade area. So far the European common market has been setting the pace, to such an extent that if you pick up any of the British economic journals it is apparent that Britain is in a complete snit about the developments that are taking place there. I do not mean that they are not prepared to take part, but it has been an in and out game in so far as the British are concerned. I understand that the minister
Supply-Trade and Commerce cannot give us any idea on how we are going to stand in the British market in the light of the possibilities of the European free trade area and the European common market. I take it from this that the British have been less than kind to us in the negotiations that have taken place.
For example, I should like to know what assurances the British were prepared to give when Mr. Maudling was over here. I have followed British affairs fairly closely, and there is a lot of maudlin sentiment about the commonwealth; but my impression from my reading has been that there is a switch away from any hope that Britain can stay away from the European blocs. She has made some kind of rapprochement with the European common market and if she does enter that bloc it may not be a case of the devil take the commonwealth and the devil take Canada, but we are likely to get much less consideration than we would have obtained a year ago.
The ultimate goal of the European common market is to eliminate tariff barriers between the members of the community, while presenting a uniform tariff to all outsiders. This means a gradual lowering of some high tariffs against outsiders but also a raising of some tariffs for low tariff countries such as Holland and Germany, both important customers for Canadian goods. So far we have had two 10 per cent tariff cuts in the European common market, the first on January 1, 1959 and the second on July 1, 1960. The embarrassing feature of raising the tariffs has been put off until January 1, 1961, which will enable the whole situation to be talked over at the GATT meetings in Geneva this fall. At present opinion differs as to what may take place in the very fluid situation.
I noticed that the parliamentary secretary was guying the Liberal spokesman about what examples of United States action he could point out which would indicate that the United States was considering this matter more seriously than Canada. Well, I could refer the parliamentary secretary to the Economist for July 23, 1960, which contains an article entitled "Tussle Over Tariffs".


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


Some hon. Members:: Go ahead.


Jacques Flynn: Has the hon. member unanimous consent to proceed?


Some hon. Members:: Agreed.


Gordon Minto Churchill: But not for another half hour.

Supply-Trade and Commerce


Douglas Mason Fisher: No, not for another half hour. This article reads:
Washington is stepping up its preparations for the round of tariff negotiations due to start in Geneva this September-the fifth since the general agreements on tariff and trade came into force in 1948. Some time ago the administration issued a provisional list of those imported items on which it was prepared to offer tariff concessions. Last week the tariff commission allowed businessmen affected by this list to present their case, and hearings will continue on an industry by industry basis throughout the summer.
Has anything like this taken place in Canada?
Their purpose is to enable the commission to establish, for each product listed, a "peril point" below which the tariff must not be pushed; the President will use these findings (which remain secret) to draw up the final list that negotiators take to Geneva. At the same time, firms testifying before the tariff commission in the mornings are invited in the afternoons to give the committee for reciprocity information (a body representing the different government agencies concerned with trade policy) their views on what concessions the United States should seek and grant.
The sharp increase in American imports has strengthened protectionist sentiments generally and the administration, with balance of payments problems much on its mind, is adopting a "tough" attitude toward the coming negotiations.
The proposed list of products on which the administration would consider tariff cuts is lengthy -it includes some 2,500 items representing 20 per cent of the present value of American imports-
And so on. The article continues:
Besides this the administration has (for the first time) drawn up a list of those products on which it hopes to win concessions-a list that runs practically the full gamut of the trade statistics. Most officials are taking pains to point out that America must have some attractive concessions to offer if it is to get more leg room in foreign markets, although the secretary of commerce, Mr. Meuller, has asserted that America should, on this occasion, get rather more than it gives in recognition of its past generosities over tariffs.
I would like to ask the minister, are we going to ask tor more than we are going to give because of past generosity? Have we a short list of parallel points? Have we had any hearings with exporters or manufacturers, with anyone, about the concessions that we are prepared to give in Canada? I would like to hear about this, because these meetings are coming up shortly and I imagine the minister's officials are to appear before them. If this is not action by the United States, I am very surprised. It seems to me very pragmatic action. What are we doing of a comparable kind? I think that is a fair question to ask the minister. It seems to me that Canada's interest stems from the fact that at present 70 per cent of her exports to E.E.C. go into Germany, a low tariff country, which according to the schedule is due to raise some of her tariffs on January 1, 1961. It is also of interest to note that 70 per cent of our exports to E.E.C., which are

mainly agricultural and raw materials, enter under rates negotiated by Canada and bound against increases by individual countries. What happens to them if we get a general increase in tariffs by E.E.C. on January 1, 1961?
When you look at the E.F.T.A. situation you also find that on July 1, 1960 the first cut of 20 per cent in the tariff rates between members of E.F.T.A. took place. So far this is not serious but with future reductions Canadian agricultural and forest products, which now enjoy a preference on the British market, will be faced with free entry goods from Denmark, Sweden, etc., and everyone knows that the Danes are very good at agriculture and that the Swedes have very high quality forest products. This is bound to affect Canadian exports, though to what extent it is difficult to say. I would like to know whether the minister can hazard some estimate as to how we are going to be affected in these particular fields of agriculture and lumber products in the E.F.T.A. area by the competition that will come from Denmark and Sweden.
The minister is more than aware of the relative state of confusion between E.E.C. and E.F.T.A., and it is almost anyone's guess whether these two will get together and form a larger European free trade area. I would take it from what the minister said that he would encourage this development if at all possible, perhaps with the idea that with the larger group-not six or seven, but a larger group of 13-it may be possible for the government to get a better deal or better arrangement in so far as Canadian goods are concerned. At present talks are going on between Germany and the United Kingdom on these matters. I wonder whether the minister has anything to report on these conversations. The United States is certainly showing concern over these groupings, and she is showing concern following a great deal of encouragement that she gave in this direction earlier.
At the very least the future of the European situation is uncertain, and our uncertainty is almost doubled or tripled by the fact that we are not in on the thing except through GATT and the negotiations that are going to take place there.
It is always interesting to reflect-and members of our party have done this before -that there is provision under NATO for economic co-operation, although this clause has never really been put into effect.
One of the questions I would like to ask the minister is whether he feels that Canada can only obtain tariff concessions for Canadian exporters through giving tariff concessions to countries importing into Canada.

In the face of all this one wonders whether Canada has bargained away all her concessions already. Certainly all manner of goods obtain free or near free access to the Canadian market, to the extent that severe pressure has been put on various sectors of our economy. We only have to look at textiles, rubber goods or automobiles, to name a few. I could flip through the first 14 or 15 pages of the minister's annual report and see potential weaknesses all over the place because of the competition and the fact that we seem to have perhaps let barriers down too far.


John Cameron Pallett: I wonder if the hon. member would permit a question. Is he advocating that there should be tariff increases?


Douglas Mason Fisher: The parliamentary secretary knows very well that I am not, but certainly it has to be considered by the government. The textile industry is in very bad shape; the automobile industry is in very bad shape, or it shows possibilities of getting into a very poor condition. The manufacturers of rubber goods seem to need protection; any protection there seems necessary. For an individual member to stand up and say we want higher tariffs it seems to me is a most retrograde step, but surely our commercial policy in these fields needs some analysis and some prediction on the part of the minister to tell us where we are going to go if we have already bargained away our position, as seems to be indicated by the fact that domestic industries are in trouble. What steps is the minister going to take to remedy this situation?
I think Canada might usefully look at Australia's example. Here we have a country in a similar stage of development, but which has used quotas, tariffs, and licensing arrangements to so restrict imports that it has become profitable for many foreign industries to set up manufacturing or assembly plants there. For instance, there is a Volkswagen plant in Australia. While Canada's automobile industry has been contracting since the war, about six new assembly and manufacturing plants have been set up in Australia to serve that particular market. Australia has used tariff protection to establish these industries, while Canada has fallen into the position where an ever increasing share of cars on the road are imported from overseas.


Mr. Jones:: If I understand the hon. member correctly, he has recommended that we follow Australia's example, which is increasing tariffs. Is that his view?


Douglas Mason Fisher: I am suggesting that we look at what the Australians have done, because they have been able to get German and 79951-0-486
Supply-Trade and Commerce British automobile manufacturers to establish manufacturing and assembly plants in their country at a time when we have not been able to achieve this at all, and a great many foreign automobiles are being sold in Canada and are affecting our domestic production. I say that if Australia has been able to achieve this, it might be an example to us in some way. They still seem to be able to sell their raw materials and agricultural goods on the world market, despite the fact that they have these barriers.
In conclusion, I suggest that Canada is not pushing her weight in world trade councils. We are always in the unenviable position of trailing along as "me too" in the wake of British or United States proposals. For a nation which boasts of the world's highest per capita trade volume this is a pathetic situation indeed. There are many avenues open to rectify this situation, but the present government is unable or unwilling to do so.
First, Canada should press for modification of GATT and call for more scrupulous adherence to the principles of the treaty by member nations.
Second, she should make more extensive use of the many provisions in GATT that give a country freedom in making unilateral tariff decisions, such as parts 18 and 29 which provide for the protection of infant industries in a new country in the process of industrialization. Third, some provision over and above the Export Credit Insurance Corporation should be made for financing the export of Canadian products to underdeveloped countries which lack the dollars for outright purchases. It seems to me that these are all steps the government should consider and eventually will have to consider.
I have tried in my reading on trade in recent weeks to get some understanding. I talked to one financial expert on one of the prominent Canadian newspapers very much interested in trade, and he said that one of the things the government needs to do is to boot some of our manufacturers on the fanny and get them to sell outside. I take it that the trade missions announced by the minister are one move in that direction.
I think another step the government should take is what I referred to earlier-and it is almost a national psychological situation-and that is the need to make us aware of all the problems involved in our trade and the desperate need for us to expand and to look at our trade situation with the Americans.
One point I want to conclude on is that I have been disappointed in the fact that one of the largest elements in any manufacturing situation has not taken more aggressive lead

Supply-Trade and Commerce in looking at our trade situation. I am referring here to our own Canadian Labour Congress. I was always very much impressed with the brief which the Canadian Labour Congress presents to the government, but it does seem to me that we should expect more initiative from this particular organization in the field of trade, even as a defensive measure; because one of the great arguments of people who might think they have a deep enmity against the labour movement is that the reason we are not getting a greater share of the export trade is because of our very high labour costs. Another argument which is raised is that the reason so many imports come into this country is that we cannot produce these kinds of products at a low enough cost because again our labour costs are too high.
If I were to make an appeal it would not be to the minister or to the government; it would be to the organized labour of this country to take a look at our trade situation and see if there is not some way they can take the initiative in dispelling some of the rumours and doubts about their own role in our cost pattern, and also to see whether we cannot blast our way into more markets and sell more Canadian manufactured products and in that way employ more Canadian workers.


John (Jack) McIntosh: Mr. Chairman, I regret that my remarks on the minister's estimates at this time must be of a critical nature. My remarks will be chiefly in connection with the Canadian wheat board, which is administered by the Department of Trade and Commerce.
I am aware that under the Canadian Wheat Board Act the Canadian wheat board is given very wide powers pertaining to the delivery and merchandising of western wheat, oats and barley. I also realize that these powers were given to the wheat board by parliament. However, I feel that the present officials of the Canadian wheat board are not carrying out the policies of this government; and I wish to stress that point. They have also become too complacent in their attitude to their duties as members of that board. I might say here that the powers they have been given are too wide to be administered by bureaucrats.
Mr. Chairman, my criticism can be broken down into two fields, marketing and politics. My chief concern has to do with the marketing of western grain both in our domestic market and in our foreign markets, and I am deeply concerned with our diminishing grain markets. The political field can be considered minor and I would suggest the difficulty can easily be rectified, but I will deal with that aspect of my remarks at the conclusion of what I have to say.


In regard to the marketing of western grain, I feel that the present officials of the board are not doing the job they are capable of doing, or possibly I should say that they should be capable of doing. I would draw your attention, Mr. Chairman, to the grain trade year book, which indicates that in some foreign markets Canada's grain sales were reduced by a considerable amount during the grain years 1958-59 from those of the previous grain year. An article which appeared on August 4 in the Western Producer stated that the visible supply of western grain has increased by 42 million bushels this week over the same week last year. I have also before me a table which shows that during the past year Russia exported 40 million bushels of wheat to western European countries, and many of these countries were former customers of Canada.
It is to be noted that Canadian wheat sales to the Netherlands dropped from 21 million bushels in 1957-58 to 7 million bushels in 1958-59. That is an actual decline of 14 million bushels in one year in sales to one of our most valuable customers. During that same period, 1958-59, Russia sold to the Netherlands almost 10 million bushels of wheat.
This situation was brought to the attention of the officials of the wheat board during the consideration of their report by the agriculture committee, but I am not satisfied with the replies to the questions which were put to them. I would ask, how does your department account for this situation? Would you suggest it is a matter of price or availability of grade required, or both? I am quite sure that the producers I represent will have an answer to the board if they contend that the question is availability, when the farmers' bins are full of millions of bushels of unsold grain. In fact, daily on the prairies at the present time many thousands of bushels of wheat are being bartered for feed at any rate.
It is also to be noted that Sweden purchased over two million bushels of wheat from Russia during 1958-59 and practically nothing from Canada during that same period. May I ask what efforts were made by the Canadian wheat board to capture any part of this Swedish market? France, also a former customer of Canada, did not purchase wheat from us in 1957-58, as she was an exporter at that time. In 1958-59 how was Russia able to sell France eight million bushels to our one million, when France again became an importer and was in the market for foreign wheat?
It is also noted that sales by Canada to the United Kingdom dropped in the past year by four million bushels, and Russia

has apparently gained this additional market. Has the increase in the tariff on British woollens contributed to fewer wheat sales to the United Kingdom? During the 20-year period prior to 1939 the United Kingdom imports, combined with their domestic production, averaged 278 million bushels. Canadian sales to the United Kingdom during the same period averaged 141 million bushels, or slightly over 50 per cent of the United Kingdom's consumption. After the second world war, from 1945 to 1949 during the British-Canadian wheat agreement, our share of the United Kingdom market was increased to 56 per cent or an average yearly export to the United Kingdom of slightly over 150 million bushels. From 1953 to 1959 our average yearly sales to the United Kingdom dropped to 100 million bushels or only 36 per cent of their total market. What was the reason for this decrease in sales to the United Kingdom when the United Kingdom imports of wheat and flour were greater during the last six years than the preceding four years?
In the past it was apparently the custom of the United Kingdom buyer to carry stocks of Canadian wheat in the United Kingdom. It would appear that this no longer happens, but rather that the Canadian farmer and taxpayer are expected to carry this load. What caused this trend? Was it a result of present policies of the Canadian wheat board?
During the 20-year period prior to 1939 the annual average world trade in wheat was approximately 660 million bushels. Canadian export sales during the same period were 240 million bushels, or 35 per cent of the market. During the period 1947 to 1959 world wheat trade averaged 993 million bushels annually. Canada's average export sales over the same period were 277 million bushels, or 27 per cent of the world market. What is the reason that the Canadian officials charged with the responsibility for wheat sales did not capture a larger percentage of this increased world market?


Gordon Minto Churchill: Excuse me for interrupting, but I missed the percentage figure. The hon. member referred to 277 million bushels-


John (Jack) McIntosh: Possibly my percentage is not entirely accurate, but the percentages I was giving do show a downward trend.


Gordon Minto Churchill: My attention was distracted, and I missed the figure which was given.


John (Jack) McIntosh: I said it dropped to 27 per cent of the world market in the period 1947 to 1959. In the year 1958-59 we are given the figure for world trade in wheat as 1,220 million bushels. United States wheat exports, including give-away programs and commercial sales, amounted to 443 million 79951-0-4861
Supply-Trade and Commerce bushels. Canada's sales of wheat were 290 million bushels. What efforts, if any, are being made by the Canadian wheat board to capture a portion of the remaining 487 million bushel market? Have the Canadian wheat board officials made any study of the apparent successful methods used by the Russians to capture their obvious new markets? What are the suggestions advanced by the wheat board to counteract the Russian aggressiveness in our foreign wheat markets? Has the wheat board advanced any suggestions as to how new markets could be opened for the sale of Canadian wheat? I refer now to the potential African market, and particularly Nigeria, where I understand the balance of trade is favourable, and with very little assistance in the field of research and education, an untold market is ripe for some aggressive wheat growing country to obtain a market for many millions of bushels of wheat. If the minister desires more information as to the potential of this market, I will gladly discuss my source of information with him.
I have reason to believe that the present wheat board policy in determining its daily selling price for Canadian wheat offerings to domestic and foreign buyers is too rigid, and that as a result of this inflexibility we have lost foreign sales which should have been available to our western producers. I am aware that those who do not agree with my remarks will charge that I am trying to interfere with the orderly system of marketing of western grain. I hasten to say that if such a system solves or will solve the problem of the western grain surplus, then I will support it wholeheartedly. On the other hand, if the present orderly system of marketing works to the disadvantage of the western grain producers whom I represent, then I suggest that some of the conditions in this system should be changed.
I am not advocating that the orderly system of marketing should be discarded. I believe I am offering evidence that proves that the way it is functioning at the present time can lead to only one result, the loss of further grain markets for our producers. It is essential that we avoid this downward pattern.
I could elaborate on this, but I do not think that is necessary. I wish to emphasize this point. As the government has complete control of the marketing of wheat on the prairies, then it is the responsibility of the government to see that markets are obtained or tell the producers they are unable to do the job.
It would appear from evidence that was presented to the agriculture committee when the feed mill problem was investigated that there is a danger of our present domestic
7694	HOUSE OF
Supply-Trade and Commerce market for grain being reduced. If the regulations in effect at the present time were enforced the result would be that some of our domestic buyers would be forced to import corn from the United States to substitute for local grain, which at the present time they are using to meet their demands. I submit that if such a situation occurs, in which a country with grain rotting in its granaries legislates so that it is not economically sound for local business to purchase the grain we have in surplus quantities but rather that they must import from our competitors, then the situation is bordering on the ridiculous.
The rural area which I represent is deeply concerned about our diminishing grain markets and the apparent unconcern of the present wheat board officials about taking positive action to retain those markets which we have enjoyed in the past, or to develop other potential possibilities.
The result of the apathy on the part of the present officials of the wheat board is that the income of the grain producers of the prairies has been steadily decreasing. Figures which I have obtained from the three largest spending departments of the federal government-and I am only talking about Saskatchewan at the present time-will show that the economy of Saskatchewan does not benefit as the result of federal government expenditures in the same proportion as do other provinces of our country. It is an absolute necessity that we retain and increase our present grain markets.
From the Department of Transport's estimates, excluding boards and commissions, on a geographical basis we find that out of a total of over $200 million, slightly over $23 million is spent in Newfoundland and Labrador. Figures for the remaining provinces are of equal interest. They are as follows:
New Brunswick	
$12	millionNova Scotia	
13	"
Northwest Territories and
the Yukon	
13	"British Columbia	
18	"Alberta	
11	"Ontario	
32	"Quebec	
42	"
On the same basis, of the expenditures of the Department of National Defence, with a total budget of over $1.5 billion, only $14 million is spent in Saskatchewan. For the other provinces the expenditure is:
Manitoba	 $ 71 million
Alberta	
76	"New Brunswick	
37	"Nova Scotia	
129	"British Columbia	
106	"Quebec	
313	"Ontario	
570	"


With regard to expenditures by provinces by the Department of Public Works, totalling $226 million, I have obtained the information that on a percentage basis, Saskatchewan obtains only 2.7 per cent. For the record, here are the remaining figures:
Newfoundland	
7.7	per	centNova Scotia	
5.2	"	"New Brunswick	
6.6	"	"Manitoba	
4.0	"	"Alberta	
5.5	"	"British Columbia	
16.4	"	"Quebec	
11.0	"	"Ontario (including Ottawa)	
37.0	"	"
The city of Ottawa accounts for 16 per cent of that figure of 37 per cent. In fact the city of Ottawa alone receives five times the amount of the expenditures made by this department in the entire province of Saskatchewan. If the expenditure of other departments of government is in the same ratio, as I would say it is, it can be seen that the province of Saskatchewan gets little to bolster its economy. That is why I suggest it is essential that the Canadian wheat board, which markets our grain, does the job it was designed to do; and if it cannot, then immediate steps should be taken for some alternative system to be investigated before we lose a larger portion of our market. If they cannot do the job, now is the time for the people to be told this fact.
Figures taken from the annual statements of the Canadian wheat board show that the cost of handling a bushel of wheat has progressively increased from 4.8 cents in 1943-44 to 16.8 cents in 1957-58. The officials of the board have stated that the administrative cost of handling a bushel of wheat is three eighths of a cent; therefore we must assume that the additional 16 cents of cost is attributable to storage and interest, which is deducted from the farmers' return per bushel.
I suggest that if there was more flexibility in the pricing policy of the wheat board, at least within the 16 cent range paid for storage and interest, there would have been more sales of wheat as well as some relief in respect to the storage problem of the western grain producer. It is no secret in the west that the elevator companies are enjoying substantial profits from these storage charges. I contend that this is revenue derived from the sale of grain which should be going directly into the pockets of the farmers rather than into the coffers of the elevator companies.
In an articled entitled "Where Your Tax Money Really Goes", published in the Financial Post of July 30, 1960, reference is made to the fact that grain storage subsidies did not begin until 1956, and that they will total $424.7 million in five fiscal years. It

appears to me that the present policies of the wheat board are working to the advantage of the elevator companies rather than the farmers whose interests, as I mentioned before, they were designed to protect.
Time does not permit me to deal at length with our coarse grain markets. The same criticism I have offered as to the board's handling of our wheat problem applies equally in the case of oats and barley, with these added observations. The present price of oats would indicate that there is a demand for this grain. Oats at the time I prepared this information were worth roughly 20 cents per bushel more than the farmers' initial payment. Why then was there an apparent shortage at the lakehead when the demand was there? Was this a result of poor planning, or of lack of foresight on the part of our officials? If a commodity is not available when the demand is presented, I suggest this is one way to discourage potential buyers, and certainly it is not in the interests of the producers trying to diversify their production to include crops which are in demand on foreign markets. Why has there been no supplemental quota for oats this year as in former years? I contend that the present wheat board appears not to concern itself with what the current demand might be. If they were abreast of the times they would have means of ascertaining the demands of foreign buyers and would have the produce readily available for any potential sale.
What effort has the Canadian wheat board made to capture the market for barley that presently exists in the United States? Would the minister not agree that if this market, which is available, could be captured, more of our wheat producers could convert their production to barley, thus cutting down our problems of surplus wheat? I understand that one hon. member has had representations made to him with respect to the possibility of a Peruvian market for our western barley. Why has that not been investigated? I could cite specific cases where my constituents, in my opinion, have been discouraged from producing barley as the result of routine handling of their problem by the officials of the wheat board. I wish to stress the point that the present wheat board officials appear to be too complacent and apathetic. They lack imagination and initiative to do the job they are charged with doing and, I state again, are not following out the policies of this government.
I stated that the second part of my criticism was in the political field. This also refers to the officials of the Canadian wheat board, who I believe deliberately took certain action prior to the Saskatchewan election with a view to discrediting our party and particularly
Supply-Trade and Commerce certain provincial candidates of the party. Before I elaborate on the particulars I wish to remind the minister of the statement of one of his present cabinet colleagues, when he said that if you allow trained civil servants to take over, you get a bureaucracy and democracy ceases to exist. The taxpayer and the public are still important and deserve protection against the encroachment of bureaucracy, but politicians and public servants sometimes forget this fact.
I would also suggest that if civil servants desire to remain above politics, they should not use the powers of their office, in either word or deed, to influence public opinion in favour of one party or another. I believe some officials of the Canadian wheat board deliberately used the powers of their office on the eve of the last Saskatchewan provincial election to influence the voters in one constituency of my riding. They called in the R.C.M.P. to assist them to investigate a great number of producers for infractions under the wheat board act. This action undoubtedly contributed to the defeat of the candidate representing the Conservative party in that area.
I do not condone the infractions of the wheat board act on the part of the persons concerned. On the other hand, I do not agree with conditions of a law which educate people to be lawbreakers. This observation may be straying from the point in question and perhaps would be better as a topic for later discussion when the wheat board act comes up for review. It is common knowledge in the west that in certain areas, in order to survive and be able to purchase the necessities of life, many farmers take chances and market their grain in any manner which presents itself, regardless of whether or not the courts would regard it as legal. Grain is the only produce they have for sale or exchange for family needs. It has been known to the wheat board for some years that these infractions were taking place and were not prevalent in just one area, but rather were scattered widely over all the spring wheat district.
I ask the minister, in view of the hundreds of complaints the wheat board have stated they have received over the years in connection with these infractions, why did the officials choose this particular time and area for an active physical investigation, if it was not for political purposes? I would remind the minister that as the employees of the Canadian wheat board do not come under the Civil Service Act, steps should be taken to assure this committee and members of all political parties that such action will not be indulged in again by officials of the government.
7696	HOUSE OF
Supply-Trade and Commerce
Common sense alone should have influenced the board's decision against such action just prior to an election, unless the officials felt they were so firmly entrenched that those they were going to embarrass could not make them account for their actions. If such is the case, Mr. Chairman, I would suggest that bureaucracy has taken over in the prairie provinces and that democracy has ceased to exist there. I further suggest that a good look should be taken at other government agencies on the prairies where, in the opinion of a great number of my constituents, a similar situation exists.
(Translation):
i Mr. Boulanger: Mr. Chairman, in the course of the inquiries I have made to understand the complex structure of the Department of Trade and Commerce, in the matter of both external and internal trade, I found that it presents a striking similarity to the administration of a family or private enterprise.
If, in a family of workers or of farmers, or in some business organization, the outgoing sums exceed the incoming revenue the situation cannot last very long. Bankruptcy can be deferred for a while if the borrowing power is good and if there remains certain collateral, but the final outcome remains inevitable. There will come a time when the confidence of the money lenders will be shaken. This will mean either total bankruptcy or a change in administration, in management.
That is precisely the situation in which Canada finds itself at the present time. It is the situation of the family man or businessman who buys more than he can afford to.
Last year, we spent $1.46 billion beyond our means and this has been the situation ever since the Conservative government has been in power. In the last four years, the Department of Trade and Commerce, or the government of Canada, has put us into debt to the tune of nearly $4 billion.
At that rate, for how many more years can Canada run deeper into debt before panic breaks out?
We in this country note a state of alarming crisis which hints at a change of administration, which would be a solution, or else we will have to surrender our assets, and our economy and our policies will then be controlled by the U.S.A.
Mr. Chairman, in support of his predictions with regard to an increase in our production,


the Minister of Trade and Commerce (Mr. Churchill), makes much ado about U.S. capital investment in Canada. He piles up figures and statistics to present a confusing picture of the real economic situation, which, however, reveals entirely artificial circumstances.
It is true that until 1957, Canada enjoyed a record development, as expressed by the rapid increase in our capital goods. That is why the Minister of Trade and Commerce feels so confident. But there are quite a few economists, including the governor of the Bank of Canada, who consider this one-sided development-if I may so describe it as a cause for concern, for it is not in keeping with the trends of our export trade or consumer market.
We may wonder today whether Canada has not borrowed abroad more than it can afford, thus shouldering a heavy financial liability which we can only meet by increasing our exports and our domestic marketing.
Yet, our imports have been increasing while our exports failed to rise in the same proportion.
In the textile field, for instance, in 1959, there was a record demand for 555 million yards of cotton goods in this country. This was an increase of 15 per cent over the previous year. Of that quantity, 326 million yards were imported in 1959, including 240 million yards from the United States alone. It was the first time in Canadian history that the United States supplied us with more than we had produced ourselves. We imported 28 million yards more than in 1958, while we produced 14 million less.
The portion of Canadian production which was left to our industries then fell to 41 per cent last year, while it was 45 per cent in 1958, and 51 per cent in 1956.
In 1959, our imports from Japan were 56 per cent greater than in 1958.
Our imports from Hong Kong, which amounted to $3.1 million in 1958 increased to $6 million in 1959. Furthermore, according to D.B.S. figures, our imports from Hong Kong have amounted to $2.3 million in the first three months of 1960. At this rate, our imports from Hong Kong should amount to something like $10 million by the end of 1960. They are a greater threat to our Canadian ready-to-wear industry than our imports from Japan, because there are no quotas in that British colony.
The same thing is happening in the field of synthetic fibres.

Our imports have gone up 18 per cent in 1959 as compared to 1958. In fact, in 1959, we imported 32 million yards of fabric from the United States; this was a million yards more than in 1958, and 5 million more yards than in 1956.
We also imported 1.3 million yards of fabric from Great Britain in 1959, as against only a million yards in 1958.
Again during the same year, in 1959, we imported 6.5 million yards of synthetic fibres from Japan; this was 2 million yards more than in 1958.
The proportion of those products used for our domestic requirements dropped from 75 to 69 per cent between 1956 and 1959, a decrease of 6 per cent.
The situation in the textile production as a whole may be summed up as follows:
In 1956, the production of our mills reached 394 million linear yards of fabric, while it dropped to 342 million yards in 1959, a decrease of 52 million yards within 4 years.
In 1956 our mills were producing 55 per cent of our domestic consumption, whereas in 1959 they were producing only 47 per cent.
In 1956, the three main sectors of primary textile products were employing 51,340 persons, but in 1959 that number was down to 43,097, a decrease of 8,253.
There, Mr. Chairman, you have a picture of the Conservative government's constribu-tion to the cause of our textile industry: lowered production in our mills, higher imports and, as a result, increased unemployment.
What is happening in the textile industry is also happening in other sectors of our economy. It is the same in the case of footwear. In 1959, we imported 5,598,734 pairs of shoes of all kinds, i.e. 44.1 per cent more than the 3,886,242 pairs imported in 1958. In 1959, footwear imports, from Japan only, increased by 144 per cent, as compared to those of 1958.
We are importing 26 per cent of our chemical products requirements, whereas the United States are importing only 2 per cent, Great Britain 10 per cent and Japan 7 per cent.
In 1956, the automobile industry was employing 35,099 persons and was producing 467,864 cars, while in 1959, the number of employees went down to 33,160, and the number of cars to 368,587.
Our 1959 imports reached $243,088,000, representing 122,340 cars. Mr. Chairman, all
Supply-Trade and Commerce sectors of the manufacturing industry in Canada are feeling the disastrous consequences of imports. The situation has reached the point where action must be taken at once, if we want the future of this country to rest on a greater and stronger manufacturing industry.
In so far as textile industry is concerned, the government has already in its statutes an act which may be applied, to put a stop to the flow of cotton imports subsidized by the United States, and to determine satisfactory prices for Japanese import products; but the government does not seem to wish to apply that act. And yet, before the election, the Conservatives had solemnly promised to solve, once and for all, the problems of our manufacturing industry, especially those of the textile industry.
(Text):
Mr. Pallet!: Would the hon. member permit a question?


Mr. Boulanger:: When I finish my remarks. (Translation):
Mr. Chairman, it is certainly not through the establishment of royal commissions that the government will fulfil its promises and strengthen our industries which are in immediate need of a definite and positive government policy.
If the government refuses to enact the legislation it claimed was so necessary in 1958 it should find other means to correct a situation that has become alarming. Consideration should be given to the possibility of introducing a special policy of grants designed to further the rehabilitation and consolidation of our industry during the difficult situation it is now going through. Other steps could no doubt be taken to promote our industry, as is being done in the case of the coal and gold mining industries.
In any case, the present situation is obvious, and should not be tolerated any longer. On the other hand, the government promised to do something. I hope that during this debate, Conservative members will rise, not to commend the government-for the present situation is worse than ever-but to join with opposition members in urging immediate action before it is too late. Mr. Chairman, before concluding my remarks, I should like to acquaint the Minister of Trade and Commerce with a resolution I have received from the Drummondville employment committee, wherein mention is made of

Supply-Trade and Commerce
the unemployment situation and of the textile industry. It reads in part as follows:
Whereas in the last few years, industry in Drummondville has been seriously affected by the increase in Canadian imports to the steadily growing detriment of our manufactured products;
Whereas these depressed conditions in our area are being felt especially in the field of textile manufactured products;
Whereas, according to official figures, obtained from the D.B.S. and from Canadian manufacturing companies, Canadian imports of those products heavily exceed exports of same;
Whereas the figures of textile imports alone can be expressed as follows:
Quantity
Date	Product	imported
December 31,1958 December 31,1959 December 31,1958 December 31,1959 December 31,1958 December 31,1959
Synthetic fibre Synthetic fibre Knitted fabric Knitted fabric Woven fabric Woven fabric
6.700.000	lbs
9.878.000	lbs
692.000	lbs
871.000	lbs
11.035.000	lbs
11.780.000	lbs
Whereas this situation, arising out of unduly high imports is financially detrimental to more than half the population of the city of Drummondville, and to almost as many residents of the eastern townships where textile mills are one of the major manufacturing industries;
Whereas the federal government does not seem to have taken any serious steps of a nature to be of assistance to our manufacturers, in this regard, despite repeated requests of various management and union organizations;
Whereas conditions are deteriorating from year to year, and it is high time serious study was made of the causes, the effects and the required remedies for the solution of that nation-wide problem;
Therefore the local employment bureau of Drummondville unanimously and respectfully requests the federal government to take immediate and vigorous action to correct the present situation;
(1)	To act on the recommendations made to the government by the employers' and employees' associations with regard to our export and import problems;
(2)	To appoint a proper commission to analyse the problem and to suggest the means of bringing about a change in the economic situation of our country in the near future, more particularly in respect of textiles.
Mr. Chairman, during this session, some hon. members from the eastern towships have dealt with the matter of textile products. The hon. member for Sherbrooke (Mr. Allard), in particular, made some recommendations. He did make urgent recommendations during the 1958 session, but the government had done nothing about it.
On behalf of the textile industries in my area, I ask hon. government members to make every possible effort, to use their prestige as well as of their ability, in helping the government to settle the problem of that industry which is vital for our district, and for the whole province of Quebec.
(Text):


Mr. McDonald (Hamilton South);: May I ask
the hon. member one question? Since this is

the trade policy of his party, I wonder if he could tell me whether his party is in favour of raising the tariff to protect the textile industry?
(Translation):


Samuel Boulanger: I am happy to answer the hon. member for Hamilton South and to tell him that it is not up to us, who are members of the opposition to assume the responsibilities which should be taken in this respect. It is up to the government to fulfil promises it made in 1958. The candidates and Conservative members stated that they knew the remedies which would help the textile industry in 1958; then, all we ask of them today is to apply the suggested remedies.
(Text):


Mr. Horner (Jasper-Edson):: Mr. Chairman, we have witnessed an amazing revelation this afternoon. We have heard two speeches from the Liberal party which are without doubt the most dismal exposition of Liberal policy that I have ever heard. We have heard a bullheaded speech from the hon. member for Port Arthur. He went ahead and contradicted everything he said last session about what we should do. He then changed his views and said he was not a leader and could not state the best policy.
We have had no Liberal policy at all, and we have had no C.C.F. policy at all. It would appear that they have not been able to put anything forward. We had scholarly dissertations on the problems of trade from the hon. member for Ottawa West and the hon. member for Port Arthur. We have just finished hearing the best high tariff speech I have ever heard in this house. I hope the Sifton press in western Canada takes particular note of that speech.
I am very sorry, sir, that the two-headed free trader from Windsor is not in the house this afternoon. Certainly we should be given the benefit of knowing which of the two roads he has taken. On one occasion he is the best free trader this country has ever known, but when it comes to his home town industry he loses his free trade instincts almost immediately. We have seen him get up in this chamber twice in the same day, at one moment he is a free trader and the next moment he is a high protection man and we have to protect this automobile industry in his home town of Windsor. I admire his ability to stick up for his constituents, but certainly he should have a little bit of consistency, particularly since I have just finished reading an article in one of the maritime

papers which forecasts that he is going to lead the Liberal party next year.
I suggest that we in western Canada have had enough of glib-tongued Liberals who have been infiltrating boards and other organizations out there. We heard the hon. member for Swift Current-Maple Creek this afternoon. We have had enough of glib-tongued Liberals. We intend to keep the sincerity that has been shown by our present Prime Minister. We do not intend to see western Canada sold down the river as it has been sold for the last 25 years by a combination of the Liberal party and the Sifton press, and for no other reason. They have put forward great stories about free trade in western Canada, but they are not sincere in their presentations, nor are they making any presentations on behalf of the people of western Canada.
They talk about agriculture. We heard agriculture discussed by the hon. member for Port Arthur. Unfortunately for him, the hon. member for Ottawa West did not have too much to say; he was going around in circles. What about agriculture? There are many agricultural problems. We have heard the Leader of the Opposition and the hon. member for Essex East talk about this British free trade offer, but what they have not said and what has not been publicized enough is the fact that the British free trade offer was a manufacturing free trade offer which would exclude agricultural products. Let the hon. member for Essex East come to the west and say that we should have British free trade in manufactured products and leave out agricultural products.
The hon. member for Port Arthur spoke about what is going to happen to our trade with the outer seven. He should know that agricultural products in the main are excluded from the agreements of the outer seven. He is a man who maintains that he is an expert as an individual M.P. in this house. I suggest that he should go back and do a little further studying, particularly with regard to trade in agricultural products.
We need, and we have been given leadership by the Minister of Trade and Commerce and the Minister of Finance. Reference was made to what is happening in Europe, and here the hon. member for Port Arthur should do a little studying on how this inner six came about. If he did, he would realize immediately that this is a political ambition of the United States. He should do more reading in those little books he had there, and a little further study on the matter. Then he would realize that we are being given better leadership in Canada right now than the United States are getting in their endeavours to recapture their lost markets. I had the privilege of meeting and talking
Supply-Trade and Commerce with people in the United States who were vitally concerned about this matter.
Now, Mr. Chairman, I would like to bring this up, because the hon. member for Ottawa West and the hon. member for Drummond-Arthabaska made some passing reference to it. It is the question of manufacturing automobiles in Canada. Where does the blame lie for the failure of the automobile manufacturing industry in Canada? It lies right with the management of these automobile companies, and the trade unions. That is where the blame lies. They should not try to pass it off on this government.
The hon. member for Port Arthur made one sensible suggestion. He wanted to see the Canadian Labour Congress do a little more. He did not go far enough. We want to see our Canadian trade unions become Cana-dianized, move their headquarters back into Canada and move their funds into Canada. To do that would help our industries. One of the ways they could have helped was by advising the management of the automobile industry. Everybody else in the streets could see it coming. We did not want the longer and flashier cars; we wanted something in which we could get around; we wanted transportation, but they were not supplying it. This goes back to the failure of the trade unions and to the management, in the automobile industry, and there the blame lies, and only there. The government is not supposed to go out and lead these people by the hand.
Then, Mr. Chairman, I want to come to something much nearer home as far as I am concerned. The hon. member for Ottawa West had the nerve to say something with regard to gas and oil. Where is the Liberal policy on gas and oil? It is down the drain, and has been for years. I have not heard one realistic speech from the Liberal party on gas and oil since 1958, when I came to this house; not one. To say that this government procrastinated and delayed in regard to the oil and gas industry is a complete untruth. Nothing is further from the truth, and that was absolute nonsense that he was spouting. What about the oil and gas industry? Because of this government, because of the Borden commission, because we went about it systematically, we did not delay for one minute the export of gas from this country. Anybody who studies the situation with regard to the gas industry would realize that. This was not delayed, but it gave to Canada stability in our oil industry; it gave us a program to work on. Only yesterday the United States authorized a second large group of gas import permits for California, Oregon and the southwest United States. This, Mr. Chairman, is going to mean a major capital
7700	HOUSE OF
Supply-Trade and Commerce expansion program in the province of Alberta which will spread over into the province of British Columbia, to the tune of $400 million within the next year and a half.
What was the Liberal gas policy? The Liberal policy was that we could not export any gas. I have not heard any other policy, and that is the one the Liberals are now advocating, that we should not export any gas. Yet we are to have the benefit of $400 million in capital construction because of this one step. I am happy to say that a substantial amount of that construction will be taking place in my constituency.
We will move on, Mr. Chairman, to oil. Where is their policy on oil? What are they going to do with oil? Where are these free traders of the country? Free traders down the drain, and the Sifton press along with them. We have an oil industry in Alberta which is producing at 55 per cent or less of capacity, yet these people are talking about free trade. I would ask them about Quebec. We can, on an equitable basis, put oil into the Montreal area. Any time we are given the protection we can do so at no cost to the residents of Quebec. This rumour which has been spread around by the Liberal party primarily is to the effect that if we build a pipe line to Montreal the people in Quebec will have to pay higher prices for their gasoline and petroleum products, which is absolute nonsense and a betrayal of western Canada again as they have betrayed us over the years. We are 20 years behind because of the Liberal party and for no other reason.
Then the hon. member for Drummond-Arthabaska talked about Japan. He said our imports from Japan went up by about 30 per cent but he did not mention that our exports to Japan went up 40 per cent and that most of these exports came from western Canada. I am a little tired of listening to this two-headed monster over here who will do anything to gain a vote and who has spread rumours around western Canada. They have been supported by the Sifton press and the Wesson press to sell Saskatchewan, Manitoba and Alberta down the river again. It will be a sorry day for western Canada if the Liberals ever regain power in this country.
The hon. member for Port Arthur says that he has nine pulp mills in his area. I have only one but I do know that one pulp mill is very grateful to the Minister of Finance and his budget for the effect of the exchange on the dollar because it has made a great difference to the lumber people who are now able to get back into the United States market.
As I have said, we have heard no statement of policy at all on the part of the Liberal party this afternoon and we certainly


have not had anything from the C.C.F. I can understand the position of the C.C.F. because they are having a convention next week, and if the hon. member for Port Arthur did what he told the rest of us to do, where would he be? He would be in a rather silly looking situation.
There is one other important problem I want to speak on for a moment and it has to do with oilseeds, and particularly with rapeseed oil. I take nothing from the hon. member for Humboldt-Melfort who initiated the action on rapeseed and has done everything in this house to get it going; and two or three weeks ago we saw the amazing spectacle of the hon. member for Assiniboia running around trying to jump on the band wagon. Where was he when this case was being presented to the board of transport commissioners?
The hon. member for Assiniboia did not even know what rapeseed was. He has been spreading other stories in Canada about the decison of the board of transport commissioners, and I think it should be put on the record so all can see exactly what the position was. As I understand it, two of the members of the board said that it was a grain within the meaning of the act and should be given Crowsnest pass statutory rates. The chairman of the board said no, that it was a grain, but not within the meaning of the 1925 statute. So we have a point of law which has to be settled and that is why the cabinet cannot act. It cannot act until such time as the Supreme Court of Canada has decided this point of law. Then the cabinet can act. So let us get that straight, especially the hon. member for Assiniboia and the hon. member for Essex East.
Now I want to say a few words with regard to rapeseed oil because each year we import into Canada about $56 million worth of oilseeds. I am talking of edible oilseeds and I exclude flax seed oil. Primarily these imports consist of soybean oil, palm oil and cottonseed oil. They are the major ones but there is also a certain amount of corn oil being imported as well. For the record, rape-seed oil is as good an oil for all the purposes for which vegetable oils are used as any of these other oils. Some propaganda has been floated around in the quasi-medical field that corn oil was the last ditch in preventing arteriosclerosis or hardening of the arteries and coronary heart disease. That is not a fact and the advertising which the manufacturers of corn oil margarine were starting in the United States had to be withdrawn because of provisions in the food and drug act in the United States. I understand that

the food and drugs people in Canada are going to consider this question.
Although it is rather a detailed chemical explanation, rapeseed oil is every bit as good as corn oil medically, scientifically or otherwise. I would hope that our trade commissioners and the Department of Trade and Commerce will give to this fledgling industry and thus to our western agriculture a solution for diversification to rapeseed and will give their support to every measure which will help promote the use of rape-seed oil, and also sunflower seed oil which we also grow in Canada, and enable them to be used for purposes for which other vegetable oils are used.
Those are the few things I wanted to put on the record. I am getting a little tired, as I have said, of the Sifton press and the Wesson press in western Canada promoting this great idea of the Liberal free trade nonsense. We have heard such nonsense from the hon. member for Drummond-Arthabaska and the hon. member for Essex East, who runs off in one direction one day and in another direction the next, depending who he is speaking to in the galleries or at home. I would suggest to him that he look at this very closely, and if he wants to be honest he will readily admit that we have never had a government in Canada which has done more for our trade than the present one.


Mr. Badanai:: Mr. Chairman, the prosperity of Canada is undoubtedly coupled and measured by the amount of business we do with other nations. We cannot live and prosper without foreign trade. We must sell to other countries the products of our great forests, the iron ore, the nickel and the copper of our mines, the grain from our farms and the fish from our lakes and oceans. We must therefore be in a position to bargain with other countries, countries that need and want these products. Indeed, there are signposts all over the world which indicate the desire for the goods we produce, but somehow we seem to have lost the initiative in trade and we are slipping in world markets.
I think one of the reasons for the deficiencies in trade with other nations is the protectionist tendency of our government. The tariff on woollens is a shining example of a bad calculation which has increased the [DOT]cost of clothing to the Canadian consumer. Take the case of the Australian trade agreement which, according to the publication The Economist, was threatened because of the Canadian government's insistence on protecting a handful of Canadian sheep raisers and therefore tariff negotiations are going to
Supply-Trade and Commerce be clouded by the government's reluctance to make a dent in its own protection.
No nation has ever enriched itself by putting up barriers against trade or instituting high tariffs. The possible exception is the United States, but they had a sufficient consuming power within their own borders to ensure their prosperity. We sadly lack population and for several generations to come we will not be able to afford the luxury of high tariffs.
The Leader of the Official Opposition has on many occasions suggested that consideration and study should be given to a North Atlantic free trade area with a view to achieving tariff reductions among its members, in stages and not necessarily all at once, when for practical purposes that could not be achieved immediately in one jump. Ten years ago he made a statement to the effect that the time was ripe for Canada to explore the possible advantages of a free trade association of the North Atlantic nations, a fulfilment of the economic vision of NATO, and he emphasized his thought with these words: "No vision less than this will do''. No one in this house can successfully deny today that these words so eloquently expressed in 1950 are even more appropriate today than they were 10 years ago.
I do not wish to pretend to instruct the experts in the civil service for whom I have the highest regard, but it does seem to me that a study could be made of the practices which have been successfully adopted by western European countries. The countries of western Europe have been remarkably successful in selling all over the world, including to the nations of the communist blocs of Europe and Asia.
It should be obvious to everyone that 18 million people cannot consume more than a fraction of the wheat, pulp and paper products, metals and fishery products which we produce and that unless a more vigorous immigration policy is adopted several decades will pass before we can smugly sit back and consume what we produce.
Protection by means of quotas and tariffs can only provide a very temporary and very small level of prosperity for a very few in Canada. This relief will benefit only a few thousand Canadians while the rest of the Canadian population would suffer because tariffs will always produce a higher cost of living. Let us take a leaf from Britain whose international trade experience and know-how is vastly superior than that of our government. The government of that country announced recently that it will consider joining two of western Europe's economic organizations. The impact of this action on the part of Britain may be a little hard
7702	HOUSE OF
Supply-Trade and Commerce to estimate at present, but it should give concern to Canada because our exports to Britain in 1959 amounted to nearly $800 million. It is true that a part of this $800 million was due to commonwealth preference. What would happen if Britain joined the European market and abandoned the preference? This is something to worry about.
Professor Walter Hallstein, president of the commission of the European economic community, speaking to the committee of chambers of commerce and of common markets in Great Britain last February, as reported in the April issue of the NATO letter said, and I quote:
Trade policy is of enormous importance, not only to ourselves and our community but also to our partners in Europe, in the North Atlantic area, and in the developing regions of the world. I was very struck, a few weeks ago, by a statement made by the British president of the board of trade when he was speaking in New York. Mr. Maudling had occasion to underline the significance of trade policy-and of a liberal trade policy- for the peaceful development of our countries and for their hopes of competitive co-existence with the communist dominated nations. "The objective of our trade policies", he said, "must be twofold; first, to strengthen our own economies, and secondly, to use this economic strength to help others."
Further on he continued:
In a world which is rapidly shrinking, it seems to me vital that while we are striving to avoid in Europe the mistakes which were made by past generations, we must above all not repeat those same mistakes on the wider scale of our Atlantic trade relations. During the past 30 years, American trade policy has undergone a remarkable evolution in the direction of liberalization and multilateralization; and it is in the interest of us all, that this evolution should continue. Our own policy must be liberal, and it must be such as to enable others to continue in liberal policies. It is very important, at this stage, when America is recovering still from a short but sharp recession, and when many people are worried about the state of her reserves situation, that we in Europe give no encouragement to those who demand more protection for her industries and her currency.
I am very glad to say that both the European community and the United Kingdom have accepted the famous proposals made by Mr. Dillon for a substantial reduction of tariff barriers to be negotiated in GATT. This in itself will have the effect of further reducing the external tariff of the European community, and we have even proposed that this round of negotiations be followed by a further round to make a real and continuing attack upon trade barriers in the free world as a whole.
While there may be instances where some protection is necessary to give an infant industry a start, I regard tariffs as a protection against progress; they only weaken industry to the point of delaying necessary changes to meet competition which in the end are bound to be made soon or later.
The interprovincial farm union council have also expressed themselves in terms of favouring the free trade offer made by Britain two years ago. This may not be feasible now


unless we join Britain in the free trade area and the Scandinavian countries of the outer seven. However, Canada could possibly become a willing negotiator between the two blocs and thus achieve a wider free trade movement with tariffs and quota reduced progressively in order to allow our industries to adapt themselves to a new trade climate which in the end would be beneficial to all concerned.
Here I would like to put on the record a resolution by the Manitoba federation of Liberal women passed at their last annual meeting. It reads:
Whereas Canada is dependent upon the export market for one quarter to one third of her national income;
Whereas tariffs raise prices of essential consumer goods, and
Whereas high tariffs restrict trade and tend to impair goodwill among nations,
Therefore be it resolved that the Manitoba federation of Liberal women in annual meeting assembled being of the opinion that increases in tariffs are harmful to Canada because of her need to export goods and services, urges the government of Canada to reduce rather than increase our present tariffs.


John Cameron Pallett: Would the hon. member permit a question. Does the hon. member agree with that resolution?


Hubert Badanai: Yes, 100 per cent. It is being widely reported that sales of surplus food to Europe which have gone on since world war II are taken over from Canada by French wheat, Dutch dairy and Danish bacon products. Sales of raw materials are lumber from Scandinavia, uranium from the Congo and coal from France.
The question is, what is Canada's trade policy? Are we going to stand idly by when we see markets which were once considered Canada's own preserves being invaded by the more aggressive selling policies of other nations? Until three years ago Canada was always in the forefront of the world wide effort to reduce barriers to trade. I fear that we no longer occupy that position. I submit that the government take steps to return to that position before other essential export markets are diminished or lost. May I repeat what every schoolboy understands, that with every tariff increase an increase in living and production costs ensues.
A very significant explanation of an unfavourable trade balance is one furnished by an editorial in the Gazette of July 12. It is a simple illustration that trade deficits mean also a deficit in many jobs. I quote:
Unemployment, of course, has various causes. But one of the causes is seen in the trading deficit. For the deficits do not show merely that Canadians bought more abroad than they were able to sell; it means that they helped to keep people

in other countries in employment, while they helped to put people in their own country out of employment.
Canada must increase the volume of her exports. But one kind of export is very undesirable; it is the export of jobs. It has been suggested that if a job had some sort of physical shape-if it was, say, the size of a telephone booth-every time that Canadians went into trading deficits they would be exporting so many jobs. Big orders, or many smaller orders together, might make up quite a shipload.
The whole matter could be made real if Canadians could go down to their harbour fronts and see these jobs, each the size of a telephone booth, being picked up and carried on board to be sent away. All this would be taking place before their eyes while hundreds of thousands of Canadians need jobs at home.
It would certainly make those deficit figures more vivid if they could be thought of in this way. An adverse balance of trade is not an adverse balance of trading dollars; it is an adverse balance of jobs. It is not only a matter of giving work to the Canadian unemployed, important as that certainly is, but whenever anyone has a job in Canada, all Canadians benefit. By working the worker makes work for others. He helps increase the demands for goods and services and he helps share the tax load. Whenever jobs are shipped abroad Canada ships away those things it needs most. No asset is as precious as a job, to the individual or to the nation.
Are we doing enough to encourage manufacturing of the things that should be considered essential Canadian products? I should like to point out that most of our souvenirs of Canada which are usually purchased by tourists are made in the United States or in Japan. Consider a tourist entering Canada for a holiday and while here going shopping for souvenirs to take home to his family and friends. What does he buy? Indian dolls, Indian heads carved in wood and images of the Royal Canadian Mounted Police. Do they bear the stamp "made in Canada"? Not at all. The stamp reads "made in Japan". Souvenirs should be made of products from the countries they are sold in, made by the people of that country. To be worth calling them Canadian souvenirs, an industry could be built here. To be successful it might require a little encouragement from the Department of Trade and Commerce.
The minister made reference to the automobile industry about which I want to say a word or two. The impression has been created that the Canadian automobile industry is sick and is fast deteriorating. Such an assumption is erroneous and nothing could be further from the truth. The industry employs some 50,000 workers and has a production value of close to $1J billion. It is true that the imported small cars have taken a good slice of the car market and I
Supply-Trade and Commerce presume that because of the inroad made by the small European car in the Canadian market the government has appointed Dean Bladen to investigate the situation. We wish him well. I am sure that the professor, who is just as qualified as any one can be to look into the economic problems of the industry in general, will now try to find a means to improve the competitive position of the Canadian automobile manufacturers. Let us hope that the distinguished investigator will come up with a satisfactory answer.
Our Canadian manufacturers are now in the process of changing over to new models and the plants will soon be in production of 1961 models. I have so much faith in the ability of their executives that I for one have no doubt that in the end the answer will be provided not by professors but by those whose energy and know-how have built up one of the major industries and employers of labour in this country, and whose faith in the destiny of Canada has never flagged.
Within a month or two the 1961 Canadian manufactured automobiles will make their appearance on the streets and highways of Canada, and I recommend that prospective purchasers of motor cars take a look at these Canadian creations before buying any automobile. I am confident that the verdict will be an improvement in the role of Canadian-made cars. If the government really wants to help the industry, it should consider the immediate removal of the 7J per cent excise tax on motor cars.


Paul Joseph James Martin: Hear, hear; long overdue.


Hubert Badanai: My opinion is that the elimination of this obnoxious tax would do more to revive the industry than any other single government action, and I will be very much surprised if the one-man royal commission does not make the removal of the excise tax on motor cars one of its first recommendations.


Mr. Smith (Lincoln):: Mr. Chairman, I do not intend to have much to say at this time. I think I have expressed my views many times in connection with trade, tariffs and quotas, but at this time I should like to ask the Minister of Trade and Commerce how his department arrives at fair market values for import and export purposes.


Gordon Minto Churchill: May I tell the hon. member that that is determined by the hon. Minister of National Revenue.


John Smith: That may be but I
should like to finish my remarks and the minister can then answer. I do not wish to refer to figures too much but I have some

Supply-Trade and Commerce here in connection with the importation of electronic tubes. I do not wish to appear as being opposed to Japanese imports but in some respects I do not think the figures used for imports and exports do justice to our country.
I understand that the declared value of electronic tubes, the value that is accepted by Canada for import purposes, is 31 cents apiece. Yet figures have been made available by the Japanese minister of international trade and industry indicating a value of 60 cents apiece. There is a vast difference between the figure we are apparently using and the figure representing the actual cost in Japan. We apparently use the figure of 31 cents and the actual cost in Japan is something like 60 cents. I also have a figure here supplied by the electronics industry of Canada whose representatives spent four or five months in Japan going into the matter and who came up with a figure of 60.3 cents. Therefore the minister can see that this is a matter which should receive serious consideration.
Perhaps someone may say, what does it prove if the figures are different? I would point out that we are going through a period when foreign trade is most competitive and we hear continually that Japan is buying much more from Canada than we buy from that country. If these figures are correct and we are completely out of line with respect to our valuation of goods that we purchase from Japan, then it may be that on the basis of using correct figures we are buying more from Japan than that country is buying from us.
Another matter I should like to bring to the attention of the minister concerns goods shipped in bulk from Japan to the United States where they are boxed for merchandising and then transshipped into Canada. I have followed this matter through with the Department of National Revenue and I find that even though the goods are manufactured in Japan and transshipped from the United States into Canada they enter Canada as exports from the United States, not exports from Japan. Therefore, this is another instance where the figures we apparently use are completely out of line.
The thought behind my remarks at this time is that in our negotiations with Japan we are negotiating on the basis of figures that do not do justice to this country. If the valuation of imports from Japan was brought up to where it should be the Department of Trade and Commerce would be in a much better bargaining position because it seems to be a fact today that in order to sell more of our wheat we have to purchase more goods. If these figures were Corrected I believe it would put the minister in a much better position


when he sits down at the bargaining table to negotiate with the Japanese government.
Now that a Canadian team has gone to Europe to take part in the GATT negotiations I should like to point out to the minister that this is a very important matter to the riding I represent because we have a large number of secondary industries which are suffering considerably at the present time. When these negotiations are being conducted I hope the interests of our secondary industries will be taken into consideration most seriously because there is no use closing our eyes to the facts. We have seen the textile industry almost disappear. The small tool and hardware industry is also going by the boards and unless something is done at this time I think conditions will gradually get worse.
I agree with what some hon. members have said in connection with the GATT agreements. I sent to the United States and got the books that were mentioned as costing something like 30 cents each. To me they all prove that the United States is going into the GATT agreements on a much better footing than we are because in our case it seems that the whole matter of negotiation is left to civil servants. It would seem that it is going to be a matter of taking a little bit off here and a little bit off there and our manufacturers do not know what is going to happen. They do not know whether they are going to lose or whether they are going to gain. I hope the Minister of Trade and Comerce will take that into consideration and try to bring about a better deal under GATT than we have had in the past.
(Translation):


Mr. Bourque:: Mr. Chairman, I had no intention of taking part in this debate, but seeing the unfair competition to which the graphic arts industries are now subjected by some foreign countries, I felt it my duty to call the attention of the Minister of Trade and Commerce (Mr. Churchill) to the causes of the present difficulties of the graphic arts industries in Canada.
(Text) :
At the present time the Canadian graphic arts industries are going through a great period of depression. They are facing the greatest competition imaginable from foreign countries. On June 21, 1960 the Minister of Trade and Commerce received a letter from the graphic arts industries association which called his attention to a circular letter issued in Washington informing the United States printing and publishing industry of that country's intention to seek tariff concessions from other countries, including Canada. On June 8, 1960 Mr. David Maclellan, general manager of E.P.A. and of the graphic arts industries

association, a national body embracing all employing printers' organizations from coast to coast, gave an address to the employing printers' association of Montreal entitled "Printing-Canada's Biggest Employer in Manufacturing".
The Canadian graphic arts industries association is a national body embracing all employing printers' organizations from coast to coast, and I have taken most of my information from this brief and from this address. Our small population supports the greatest volume of imported printing of any country in the world. Sixty per cent of United States printing imports are absorbed by Canada and only 5 per cent of our printing exports are absorbed by the United States. We absorb 60 per cent of printing exports manufactured by 170 million people and they only absorb 5 per cent of printed material manufactured by 17 million people. A fair illustration of this unfair and unjust trade imbalance in cash and in bulk is the comparison that for every rabbit we ship to the United States we have to purchase 12 elephants. This may seem like an exaggerated comparison, but I firmly believe that that is what is taking place.
On the United States side the lithographers and printers national association reports that they are regularly watching the import quotas on lithographic and printed products from Canada and other countries. I believe it is the intention of the United States authorities to seek further tariff concessions on the following printing products: dictionaries and encyclopaedias; catalogues, pamphlets and booklets, geographic maps and charts, including atlases, newspapers, advertising matter, playing cards and playing card sheets, bank notes, bonds, cheques, pictures and tickets.
At the present time the Canadian printing industry is subjected to more foreign competition, largely from the United States, than it can comfortably support and this volume is growing rapidly as the department's statistics will show. This practically uncontrolled flow of printed matter from foreign countries, and principally from the United States as I have said previously, is having a serious effect on the employment situation in Canada. It is the cause of much unemployment. Our small population supports the greatest volume of imported printing of any country in the world. Our newsstands, bookstores and postal channels are flooded with foreign printed matter on an unprecedented scale.
Does the minister know that Japan, with printing costs almost half those in the United States and Canada, is preparing to invade the Canadian market and this at a time when
Supply-Trade and Commerce our newsstands, bookstores and postal channels are flooded with printed matter on an unprecedented scale, as I have said previously. The printing industry is the largest employer among manufacturing industries in Canada. This department should be most particularly concerned with the preservation and development of business and industry. It should be interested in the employment situation in Canada. I have here a few excerpts and figures from an address by Mr. David Maclellan, before a printing group on June 8, 1960, one of which is as follows:
The printing industry now spends about $400 million in wages and salaries, about $500 million a year on materials and outside services, as well as something like $65 million a year on machinery, equipment, building construction and repairs, etc.
If a magician removed all the printing from labels and packages in our grocery stores, the food industry and our women too would be at a total loss. A naked package tells you nothing and offers no temptations.
I believe the minister should give serious consideration to the fate of the graphic arts industry in Canada, an industry that is responsible for an expenditure of approximately $1 billion a year and on which depends the livelihood, directly or indirectly, of approximately one million persons. The graphic arts industry, if it is to be correctly understood and appreciated in the nation's economy, can only be accurately described as the first and most indispensable manufacturing industry in Canada. It is a most competitive industry. This may be unfortunate in some ways, but it is a great thing for the country. The graphic arts are first among Canadian manufacturing industries in employment and fourth in dollar value of production. The graphic arts industry employs more creative people and more skilled craftsmen than any other Canadian industry; pays the highest wages of any non-seasonal manufacturing industry and provides the most favourable working conditions.
I should like to talk about the 20 per cent tax placed on United States magazines by the previous government and removed by this government. I know I would be out of order in doing so, so I will not insist. However, I believe I can say that as a result of undue competition from United States publications four national Canadian periodicals were forced out of business in the last 10 years. Dozens of others have had to reduce their frequency of publication or otherwise curtail their usefulness. In 1951 Canadian national periodicals had attained a total combined circulation of 42 million copies per year, while the circulation of United States periodicals was more than 86 million. In 1957 the circulation of Canadian magazines had reached 45.6 million and the circulation of United States magazines in Canada 154

Supply-Trade and Commerce million. I do not know how the circulation figures compare in 1960, now that the tax on United States magazines has been repealed. For the first quarter of 1960 I believe more than 43 per cent of all dollars spent on advertising in Canadian magazines was being spent in two United States magazines. It is a most unfair competition, and I am wondering how the unemployed feel about this favouritism which in a large measure is the cause of a good part of the unemployment situation in Canada.


Mr. Rapp:: Mr. Chairman, I welcome this opportunity to say a few words on the estimates of the Department of Trade and Commerce. Very good speeches have been delivered on this subject. I was particularly interested in the speech delivered by the hon. member for Jasper-Edson. Although he is by profession a doctor of medicine, he has a tremendous knowledge of the agricultural industry; particularly on the subject of rape-seed, which he so eloquently described in his speech. It is not my intention to be repetitious and cover the same ground regarding the question of rapeseed. But I would like to add some information to that which has been put on the record, information which has not yet been given.
The western rapeseed producer has done a tremendous job. As one example, this year he has taken one million acres out of the production of wheat and has planted it with rapeseed. These one million acres of rapeseed made a saving to this country, because the Department of Trade and Commerce does not need to worry about how it is going to sell 35 million bushels of wheat; also the treasury does not need to pay storage charges on 35 million bushels which amount to somewhere between 10 and 16 cents per bushel, depending on the year and the amount of grain in storage.
However, there is one thing about this grain that causes great concern to the western rapeseed producer, and that is the freight charge. You are all aware that at the present time, due to the fact that it does not come under the statutory Crowsnest pass freight rate, the producer has to pay 80 cents per hundredweight on rapeseed, while for other grain like wheat, oats, rye and flax the statutory rate is approximately 23J cents per hundredweight. This all came about under the previous government. During their tenure of office they increased the freight rate by something like 150 per cent. Although it may be said that nothing has been done at the present time, let me put this on the record.
Had we followed the same policy that was adopted by the previous government when it allowed freight charges to go up we would


not be paying only 80 cents today for rape-seed, we would be paying $1.20 per hundredweight for it. However, the Canadian producer must pay approximately $5 per acre more in freight charges than if he planted and produced wheat, oats or barley. We produce approximately 1,000 pounds per acre, and since a farmer's average crop is approximately 100 acres, at that rate of $5 per acre he is forced to subsidize the Canadian railroads to the extent of approximately $500 a year. This amounts to approximately $5 million, and I would like to stress this point very much; that the Canadian railroads are filling their coffers with these $5 million per year at the expense of the western rapeseed producers.
But that is not the only thing that is of great concern to us. We hear so much lately about the Russian deal that was made, and how we would be able to sell $2 worth of wheat for every dollar's worth that Russia would buy. But if we had a chance to sell our rapeseed crop every year at a reasonable price we would be able to take out, not only one million acres a year, we would be able to plant about two million or three million acres of rapeseed.
The information that I have is that there is a market available in the world for rape-seed, and this year the prospects are that we will be able to sell at least two thirds of our rapeseed production. Of course we do not know what price we will be getting. However, we expect that it is not going to be down to the same price that we received in 1958. Consequently, the production of this valuable grain went down approximately 200,000 acres a year.
It was mentioned that the export potential of this grain is very promising. But there is another thing that we must be concerned with, and that is supplying the local market with edible oilseeds. At the present time many of the oil-bearing seeds come in from the United States duty free. This came about when a few years ago Canada entered into an agreement with the United States under GATT to allow oil-bearing seeds to come into this country duty free. Of course, it must be said that at that time and perhaps even since then there was a shortage of edible oilseeds in this country But this agreement has outlived its usefulness and must be changed.
I understand there is going to be a delegation from Canada attending the conference of Geneva to take part in the revision of the GATT agreement. I would like to stress this point and bring it to the attention of the minister. I would ask the minister to make efforts to see that the GATT agreement with the United States is changed because, as I said, there are great possibilities for planting

rapeseed in this country; not only for the export market, but also for the local market.
In 1959 nine tenths of the oil that went into the production of products requiring edible oil was imported from the United States and only one tenth was oil obtained from Canadian seed. This has been brought to the attention of the minister through other departments, by myself and other members from the west and particularly, as I mentioned earlier in my speech, by the hon. member for Jasper-Edson. If serious and immediate attention were given to this matter I am sure that in the future the rapeseed producer in the west will do a very valuable job as far as reducing the wheat surplus is concerned and producing grain that has every chance in the world of being a cash product.


Mr. Carter:: Mr. Chairman, Canadians live by foreign trade. Since approximately one quarter of our jobs depend on foreign trade, it is obvious that trade policies must affect every Canadian. My own province of Newfoundland is perhaps more sensitive to trade policies than any other part of Canada, because we export everything that we produce, while everything that we consume has to be brought into the province from outside. Our trading position in the foreign markets is a matter of concern to all of us. We seem to have got ourselves into a position where we are damned if we do, and we are damned if we don't.
Less protection than we have now will affect local manufacturers and, they claim, will increase and aggravate our unemployment problem, which is already a very serious one. On the other hand, more protection will affect our exporters and make it difficult for them to export and will raise the possibility of retaliation in our traditional markets. That too will cause unemployment. So there seems to be no way of avoiding unemployment in either of these courses.
I do not think there is much point in looking for a scapegoat for this situation or in trying to fix the blame. Certainly to whatever extent the government has pursued unwise or wrong policies and to the extent that they have done things they should not have done or have left undone things which they ought to have done they must bear the blame. But it seems to me that a large part of the problem arises from the exercise by a free people of a free choice in their purchases both in the domestic and foreign markets. No government can interfere with the exercise of that free choice without taking sides either against the interests of the consumer or against the interests of the manufacturer.
So there is no easy solution to this problem. I think we must use common sense and be prepared to make painful decisions if they
Supply-Trade and Commerce are necessary. We should not shrink from our duty in that regard. I think we must somehow come to some decision as to what industries in our country are essential and either provide subsidies or find some means of allowing these industries to continue in existence. If other industries are less essential and not in the interests of the economy as a whole, I think we ought not to permit them to exist by increasing tariff protection. That will involve very painful decisions, but I think they are decisions we must face.
Besides this there are a number of avenues which might be explored and one very obvious avenue is to increase our population. I think we have been far too timid in our immigration policies and have lost sight of the fact that the more people we have in Canada the bigger will be our domestic market. And the domestic market is the best market for Canada because it is the only market we can control. When we consider that last year $4.25 billion worth of manufactured goods were brought into Canada we see how important this domestic market is. At the same time the fact that that huge sum of money was spent by Canadians on foreign goods should be a challenge to our manufacturers and one which they should meet without taking the line of least resistance and running to the government for protection whenever the going gets a bit rough.
A second avenue of approach would be to overhaul and improve our long term trading machinery. This involves long term credits and export insurance. There are many places where Canadian goods can compete in foreign markets, yet we lose out to other competitors who do not have a better price but who do have a better credit arrangement which is more suitable to the countries who need and purchase goods which we could otherwise supply.
Another place where I think we have fallen down very badly is in the matter of technical assistance. Here in Canada we have hardly developed enough technologists to supply our own needs, but Canada should be able to export technologists and be in a position to give technical aid and assistance to all these new countries which are coming into existence as well as to other countries which have a potential for becoming our customers. These countries I think we should help with foreign aid and technical assistance to the greatest possible extent.
One very obvious country to which this technical aid and assistance should be given is the British West Indies and the Caribbean countries which are right on our doorstep. Anything we can do to strengthen their economy will put them in a position to become a better market for Canada, and the

Supply-Trade and Commerce kind of friendly relationship we set up in doing that will stand us in good stead.
Nigeria is another country, a young country of 50 million people newly emerging and one of the countries of Africa which does have a stable government. We are losing out in Nigeria, I think, because Nigeria could become a consumer of Canadian flour. But our competitors in the United States have put up flour mills in Nigeria and they are using United States wheat to supply that market. Certainly Canada could have done and should have done the same thing long ago.
Brazil, Spain, and Portugal are three countries of special interest to my province because when Newfoundland was an independent country paddling her own canoe and looking after her own affairs these three countries were our traditional markets. We imported from them salt, oranges, wines and a number of other goods which we do not get now, and they were products of a much superior quality than those we get from our neighbour to the south.
Spain and Portugal are important to Newfoundland because they fish in our waters and produce fish which compete with us. But we are unable to compete with them because the subsidies which they get from their governments together with their low standards of living put them in the position where they can come all the way across the Atlantic and produce fish more cheaply than we can when this fish is right on our own doorstep. These people in Spain and Portugal are not satisfied with their standards of living. They want a better standard of living the same as we do, and I think Canada should make inquiries to see what we can do to help them achieve that. Certainly when their standards of living go up it will put us in a better competitive position with regard to our fish. Therefore let us get together with these countries and find out what technical aid and assistance we can give them and find out what other things we might do to help them strengthen their economy.
Spain and Italy have always been prime markets for salt cod, and to meet that market we have developed special cures of fish called the Spanish cure and the Italian cure. While exports of that quality of fish went up by 8 per cent last year, they are declining now and we are gravely concerned in Newfoundland as to what effect the common market tariffs will have upon our fish exports to those countries. We are all glad that these tariff averages have been deferred until January 1 but the time is going to come when we will have to face that problem, and we do hope


that the minister and his department will do everything possible to see that our fish will not be prohibited from entering that market.
While the Spanish and Italian cured fish exports have come down, the West Indies cured fish exports have gone up. That could result, if we had a normal catch, in a flooding of that particular market with a corresponding reduction in price. I would ask the minister again to consider the placing of a premium on Spanish and Italian grade fish to ensure an increase in the production of that particular variety which is a special kind of light salted fish as compared with the heavy salted fish which is sold the West Indies. It is more profitable today for fishermen to salt their fish heavily because the more salt they use the more rebate they receive, and this offsets the extra trouble they must take to produce Spanish and Italian grades.
Before I sit down I want to say that we should do everything possible to maintain and increase our trade with Japan, not only because this is an important market for Canadian wheat and other products but also because Japan is the one bastion of democracy in Asia, and if that bastion were to disappear, Asia would likely disappear with it. If China-the manpower of China-could be combined with the industrial potential of Japan a most serious position would arise, and that is one of the main objectives of communist strategy in Asia.


Mr. Browne (St. John's West):: What about the Philippines and Formosa?


Chesley William Carter: The Philippines, certainly, but they do not have the same importance to communist strategy, because they are not the industrial nation that Japan is. Japan has to trade with somebody, either with the free world or with communist China. That is why the Kremlin is taking every possible means of trying to force Japan to trade with China and other communist countries. This is the worst thing that could happen for democracy, and we must bear this firmly in mind when we negotiate trade treaties with Japan.


Lester Bowles Pearson: Before this vote is carried 1 should like to say a few words because of the importance of this subject of our foreign trade and domestic policy in the contexl of the minister's statement last evening. Thai statement, as has been pointed out by a good many speakers, was a very optimistic and rosy one, much more optimistic than statements we have received from other sources on our economic situation. If one compares the minister's statement last evening with certain other observations, for instance, on the part of the governor of the Bank of

Canada, he might be pardoned for thinking that we were speaking of different worlds of different Canadas.
The discussion this afternoon has ranged far and wide over the whole area of foreign trade, and that is understandable because of the importance of this subject to our economy. It is true there have been some encouraging developments in the early part of this year in the foreign trade picture as far as Canada is concerned. Our exports have gone up, and our imports have gone up. However, the improvement that is obvious from the earlier figures received a set-back in June which we all hope is only a reflection of a temporary decrease in our trade but which does underline the vulnerability of that foreign trade to world conditions and which emphasizes some of the dangers that face us at the present time.
Our vulnerability is largely, perhaps, in relation to that country with respect to which our trade is most important, that is, the United States of America. The objective of the government to divert a huge proportion of our trade from the United States to the United Kingdom has not been realized, and we remain dependent to an excessive degree on our trade with our neighbour. If there was a pause in the economic development of that country-and there are some indications of that at the present time-this would reflect itself at once in our economic situation. There are trends and developments in the United States at the present time which must give us some cause for anxiety- efforts to put obstacles in the way of our exports into that country, especially in the field of base metals. We should not forget that while our sales of base metals have gone up generally, there is one commodity, uranium, which bids fair to be reduced to practically nothing in the next few years even though at the present time it represents exports valued at $300 million.
Then there is the competition which we are experiencing from the United States in the disposal of our agricultural products, competition which is becoming increasingly difficult as the United States adopts measures to subsidize her agricultural exports in world markets. The effect of this is seen when we realize that while world trade in wheat has gone up over the last year or so, our proportion of that trade has gone down.
Then there is another thing which is quite rightly causing concern with regard to our position in world markets and that is our increasing costs of production. The minister had something to say about this last night when he was talking about Canada's position in a multilateral trading system. Since the end of the second world war that has been
Supply-Trade and Commerce our objective, to bring about a multilateral trading system in the world in which our position would be strong. That has been the important objective to achieve. The minister, speaking about this subject last night, had this to say:
The advent of this multilateral system and the realization of the advantages which might reasonably be expected from it was for many years frustrated by the prevalence of foreign exchange difficulties in many parts of the world. More recently, with the improvement in the world economy and financial conditions, the import controls which had been maintained by many other countries against our goods have been rapidly disappearing. That, of course, is something which we all welcome. As a result, Canadian exporters are for the first time since the war in a position to compete on equal terms in most markets with other most favoured nation suppliers.
In one sense that is no doubt true. They are in a position to compete on equal terms in the sense that the special obstacles in the way of their imports into these countries have been removed. Whether or not they will be in a position to compete on equal terms in other respects will depend on how we can maintain our competitive position in those markets by keeping our own cost of production down.
In any event, as the minister pointed out, the multilateral principle remains the basis of our world trading policy but that principle is under pressure these days. Some of those pressures are pretty obvious. That is one reason why the current and prospective GATT discussions at Geneva are going to be so very important at this time. The pressures I talked about on the multilateral trading system may come-indeed they have already come-from the development of these regional groupings concerning which more than one speaker in this debate has spoken; regional groupings and regional developments for trading purposes not only in Europe but in the western hemisphere.
The Paris meeting of a couple of weeks ago which was attended by my hon. friend the Minister of Finance was important in this connection because it represented another attempt-and I know the government has been continuing this effort over many months- to bring about a reconciliation of these European developments which are so important politically and economically and the multilateral principle which remains the basis of our world trading policy. We should support a move to bring about a reconciliation of that development with the interests of our own multilateral policy by assuring two things, that there will be an association of the United States and Canada with European developments and by doing our best to ensure that these developments will be on a general expansionist rather than restrictionist basis.

Supply-Trade and Commerce It was pointed out by my friend the hon. member for Ottawa West that the United States has taken a more active part in recent months in the effort to associate North America-the United States and Canada- with these developments. We can only hope that this new organization developing out of O.E.E.C. and on a broader basis than O.E.E.C. will do something in both the directions I mentioned, in making an Atlantic area rather than a European area the trading basis and in ensuring that if that is not done the European developments will not hurt our own exports any more than is absolutely necessary.
It is quite true that there are great difficulties in the way of the two European groupings coming together, the common market and the European free trade area but I know the government will have more information about this than is at my disposal. Some of these difficulties in recent weeks have begun to disappear and some progress has been made in the direction of the entry into the common market of the nations of the free trade area.
I studied, as no doubt the minister did, the debate in the British house of commons the other day on this subject. It seems to me that that debate while it did emphasize the difficulties in the way of British association with the common market, especially those difficulties which were derived from her commonwealth position, nevertheless there was a general feeling among members of all parties during the debate that those difficulties were now not so great that they could not be overcome.
There is an article on this subject in the July 30 issue of The Economist which perhaps members of the government concerned with these matters may have read. It underlines the feeling I got from reading the debate myself. Perhaps I may be permitted to quote one or two sentences from the article which is entitled "Honest Doubt". The article quotes Mr. Denis Healey, a leading member of the labour party, as saying toward the end of the debate:
-there is no longer anybody in this house who believes it inconceivable that we should join the common market.
The editorial went on to say:
The case for joining the six-
That is, the common market:
-was strong-and some of the objections of two or three years ago "are less strong now than they seemed then."
That was referring to the remarks of Mr. Harold Wilson. Mr. Selwyn Lloyd who is now the chancellor of the exchequer in winding up this debate for the government, while 

he trotted out all the traditional and conventional arguments against association, according to The Economist said:
-when these phrases were added up they amount to a refusal to be rushed, not much more.
The editorial went on to say, and this I think sums up the present position, that in a matter of such great importance to the United Kingdom only the government could take the decision to move. In the words of the editorial:
Only the government can take the decision to move, and though it is edging closer it has still not been able to make up its mind. The commons did, however, make clear enough that, if and when the government does take the plunge, it will have no difficulty in carrying the house with it.
That is a very important conclusion to be reached by a magazine of such importance as The Economist based on a debate of this kind in the British house of commons. Therefore it becomes of the very greatest possible importance for the government to continue in the efforts it is making to ensure that if this development occurs it is not at our expense. When I say that I do not think that that need necessarily happen because while this European association-the two regional groupings that might get together-would of course mean an adjustment in our trade policies it might be the bind of adjustment by which we would gain freer access into a large trading area, indeed more than we would lose by our preferential position inside the United Kingdom. In any event I know that is the attitude the government has taken in the past. The situation was referred to last night by the minister when he said with respect to these European groupings:
These groupings can develop in ways which will promise larger markets for Canadian goods-
That is the optimistic side of the question:
-or, if they take a restrictive turn, our interests could be prejudiced. Our efforts are being directed to ensuring, so far as possible, that outward looking policies will be pursued which will allow us to continue the mutually advantageous trade relationships which have been developed up to this time.
We on this side wish the government well in any efforts it can take to ensure that this development takes place in Europe in that way, I repeat, however, what I have said so often in this chamber, that this European development will not be enough unless it eventually leads to something wider and deeper both politically and economically and that is the development of an Atlantic freer trade area.
Perhaps in this connection I might put on the record some very wise words of a man who was prime minister of Belgium not so many years ago and who was a great figure in European economic and trade matters. I

refer to Mr. Paul Van Zealand and the words he used when reporting on the Atlantic congress in London. He said this:
These were some of the conclusions of the Atlantic congress. As you notice, every one of these observations leads to the same conclusion: that, in order to meet the actual requirements of the western world, the western world must solve its internal differences, use its imagination and form that economic Atlantic community which, to my mind, is the solution of our problems. It is the solution which will enable Europe at least to eliminate the differences between the common market and the free trade zone. It is the solution which will allow us to help the underdeveloped countries to help themselves, and finally, to achieve a better standard of living.
So much for the foreign trade situation, Mr. Chairman, and I know it has been a very cursory survey. The minister also had something to say about our domestic economic conditions, and he was again very rosy and optimistic on that subject. He said, as found on page 7671 of Hansard:
During the past year economic activity in Canada has moved upward in line with expansionary conditions in the world at large. Canada's gross national product is running appreciably above the level of a year ago.
I doubt very much whether the figures, trends and indices of the last month or two would justify that optimistic conclusion. Applying this expansionary trend to the employment situation, the minister had this to say:
Total employment in June and in the first six months of the current year was approximately 2 per cent above the corresponding period of 1959.
That, of course, is factually true but actually most misleading in terms of reflecting the situation that we face because, as we know and as has been put on the record so many times, while our employment has gone up-of course it has gone up; our population is going up-the fact is that over the period about which the minister is talking the number of new jobs created in this country did not equal the number of people coming into the labour force. It does not matter if we have an employment picture which shows a 2 per cent increase over the corresponding period of 1959 if we have a labour force which represents a greater increase than that over the same period because unless the one is above the other we are going to have unemployment. Therefore that particular statistic does not give me nearly as much comfort as it apparently gives to the minister.
The minister went on to give some other indications of what he considered to be these expansionist tendencies in our economy. As I read these in Hansard this morning I also read the monthly business analysis of Beckett Associates issued in August, 1960 and covering July of this year. These are reputable
Supply-Trade and Commerce economic analysts. They have no particular axe to grind. They certainly have no political prejudices in this matter and I should think no economic prejudices. I should like to quote one or two paragraphs from their analysis covering July which give a rather different picture of the situation than that which was given last night by the minister. One paragraph reads as follows:
The decline in the preliminary July figure for industrial common stock prices indicated the sharpest month-to-month drop of the current cycle. The continuing decline in this indicator has now erased all the gains of the past two years. The stock market holds out little prospect for a fall revival in general business.
While I would not wish to base my conclusions on the stock market exclusively, it is one indicator and there are a good many others. I might mention one or two others referred to in this report. Here is another paragraph:
The central measures of Canadian business activity also remained on the downside in the most recent months. May showed three rising, four falling and two unchanged. The scope of contraction is estimated to have remained the same in July.
Here is another paragraph which has a very direct bearing on what the minister said last night about the increase in the gross national product:
Available monthly data for the second quarter indicate the possibility of a decline of gross national product, with the weakness being widespread by sector but modest in magnitude.
Then, the conclusion of the report reads as follows:
As the summer wears on, with below normal temperatures and below normal levels of business activity, the prospects for an early end to the contraction grow dimmer. Significant recoveries among the leading indicators which are, so far, conspicuous by their absence, must appear if Canadian business is not to end the year on a continuing down swing.
I mention these matters because both in the foreign trade field and in our domestic economic picture it is well to have the whole picture and to put it in perspective. I admit, as the minister said last night, that there have been some very encouraging developments in the foreign trade picture, though not in the last months for which we have the figures. I admit that there are elements of great strength in our domestic economy but anyone who studies the picture at this time, who studies the evidence, who studies the trends, must also admit that there are some very dangerous developments in connection with our economy and that all is not rosy in this economic garden.
We hope that the minister's optimistic predictions will be fulfilled. On the basis of the information we have in addition to that which the minister gave, we are worried that it may not be nearly as easy and comfortable
7712	HOUSE OF
Supply-Trade and Commerce a picture as he would have us believe it is from his own statement last night. There are many other matters of detail which we will be discussing when we come to the other items but this seems to be all I need to say now on the general situation.


Gordon Minto Churchill: Mr. Chairman, I have
listened with a great deal of interest to those who have participated in the debate so far, and I gather that there is general agreement that conditions are reasonably good within the country and that our trade and commerce position is satisfactory. I did not sense any severe criticism of anything that is going on at the present time. However, the Leader of the Opposition was disturbed and disappointed because I was not gloomy, depressed and forlorn with regard to present conditions. He rejoices in words like "decrease", "decline" and "recession", looks around the corner with foreboding and is fearful of what may happen next month. Perhaps next year he will have some fear. These things bother him.


Lester Bowles Pearson: Nothing bothers me.


Gordon Minto Churchill: He wants people to be gloomy about the future. I have said nothing in the remarks I have made concerning Canada's foreign trade position or her internal economy that could be described as unusually optimistic or rosy and so on. It was in very restrained prose that I put forward the picture last night, and I am glad to hear from the Leader of the Opposition that he found time to read my speech this morning since he was not present to hear it.
The situation with regard to our foreign trade is good and is based, as I showed, on the statistics, not on any uncertain forecast.
I put before the house the trade statistics and when we are living in a period when our foreign trade is on the increase and when 1960 will likely set a new record over 1959, why then spread gloom or be depressed? I do not see how it is possible for any minister of trade and commerce at any time in Canada's history to adopt an attitude of gloom. The whole nature of the Department of Trade and Commerce is forward looking. It is a department that is based on the growth and expansion of Canada and it takes a worldwide outlook. Consequently, it would be nothing less than stupid for a person representing the Department of Trade and Commerce constantly to be spreading fear about the future when the facts indicate that things are really going well for Canada and going well because we have the resources, the industrial establishments and a vigorous population in this country to continue the development of Canada.


Paul Joseph James Martin: The governor of the Bank of Canada does not think so.


Gordon Minto Churchill: A great many countries in the world look to this country with a great deal of admiration and some envy because of the fortunate position we occupy based on our location and resources. Therefore, I make no excuses whatever, and hon. members opposite are at liberty to pretend that I am being unusually optimistic. We have good grounds for confidence in Canada and in Canada's future. All the reports that have attempted to look into the future, five years, 10 or 20 years ahead, paint a picture of a developing Canada with great prospects for her people. It is on that basis that the Department of Trade and Commerce carries on its work.
The Leader of the Opposition expressed his usual fears, his usual anxiety, but had little upon which to base it. He talked about the vulnerability of our foreign trade. Of course, foreign trade is vulnerable if the international situation changes, as it can. He is worried about our dependency on our next door neighbour, the United States. This has bothered Canadians, generation after generation. We have been successful over the last three years in reducing that dependency. I gave the figures last night to indicate that in the last three years imports from that country have declined from 74 per cent of our total imports to 67 per cent at the present moment. The Leader of the Opposition talked about world trade in wheat having gone up and our proportion of it having gone down. This is a misconception with which I dealt in March when we had a rather lengthy discussion on the subject of wheat. It is a misconception which I think is in the mind of the hon. member for Swift Current-Maple Creek. 1 will give you the facts and figures dealing with commercial exports.


Lester Bowles Pearson: Let us deal with all exports.


Gordon Minto Churchill: Commercial exports are the wheat sold for cash. During the inter-war years from 1920 to 1939 Canada's percentage of the world trade in commercial wheat exports was 30.2 per cent and rose in 1958 to 35.7 per cent.


Lester Bowles Pearson: What about total exports?


Gordon Minto Churchill: There has been no decrease with regard to Canada's share of the world market in wheat, the total world wheat trade.


George James McIlraith: Will my hon. friend permit a question?


Gordon Minto Churchill: I will just put this on the record and then the hon. member can ask the question. The total world wheat trade has grown from the inter-war years by 439

million bushels. This increase can be more than accounted for by concessional and political sales, primarily by the United States and Russia. The world commercial export markets for wheat have shown a slight decrease during the same period. Canadian commercial markets have increased from 30.2 per cent to at least 35.7 per cent of the total commercial world exports from the interwar years to 1958. This indicates that Canada continues to be a world leader in wheat sold for cash. Does the hon. member have a question now?


George James McIlraith: I wanted to ask the minister if he had the figures for the total exports of wheat.


Gordon Minto Churchill: The total exports of wheat?


George James McIlraith: Yes, the minister gave them to us as they pertained to commercial sales of wheat, and I wondered if he had them for total sales.


Gordon Minto Churchill: I was pointing out that the figures that are quoted in connection with world trade very frequently indicate commercial sales plus government programs for gifts or subsidies. In so far as the United States is concerned, although in this last crop year their trade in wheat was much larger than ours, over 70 per cent of it was in the nature of gifts,-


Lester Bowles Pearson: That is still competition.


Gordon Minto Churchill: -whereas our trade in wheat has been chiefly for cash.


George James McIlraith: I was not arguing that point. I was wondering if the minister had comparative figures available because it seems to me that United States disposal of wheat, plus their sales through usual commercial channels, presents something in the nature of a problem for us. If the minister had these figures available to put alongside the ones he has given it would perhaps help us to appreciate that problem and take the appropriate steps that may have to be taken over the years to help to meet it.


Gordon Minto Churchill: Those figures will be produced in a few minutes by the officials. The Leader of the Opposition, I think, suggested that there was a problem, as did the hon. member for Ottawa West, in the competition we were facing as a result of the United States agricultural disposal program. It is only if these agricultural exports that are given away or given under a subsidized program interfere with the markets that Canada has occupied in the past or might have some thought of occupying in the future that there is any difficulty. At the present time there is very little interference from United
Supply-Trade and Commerce States disposal operations in wheat with Canada's commercial markets. In fact, when we discovered a few years ago that they were interfering with our markets in Europe with barter proposals we asked them to withdraw those proposals and they did. They have not resumed them. Their very large gifts of wheat to India and the other countries of Asia, which are not normal commercial markets for Canada, have not interfered with our exports of wheat.
While I am on the wheat problem, I might just indicate what has happened during the last three years. Our exports of wheat during the last three crop years have run as follows: 320.3 million bushels in 1957-58; 249.1 million bushels in 1958-59; and the estimate for 1959-60 is 276.7 million bushels, making an average of the last three years of 297 million bushels compared with the average of the preceding years of 276 million bushels; the 10-year average, that is 1948-49 to 1957-58, 284.4 million bushels and the 30-year average was 252.6 million bushels. During the last three years, therefore, we have made substantial gains in the sales of wheat abroad, despite the competition that has come from other countries. This is a clear indication that the policy of the government, carried out by the wheat board and supported by those who are in the commercial grain trade has been successful. Our exports of wheat over the last three years have increased and make a better showing than the preceding period.
The hon. member for Ottawa West and the hon. member for Port Arthur followed somewhat the same line as that followed by the Leader of the Opposition in attempting to convey the idea that I was being unusually optimistic with regard to our trade picture. I have dealt with that, I hope, to their satisfaction.
There was some discussion of the question of the GATT conference coming up this September, and the suggestion on the part of the hon. member for Ottawa West and the hon. member for Port Arthur that the government was inactive in connection with this matter, while the United States was being much more active. It is the old, old story of suggesting that Canada is not playing its part and that some other country is doing something that is much more impressive. That is not the case at all. There has been just the same activity in Canada on the part of the government, the same interest on the part of business in Canada, as has been shown in the United States. But it has not received the same amount of publicity.
Canadian businessmen have had every opportunity to present their views to the Minister of Finance, the Minister of National
7714	HOUSE OF
Supply-Trade and Commerce Revenue, the Minister of Trade and Commerce and to officials with regard to the changes that they would hope to see made, the concessions that they hoped Canada would be able to get in the tariff conferences that are coming up. Those suggestions have been given very careful attention.
There is precisely the same type of activity going on in this country as in the United States. We are quite prepared to be as active at the GATT conference as any other country. One of the most experienced civil servants in Canada is heading up our delegation to that conference, and with his wealth of experience I am sure that Canadian interests will be adequately protected.
I was not quite sure whether the member for Ottawa West was suggesting that representatives of business should have an offiicial position-


George James McIlraith: No.


Gordon Minto Churchill: -on the Canadian delegation to Geneva.


George James McIlraith: No, I was not suggesting that.


Gordon Minto Churchill: They will have the opportunity of making representations and perhaps being there as observers.


George James McIlraith: Mr. Chairman, perhaps before the minister leaves that point I could ask him this question. That was the very thing I wanted to find out; what arrangements had been made by the government in that respect; what arrangements, if any, had been made for the government team to receive representations in the various cities of Canada, and that sort of thing.


Gordon Minto Churchill: The information given to us just the other day by Hector McKinnon was that he has received scores of delegations and representations from businessmen right across the country.
Then at the same time during the course of the negotiations-which will be prolonged, as the hon. member for Ottawa West knows, and will extend over several months-there will be opportunities for Canadian businessmen to make further representations.


Mr. Benidickson:: Mr. Chairman, on this point I would like permission to ask the minister another question. He will recall the debate during this session about the disclosure of a big trading nation, the United States, as to the items upon which they would propose to negotiate with the fellow partners in Canada at a fall conference.
I wonder, in view of the remarks of the hon. member for Ottawa West this afternoon, whether the minister would explain Canada's policy which seems to refrain from indicating


to the industries of this country and to our trading partners in advance our possible levels of trading negotiation that we have in mind prior to the actual assembling of the conference.


Gordon Minto Churchill: Mr. Chairman, I am not sure that the hon. member's statement can be answered completely, or whether he is being quite realistic about the situation. A preliminary list of matters that the United States government is going to take up-may propose to take up-at the conference at Geneva was published. It was a published document, available to the public anywhere. Business in the United States made its representations with regard to that. As was pointed out earlier this afternoon, a final list will be prepared secretly, by the United States and will form the basis for their negotiating team when they deal with the other countries at Geneva.
Canadian businessmen have full knowledge of Canada's position. They know what is the present tariff. They know what the concessions have been in the past at Geneva. They know what the tariff is with regard to other countries, our trading partners. There is nothing that is not available to Canadian business in Canada, from the standpoint of information pertaining to these matters. On the basis of that they have made their representations to us.
The question was raised by some hon. members as to what concessions could Canada get; what had Canada to bargain with at the conference table at Geneva. All that information is in the hands of our efficient team that will be in attendance at Geneva. The documents setting out the obligations of Canada and other countries under GATT are available. It is on that basis that these negotiations will be carried on.
The United States has, under authority, an opportunity to make certain reductions. In return the United States will be asking for certain concessions. Canada is in a somewhat similar position. It is a bargaining counter at which people give and expect to get something in return, and we have our protection under GATT with regard to the contractual relations that countries have entered into there. If changes are made in those arrangements, then something must be given in return; or a country that thinks it is being harmed will ask for something in return. This leads on to the other discussion concerning European region groupings and the possibility of the United Kingdom-


William Moore Benidickson: Mr. Chairman, before the minister comes to that point would he perhaps be a little clearer in defining the difference between the policy of the United States government, a member of GATT, and

the Canadian government, a member of GATT, in announcing in advance the commodities that it would prefer to have as important trading items at one of these major conferences.


Gordon Minto Churchill: I mentioned the fact that this was a preliminary list which they made public. They are not disclosing the final list. There is a difference between the two types of government in the United States and Canada. Under their law they make their start in the way they have done. That is not the custom in Canada. But at the same time, under our system the information is available for Canadian business and Canadian businessmen have been here interviewing ministers and interviewing the delegation that will be in attendance at Geneva. So there is just a difference that arises because of different laws and different types of government. But the objective is the same in the end.


William Moore Benidickson: Mr. Chairman, because of the importance of this September conference of GATT I thought perhaps the minister might want to let parliament know what was in the minds of the Canadian delegation as major items of perhaps substantial change, such as has been indicated publicly by the United States government.


Gordon Minto Churchill: We are going to the table to negotiate, and you do not disclose everything you are going to do to the people who are also going to sit at that table with you. Nor has the United States disclosed these things. They have put out feelers as to what they might like to happen and have suggested this and suggested that. But that is quite different from what will occur when they finally end up at the conference table in Geneva and start to bargain with other countries that will be represented there.


William Moore Benidickson: I appreciate the minister's comment but on the other hand we have all had experience with the fact that we have references to the tariff board. In connection with some of the items in the tariff schedule they are inevitably tied up with GATT agreements, so it is quite obvious that if our tariff board under our processes has recommendations to make, some of these items in the tariff schedule are going to be of important concern to Canada at this unusually important GATT conference.
Having regard to that I thought the Minister of Trade and Commerce might review some of the items about which there is a suggestion from the tariff board that we should have an upward or a downward reduction in our tariff arrangements which would 79951-0-487
Supply-Trade and Commerce be prominent in our presentation of negotiations at the GATT conference this fall.


Gordon Minto Churchill: The hon. member for
Kenora-Rainy River is well versed in these matters and he will recall that in the course of the budget speech reference was made to some of the tariff matters on which negotiations might be carried on. He is also well aware that matters which are before the tariff board will not immediately be up for negotiation, and he has stated his knowledge of the contractual obligations which Canada and other countries associated with Canada have under the GATT agreement. He is not surely expecting some announcement here with regard to a detailed list of subjects. This is in the hands of the negotiating team and will be left to them and to their discretion; and they have been very discreet in the past, because this is the delegation which was at the previous GATT conference dealing with tariff items.


George James McIlraith: Before we leave that point may I ask just one more question. The United States government published a list of the products on which it might consider offering tariff concessions for the purpose of obtaining from other countries tariff concessions to the benefit of United States export trade. It is clear that the list was merely a preliminary one and was designed to provide an opportunity for all persons in the United States interested to submit any information they might have on whether or not the United States government should offer concessions on individual products.
Now, my question is this. Did the Canadian government submit any such preliminary list to Canadian industry or did it otherwise publish any other list so that Canadian industry could after seeing that preliminary list make representations to the government as to what the industry thought the government should do?


Gordon Minto Churchill: The United States action was taken under their law because they are obliged to put out a preliminary list. We are not required so to do, but every opportunity was given to Canadian industry and they were so advised by letter and by advertisement to make representations to the government with regard to matters which concern them and which would be perhaps the subject of discussion at the tariff conferences. The hon. member for Ottawa West has been through this before, and was he not parliamentary secretary at the time the earlier negotiations were held? We are following exactly the same practice as in the past. There were no suggestions in those days that lists should be widely published and our law does not so require.

Supply-Trade and Commerce


George James McIlraith: There was pretty intensive preparation in those days and what I am worried about is to make sure that there has been sufficient intensive preparation. I have nothing but praise for the head of the government team who will be conducting the negotiations, but I am wondering whether or not the government has done enough by way of making preparations.


Gordon Minto Churchill: I will immediately allay the fears of the hon. member for Ottawa West. The most intensive preparation has been made for the conference, and it is just a few days ago that the Minister of Finance and myself discussed most of the problems with the negotiating team. We are quite satisfied that they go there fully prepared and that they have heard from all segments Canadian industry who are interested in the matter. The way is still open for others who may wish to make further representations, but the most intensive preparation has gone into the preparation for the conference.


Paul Joseph James Martin: May I ask a question in this connection. I appreciate fully, as the hon. member for Kenora-Rainy River does, that full disclosure of the specific commodity objects that the government has in mind would be unwise during this stage of negotiation. But the Minister of Agriculture during this session has on a number of occasions indicated with regard to certain agricultural imports that an opportunity would be seized by the government at the September meeting to permit freer action on the part of the government with regard to the importation of agricultural products, particularly those from the United States.
Is the minister in a position to indicate whether the Minister of Agriculture spoke out of turn, or what has the government in mind?


Gordon Minto Churchill: The Minister of Agriculture does not speak out of turn. It is a practice which is well known to the hon. member for Essex East. He speaks with knowledge and at the proper time, and if this question is of great importance to the hon. member for Essex East he will have an opportunity of asking the Minister of Agriculture that question on orders of the day when we next meet.


Paul Joseph James Martin: That is hardly a satisfactory answer. I must say I admire the minister in seeking to defend his colleague and the indiscretions of his colleague, if that is what they are, but I imagine that the conduct of the negotiations is under the Minister of Trade and Commerce. Am I right in that or is that one of the pre-emptive rights of the Minister of Finance who seeks to cover the whole ambit of government? I take it


the Minister of Trade and Commerce is sitting next to the Minister of Finance, and as I suspect the Minister of Agriculture would not have part in those negotiations, this is the moment when the Minister of Trade and Commerce should tell me whether the government proposes to be relieved of commitments now which in any way restrict action with regard to the importation of agricultural commodities from the United States which seem to compete with agricultural production in Canada.


Gordon Minto Churchill: Any of these matters which require negotiation will be taken up at the conference. This problem that the hon. member raises with regard to the Minister of Agriculture we will draw to his attention and see if he has any further representations to make. But I must point out to the hon. member for Essex East that the Minister of Agriculture is entirely discreet. He does not get carried away as does the hon. gentleman opposite.


Paul Joseph James Martin: This is an important matter. The Minister of Agriculture has said in this session on two occasions, that the government was going to take action at the September meeting which would enable it in turn to take action against the importation of agricultural products from the United States into Canada. The government is denied that opportunity now because of action taken by the previous administration.
The Minister of Trade and Commerce cannot be compelled to give an answer, but his refusal to give an answer in the particular context leaves one justified in drawing the conclusion that the Minister of Agriculture was talking out of turn.


John Cameron Pallett: Would the hon. member give the reference in Hansard?


Paul Joseph James Martin: I have not got them but if the whip had been in the house at the time, as he sometimes is not, he would know what I was talking about.


Gordon Minto Churchill: I would like to deal briefly with the remarks made by the hon. member for Port Arthur, but apparently he is not available at the moment so perhaps I should wait until he happens to return.
The hon. member for Swift Current-Maple Creek made quite an interesting contribution to the debate this afternoon based on a very careful study of conditions and of research work. I think he has placed before the committee some material which is of considerable importance. I think I have already dealt with some of the remarks the hon. member made concerning Canada's share of the world wheat market, and I shall not go further into

that question now. I shall have to suggest to my hon. friend that his criticisms of the activities of the officials of the wheat board would more properly be taken up with the members of the wheat board when they are here in attendance before the agriculture committee of the House of Commons, as they are each session. Officials present at those meetings have an opportunity to make replies and to defend their position. Here in the House of Commons the minister is responsible for the acts of officials, and I certainly accept full responsibility for the acts of the Canadian wheat board. I should like to tell my hon. friend that it is in those terms he should discuss problems here in the House of Commons: let the criticism be directed toward the responsible member of the government who then will deal with the matter.
The Canadian wheat board, as far as I am concerned has acted during the past three years in accordance with the policy of this government, which has been a policy of the expansion of our wheat sales in countries outside Canada, and I have given figures to indicate that success has attended that policy. The wheat board has been very active. I have accompanied members of the wheat board to Europe on three different occasions to confer with importers of Canadian wheat in the United Kingdom, in Belgium, in Holland, West Germany, Switzerland and the Scandinavian countries. The members of the wheat board have toured the Latin American countries, Japan and the Far East. In addition, during the last six months they have been in Africa.
They have been very active in attempting to extend the sale of Canadian wheat and to open up new markets. They appreciate the fact, as we do here, that it is essential to open up new markets for Canadian wheat in Africa if we are to maintain our export position. The hon. member for Burin-Burgeo, I think it was, said we should have been more active with regard to the sale of wheat flour in Nigeria. Well, that country has been visited. I have talked with officials of that country.
Members of the wheat board have visited Nigeria, and a concrete effort was made to establish a Canadian flour mill in that country. Other interests prevailed, but I would remind hon. members that this activity is not solely one which is the responsibility of the wheat board or of the Canadian government. Those who are actively engaged in the flour milling industry or in the purchase and sale of wheat must look afield now to establish further opportunities for the sale of Canadian wheat and flour abroad. The 79951-0-4871
Supply-Trade and Commerce wheat board has been doing what it can to promote such sales, but other segments of the industry must similarly be active. The wheat board as I see it has over the last three years been very active in promoting the sale of Canadian wheat flour. They may have made mistakes here and there, but who does not. I cannot at this moment here in the House of Commons do other than protect those who, because of their absence, cannot reply to criticisms which are made of them.
The constructive suggestions made by the hon. member for Swift Current-Maple Creek will be drawn to the attention of the Canadian wheat board and we shall see whether the changes he suggests can be introduced or if they are adequate to meet conditions. I do not wish to create the impression that I am rejecting the suggestions he has put forward, because they will be examined with the greatest of care. I think he was somewhat mistaken with regard to some alleged losses of sales in certain markets, and I think he is not correct in suggesting that Russia has been capturing new markets at our expense. There was a sale of wheat a year ago to the Netherlands at a time when we did not have sufficient quantities of No. 5 wheat, which was what the millers in the Netherlands required.
The hon. member mentioned France as a market for Canadian wheat. It is very rarely that France is a customer for our wheat. France has been an exporter of wheat for many years and when any wheat is bought we have to find out what kind of wheat is purchased. If it is soft wheat, then we do not supply it. We have sold durum wheat to France, and hope to do so again, but I question if it is accurate to say that Canada has lost out to any other country in such foreign markets as this. If that has happened it is probably because of the type of wheat which was desired by the purchasing country, or it may have been related to price.
We have no control over purchasers. If they should wish on some occasion to purchase wheat from some country other than Canada there is nothing we can do about it. There may be other factors involved, factors of which we have no knowledge; barter arrangements or something like that. I am not at all convinced that Canada has lost out in her normal markets overseas through any unusual competition or greater activity on the part of a country such as Russia. I think the members of the Canadian wheat board and of the grain trade have been very active in selling our wheat abroad and that they have done a very fine job for the western Canadian producer.

Supply-Trade and Commerce


William Moore Benidickson: Mr. Chairman, would the minister permit at this point an intervention which I think might be appropriate. On the question of markets, and particularly markets for flour, I wonder if the minister would expand upon the welcome comments he has just made with respect to the matter of our exports to the West Indies and would he relate his remarks to the representations that were made by the western Canada liaison committee this year with respect to competition having relation to subsidies on flour exports to the West Indies market which nave in the past always been very important to Canada?
In so far as our competition with the United States is concerned, would the minister give an up-to-date picture as to whether or not through the wheat board or otherwise we are keeping in keen competition with the pricing opportunities that are available to the West Indies from United States markets.
The minister knows that in my riding we have an important flour milling industry as we have throughout western Canada and in other places. One of the four or five points presented to the government when the wheat pools and others last met the cabinet was that the government and Canada as a whole might possibly be of assistance to the grain producer in meeting subsidy competition in so far as the supply of flour was concerned, particularly into the West Indies market.


Gordon Minto Churchill: Mr. Chairman, the question of our flour exports has been given very careful consideration. I have looked into this on many occasions during the past two or three /ears. I have discussed with the wheat board and representatives of the milling industry and others the problem of the competition suffered from the United States subsidization of their flour exports. That has been met in part by wheat board action in assisting the flour exporters in Canada. The situation at the present moment is that competition is still keen between Canadian flour exporters and United States exporters.


William Moore Benidickson: Are we holding our own?


Gordon Minto Churchill: The over-all picture indicates that we are holding our own but here and there we have suffered a rather serious decline. British Guiana is an example of a place where our flour exports have declined rather markedly but the over-all picture indicates that we are holding our own.
This has been the subject of consultation when we have had meetings with representatives from the United States. We have impressed upon them the importance to us of maintaining our flour markets in areas in which they are also active. It is only about a year and a half ago that representatives of

the Canadian wheat board and the flour milling industry were in the West Indies making a careful survey of the situation there.
I will consult with the wheat board again after this session is over with particular reference to the problem the hon. member has raised because it is just as important to us to maintain our exports of flour as it is to maintain our exports of wheat. In fact, as new countries are developing around the world they seem to become interested in establishing flour mills within their borders. This means a reduction in imports. We are watching that situation very closely and will make this a special point of investigation later this summer.


William Moore Benidickson: Will the minister agree that that was one of the four or five points of possible relief as a result of government intervention, mentioned when the western grain growers' representatives came before the cabinet? Was there not a price tag on that? Was it not a relatively small sum, $6 million, perhaps?


Gordon Minto Churchill: I cannot give the hon. member the figure. That type of assistance has been asked for previously. It may have appeared in the brief presented by the group mentioned but it certainly has been raised before and has been the subject of discussion.


John (Jack) McIntosh: Mr. Chairman, the minister has referred to cash sales of wheat. Is it the policy of Canada to make sales on a credit basis? If that is so, what is the reason why we cannot sell some of these countries our wheat on a credit basis? Is it because we cannot carry the load?


Gordon Minto Churchill: No, Mr. Chairman, we have made sales of wheat on credit. The chief example is Poland to whom we have sold substantial amounts of wheat on credit. Sales of wheat on credit were also made to Israel and India, but the general policy is to sell for cash.
This matter has been talked over on many occasions. We do not consider it advisable to sell wheat or flour on credit to countries that are normally commercial markets for wheat and flour. It is material that is consumed shortly after it is delivered. It is not machinery or something that has a long life ahead of it. Consequently, we have not gone beyond the examples I have given of selling wheat on credit terms nor have we gone as the United States has into the field of accepting foreign currency for wheat which is the same thing as selling it on credit. That is a field we have not entered extensively at all.
We do not see the need for doing this. Two thirds of the wheat we export from

Supply-Trade and Commerce
Canada goes to the United Kingdom and the countries of western Europe and they are cash customers. Our second largest customer is Japan, also a cash customer. With those countries as customers there is no need to sell wheat on credit terms and consequently we have not entered that field and it is not our policy to do so.


William Moore Benidickson: On that point, would the minister indicate to the committee whether there have been any defaults on credit contracts? I believe that all these credit contracts have been arranged through the exports credit insurance corporation. Have there been any defaults? The minister mentioned Poland, India and Israel.


Gordon Minto Churchill: No, there have been no defaults.


William Moore Benidickson: What was the maximum term for any one contract?


Gordon Minto Churchill: Three years was the length.
Other hon. members have raised questions which I do not want to gloss over without giving them attention but if I have failed to answer any point perhaps hon. members would raise their questions when the relevant items are before us. At this stage I wish to thank hon. members for their contributions dealing with the general subjects that are open for discussion on the first item.


Lester Bowles Pearson: Mr. Chairman, perhaps the minister may not be disposed to thank me for my additional contribution but I propose to make it in any event because his rather peevish words at the beginning of his statement demand some reply by me and I should not like to disappoint the minister by not producing one.
The trouble with the minister is that he gives us his picture of the economic and trade conditions from carefully selected statistics and when we put forward some other facts and other suggestions which bring the picture into a better focus as we see it the minister then accuses us, and he has done it so many times, of relishing the gloom we are trying to create and all that kind of tawdry talk. If we put forward observations which attempt to correct the false impression, as we see it, created by the minister, we are doing in this house what other people are doing in the country, the governor of the Bank of Canada and other bank presidents, economic analysts, and I have quoted one this afternoon, and businessmen. I do not suppose the minister would accuse them of revelling in gloom or selling the country short or having no faith in Canada.


Gordon Minto Churchill: Would the Leader of the Opposition permit a question?


Lester Bowles Pearson: Yes.


Gordon Minto Churchill: Will he put forward statistics indicating lower export trade or decreased sales or things of that nature? Let us have the other side of the picture about which he is talking.


Lester Bowles Pearson: I tried to give the other side of the picture in what I thought were very restrained terms, but they were not restrained enough to prevent the minister becoming annoyed. The June figures for export trade are down.


Gordon Minto Churchill: One month.


Lester Bowles Pearson: The minister has manipulated the statistics about wheat but I will put them on the record to show that they are creating anxiety. The hon. member for Swift Current-Maple Creek attempted to reflect that anxiety. When we do this the minister says we have no faith in Canada. The minister and some of his colleagues often fall into the habit of identifying Canada with the government. We have no faith in the government. We have great faith in Canada. The trouble with the minister is that we will not move a vote of thanks to him for his operations as cheer leader in the government. We propose to continue as I have done this afternoon, and as we will do on the estimates of the Minister of Finance, to give the picture as we see it and try to get it into balance.
Perhaps the minister might deal with at least one of the statements I made this afternoon. He said last night, and I apologize to the minister for not having had the pleasure of hearing his statement, that Canada's gross national product is running appreciably above the level of a year ago. I quoted from the monthly business analysis of Beckett Associates this paragraph:
Available monthly data for the second quarter indicate the possibility of a decline of gross national product-[DOT]
Who is right? The minister had a good deal to say about wheat. I talked about the proportionate decline of Canada's share of world wheat marketing. That was the expression I used, and the figures show that has in fact happened. I quote from a Canadian Press story based on official statistics because I have not the bureau's figures here. I think the minister will accept these figures. The story reads in part as follows:
Canadian shipments of wheat and wheat flour in terms of wheat declined to 235,900,000 bushels during the first ten months of the current crop year from 243,800,000 in the corresponding period last year. The Canadian share of the international market supplied by the four major exporting countries eased to 29 per cent from 32 a year ago.

Supply-Trade and Commerce
That is all I stated and that seems to be quite accurate. The minister tried to shift the argument by talking about commercial marketings.


Gordon Minto Churchill: That is what is important.


Lester Bowles Pearson: I was talking about all marketings. Whether marketings by the United States of America are commercial or non-commercial they compete with Canadian marketings in the markets of the world.


Mr. Harkness:: It is not marketing; it is a gift.


Lester Bowles Pearson: It is part of the world wheat trade whether it is given away or whether it is sold.


Douglas Scott Harkness: It is a gift.


Lester Bowles Pearson: The effect on the Canadian exporter and the Canadian farmer is exactly the same whether he is competing with wheat given away by the United States or whether he is competing with wheat sold by Argentina.


Douglas Scott Harkness: When you are talking about markets you should talk about markets, not gifts.


Lester Bowles Pearson: Therefore what I said was quite right. I want to ask the minister something else because without success we have tried to get some indication from his department and from the minister as minister of the department about the economic outlook. We tried to get it through seeking the tabling of the report, Canadian Economic Outlook, 1960. It would have been very interesting to have had that report tabled inasmuch as it was tabled in 1959 after having been surreptitiously used in 1958. So the hon. member for Bonavista-Twillingate asked this question on July 30, as found at page 7266 of Hansard:
In order to assist the committee of supply in considering the unemployment problem, will the Minister of Trade and Commerce table the Canadian Economic Outlook for I960?
The minister replied:
The hon. member for Bonavista-Twillingate is asking for the tabling of a confidential report, and last evening the hon. member for Essex East said that this was contrary to the usages of parliament. I think perhaps we shall not do it.
In other words, "I think perhaps we shall not table that report", said the minister. When the subject was brought up on Monday, August 1, by way of a motion to table the report, this report which the minister had said the day before could not be tabled because it was confidential, the minister said as found on page 7324 of Hansard:
Mr. Speaker, there is no such document for 1960.
In 24 hours the existence of this document disappeared. Not only was it a document


which could not be tabled, as we were told the day before, but it is now a document which does not exist. I should like to ask the minister if he can recon'cile that rather confusing contradiction and whether he can also tell the committee if there is any report of that nature from the department. Perhaps it might throw some light on the department's views on the economic situation. It may have been given a different title or form. It may not be called, "Canadian Economic Outlook for 1960", but is there an annual report under any other name which deals with the same matter?


Gordon Minto Churchill: A series of confidential reports from the economics branch is submitted in the Department of Trade and Commerce. So many hon. members on the other side have said that confidential reports should not be tabled that I rather wonder at the Leader of the Opposition asking about the matter now. He is quite aware that confidential reports are passing over the desks of ministers every week.


Paul Joseph James Martin: Mr. Chairman, I do not think the minister can really expect to convince hon. members by this reply. The minister did say in answer to a motion put the other day by the hon. member for Bonavista-Twillingate that there was no economic report in existence. That is the fact but, as the Leader of the Opposition has just indicated, in commenting on my statement, that there were confidential documents which should not be produced, the minister acknowledged that there was in fact such a report in existence. Thus the two replies cannot be reconciled.


Gordon Minto Churchill: I did not say there was such a report.


Paul Joseph James Martin: My hon. friend did. He told the hon. member for Bonavista-Twillingate that there was no such report. Here is the question of the hon. member for Bonavista-Twillingate.


Gordon Minto Churchill: What day was that?


Mr. Marlin (Essex Easl):: This was on Saturday, July 30, just a week ago today, not so long ago really as to have been forgotten. The hon. member for Bonavista-Twillingate said as found on page 7266 of Hansard:
In order to assist the committee of supply in considering the unemployment problem, will the Minister of Trade and Commerce table the Canadian Economic Outlook for 1960?


Mr. Speaker:: If I am not mistaken, an order of the house was made with regard to this matter.


Mr. Pickersgill:: There was an order with respect to the volume for 1959, sir. Is the minister going to give an answer?


Gordon Minto Churchill: The hon. member for Bonavista-Twillingate is asking for the tabling of a confidential

report, and last evening the hon. member for Essex East said that this was contrary to the usages of parliament. I think perhaps we shall not do it.


John Whitney Pickersgill: Does the minister recall an
exalted precedent?
Let there be no question about it. Our position always has been that confidential documents of that character were matters that were prepared for the members of the government. But that is not the position taken by this government, as we know from the conduct of the Prime Minister with regard to this particular document in the year 1958 when, without any reservation, he divulged it to parliament. What the hon. member for Bonavista-Twillingate had clearly established was that there was such a document this year. The minister denied it at a later date.
What we want to know from the minister today is-is the economic report in the form used in 1959 and 1958 still in existence? If it is not in existence, in what form does the minister receive from his officials this report? Has the name of the report been changed? Is its circulation now limited to certain members of the cabinet? I would hope that the Minister of Labour would be one of those receiving it. Has it changed its colour? Is its name no longer that of the years previous? In other words, is the minister trying to disguise its characteristics and because it is not in the same form as previous years- although he would still be contradicting himself-saying that there is no longer such a report as was revealed by the Prime Minister? Then, when he is asked by the hon. member for Bonavista-Twillingate about that report, the minister can say, no, there is no such report in 1960.
We want to ascertain whether, if there is not in exactly that form such a report, there is such a document which should be produced according to the precedent which the Prime Minister himself established. If there is, will the minister table it? Will he tell us, if he will not table it, what is the broad outline of it so that we can ascertain the kind of answers which the Leader of the Opposition has been seeking to elicit from the Minister of Trade and Commerce, and the kind of answers which the governor of the Bank of Canada has not hesitated to give to the country. However, the Minister of Trade and Commerce says that is not the kind of reply that should be given by the Minister of Trade and Commerce.
The immediate question now is, is there such a document known as the "Canadian Economic Outlook for 1960"? This is something that has always existed. Perhaps if the minister would give us an unequivocal answer to that, we could get responses which
Supply-Trade and Commerce would reveal whether or not there is an economic outlook available, and presented to the Minister of Trade and Commerce in another form.


Gordon Minto Churchill: The hon. member for Essex East, on the one hand, states as he did in July that confidential reports should not be tabled. It is contrary to the usages of parliament. The hon. member for Bonavista-Twillingate said the same thing, and I think the Leader of the Opposition said just about the same thing.


Paul Joseph James Martin: That is our position.


Lester Bowles Pearson: We are talking about your position.


Gordon Minto Churchill: These hon. members are trying to occupy two positions, as they so frequently do. They place a question on the order paper asking for the tabling of a confidential report.


Peter Francis Martin: Which is the policy of the present government.


Gordon Minto Churchill: It is not the policy of the government whatever, except at the request of hon. members opposite who asked for the tabling of the document which was a year old, and it was tabled after a whole year had elapsed. A second document with a similar title was tabled the following year. Here the other day the hon. member for Bonavista-Twillingate wanted to have the report for 1959 tabled, and the house refused to grant that request. Then he asked for the "Canadian Economic Outlook for 1960", knowing that he was asking for something which, if it is in existence, is a confidential document according to the definition of hon. members opposite.
Hon. gentlemen opposite cannot have it both ways. You cannot have it confidential and say it should not be disclosed and then, in the next breath, say it is a confidential document which should be disclosed. This is more confusing than the usual state of the opposition. You simply cannot occupy these two positions, nor can the hon. member for Essex East now come forward and ask for full information with regard to confidential reports in a department. He wants to know if there is a confidential report by another name, how many confidential reports come to my office and how many are distributed to the members of the privy council. He wants the whole thing disclosed. He knows, having been a member of the privy council, that would be contrary to the oath.


Paul Joseph James Martin: Is that a question? I fully agree, but the point is this: This government does not take that position. The

Supply-Trade and Commerce Prime Minister revealed this confidential document and said that it should be revealed. Now, having taken that position we are entitled in the following years to ask for it. We did ask for it, and it was tabled. We are asking for it again, because that is the government's attitude with regard to this confidential document. I may tell my hon. friend now that if he wants to pass this general item he should not fail to recognize the logic of this position.


Some hon. Members:: Threats, threats.


Paul Joseph James Martin: Hon. gentlemen say "threats". This is not a threat, it is just an examination of the statement made by the minister. We have always taken the position that confidential documents addressed to the minister should be so considered, but that is not the position that this government has taken in 1958 or in 1959 when they tabled the documents. We are asking, on the basis of the precedents which this government established-and my hon. friend was the instrument in 1959-that the performance be repeated and the "Canadian Economic Outlook for 1960" be tabled.


William Moore Benidickson: I wonder if the minister would indicate just how many economists there are in his department today as compared with three years ago. I recall very vividly that the financial critic of the opposition in the budget debate on April 6, 1954 referred very critically to the increase in the size of the staff of economists employed by the government. I do not accept that view. I have no objection to the employment of economists. However, I have objection to the employment of economists if their reports are not advanced and not acted upon. I should like to know just what advance there has been in the Department of Trade and Commerce in the employment of economists.
I have a folder here, which all hon. members can see, containing some of the recent civil service advertisements. There are requests galore for information officers, for economists, for photographers and so on. The point is that this year we have a heavy staff of economists, and apparently the minister does not want to receive their advice and there are no reports from them.


Gordon Minto Churchill: I object to that statement immediately, that I do not want to receive their advice and there is no report made to me. I said just a few minutes ago that reports of the economic branch of our department were sent to me regularly.


Lester Bowles Pearson: Mr. Chairman, the minister on July 30 said, or indicated that there was a report "Canadian Economic Outlook for 1960".


Gordon Minto Churchill: I said no such thing.


Lester Bowles Pearson: On August 1 he said there was no such report. When was he right ?


An hon. Member:: He is always right.


Gordon Minto Churchill: That is an inaccurate statement by the Leader of the Opposition.


Lester Bowles Pearson: You put it on Hansard twice.


Gordon Minto Churchill: I did not put it on Hansard twice. I said no such thing. The hon. member for Bonavista-Twillingate was asking for a confidential document. In his opinion, that is what it was.


Paul Joseph James Martin: Mr. Chairman, just so the record may be clear, I say this to the minister. On page 7324 of Hansard there appears:
Motion No. 136-Mr. Pickersgill:
For a copy of the "Canadian Economic Outlook for 1960", prepared in the Department of Trade and Commerce.


Gordon Minto Churchill: Mr. Speaker, there is no such document for 1960.


Gordon Minto Churchill: That is correct.


Lester Bowles Pearson: What did you say the day
before?


Paul Joseph James Martin: Is that the situation?


Gordon Minto Churchill: That is the situation.


Paul Joseph James Martin: The day before, the minister said, at page 7266:
The hon. member for Bonavista-Twillingate is asking for the tabling of a confidential report, and last evening the hon. member for Essex East said that this was contrary to the usages of parliament. I think perhaps we shall not do it.
Which answer is correct?


An hon. Member:: Both.


Gordon Minto Churchill: They are both correct. The hon. member for Essex East thoroughly understands the situation.


Paul Joseph James Martin: I certainly do.


Gordon Minto Churchill: The hon. member for Bonavista-Twillingate was asking for a confidential document that he considered to be in existence and that he knew he should not be asking for because he had stated-


Lester Bowles Pearson: He got it the year before.


Gordon Minto Churchill: -that a confidential document could not be tabled, and no matter what was done in the past, no document for 1960, 1959, 1958 or 1957 was made public in the year in which it was produced. Yet despite that he asks for what he considered to be a confidential document. He said that is what he had asked for, and the house understood it perfectly. Then the next day.

contrary to what he had stated should not be done, he puts a question on the order paper asking for the tabling of a report for this year-


Lester Bowles Pearson: It had been on the order paper
for a week.


Gordon Minto Churchill: -which I said was not in
existence.


George James McIlraith: Mr. Chairman, the Minister of Trade and Commerce indicates that the opposition gets confused. If there is any confusion to be shown that should raise concern in this committee or in parliament it is the confusion of the minister, as evidenced by his attitude on this day on this subject.
He started oil by stating that the opposition had been asking for these reports and that this was the situation. The facts of the situation are, as he well remembers, that the Prime Minister of	Canada-the	new Prime
Minister of Canada-on January 20, 1958, in the midst of a very dramatic production in the course of a debate in this house quoted excerpts from a document which he waved very dramatically, a white document fastened together with heavy brass tabs and with some blue pieces of paper sticking on the tabs, obviously a blue cover had been torn off, although parts of the cover were still remaining on it.
He quoted excerpts at length. It was obvious from the technique that he used that he was quoting only chosen phrases and quoting them out of their context. I was the one who asked him, after he had carried on this performance for quite some time, to table the document.
There was a great deal of hesitation on that occasion about tabling the document then; he was going to table it later. But he finally did table it at the dinner adjournment, and that document, which I took the precaution of looking at immediately, was rather an interesting one, because parts of the blue cover were still on it, although he said there was no cover on it and he did not know anything about the cover. Be that as it may; I am not discussing that now.
That is the origin and the genesis of this business. The next year, when the opposition asked for the production of the document for the year 1958, the answer given by the Prime Minister was, no, it could not be tabled. That was on June 18 of 1958. The Prime Minister made his position clear, that he would not table it then, that it was too early. But he did not say he would not table it later. I think he indicated-if my recollection is right -that he would table it at the end of the year. On January 16, 1959, a request was made for that document and the Prime Minister I believe indicated that the Minister of Trade 79951-0-488
Supply-Trade and Commerce and Commerce would table it that day. Well, it was tabled on January 16; it was tabled that day.


Paul Joseph James Martin: What day?


George James McIlraith: January 16, 1959. In the 1960 session there was a request about the publication; there were two requests, and nothing was done. There was no indication that there was an objection to tabling the 1959 document at the end of the year. There was a motion, and when the motion was put on February 15, 1960, it will be noted that there would no longer be any objection to a motion of that type.
The house had to vote on it and the house turned it down. The minister did not say then that there was no such document for 1959. He did not give any reasons, and certainly any earlier objections that there were on the part of the government could not be effective.
Then when the copy of the "Canadian Economic Outlook for 1960" was asked for, the minister took the strange and conflicting position indicated in Hansard of July 30 and again in Hansard of August 1, both of which have been quoted here. I would like to know categorically from the minister: first, was there any such document for the year 1959; and second, was there any such document for the year 1960?


Gordon Minto Churchill: I do not mind answering those questions at all. First let me deal with the so-called confidential document of 1957 about which hon. members of the opposition have been so disturbed. It was called a confidential document. I found the distribution list of that document in 1957, and the same distribution list was used in 1958.


William Moore Benidickson: 1958?


Gordon Minto Churchill: It was a carelessly treated confidential document because 175 copies were mimeographed. It was very widely distributed; I think over 150 of those were sent out.


William Moore Benidickson: Several hundred by the Liberal association.


Gordon Minto Churchill: I am speaking of the 1957
one. One went to the Canadian National Railways, and a copy to the library at the Royal Military College at Kingston. Yet hon. friends opposite have been telling us for years that this was a confidential document whose contents could not be disclosed and it was improper to bring it to the light of day.


Paul Joseph James Martin: Hear, hear.


Gordon Minto Churchill: That was the confidential document spread across this country, with a word on it marking it confidential and that word meaning nothing.

Supply-Trade and Commerce


Lester Bowles Pearson: Meaning nothing to some people.


Gordon Minto Churchill: The document of 1958 followed the same distribution list. When I investigated it I found and considered that that was quite improper for a confidential document, and the document of 1959 was issued on a restricted list and was kept strictly confidential.


Lester Bowles Pearson: I bet it was.


Gordon Minto Churchill: No "Canadian Economic Outlook for 1960" such as the one for 1957, 1958 and 1959 has been published.


William Moore Benidickson: Why?


Gordon Minto Churchill: Does that answer the question of the hon. member for Ottawa West?


George James McIlraith: It only answers part of it. In the foreword to the documents tabled in 1958 and 1959 it indicates that the reports contain a regular series of statements on the economic outlook prepared for the use of the federal minister and civil servants concerned. The purpose of the reports is to appraise the influences operating in the economy as they are likely to affect the general level of economic activity in the year. Then it says the present report was completed in March and a supplement containing the usual statistical tables will be made available at a later date.
The estimates show the same number of economists in the branches last year, although the grading has changed slightly. What I want to know now is, does the minister have the benefit of any similar publication for his own use?


Gordon Minto Churchill: I have the benefit of the advice of the economists in the economics branch and that advice is available day after day, week after week and month after month. It is given and it is appreciated.


George James McIlraith: That is not the question I asked. My question was: Is there any document of a similar nature appraising the influences operating in the economy as they are likely to affect the general level of economic activity for the year prepared now? Does the minister have the benefit of any such document?


Gordon Minto Churchill: This is getting to be rather technical. The hon. member refers to a document "such as this". I have in my hand the "Canadian Economic Outlook for 1958", 31 pages long, mimeographed. He has asked me, is a document similar to that prepared? What does the hon. member mean? Does he mean 31 pages, of that size, and prepared by the economics branch? If that is what he means by the word "document", similar documents

are prepared because the economics branch continues to report to me and gives information which is, according to the foreword, "appraising the influences operating in the economy as they are likely to affect the general level of economic activity". Last night when I was making my opening remarks on the estimates I based them on similar reports given me by the economics branch and I laid before the house the outlook for the balance of 1960. That is the situation with regard to reports.


George James McIlraith: Let me follow that up. The document I understood the minister had reference to last night was the document "Public and private investment in Canada".


Gordon Minto Churchill: No.


George James McIlraith: Then when was the document given to the house? The point is that the minister gave his interpretation of some documents.


Gordon Minto Churchill: No. I said that the outlook
report which I gave in the estimates speech last night was based on information supplied me by the economics branch of the Department of Trade and Commerce following along the same lines as is given in the foreword to this report "appraising the influences operating in the economy as they are likely to affect the general level of economic activity".


William Moore Benidickson: I regret I have not in front of me the Financial Post clipping, of which I have a very clear recollection as I am sure has also the minister. It was a report of a statement made by the head of his economics branch.


Robert Matthew Turnbull McDonald: What date?


William Moore Benidickson: I will give that later in the debate. I also recall quite vividly that the headline was that a major recession was imminent in 1961-62.


An hon. Member:: That is what the Liberals would like.


William Moore Benidickson: No; this is from the senior representative of the economics branch of the Department of Trade and Commerce. I will get this clipping because I think the minister is aware of it. But in the course of this debate the minister should comment on that advice given to the nation at large, and doubtless given to the minister earlier, if we have not got in 1960 the usual concise report on economic prospects compiled by the innumerable economists which are employed by the Department of Trade and Commerce.


Lester Bowles Pearson: 1 was interested, indeed somewhat amused, by the minister's historical explanation of the nature of the report used by the Prime Minister on the occasion to which we have been referring. The Prime Minister at that time said that this was a hidden report, that it was a horrible example of concealment on the part of the Liberals. According to Hansard for that year he said "It was hidden away so well we just found it".
Now the minister tells us that this was a report which was circulated from coast to coast, even to the Royal Military College, and therefore that the confidential character indicated by the cover had no meaning whatever. This was a report which the Prime Minister called a hidden report, so well concealed that even they could not find it in the first few weeks of their existence. Somebody must be wrong again.


Gordon Minto Churchill: The Prime Minister mentioned the concealing of the facts contained in the report.


Lester Bowles Pearson: No, it is all on the record.


Gordon Minto Churchill: On page 3525 of Hansard for 1958 he said:
They did not realize the situation or if they did so they concealed the facts from the Canadian people;-


Lester Bowles Pearson: And the report, the hidden report circulated from coast to coast.


Gordon Minto Churchill: While we are still dealing with the economic report, if the Leader of the Opposition will look at page 7270 of Hansard for July 30 he might like to make some slight correction for the benefit of the house. He is reported as saying:
The Prime Minister took the confidential report, tore off the page marked "confidential",-
Earlier in 1958 when the hon. member for Ottawa West was discussing this report he mentioned the fact that the page had been torn off and someone asked him if he meant that the Prime Minister had torn it off, and the hon. member for Ottawa West was much more careful than the Leader of the Opposition, because he said "I have no evidence that was so". But here you have the Leader of the Opposition saying that the Prime Minister took the confidential report and tore off the page marked "confidential". I think that is a statement which should be corrected by the Leader of the Opposition.


Lester Bowles Pearson: Mr. Chairman, now the minister has brought it up the report was tabled by the Prime Minister with a part of the covering still on the report, with the word "confidential" left on that part. There was a report tabled by the Prime Minister himself and the report bore a bit of the covering 79951-0-488i
Supply-Trade and Commerce which had not been torn off. I have it here; the word "confidential" is marked on every page. If it will make the minister happier I will withdraw that word and say that the page with "confidential" marked on it was torn off.


Gordon Minto Churchill: That makes it better.


Lester Bowles Pearson: I am glad to do that.


Paul Joseph James Martin: There can be no doubt that the Prime Minister did table a document that was confidential, that was hidden. Hansard volume IV, for the year 1957-58 at pages 3530, 3531, 3532 and 3533 clearly establishes that fact. What we are interested in now is in ascertaining from the government an indication of what lies ahead.
The Minister of Labour the other night said that there was no confidential document in the Department of Labour that was prepared for his assessment of the unemployment situation for the summer, for the fall or for the winter. However, after he was pressed he finally did admit that there was a confidential document, a confidential document that gave an estimate of the unemployment prospects for each quarter. However he refused to tell the committee even in general terms, what those prospects were. We insisted on having an indication of what the prospects were, so that we could determine if the government's unemployment program was vigorous enough to meet the situation which might eventuate.
We asked the Minister of Labour if there were any confidential surveys prepared in other departments which were made available to him; was the report of the governor of the Bank of Canada made available to him; did he know of any reports which were prepared for the benefit of the Minister of Finance; did he know of the economic surveys prepared for the Minister of Trade and Commerce? It was not possible to get from the Minister of Labour any acknowledgment as to whether these various departmental reports and the report of the Bank of Canada came across his desk, but he did finally admit there was a confidential report prepared for him in the Department of Labour, although he denied this in the course of the same debate the same evening.
Now we have before us today two contradictory statements by the Minister of Trade and Commerce. This is not my opinion. It is based on the record as I shall show. Now we are entitled to know from the Minister of Trade and Commerce if the prospects for trade are as indicated by the Leader of the Opposition. If the Leader of the Opposition is right, then obviously the enthusiasm about the prospects as stated by the Minister of Labour is incorrect. The Minister of Trade
7726	HOUSE OF
Supply-Trade and Commerce and Commerce can correct the statement made by the Minister of Labour as to the prospects for unemployment in the fall. We are now entitled to ask the Minister of Trade and Commerce on the basis of reports made to him annually in pursuit of a tradition, which has existed in that department for some time, to give us this information. There is no doubt that there was a report prepared known as the "Canadian Economic Outlook for 1957". The minister gave that in the house in January, 1958. We know there was a "Canadian Economic Outlook for 1959". The question now is: is there one for 1960 and if there is, on the basis of the policy of this government, that should now be considered as a public document, because the Prime Minister said there was no reason why it should not be given, and because there is no reason why it should not be given and for making it public, as he did in January, 1958-


Gordon Minto Churchill: A year later.


Paul Joseph James Martin: Never mind a year later. The Prime Minister said that confidential documents of that character should be given to the house. We want to know from the minister whether there is such a document, and because the Prime Minister has entered the chamber, I am going to give him the benefit of knowing the inconsistent position taken by the hon. minister. First of all, only a week ago, on July 30, as reported at page 7266 of Hansard, the following exchange took place:


John Whitney Pickersgill: In order to assist the committee of supply in considering the unemployment problem, will the Minister of Trade and Commerce table the "Canadian Economic Outlook for 1960"?


Mr. Speaker:: If I am not mistaken, an order of the house was made with regard to this matter.


John Whitney Pickersgill: There was an order with respect to the volume for 1959, sir. Is the minister going to give an answer?


Gordon Minto Churchill: The hon. member for Bonavista-
Twillingate is asking for the tabling of a confidential report, and last evening the hon. member for Essex East said that this was contrary to the usages of parliament. I think perhaps we shall not do it.
First of all, before commenting on those words "I think perhaps we shall not do it", I shall deal with the statement I had made the previous day that such documents should not be made available. That is the position which I believe a responsible government should take; that is the position which the previous government took with regard to confidential documents.


Gordon Minto Churchill: A responsible opposition should not ask for it.


Paul Joseph James Martin: But because the government does not regard this kind of confidential document, as we did, there can


be no excuse in logic or in fairness for refusing to table it. Here is the statement of the Minister of Trade and Commerce: "I think perhaps we shall not do it". That is what he said a week ago today in reply to the hon. member for Bonavista-Twillingate. That can only mean that there is such a document in existence for 1960.


Gordon Minto Churchill: No.


Paul Joseph James Martin: It means there was a "Canadian Economic Outlook for 1960".


Gordon Minto Churchill: No, sir.


Paul Joseph James Martin: The minister says "no, sir". We shall deal with that answer in a few moments. The next day the minister said on Monday, August 1-but I will read the complete exchange:
Motion No. 136-Mr. Pickersgill:
For a copy of the "Canadian Economic Outlook for I960" prepared in the Department of Trade and Commerce.


Gordon Minto Churchill: Mr. Speaker, there is no such document for 1960.


Mr. Speaker:: Does the hon. member wish his motion to be withdrawn?


John Whitney Pickersgill: Mr. Speaker, It seems to me there is no reason why the motion should not be passed. If there is no such document it obviously cannot be complied with.


Gordon Minto Churchill: Mr. Speaker, on a point of order, it would not be in accordance with the practices and usages of parliament to pass a motion concerning a document which does not exist.
So the statement made by the minister on Monday, August 1 is inconsistent with the statement he made a few moments ago that there is no such document. But that is not what he said on Saturday, July 30 when he said: I think perhaps we shall not do it.
The position, now, I take it from the minister is that there is no "Economic Outlook for 1960" as such. I take it, since the minister does not disagree, that that is the position. Is the minister saying that his department does not give him any confidential statement or commentary on the economic picture for 1960? Is the minister saying he does not get it in some form? If that is the case, and if there is no such document, will the minister deny-


Gordon Minto Churchill: On a point of order, this is the most shocking repetition I have heard in ages. We have been all over this more than four times. All these questions were asked by the hon. member for Ottawa West, and I gave the answer. All the hon. member for Essex East is doing is getting into Hansard again as he has been for the last two weeks and putting on record things which are not correct. I have given the answers, and the hon. gentleman knows I have. This is repetition of the worst order.


Paul Joseph James Martin: The hon. gentleman is right-it is repetition, because it is directed at the minister in order to find out what the position is, since one position has been taken one day and denied the next.


Gordon Minto Churchill: Nonsense.


Paul Joseph James Martin: Because of these contradictions, and because so much is at stake, and because we have so much unemployment in this country we are entitled to know what kind of advice has been given to this government. That is the reason for this persistent interrogation. The Minister of Trade and Commerce is not going to halt me in this process-


Gordon Minto Churchill: On a question of privilege, Mr. Chairman, I will. On a question of privilege, I will halt the hon. member.


Paul Joseph James Martin: Does the minister have a point of order?


Gordon Minto Churchill: I have a question of
privilege.


Peter Francis Martin: What is the question of privilege?


Gordon Minto Churchill: I thank the hon. member for Essex East very much. Now that the hon. member is acting as chairman of the committee and has asked for a statement from an hon. member, I will give it. My question of privilege is this. The hon. member for Essex East said I made a statement on July 30 and denied it on August 1. That statement or charge on the part of the hon. member for Essex East is false and should be withdrawn and I ask for its withdrawal right now.


Peter Francis Martin: All I am saying, Mr. Chairman, is that the minister said-


Some hon. Members:: Withdraw.


Peter Francis Martin: Just a moment-


William Moore Benidickson: What about the bill of rights?


Jacques Flynn: Order.


Peter Francis Martin: Mr. Chairman, in view of the fact that hon. gentlemen are attempting to shout me down, I should remind them that only recently we passed the bill of rights which surely means that we are entitled to speak-


Mr. Speakman:: It is no thanks to you that we passed the bill of rights, our bill.


William Moore Benidickson: It was improved by the hon. member for Essex East.


Peter Francis Martin: Mr. Chairman, perhaps my hon. friends think I have been unfair to the minister, and of course I would not want to be unfair to the hon. gentleman-
Supply-Trade and Commerce


Some hon. Members:: Oh, oh.


Peter Francis Martin: -but if the minister has put before the house two contradictory positions I am certainly entitled to analyse them. On July 30 the hon. gentleman was asked by the hon. member for Bonavista-Twillingate to produce or table the document called "Canadian Economic Outlook for 1960". As reported at page 7266 of Hansard of July 30 the Minister of Trade and Commerce said:
I think perhaps we shall not do it.
Now, how can you do it or how can you consider whether you should do it unless you have it?


Mr. Walker:: Nonsense.


William Moore Benidickson: Nonsense is no answer.


Peter Francis Martin: The Minister of Public Works displays an unusual eagerness today even for him-


David James Walker: The hon. member has been talking nonsense for the last half hour. During the course of his nonsense the hon. member asked a question. Does he want me to explain it?


Peter Francis Martin: The Minister of Public Works is a new minister. I do not want to be too hard on him, but I suggest that a new minister should always manage his own affairs, and having done that he should gradually learn to deal with matters affecting other departments. Returning to my point, the Minister of Trade and Commerce on July 30 with respect to the production of this document said:
X think perhaps we shall not do it.
But the very next day the minister said there was no such document. On August 1, as reported at page 7327 of Hansard, he said it would not be in accordance with the practice, having previously said that there was no such document for 1960. In the face of these two contradictions, Mr. Chairman, I suggest to you that the question of privilege raised by the hon. member is not one that really should have been raised.


Gordon Minto Churchill: I submit they are not contradictions.


Peter Francis Martin: If the minister would only explain these contradictions-


David James Walker: There are none.


Paul Joseph James Martin: If the minister would only say, "What I said on the first day was wrong," or "What I said on the second day was wrong," then the matter would be cleared up.
7728	HOUSE OF
Supply-Trade and Commerce


David James Walker: The hon. member for Essex East is wrong.


Paul Joseph James Martin: My hon. friend says I am wrong. I would remind the hon. gentleman that a mere assertion is no argument, and he waives an acknowledgement.
The Minister of Trade and Commerce is put in this dilemma. He finds himself imprisoned by his own contradictions. The reason he does not seek to extricate himself is because he has in his possession reports that back up the prognostications made by those gentlemen and those organizations referred to by the Leader of the Opposition.


William Moore Benidickson: And he will not give them to parliament.


Paul Joseph James Martin: One other reason for the minister refusing to produce these documents is because in revealing them, they will display the complete bankruptcy of the government's policy on unemployment.


John George Diefenbaker: Mr. Chairman, I always listen with rapt attention to the hon. member for Essex East and I always know that the louder the hon. gentleman talks and the more vociferous his delivery, the more uncertain he is of the facts. I am going to be generous to the hon. gentleman today-


Paul Joseph James Martin: Do not worry about me; be as severe as you can.


John George Diefenbaker: No, I will not be severe. I could not be severe to such a congenial hon. member.


William Moore Benidickson: And a very effective hon. member, too.


John George Diefenbaker: But I will say this. I follow a course of not answering the kind of things that are obviously untrue. From time to time in this house, as well as outside of it statements are made that in the days of Mr. Mackenzie King these were regarded as matters which were invariably raised by him on privilege. I have just had the opportunity of listening to the concluding remarks of the hon. gentleman. In view of the fact that he saw fit to quote some words that were spoken on July 30, the opportunity comes to me to answer those statements made on that occasion by the Leader of the Opposition who usually displays considerable courage in this regard in making statements unjustified by the facts, whenever I happen to be absent from the house.


Some hon. Members:: Oh, oh.


William Moore Benidickson: Shameful.


John George Diefenbaker: The hon. gentleman has followed that course on a number of occasions and I agree with the hon. member for
[Mr. Martin (Essex East).)

Kenora-Rainy River that it is shameful to do that. The Leader of the Opposition made a statement the other day in reply to which I simply say to him that that statement was completely unjustified in any particular.


William Moore Benidickson: He is the most accurate speaker in the house.


John George Diefenbaker: Would the hon. gentleman not allow his spirits to overflow?


Lester Bowles Pearson: An unparliamentary remark.


John George Diefenbaker: I can understand how the Leader of the Opposition feels. I recall his experience on January 20, 1958. That was an historic day in the House of Commons. That was the day when the hon. gentleman produced that historic amendment-and I dislike to come back to this but I feel entitled to-that will never be forgotten in parliamentary history however many years this house of parliament may last. That was the day the hon, gentleman-


Lester Bowles Pearson: Are you still living in the past?


John George Diefenbaker: Living in the past? Hon. gentlemen do not like the past. When I refer to their part in it, they dislike that.


Lester Bowles Pearson: Let us look ahead.


John George Diefenbaker: It was my hon. friend the Leader of the Opposition who brought this up. I am going to recall that historic day for that memorable amendment deserves to be read.


Lester Bowles Pearson: The Prime Minister is out of order, but that is all right.


John George Diefenbaker: I do not want to cause the hon. gentleman and those associated with him any exacerbated feelings but I think it is only fair to refer to this in view of the fact that mention of this has been made and made in my absence. I therefore feel justified in saying a few words at this time.


George James McIlraith: By way of abuse of the rules.


Lester Bowles Pearson: Give us your speech over again.


John George Diefenbaker: Mr. Chairman, they do not like it.


Lester Bowles Pearson: We love it.


William Moore Benidickson: Mr. Meighen said he never abused the rules.


John George Diefenbaker: Hon. gentlemen opposite are hurt by their experience on that day. Let me read that famous amendment.


George James McIlraith: The hon. gentleman is quite out of order in doing so.


John George Diefenbaker: This was the amendment moved a few months after we came into power. It may be found at page 3520 of Hansard of January 20, 1958. On that occasion the Leader of the Opposition moved an amendment in these words:
That all the words after the word "That" be struck out and the following substituted therefor:
In view of the fact that, in the seven months His Excellency's advisers have been in office, Canada's total trade has ceased to expand, export markets have been threatened, and proposals for freer trade have been rebuffed-


Robert Matthew Turnbull McDonald: Ask the
hon. member for Essex East about freer trade-


John George Diefenbaker: In the light of the experience of the two and a half years since, what of that statement regarding trade ceasing to expand, export markets being threatened and proposals for freer trade being rebuffed?


Lester Bowles Pearson: Half a million unemployed.


John George Diefenbaker: Oh, I will come to the unemployment question in a moment, but this gives me the opportunity, and I am glad of that opportunity, to deal with-


Lester Bowles Pearson: No one will suffer-


John George Diefenbaker: Incidentally, may I say this, that statement was never made.


Some hon. Members:: Oh, oh.


John George Diefenbaker: I said that no person in this country will suffer from unemployment and we have seen that such has been the case.


Some hon. Members:: Oh, oh.


Some hon. Members:: Hear, hear.


John George Diefenbaker: Let me read on.


Paul Joseph James Martin: The worst unemployment in Canadian history.


John George Diefenbaker: Mr. Chairman, I sit and listen, I scarcely ever rise even to ask a question, but as soon as hon. gentlemen opposite realize that something may be said that they do not like they start this chattering. I simply ask that I be allowed to proceed without these aimless and inane interruptions.


Lester Bowles Pearson: Proceed, proceed.


John George Diefenbaker: I continue:
In view of the fact that, In the seven months ... Canada's total trade has ceased to expand, export markets have been threatened . .. that investment has been discouraged-


Some hon. Members:: Hear, hear.


John George Diefenbaker: And so on I might go. Finally there are these words:
Supply-Trade and Commerce
And in view of the desirability, at this time, of having a government pledged to implement Liberal policies;
His Excellency's advisers should, in the opinion of this house, submit their resignation forthwith.


Mr. Cardin:: That is the best thing that could happen to Canada.


Lester Bowles Pearson: It would have been a good thing for the country.


John George Diefenbaker: I am just reading the record. I recall the Leader of the Opposition, on an occasion when there was some competition between him and the hon. member for Essex East, making a speech in which he said: "We want an election".


Lester Bowles Pearson: We do.


John George Diefenbaker: "We will be back in power and soon". While I listened to that from my bed I could just feel the fear that must have been in the hearts of those who were saying, "Resign, give us your place". Now, this is all on the record and they will never get over this amendment as long as time lasts, this monstrosity of an amendment. I do not think the Leader of the Opposition produced it on his own. He must have had help. I have always credited it to the hon. member for Bonavista-Twillingate.


Lester Bowles Pearson: Shame, shame.


John George Diefenbaker: If he is not entitled to the credit I withdraw the credit I have given him in this regard. They produced this thing and then it was 1958-


Lester Bowles Pearson: Now 1960.


John George Diefenbaker: -and I produced the document-


Lester Bowles Pearson: Marked confidential.


John George Diefenbaker: -dealing with events in 1957, which in every particular contradicted in black and white the allegations made by hon. gentlemen opposite during 1957.


William Moore Benidickson: That is not so.


Lester Bowles Pearson: That happens to be untrue.


John George Diefenbaker: I went through the record. I do not want to reread it. If you want to read it-


Lester Bowles Pearson: You never did read it, you just took bits out of it.


John George Diefenbaker: I read it. Let me say this to the Leader of the Opposition. There was no removal of any part of that document. He made that statement in my absence and I say to him now in his presence that that statement is not in accordance with the facts. I am not going to go further than that so that there will be no misunderstanding, but I was very surprised. I can understand any

Supply-Trade and Commerce of the smaller folk surrounding him making statements like that but not the Leader of the Opposition. I was not here the other day, and if it had not been repeated today, I would not have thought it necessary to reply. I usually follow the course of not denying statements that are made from time to time for the reason that, after all, the denial never catches up with such a statement made without foundation by anyone. We talk about the course followed subsequently. I can understand how the souls of hon. gentlemen opposite have been seared.


An hon. Member:: Don't cry.


John George Diefenbaker: It has been so all through the ages. Caught out, it put them in a shameful position. They knew and the Leader of the Opposition knew in 1957 that we were entering a period of recession. The hon. member for Essex East knew.


Lester Bowles Pearson: Rubbish.


Paul Joseph James Martin: Mr. Harris referred to it in the budget.


John George Diefenbaker: They had been warned in the month of June of 1957, and if my recollection is correct the number of unemployed at that time was over 200,000.


Paul Joseph James Martin: One hundred and fifty thousand.


Lester Bowles Pearson: Your recollection is incorrect.


Paul Joseph James Martin: One hundred and fifty thousand; those are the facts.


John George Diefenbaker: Those are not the facts.


Paul Joseph James Martin: Show me the record.


Lester Bowles Pearson: Try to be accurate.


John George Diefenbaker: The record will show the situation and the position of affairs.


Lester Bowles Pearson: We will have the figures in a minute.


John George Diefenbaker: They knew this. They were warned. I am not going to read how they were warned but they knew and they concealed it. There is nothing that causes a person to be more outspoken than a guilty conscience.


Lester Bowles Pearson: Is that why you talk so much?


John George Diefenbaker: Yes, they concealed the facts. Then they sought refuge by endeavouring to make statements that were not based on the facts. In 1958 we had such a report; we produced it in 1959. So far as the 1959 report was concerned we were prepared to produce that report at the beginning of the next year. We made it perfectly clear that we would submit it in January, 1960, at the

beginning of the next year. We concealed nothing. Instead of accepting our promise and undertaking in that behalf, a vote was called and the house decided that that was not the time to secure the production of the document before the house. We were prepared to give them the 1959 report but hon. gentlemen opposite did not want to wait. They wanted it produced during the calendar year. We never produced any document during the calendar year. It was the year following. We were prepared to do that but they refused to accept it.
So far as the present situation is concerned, the Minister of Trade and Commerce has made it perfectly clear what is the situation. Hon. gentlemen opposite just gloat over the difficulties in the economic condition of Canada. They revel over the fact that there is a degree of unemployment. Wherever a market is lost through intensive international competition, they rub their hands in glee. That has been their attitude. I cannot understand it. I cannot conceive of an opposition made up of such fine gentlemen who would devote themselves so hopefully to the attainment of something in the nature of a depression in Canada. They are working to that end. They say-


Lester Bowles Pearson: Mr. Chairman, on a question of privilege, the Prime Minister of this country, without any respect for the dignity of his office, has said that the opposition is working for a depression in this country, which is a false, malicious slander and unworthy of him.


John George Diefenbaker: Mr. Chairman-


Lester Bowles Pearson: Perhaps he will withdraw it.


John George Diefenbaker: By their words ye shall know them. If they are not, and I believe the hon. gentleman says he is not, then he does not realize-


Lester Bowles Pearson: On a question of privilege, Mr. Chairman, I have asked that the Prime Minister withdraw those words.


Some hon. Members:: Order.


Jacques Flynn: Order.


David James Walker: "Honi soit qui mal y pense."


Jacques Flynn: If I remember the words to which the Leader of the Opposition objects, there was a reference that the opposition was revelling-


Lester Bowles Pearson: No, no, Mr. Chairman.


Jacques Flynn: From what I heard, it would appear there was no question of privilege. A question of privilege has to be a matter which affects the conduct of an hon. member or his honour, and this seemed to

be a question of opinion as to attitude. In my opinion, there was no point of privilege in the statement made by the Prime Minister. After the Prime Minister has resumed his seat, the Leader of the Opposition may wish to make a correction if his attitude was not well represented in the remarks of the Prime Minister.


Lester Bowles Pearson: I am still speaking on the question of privilege, Mr. Chairman. Obviously you have not heard what the Prime Minister has said. He has just said that the oposition was working for a depression.


An hon. Member:: He did not.


Lester Bowles Pearson: Those were his words, and he cannot try to sneak out of them. Those words reflect on the opposition and therefore they should be withdrawn at once, and without any equivocation by the Prime Minister.


John George Diefenbaker: I do not know what the words were.


Lester Bowles Pearson: Well, I do.


John George Diefenbaker: Sometimes the hon. gentleman's recollections have not proven to be in accordance with the facts. I would say, if their sensibilities have been hurt, that if they are not working for it-I will not say they are because they tell me they are not-that will be the ultimate end as they go about this country preaching gloom and doom. I quite frankly say that they are not working for that purpose, but that will be the end, and that is what they are not unhopeful of obtaining.


Lester Bowles Pearson: On another question of
privilege, Mr. Chairman; I hope you heard those words. The Prime Minister has said that we are not unhopeful of a depression, and I ask the Prime Minister once again to withdraw at once words which are unworthy of him.


Jacques Flynn: May I say that in my opinion there is no question of privilege in those words.


Some hon. Members:: No.


Jacques Flynn: If any hon. member wishes to refer the Chair to any citation in Beauchesne which would indicate that similar words would be sufficient to justify a question of privilege I am willing to examine the question further. I should like the Leader of the Opposition to refer me to any citation which would indicate that such words justify a question of privilege. I have no objection to examining the matter further.


Lester Bowles Pearson: The words used by the Prime Minister were that the opposition were not unhopeful of a depression in this country.
Supply-Trade and Commerce I call your attention to chapter 3, rules of debate, of Beauchesne's fourth edition, page 131:
No member can be allowed to attribute any intention to insult others; or
to question the honour of one;-
To tell the House of Commons that the opposition is not unhopeful for a depression in this country, with all that means to the people of this country, and to say that that is not a question of privilege or that is not insulting the opposition or questioning the honour of the opposition, seems to me to be incomprehensible. The Prime Minister should be asked at once to withdraw those words.


John George Diefenbaker: In that regard, I have nothing to withdraw.


Paul Joseph James Martin: The Leader of the Opposition has asked you, Mr. Chairman, on a point of order, to ask the hon. gentleman to withdraw a statement. Until you have been unequivocal in your ruling, it is not open to the Prime Minister to make any other argument.


Jacques Flynn: The Prime Minister was answering the question of privilege which had been raised by the opposition, and gave his view as to whether those words should be withdrawn. This is the way I understood the intervention by the Prime Minister.


Lester Bowles Pearson: The Prime Minister has said he has nothing to withdraw in attributing to the opposition a desire for a depression or in saying that they were not unhopeful of a depression. Are you ruling, sir, that that is not a question of privilege and that the Prime Minister need not withdraw words of that kind?


Jacques Flynn: I have not made any ruling as yet. I have been trying to find the citation to which the hon. member has referred me. Do I understand it is citation 155?


Lester Bowles Pearson: Yes.


Jacques Flynn: This is a citation which I have consulted several times. In my opinion what constitutes a matter of privilege is the imputation of false or unavowed motives or anything which concerns the personal conduct of an hon. member. In discussing problems generally, even if some expressions may be strong, in my view they would not justify a question of privilege because that is not something affecting the honour of any hon. member, and so no question of privilege would be involved.
Now, in so far as unparliamentary words are concerned, I think the rule is generally the same. There were no words used by the Prime Minister, in my opinion, that were unparliamentary. I do not see that there is a question of privilege. There may be justification, as I said before, for the Leader of

Supply-Trade and Commerce the Opposition to rise after the Prime Minister has completed his remarks and make a correction or state his views. Frankly I do not see that there is a question of privilege because neither the honour nor the conduct of the hon. member has been questioned.


Lester Bowles Pearson: According to your ruling, then, it is no reflection on the honour of the opposition for the Prime Minister to state that they are not unhopeful of a depression in this country. Is that your ruling, there is no question of privilege and no reflection on the honour of the opposition?


Jacques Flynn: May I refer the Leader of the Opposition to citation 150:
If a member should say nothing disrespectfully to the house or the Chair, or personally opprobrious to other members, or in violation of other rules of the house, he may state whatever he thinks fit in debate, however offensive it may be to the feelings, or injurious to the character, of individuals; and he is protected by his privilege from any action for libel, as well as from any other question or molestation.
If such a statement did justify a question of privilege, I think it would be very difficult to conduct the debates in this house. It is only what affects the personal conduct of hon. members that, in my opinion, justifies a question of privilege.


Lester Bowles Pearson: Then the only course open to me now that you have allowed the words of the Prime Minister to stand that the opposition is not unhopeful of a depression, is to say that this is a malicious falsehood.


John George Diefenbaker: Mr. Chairman, that is the usual course followed by the Leader of the Opposition. May I say to him that one of his most devoted followers was quoted in this house by the Minister of Finance on April 12. A Mr. Cohen was interviewing Mr. Templeton in the city of Toronto, and the following appears at page 3165 of Hansard for that date:


Mr.   Cohen@: Mr. Templeton, I know that politics interest you. Off the record, do you see a revival on the federal scene of the Liberal party? Do you see them staging a comeback?


Mr. Templeton;: This is off the record on television?


Mr.   Cohen@: Off the record on television.
Mr. Templeton then replied as follows:
The only thing I would say about that is that there is a chance of a Liberal revival if there is the economic recession predicted by-I hope accurately -by a number of well-known economists.
I need say no more in that connection.


Lester Bowles Pearson: You have said quite enough.


John George Diefenbaker: There was the spokesman-


George James McIlraith: You have branded yourself.


Lester Bowles Pearson: You will be charged.
[The Chairman.]


John George Diefenbaker: That was the statement on that. Now I return to the question of unemployment in 1957.


Lester Bowles Pearson: Mr. Chairman, the Prime Minister has quoted someone to substantiate his statement that the opposition of this house is not unhopeful of a depression. I call your attention to the fact that the Prime Minister has quoted no member of parliament in this house, no member of the opposition, and we were dealing with the question of the Prime Minister's statement about the opposition of this house. Of course, he was quite out of order in producing that statement.


An hon. Member:: No one challenged it.


John George Diefenbaker: As far as that is concerned, I can quite understand how the Leader of the Opposition feels in that regard, because after all, in the very beginning of our term of office, from the time that the famous amendment was moved in January, 1959-


An hon. Member:: It was our job.


John George Diefenbaker: -day after day, hour after hour in the house and outside the house they have continued to preach the probability, indeed the actual acceptance of recession in this house-


Some hon. Members:: Hear, hear.


John George Diefenbaker: -and in many cases exaggerating the facts. They will object to my saying "for political purposes", and I certainly would want them to object properly to any statement that I make. I simply say that they exaggerated; they have overemphasized.


Paul Joseph James Martin: Give us the facts.


John George Diefenbaker: The hon. gentleman says "give us the facts". I am glad the hon. gentleman asked for the facts.


Paul Joseph James Martin: Six hundred thousand.


John George Diefenbaker: A moment ago he said there were one hundred and fifty-


Lester Bowles Pearson: And you said one hundred.


Some hon. Members:: Sit down.


William Moore Benidickson: Sit down and hear the truth.


John George Diefenbaker: I have before me the news release-


An hon. Member:: Oh, oh.


John George Diefenbaker: The hon. member always laughs when he realizes he is in difficulty. The employment situation of June, 1957,

issued jointly by the Department of Labour and the dominion bureau of statistics shows that an estimated 5,834,000 persons had jobs on June 22, 1957. Registration for employment at N.E.S. offices-


Paul Joseph James Martin: Give us the figure. Mr. Chairman, on a point of order-


Some hon. Members:: Sit down.


Paul Joseph James Martin: Mr. Chairman, on a point of order.


An hon. Member:: You do not want the facts now.


Jacques Flynn: Order. I see the hon. member for Essex East rising on a point of order.


Paul Joseph James Martin: The Prime Minister has challenged the figure which I gave.


Some hon. Members:: No, no.


Paul Joseph James Martin: On a point of order-


Some hon. Members:: No.


Paul Joseph James Martin: Mr. Chairman, you must-


Some hon. Members:: Sit down.


Paul Joseph James Martin: Mr. Chairman, you must let me state my point of order. If the Prime Minister sits down, I will sit down with him.


Jacques Flynn: Order. I have to listen to the hon. member for Essex East.


An hon. Member:: I don't.


Paul Joseph James Martin: Mr. Chairman, you said you have to listen to me. I hope you do not mean it is a painful performance.


Mr. Johnson:: You said so.


Paul Joseph James Martin: The Prime Minister quoted-


Some hon. Members:: Point of order. Sit down.


John George Diefenbaker: If the hon. gentleman wants me to put the facts before the house-


Jacques Flynn: The hon. member for Essex East has risen on a point of order. I have to hear what he has to say to decide whether it is correct or not.


Paul Joseph James Martin: Thank you, Mr. Chairman. The Prime Minister was about to quote figures-


An hon. Member:: He has not quoted them yet.


Paul Joseph James Martin: I am sure hon. members opposite realize their difficulty; but surely they are going to allow me to plead at the bar of this house.
Supply-Trade and Commerce


Jacques Flynn: Does the hon. member sustain this point of order?


Paul Joseph James Martin: I was just addressing myself to these men who-


Some hon. Members:: Order.


Paul Joseph James Martin: I made a statement as to the unemployed in June, 1957, and the Prime Minister now, in an effort to show that that was a wrong statement is quoting from the N.E.S. figures, which are not the figures on which I am relying, which he realizes. In order to be fair the Prime Minister ought to quote from the-


Some hon. Members:: Order.


Jacques Flynn: Order. The Chair has heard enough to decide that this is not a point of order, but rather a point of disagreement.


John George Diefenbaker: Mr. Chairman, I know the hon. gentleman's great powers, but he does not yet know what I am going to read, although his powers of perception in this case indicate that he is afraid of the facts. Registration for employment at any N.E.S. offices-


Paul Joseph James Martin: How about persons without jobs?


John George Diefenbaker: -totalled about 267,000. I simply wanted to place on the record-


Lester Bowles Pearson: That is not the figure we were talking about, and you know it.


John George Diefenbaker: Mr. Chairman, that concludes what I have to say in this regard. I will conclude with the warning that the former government had in 1957. Coupled with that warning they proceeded throughout that entire election campaign to say that there was no unemployment, that all was well. Today their conscience is troubling them, and I can understand it. They concealed these facts from the Canadian people and they will never get over the fact that these concealed records, not made available in 1957, were shown in the house in 1958. We produced the 1958 economic report in 1959. We were prepared to produce the 1959 report in January, 1960, in accordance with the practice I followed in 1958. The opposition did not want it; they refused any delay and they asked for an immediate vote.


Lester Bowles Pearson: What about the 1960 figures?


John George Diefenbaker: As far as the present situation is concerned, the Minister of Trade and Commerce has stated, as I understand it, that there was no economic report of this type in 1960. There has been none. That is his statement and no amount of endeavour to obscure the issue-

Business of the House


Paul Joseph James Martin: What about what he said the day before?


Some hon. Members:: Sit down.


John George Diefenbaker: -on the part of the opposition in any way answers what the Minister of Trade and Commerce has stated. We will give you the past reports; we will give you that report at any time up to 1959; but we do not intend to produce that which does not exist according to the minister.


Some hon. Members:: Six o'clock.


George James McIlraith: Mr. Chairman, I wonder if the Prime Minister-


Some hon. Members:: Six o'clock.


Mr. Maclnnis:: You called it, so sit down.


Jacques Flynn: Some hon. members have called it six o'clock. Shall I rise, report resolutions and ask leave to sit again?
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, I wonder if the house leader would like to sit tonight in order to make further progress with his estimates?


Some hon. Members:: No.


Paul Joseph James Martin: We might as well sit here till September now.


Gordon Minto Churchill: I think not. In view of the exhaustion apparent on the other side I think we should rise.


Lionel Chevrier: I would think the exhaustion is on the other side, judging from the noise we have had. Could we get some indication of what we will be doing next week, particularly on Monday, and would the house leader be good enough to indicate the order in which these items will be taken?


Gordon Minto Churchill: We have a few items left, as I mentioned last night, to consider and they will come up on Monday. There is the concurrence in the report of the civil service commission affecting the staff of the House of Commons; the concurrence in the report of the committee on procedure, and various other items to which I drew attention last night.


Lionel Chevrier: May I ask if these items will be taken in the order in which they were given last night?


Gordon Minto Churchill: I think that will be the order in which we will take things on Monday. If there should be any change in that order I will notify hon. members on the other side in plenty of time prior to the opening of the house at 3 p.m. on Monday afternoon.
The house adjourned at six o'clock, without question put, pursuant to special order.