June 14, 1917

CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

The Act under

which bounties are paid on crude petroleum was passed in 1910, under the regime of my hon. friends who now sit

opposite, and I suppose it really was an adjustment as between duties and bounties, that when the duty on

imported oil was lowered, the bounty was

-given as a recompense to the producer of oil in Canada. I do not think the bounty was put on to stimulate the search for oil, and to develop the industry in Ontario, but rather to offset this reduced protection. If the intention is to carry out a policy designed to stimulate the production of oil, there is no reason why the bounty should be limited to any locality. If, however, the legislation was designed to recompense the producer in Canada for the loss of a protection in the matter of duty on import, and, if at the time the Act was passed, all of our production of oil was in a certain section, there is a basis upon which the present Act rests, which does not necessarily call for equality, as between different sections of Canada. Representations have been made to the departmeent on several occasions upon the subject, and at my last interview with some gentlemen connected with the development in Alberta, I asked them to send me as complete and accurate returns as possible of the wells which were being developed, and of those which were producing, and, generally, information which would enable us to deal with the whole subject. I think it is perfectly fair that, in the case of another development in another part of the Dominion, a difference in specific gravity should not be the determining factor in the payment of a bounty. 'Some other and better principle should be adopted.

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LIB

James McCrie Douglas

Liberal

Mr. DOUGLAS:

Will the minister give

me the information as to bounties paid on zinc at the present time?

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CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

That is by a

special Act passed last year. I am not administering that provision, and have not the information with me, but I shall be' pleased to obtain the information.

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LIB
CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

There was an

arrangement which was made to stimulate the production of zinc, I think, in British Columbia, and that is a special arrangement. I think there was an enactment passed last year or the year before which carries that out. From my general knowledge, all I can say is that that operation has -been very successful, and that the foundation of an industry has been laid, which is developing, and which promises to be permanent, and the price at which the spelter is now provided, under that arrangement, is very much lower than the price for which it could be obtained from other sources.

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LIB

James McCrie Douglas

Liberal

Mr. DOUGLAS:

I have information in connection with the zinc industry which would lead me to believe that, if the bounty on zinc were continued after the war, a very large plant might be established for concentrating, under the retort process, in the province of Alberta, at the gas fields which are being developed in that province at the present time. The statement has been made that the price of spelter is so high that a bounty is not required to stimulate the industry, but that, after the w-ar, with the large number of smelters established in the United States to take advantage of the demand for zinc at the present time, the competition will be so keen that, unless some stimulus is given to the zinc industry in Canada, the Canadian industry may suffer very materially, and that- if a guarantee could be given that the industry would receive some protection for a number of years after the war, a large retort smelter might be established in the province of Alberta, but that, unless such guarantee be given, the large expenditure which would be necessary .would cause promoters to be very chary about going into it. The writer of this letter informs me that, at the present moment, he has a large operating company in the United States, ready at any time to build a plant, provided the Dominion Government will give some assurance that, after 1918, which I believe is the time at which the zinc bounty ceases, under the enactment which the hon. minister refers to the guarantee will be continued for two or three years, it would be possible to have an industry of this kind established. The claim is made that, on account of the excessive rate of freight, it is absolutely essential that a very cheap fuel should be used in the smelting operation, and that gas appears to be the only fuel employed that would make it a profitable industry. Without a guarantee from the Government that a bounty would be enjoyed for a number of years -after the war, the advisability of establishing a large industry of this kind would be very doubtful.

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CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

I imagine that my hon. friend has reference to the bounty upon lead ores. Zinc and lead are intimately connected in many of the British Columbia .mines, because zinc is recoverable from the lead ores. There is no general bounty on zinc of itself. The Act under which the bounty is paid upon lead ores will come to an end on June 30, 1918. What I was speaking about was the -special arrangement made for the refining of zinc and the manufacture of spelter at the Can-

adian Pacific works at Trail. The bounty was given there for a special purpose- largely for a war purpose-the idea being that it was necessary to make a special arrangement in order to get practical results and to get them speedily. Although a certain bounty was given, the consideration wras a minimum price for the product to the manufacture of which the bounty was applied. That product has been utilized in the munition work of Canada. The matter does not come under my department;

I am merely giving my impression with regard to it.

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LIB
CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

No; I think they are under the Militia Department. The lead bounties are under my department.

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LIB
CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

No. Where the two are combined, I suppose the bounty is upon lead-bearing ores.

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LIB

Edward Mortimer Macdonald

Liberal

Mr. MACDONALD:

I assume that any

one producing merchantable zinc from lead bearing ores would be entitled to receive the bounty. The answer the hon. minister has given to the member for Strathcona would, I assume, apply also to an inquiry which I received the other day from a gentleman in Toronto who is interested in zinc bounties in Nova Scotia. I understand that special arrangements have been made by the Department of Militia with a concern in British Columbia for production at their smelter, and that unless some new legislation is introduced or the bounty extended, the aid now given to the production from lead-bearing ores will expires next year.

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CON
LIB
CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

I think they are all in British Columbia.

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LIB

Edward Mortimer Macdonald

Liberal

Mr. MACDONALD:

Has the minister considered the desirability and importance of doing anything in the way of extending trade with South America? When the manufacturing nations which are now embroiled in the war shall have set their bouses in order, they will proceed to deal with their own trade arrangements on the same basis as before the war. On this continent no effort has been made-not even by United States until very recently-for

reaching the tremendous trade of South America. We have not attempted to extend our steam communication on the Atlantic coast south of British Guiana. The great industrial countries of Brazil and the Argentine Republic have maintained their trade conditions, largely on account of their exports to Great Britain and other nations across the Atlantic. After their entry into the war, United States put forth special efforts to capture South American trade. As we are capable of sending our products south from Vancouver on one side of the Dominion, and from the Maritime Provinces on the other, special efforts ought now to be exerted with a view to extending our trade with South America, and, if possible, creating conditions under which after the war we shall have the advantage of the people on the other side of the ocean. However we may be associated in sympathy and sentiment with them, I am quite sure that the Allied nations will, after the war, strain every nerve, without the slightest regard to Canada, with a view to extending their trade. There is no reason why we should not anticipate that. The peaceful war of trade will go on, and if the fates decree that the older continent shall suffer the penalty of being the actual theatre of war, those nations which are more fortunate in that respect should take advantage of existing conditions. I do not criticise the minister for maintaining trade agencies on the other side of the ocean, although they must of necessity mark time until the war is over. But I think the people would support any effort made by the minister-and would consider any money devoted to that end as being well invested- to extend our trade with South America and the West Indies.

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CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

One great difficulty I have always found with regard to trade with South America is the lack of direct communication. You are always at a disadvantage where your trade has to filter through a foreign port, and it tends to get into the hands of a commission business in the foreign port through which the trade filters. Before the war I had taken up especially the possibility of steamship communication between South America and Canada, and had carried on negotiations to a certain extent. Had the war not broken out, I believe they would have been successful, but on the outbreak of war negotiations ceased, and during war time it has been absolutely impossible to have anything like a steamship service between Can-

ada and South America. The war completely disorganized the finances of South American countries for a long time; in fact they have not yet recovered. The system of carrying on trade with South American countries involves a good deal of difficulty and long credits. The United States or any other country that undertakes to do a large export business with South America must have banking arrangements; they are as important as steamship communication. Last night I spoke of the extension of our Canadian banks to the West Indies, and the effect of that on our trade has been very marked. The German policy was to push their banks ahead of their trade, and their banks were their commercial travellers, so to speak. We need in Canada some adaptation of banking facilities which will project that auxiliary to Canadian export trade which is needed everywhere, especially in South America. The necessity for banking facilities of that description is being brought home strongly to the British people to-day, and the result of their cogitations in the matter has been the formation of a very large and influential corporation, which is not assisted financially by Government, but with which the Government is sympathetic. This corporation is given an opportunity of acting in conjunction with the Government in the different countries in which it may establish itself, and to that extent is given the sympathy and the active backing of the Government. It is called a trade corporation, but according to the articles of incorporation, it might just as well be called a banking corporation, because banking is the foundation- of the trade and is intermixed with it as a factor or agent. I think a similar organization should be formed in Canada, so that along with the efforts of middlemen, producers and carriers, there would be this most important agent of banking and financial assistance. This matter is now being canvassed by business men throughout the country, and I hope that before the reorganization period we shall make some progress. South America has not been neglected. One of the best and most experienced trade commissioners that we had, Mr. Poussette, was our trade commissioner at Buenos Aires. The year before the war started he made a tour of all the different states of South America, and made a very thorough examination into trade conditions and possibilities. His -reports which are excellent, have been distributed everywhere and they are being studied by our Canadian people. The war intervened, and the work

was not brought to the point to which it otherwise would h-ave attained. After Mr. Poussette had finished that tour and published his report, I had him brought to Canada through which he made a tour, and he met the producers and manufacturers face to face and canvassed with them. A year and a half ago Mr. Poussette felt the call of the war and left his post, and he is now engaged in military work in England or at the front. In his place we have a Mr. Webb, a very excellent man who understands the language of the Argentine Republic. Our men occasionally go to South America, and whenever they go they speak very highly about the commissioner there, of [DOT]'the assistance he gives to them and of the reputation he seems to have with the commercial people there. This field is therefore not by any means neglected, and when the war is over I hope we shall be able to get steamship service to South America, and with an organization of the kind I have described, and the co-ordination of trade, here is a great field in South America* for certain branches of Canadian products. The people there do not manufacture largely; the countries are rich in possibilities; the better class of the people not only are rich, but indulge their propensities, and are good, generous, heavy traders.

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LIB

Edward Mortimer Macdonald

Liberal

Mr. MACDONALD:

I am glad the minister agrees with me as to the wisdom and advantage of looking to South America for trade development, and I quite appreciate the difficulties to be encountered. One of the difficulties would be removed if it were possible, by the Government taking certain exceptional powers with our Canadian banks or in some other way, to provide for an extension of banking facilities in South America. -Our brethren in Great Britain, while the war is on, appreciate the necessity of maintaining their trade connection, and by the corporation which has been formed and of which the minister has spoken, they are preparing for the maintenance of the trade which has always existed between the Atlantic states of South America and Great Britain. We ought not to be behind, and I would urge upon the Government the duty of taking up this financial problem and endeavouring to do what is being done in Great Britain.

With regard to the question, of shipping, I am 6orry the minister is talking about waiting until after the war. I have grown- weary of urging on the Government the duty of providing for a Canadian Mercantile marine. If we wait until after the war, we shall

have the greatest difficulty in getting ship6 for our needs, because the ships of Great Britain, France and our other Allies will be used in maintaining their own trade. Here is this great continent to- the south of ue with marvellous possibilities. The possibilities of trade are quite as great on the western coast as on, the east. The minister has outlined the difficulties; those are the' only difficulties, and I would sincerely urge upon the Government the bounden necessity and duty of providing for the conditions I have described. Unless we provide a market on this continent for our natural resources and manufactured products I believe that the expenditure of money for trade expansion in these older countries will not produce any considerable results. The whole world requires our grain and our farm products, and will continue to require them for a great number of years. It will not be necessary to have commissioners to look .after that trade; the trade will be there, and it will simply be a question of getting the products to the market. The competition that will arise as soon as the war is over will prevent to a very great degree any expansion of our trade with these older countries. But this great continent to the south of us is the Mecca to which the eyes of the business men of this country should turn. We should 'bend every possible energy in that direction, by the immediate construction of ships, by the creation of banking facilities, and of trade routes both on the Atlantic and the Pacific, because the people of the United States are our natural buyers, and have a great many commodities to exchange for ours.

Salaries and contingencies under the Inspection and Sale Act, $3,000.

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LIB

Frank Oliver

Liberal

Mr. OLIVER:

A few days ago I brought to the attention of the minister a communication which I received from a point in my constituency, in which the secretary of the local branch of the United Farmers of Alberta complained that they were unable to place any orders for binder twine either with the Grain Growers' Grain Company or the T. Eaton Company. The correspondence they had received was to the effect that binder twine was scarce because it had not been possible to secure transportation of the raw material from the seaboard to the point of manufacture. The minister was good enough to send me a memorandum on the subject which, I am sorry to say, bore out the statement made by my correspondent. It would be a very serious

condition if there was to be a shortage of binder twine, and I should be glad if the minister would tell us what the situation is.

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CON

George Eulas Foster (Minister of Trade and Commerce)

Conservative (1867-1942)

Sir GEORGE FOSTER:

The general

situation has, I think, improved. It has been very difficult, if not impossible, to import the raw material for the binder twine. Hitherto we have received a good deal of binder twine from the United States, but there has lately been some difficulty in having orders placed and filled. I think most of the manufacturers of binder twine in Canada are filling orders. The International Harvester Company, of Hamilton, in a communication in the month of May which I sent to my hon. friend, do not anticipate any shortage of binder twine; I think they provide more than 50 per cent of the output in Canada. Since that time we have had no complaints. We presume that the orders are being filled. A pretty large order for binder twine was placed in the United States by British people, but the twine was not exported from, lack of transport. We allowed this to be brought into this country, although it did not comply with the conditions of the

5 p.m. Act, as regards tagging and we guarded against its being sold under our own Marking Act by giving it a special tag. By Order in Council 300 or 400 tons of this twine was allowed to come in to help make up the shortage.

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June 14, 1917