May 13, 1930

LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I am smiling at you.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

It is offered to the people of this country by the Minister of Finance as a cure-all for the different ills that this government has brought upon the people of Canada. This budget is offered to the country by a group whose whole tariff history is a record of deception, trickery and vote-chasing; by a group whose endeavour at this moment is not to help the people of Canada, but to catch their votes; by a group who next year would just as unhesitatingly throw over the free trade or the protectionist side of this budget, as they have in this session thrown over all the principles and policies which they espoused in the past; offered by a group, sir, whose lack of Canadian policy has put Canada in a position from which she will take years to recover.

Now, I might be asked, what is the object of a budget salad of free trade and protection such as this? The object, of course, is political. It is a political shield with two distinct sides, the protectionist side for the east and the free trade side for the west, with no doubt a

strong recommendation whispered to the government supporters not to show the two sides in any one part of Canada during the election. In other words, the object of this budget is to get the votes of both the protectionist and the free trader by deceiving the one and betraying the other. It is no wonder the Minister of Justice the other day at Woodstock made a speech in which he said:

This is not an eastern budget, nor a western budget, nor a farmer's budget, nor a manufacturer's budget, nor a workingman's budget.

Of course it is not, it is a political budget; that is what it is.

The people of Canada are tired, sir, of a government which has shown no leadership or initiative, no consistent policy or principle, no frankness or courage, and no real Cana-dianism. They are tired of a government which has shown by this budget that it is nothing more or less than an " organized hypocrisy." They are tired of a government which after nine years of power has placed this country in a worse condition than it has been in at any time previous to this year. The sooner we are rid of a government which by its policies has taken away the work and wages of the fathers, sons, brothers and husbands of this country, and thinks that it can gain the support of the women voters by a pound of tea, the better for Canada. The sooner we see the end of a government which by this feeble gesture has endeavoured to keep out twenty-five or thirty million dollars' worth of imports from the United States, yet allows the other nearly nine hundred million dollars' worth to pour in, the better for the workers and wage earners of Canada. The sooner the low tariff people in the west who have kept this government in power realize that they have been betrayed, victimized and used as cheap pawns on the chessboard of power, the better for western Canada. What Canada needs, sir, is not a crazy-quilt policy, as outlined in the budget, but a consistent, courageous, Canada-first policy which will build up on the northern half of this continent not only a great, prosperous and progressive Canadian nation, but a worthy portion of the British Empire.

Mr. E.-C. ST-PERE (Hochelaga) (Translation) : Mr. Speaker, Mr. Solomon Buckley

Harris, a journalist on the staff of the Springfield Republican, remarks in his memoirs that "the art of politics is to obtain results". The history of our own country is proof that, notwithstanding the many changes effected in our political outlook, we have arrived at positive results. In keeping with the times, our governments are aware that they must have re-

The Budget-Mr. St-Pere

course to up-to-date methods, adopt a new "modus operandi" to keep up with the needs of the day, and this with the aim of governing the country for the greatest welfare of the majority.

An arbitrary deed committed years ago, threw' nations into disastrous conflicts. Two plenipotentiaries thrown out of a window was the cause of the thirty years war, and England unsheated the sword against Spain because some Iberians took a fancy to cut off the ears of the captain of a sea trading vessel. Things have changed since then. Countries, to-day, are more sensitive to the attacks launched against their foreign trade than to the affronts which caused great conflicts in the past. Turning to more contemporary times, let us note that one of the causes of the Great War was the promulgation of a tariff on hogs. And what is happening now? Are not the South American republics and Europe leagued together in unanmous protest against the new tariff of the United States.

It is useless, sir to suppose for an instant the withdrawal of Canada from the economic world. It would be idle works to maintain that we could escape from the changes which have taken place everywhere. It would be but vain boasting, to say that our country could prosper, without adapting our economic life to those conditions forced upon us by an almost general confusion of international affairs.

By its resolution of September, 24, 1925, the Council of the League of Nations asserted its conviction "that economic peace will greatly contribute to maintaining the security of nations". The desire of all good Canadians is that this peace may come as soon as possible to promote the healthy state of the economic world and the conditions which would help the expansion of civilization. Any national policy which is narrow in its outlook is detrimental, not only to the nations which endorse it, but also to the others as a whole. The economic conference has further noted, that the after-war experience prove that the prohibition of imports and exports, arbitrary regimes, disguised discriminations which result, sudden changes in customs duties and the high tariffs prevailing in many countries have fatal results on production and trade.

The United States are, at present, passing through a crisis of upward revision of their customs duties. Certain countries have been fretful of this recourse to autarchy by the United States in order to make sure of their economic independence. It is the Argentine Republic, the country of the teachings of Garvo and Calvo, that voices the most serious

threats of tariff retaliation and boycotting of United States products. The New York World on February 24, 1930, published the following articles..

Antagonizing a Neighbour

Offhand it may seem a small matter to most American protectionists that Argentina is seriously disturbed and offended by the impending upward revision of our tariff. The newspaper La Razon is interviewing eminent citizens; many of them are declaring for retaliatory measures; the Rural Society representing 4,000 ranch owners, is calling for a boycott on American goods and the purchase of British imports; and a majority of the Agrarian Federation, composed of small farmers, favours increased duties on our farm machinery, automobiles and household appliances. But what of it? Argentina is a remote, thinly populated and imperfectly developed country, isn't it? The population is still under eleven millions, isn't it? It is all very well to talk of the great markets offered by it and by Canada, another country so seriously disturbed by our tariff plans that the Conservatives are talking of a party campaign for high counter duties. But cannot the 120,000,000 American people shape their own economic policy without bothering to consult these minor nations?

This article shows without further comments, that high protection tariff does not receive unanimous approval in the neighbouring republic.

The United States, contend the partisans of its high tariff, must have recourse to this upward revision of customs duties for the following reasons; the dumping of goods coming from countries having a depreciated currency, the desire to maintain old or recently created industries to a certain level. If such a stand was not taken they could not survive, or protect invested capital. They are masters in their own country, and we have nothing to say against this attitude of our neighbouring legislators.

Canada must conclude, sir, that it is indispensable to its security to develop in an ever increasing way the means to support itself. Without going into the respective merits of the theories of free trade and protection, without going back to ponder over the contentions of Gladstone, Blaine, Mills, Cartwright. Carnegie, Lloyd George, Balfour, Chamberlain, Beaverbrook, Baldwin, Scullin, and all the economists whose works embellish the shelves of the library of parliament, may I state that the budget introduced by the hon. Minister of Finance (Mr. Dunning) is a conception of our times and for our epoch. Tt contains no threats and its subject matter answers to our present wants.

The Budget-Mr. St-Pere

Two items please the public especially, viz., the British preference and the countervailing duties.

"Hands across the sea," such was the appeal of Sir Wilfrid Laurier when he granted the British people preference. He did this because England was the only country where Canadian products were admitted free of duty. The Hon. William Lyon Mackenzie King made the following statement at the 1926 Imperial conference:

The same satisfactory position as to total inter-empire trade is indicated by an analysis of trends in Canada. In the past four years, our imports from the British Isles have increased approximately from 117,000,000 dollars to 163.000.000 dollars, and from 15.7 per cent of our total imports to 17.6 per cent. We would wish that British imports formed a larger proportion of our purchases, but in view of increasing competition from other countries, and particularly the advantage which the United States exports derive from close proximity and knowledge of Canadian requirements. it is striking to find the share of British exports on the increase. I think it will be agreed that but for Canada's extension of preference to Great Britain in 1897, the starting point of the present intricate inter-imperial preferential system, and further developments such as the grant in our budget of 1923 of one-tenth additional tariff preference to British goods entering by Canadian ports, the position would be far from as satisfactory as it is to-day. It may further be of interest to note the very high percentage of manufactured goods in these imports from the British Isles, 87 per cent in the last fiscal year, or more than half as great again as in the case of imports from the United States, from which we derive a good deal of our raw materials. In the same four years the rate of duty levied on dutiable imports from Britain declined from 24.8 to 22.1 per cent.

Great Britain was last year our best customer; it has alternated in this position of late years with the United States. Four years ago we exported to Great Britain 300,000,000 dollars' worth of Canadian products; last year, over 500.000,000 dollars. Yet the percentage of our exports taken by Great Britain fell during these years from 40.4 to 39 per cent, a fact which reflects the growing diversity of our export trade and the increasing amounts taken by Continental Europe and Asia.

During the past four years our trade with the other members of the British Commonwealth has shown marked expansion in totals, and a slighter increase in percentage of our whole export and import trade.

This took place in 1926. In 1930, Canada increases this preference on many items. Our country in no way desires to have the artisans of England; it wishes to see them find at home the prosperity and happiness they enjoyed when the vessels of Albion carried the products of the United Kingdom across the seven seas of the world. Sir R. Gillen, once stated that preference was a measure of safeguard

for certain products of the empire. The right hon. Mr. Snowden is not without knowing that our wheat needs an outlet, that the next crop is growing and that, for the Western farmers as well as for the manufacturers, to restrict production always entails smaller revenues. The United States have forged ahead in trade exports, since 1914, but England certainly can regain the lost ground, if she generally responds to the offers which come from various parts of the empire. Without going back to the Corn laws the United Kingdom cannot be satisfied with extending her thanks for the advantages that Canada procures to her exports.

The budget brought down by the hon. Minister of Finance does not go beyond the limits, as a number of manufacturers of our country have entirely approved of it; that is, the items enjoying British preference will help to increase production, to create new wealth, more stable employment and better remuneration for a great number of unemployed that modern machinery has temporarily thrown out of work. Canada wants economic peace. Her representatives at Geneva proclaimed it to the world. Our Finince minister by putting the countervailing duties in the budget, will first have recourse to thit economic expedient as means of negotiation, reserving later their application against those countries which, dealing with us, refuse to abolish certain tariff regulations harmful to our exports. The fundamental notion of this countervailing tariff will not vitiate in an? way the normal course of competition by putting in danger the essential supplies of certain nations as well as the outlets no less indispensable of others. It is to attain the reestablishment and future development of the world activities, to succeed in improving the respective positions during trade negotiations, in eliminating that desire of retaliation against foreign tariff measures which are very injurious, etc., that this countervailing duty was proclaimed. It holds no threats: still less do they imply retaliation measures synonymous to high protection. It is properly speaking, a simple measure of an economic order creating no special privilege.

The Liberal party realizes that disorganization would result from the abolition of a tariff wall. It refuses to believe, like those who complain of "the theft of their exaggerated protection", that it is always more advantageous to decrease the imports than to increase the exports. We must note that if exportation increases, production, the wage3 of workers and the national revenue increase proportionately; if importation decreases,

The Budget-Mr. St-Pere

owing to too high customs duties, the level of the articles increased lowers not only the possibility of exportation but also the consuming capacity of the country. It is to the conquest of new markets that we must turn. We have already done so with success; we must reach higher. Canada is an exporting country. Let us produce rationally and let our industries never be in such a position as to create temporary unemployment, because of our production which must compete with that of the United States on other markets.

A tariff for the people, enacted by a government which realizes that the state is for the people and not the people for the state, such is the policy that the King government proclaims in its budget of 1930.

It is a difficult thing to fashion a tariff capable of satisfying a whole population. The Conservatives demand a tariff which would protect national industries by establishing equilibrium between the cost of production of imports and the products of our domestic industries. The Liberals are in favour of a tariff for revenue by establishing fair competition between domestic productions and imports. If we were to judge by their programs in economic matters, the two parties would seem to have the same object in view, but it is in the practice that the chasm appears. The Conservative tariffs are always higher than those of the Liberals.

For years, there was a question of withdrawing the control of the tariff from the political arena, so as to make it a national question instead of having it decided by local interests. Tariff being so to speak the expression of a fiscal policy, how can it be withdrawn from political control? On the other hand it could never become a science by remaining in the field of politics.

In order to obviate to all this, it was considered best to create a tariff commission, which has already justified its existence. After having heard the requests and objections of a number of industries, farmers and consumers, it sent to the Minister of Finance its report which embodied what Mr. Thomas Walter Page, Chairman of the United States Tariff Commission from 1920 to 1922, qualified as " the only method capable of bringing about certain reforms in the tariff systems." The farmer is not, thank Heaven, this ferocious m^n described by LaBruyere:

" black, livid, sun-tanned individual held down to the soil which he digs and turns up with an invincible stubbornness." If he no more leads that extraordinary hard existence that Massillon, Saint-Simon and Arthur Young

have described under the most gloomy colours, we must admit that he had a right to have his grievances adjusted. Although not favouring him with exceptional advantages at the expense of the consumers, the King government gives him the opportunity of getting more from his land and retaining those who too often forsake it to seek in the mirage of our large cities that happiness to which they aspire but which deserts them most of the time.

The merchant and manufacturer buy in the course of business certain commodities with a view to disposing of them under a more or less modified form. They know pretty well %vhat the cost of production has been and are thus enabled to set a sale price which will ensure a certain margin of profit. Competition among them is regulated by professional skill, technical ability and resources in manufacturing; the vastness or moderation of their desire for riches. Should the profits anticipated fail to materialize, they have as a rule the alternative of storing their products until a better opportunity offers of selling them. When they sell at a sacrifice, it is for considerations well known to them: the desirability of retaining their help or their customers or of paying off a debt. Besides, they are in a position to limit their losses, or to make up for them by increasing their gains in some other lines of their business. In a word they have the upper hand at every turn.

The farmer is in a totally different position, he has no control either over the cost of production or over the sale price. His raw material is a manufactured product in the acquisition of which he is bound to submit to the demands of his_ purveyors. As regards his implements, he is in the same position, while, as regards labour he is met with exigencies as great as those -with which the manufacturer or merchant is confronted. Besides he must put up with atmospheric conditions: a late frost, a sudden storm may imperil the fruits of the labours of the year; the sunny days which hasten the ripening of his crops, may also blight his hopes. When he starts work and goes into expenditure which rapidly increases as time goes on in order to secure a far off result, he is unable to foresee what will be the outcome j he is at a loss to tell what profit he will derive from an uncertain venture. And the extent of his risk is gauged by the despair of that farmer m the "departement de Gers" who having obtained for his cow one-half only of the price expected, hanged himself on reaching home.

It will not be seriously contended that farmers are responsible for the high cost of living. It is a worldwide phenomenon, the causes of which are too evident and well known to dwell upon.

The Count of Paris believed in the formula: "Institutions have corrupted men," but is it not proper to admit some truth in the reverse formula: "Men have corrupted institutions?" Indeed, it was the day after the putting into force of the new seasonal tariff,

The Budget-Mr. St-Pere

that jobbers and profiteers thought it wise to increase the price of commodities still under the duties "ad valorem," contending that this new tariff system was responsible for it. Lies, added to mercantilism which deserve the contempt of all honest people. "Coveant con-sules!" Let those who govern, watch!

The economic tendency of Canada, for the last five years, has tended upwards. Thanks to abundant crops in the Canadian west, the purchasing power of the farming community has greatly increased, and that period of the seven fat cows has given us a series of favourable trade balances which helped us to liquidate successfully the current obligations of Canada abroad. Trade, industry and finance reached new heights in 1929. The volume of industrial production exceeded by more than 14 per cent that of the previous period, during the first nine months of 1929; the volume, as a whole, of business, expressed in dollars and cents, as well as the general level of investment have greatly exceeded the figures mentioned in the schedules submitted by the Dominion Bureau of Statistics.

As we must admit that events cast their shadows before them, two noxious features intervened during the autumn. The wheat crop showed in 1929 a falling off of 300,000,000 bushels, and the competition of the wheat trusts on the markets of Europe brought on a reaction which was generally felt in all fields of activity and contributed greatly to unemployment. The reaction of the crash on the exchange market equally created an economic uneasiness from which Canada will shortly recover. Our favourable trade balance suffered from the falling off in our exports since last June, following the slowing down of the grain shipments, especially wheat.

It would take too long to give the details of all our statistics, but let us be optimists when realizing that the visible wealth of Canada is $27,000,000,000 and that the total sum of all our economic activities represents $5,500,000,000.

Since the war the outstanding feature in the situation has been the considerable importation of capital from the United States; in 1913 United States capital investments were probably around 650 millions; to-day they approach 3} billions. British investments in Canada have in the meantime slightly declined.

In spite of the large importation of capital from abroad, Canadian capital probably controls at least 60 per cent of the securities of all enterprises located on Canadian soil. Foreign capital investments as a whole are not greatly in excess of 20 per cent of the national wealth.

It must be pointed out in addition that Canadians have large amounts of capital invested abroad. The Bureau of Statistics estimate of

this amount in 1928 was $1,579,074,000 divided as follows:-In Great Britain $131,915,000; in the United States $874,626,000; and in other countries $572,533,000.

Capital investment by other countries in Canada, 1913 and 1929

1913 1929

United States. . $ 650,000.000 $3,400,000,000Great Britain. . 2,500,000,000 2,210,000,000Other countries. . 175,000,000 250,000,000$3,325,000,000 $5,860,000,000

A young nation like ours cannot dispense with outside help, and if England in return for the preference that we grant her, wishes to show herself practical and grateful, let her invest with us some of her capital to create industries, as she did during the period extending between 1900 and 1912. Our untouched natural resources await a response to this appeal. The industrial development of Canada first rests with the work of her sons, and secondly, England's help.

Our total trade exceeded $2,000,000,000, in 1929. Canada draws its supplies from everywhere and its trade relations extend to all countries. We must bear in mind, that our industries import a large quantity of raw material, a sign of prosperity. Enough as regards to statistics. The forty minutes allotted to me do not allow me to give any more.

The King government will soon be asking the Canadian people for a renewal of its mandate. Its history, since 1921, is that of a return to prosperity, the reduction in the national debt, a considerable expansion in industries and exports, the reduction and even the wiping out of many taxes, the enacting of many social measures, aiming at the prosperity and welfare of all classes and provinces in the Dominion.

A government which has so well managed the affairs of Canada since 1921 cannot possibly lose the confidence of the public; and the wisdom of which it gives proof by not increasing the British preference on textiles will certainly assure it the gratitude of thousands of workmen depending on this industry, in my riding, as well as in many other localities of the province of Quebec. Let the manufacturers respond to this generous act by increasing the wages of those who contribute to the prosperity of those industries. It would be a proof of well placed altruism.

The Liberal party is rational and not swayed by traditions in its undertakings. It avoids mere routine when it is more or less out of touch with the requirements of the time; it puts logic above sentiment, fairnes0 toward?

The Budget-Mr. Stirling

the people above the holding of power, and it prefers experimenting to plodding in the narrow ruts of the past. Liberty, justice, equality, local autonomy and uprightness are ideals from which the Liberal party must never depart. A great American poet wrote that:

" Freedom, from her mountain height, Unfurled her standard to the air."

Let our Canadians never forget that freedom united to progress must ever be found on lofty heights.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Grote Stirling

Conservative (1867-1942)

Mr. GROTE STIRLING (Yale):

Mr. Speaker, there is a feature in regard to the proposals of the government concerning the schedules on fruits and vegetables in which they appear to be departing from the principles they have been supposed to follow all these years; apparently they have grasped at protection and gone crazy. In a great many instances it will be found that they are proposing further protection than that for which the fruit and vegetable growers have asked, and if the Liberal doctrine be true that of necessity an extra duty means a higher price to the consumer, then the consumer will have to pay more for his fruit and vegetables in the future. Certainly he must be careful no't to put the blame for that increase on the producer; he must not say to the producer, " This is what you have been clamouring for all these years. We knew what would happen; the price has risen to us, and you are to blame."

I point out to you, Mr. Speaker, that an examination of these schedules will show that the proposals of the government in a considerable number of instances go further than the producer asked to have them go. For years past, in his divisional organizations, the fruit and vegetable grower has been discussing the amounts of duty to which, in his opinion, the specific rates should be raised in order to give him that protection he considers to be his due. These discussions have been carried on in his provincial organizations; they have been taken up by the national organization and presented to the Advisory Board on Tariff and Taxation ever since its inception, through the medium of the Canadian Horticultural Council. The basis of the producer's plea always has been that we can produce the quality and we are convinced that we can produce a much greater quantity, displacing some of the importations of those commodities from other countries, if we are given reasonable facilities for so doing, but the producer always has had in the back of his mind the position occupied by the con-

sumer. It has not been the wish of the producer to initiate such high rates of duty as of necessity will perturb the consumer, for if the consumer is too severely handled in this matter he will buy less and we shall have a smaller distribution. In the working out of the problems which confront us, both fruit and vegetable growers look for a greater and more perfect distribution through the markets of Canada than we have attained as yet.

In connection with certain highly perishable commodities such as peaches and strawberries the proposition put forward by the producer has been that the specific tariff should be increased. That tariff should be applicable during the period of our production, but before and after certain dates which may be set by the minister the tariff is no intimate concern of the producer. However, examination of these proposed schedules will indicate that in a great number of cases the producer has been given the amount of specific duty for which he asked not only during t'he time of his production but during the whole year, and in addition he has been given something more for which he did not ask. In many cases the specific rate of duty has been raised to the amount asked for by the producer, although not in all cases; this is to be kept on the year round, so that when Canadian production has ceased and there are no Canadian fruits and vegetables on our markets which would tend to stabilize prices, the tariff will increase, the price will rise and the enhanced price very probably will be passed on by the trade to the consumer. Over and above that, however, the producer has been given something further for which he did not ask. The present proposal of the government is that in addition to these specific duties there shall be an ad valorem duty which shall be alternative to the specific rate, and whichever is the higher shall be collected. The ad valorem rate on vegetables is 30 per cent; the rate on fruits is 25 per cent, and the duty which is higher, as between the ad valorem and the specific, will be collected. I think the way that would work out would be as follows: when Canadian production is moving on to the markets in full volume, the price would tend to be low and the specific duty would be higher; when Canadian production is over the price would tend to rise, and it would then come under the ad valorem duty. I am persuaded that the higher price will be passed cn to the consumer. The revenue of Canada will benefit, but the consumer will pay more for his necessities and it is hard to understand how t'he grower will benefit thereby.

The Budget-Mr. Stirling

My main objection to the government's proposal is the fact that once more it has turned a deaf ear to the growers' request for something in the nature of an emergency tariff. Foreign countries with surplus production of certain fruits and vegetables endeavour to keep that production off their own markets because the price, there, would be broken. They look around for some unprotected spot to which they can send their perishable commodities, and in this particular instance Canada is next to such a neighbour. The surplus production of the United States is tipped into our markets at various times. When the glut is coming into the Canadian market the price is so low that the ad valorem rate is not the higher, and the specific rate is insufficient. So far as I know, the grower has never asked that the specific rate shall be raised to such a height as would make the price such as to prohibit the foreigner marketing his products in Canada.

Two winters ago the producers of British Columbia sent a delegation through the western provinces in an endeavour to meet the opposition which they were prone bo believe existed in that part of the country. That delegation met associations of farmers; it met representatives of labour; it met the press; it met the cooperative societies; it met responsible individuals, and it was careful to explain that its mission was not to discuss a general rise in the tariff-that part of the case had already been submitted in detail bo the tariff advisory board-it was there to meet supposed opponents and make sure that the view of the producer was correctly explained. The members of the delegation returned home to British Columbia with renewed hope because of the kindly feelings which had been expressed toward their view.

As I said before, the government has once more refrained from doing anything which will be of the slightest assistance to the producer in taking care of the glut in importations. At the present time nothing stands between the producers and these importations except what one might call the toy clause of the Liberal government. That clause was inserted in the Customs Act in 1922 and requires the passing of an order in council bo make it operative, which order in council this government has never passed. An order in council was passed in 1926, which this government proceeded to use when they returned to power. Subsequent orders in council were passed which provided some effective protection, but when the fanatical free trade supporters of the government blew up all those orders in council were rescinded. We are now in the position in which

we were before. It seems to me to be quite unreasonable that we should be expected to rely on that impotent clause of the Liberal government, precious to them because it replaces one which they repealed and which had been put into effect by their predecessors. That previous clause took some cognizance of the costs of production. However, the Liberal government said: to consider the costs of production is unworkable, and they ignored the fact that that clause had been in operation with satisfactory results. The Liberal government has not in the past shown any desire to pass the necessary orders in council, and it seems to think that recantations at this late date will appeal to the fruit growers.

One of the reasons for repealing the orders in council in 1928, was a letter Written by the Department of Justice. This letter stated as an opinion, but not as a ruling, that it was improper to use the dumping clause on articles carrying a specific tariff. A few days ago a despatch from Ottawa appeared on the front page of the Vancouver Daily Province which stated that now that the government had imposed an ad valorem duty on fruit it would be possible to use the dumping clause in the future for the assistance of the apple grower. I cannot imagine the apple grower believing that this government would pass an order in council to help him in view of the way it has flouted him all these past years. When the glut importation of apples is entering Canada, the price is low and the ad valorem duty is not the higher. The specific duty is insufficient, but, it is not to apply because of the letter from the Department of Justice saying that it is improper to impose the dumping clause in relation to articles carrying a specific tariff.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn):

That is not what it said.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

Does the government

really think that the fruit and vegetable grower is such an arrant ass as to believe in these late protestations of assistance? The thought passing through the mind of the fruit and vegetable grower is quite different; it is similar to that couplet written many years ago:

The devil was sick, the devil a monk would be,

The devil was well, the devil a monk was he.

These gluts to which I have been referring do not occur every year, nor in succeeding years do they occur in regard to the same fruit or vegetable nor even in the same variety

The Budget-Mr. Stirling

of any fruit or vegetable. Last year, so far as I am aware, there was no glut trouble with regard to apples, but there certainly was with regard to prunes. Let me read two or three short extracts from our own inspectors in some of the markets in Canada. This is from Edmonton:

Very few British Columbia prunes have come into the city of Edmonton, although considerable quantities have been handled in country cars. The city and the adjacent towns were supplied with Washington prunes that were bought at 30 cents or 35 cents and were laid in here at from 4 cents to 10 cents per package less than British Columbia stuff could be. In the single week from September 9 to 14 there were 13 cars of the Washington prunes sold in Edmonton; and the total for the season must be over 30 cars. The British Columbia prunes moved in country cai*s partly because the rates direct to country points made the delivered cost lower than on American prunes reshipped from the warehouses here and partly because they were needed in the country cars to make weight and provide a reasonable assortment.

J. M. Cassels.

This is another one from Regina:

The British Columbia Italian prunes were subject to the same competition as in the past years, namely the early importations of Washington prunes. The Washington prune deal this year started off at very low prices and the market declined to even lower levels before the deal was over. The same conditions existed in respect to Washington prunes that have been noted in past seasons. The fruit was packed very immature and on arrival at destination did not have the proper sugar content to give it a good flavour, or to make it desirable fruit for canning purposes that the Italian prune is when properly matured. The consumers purchased the Washington prunes in large quantities on account of the very cheap price. I did all that I could to discourage the imported prune deal, stating that this would not be satisfactory on account of the fruit being immature, but cannot say that I had any measure of success.

J. W. Dilworth.

This is from Vancouver:

We have not received a single car of prunes this season; up to date we have received around 20 cars of Yakima prunes which has killed the sale of plums. Some retail stores selling as low as 60 cents a box.

N. E. Peters.

So prunes were entering Canada from the United States at, say thirty-three cents for a twenty-two pound box. The duty that was being levied was nine cents. Nine added to thirty-three makes forty-two and prunes cannot be produced at forty-two cents a box. The present proposals would raise the duty byseven and a half cents. Seven and a half added to forty-two is forty-nine and a half. Prunes cannot be produced, packed and ship-

ped at forty-nine and a half cents a box. In 1926, when the minister had the right to set fair market values, the figure which he set was sixty-six cents a box, and I think the opinion of the producer, the trade and perhaps the consumer, would confirm the fact that sixty-six cents a box was by no means too high a figure.

What the grower has asked for has been a measure of assistance which shall be there on the shelf, ready for use, when an emergency occurs, and which will at least tend to raise that very low price to the figure which he considers is a fair market price in Canada. Prunes we grow in abundance. We certainly could grow a sufficiency to take care of the fresh prune requirements of Canada and we could go a long way towards producing sufficient prunes to take care of the dried prunes needed in Canada. Only the other day I received some dried prunes, processed by the Dominion government at Summerland. They were excellent; I have never eaten a better imported prune. What is the use of one department of government carrying on these experiments helpful to the fruit grower, if another department of government by its inaction makes it well nigh impossible for the fruit grower to continue to exist?

On apples the grower has not asked for any increased duty. He has asked for assistance in times of glut. The specific rate proposed by the government leaves that amount as it was before, namely, thirty cents a box, and merely clarifies the wording. Alternate to that is an ad valorem duty of 25 per cent on the value of the importation. When Canadian production is over or all but over, the price certainly tends to rise. The ad valorem duty will come into effect. It is extremely probable that the trade will pass the extra duty on to the consumer. The consumer will pay more for his apples and for the life of me I cannot see in that case just how the producer is going to benefit. In times of glut neither of these two methods of handling the duty on apples will be of assistance. In times of glut, apples may come into Canada at sixty cents a box and the ad valorem rate will then certainly not be the higher. The specific rate of thirty cents a box will be insufficient so far as the producer is concerned.

I cannot go through every item in these schedules, because that would be wearisome and the time would not be sufficient, but I desire to refer to one or two, taking them more or less at random. Let us look at the case of grapes. Production of grapes in the

The Budget-Mr. Stirling

Niagara peninsula produced the wineries. British Columiba is producing more and more grapes for table use and also for the supply of wineries. Of recent weeks, perhaps running into months, California has increasingly been importing into Canada crushed grapes, grape-juice, and more deadly from our point of view still, concentrated grapejuice. The grape grower considered that with that competition it would indeed be difficult for him to survive. He therefore came to the tariff board and put forward his proposals. He asked that crushed grapes might be included in the item "grapes," but he did not ask for any increased tariff on that item. He asked further that grapejuice might come under a tariff of twenty-five cents a gallon and that the density of that juice might be subjected to the Boehm test. The government has not acceded to any of his requests.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Does my hon. friend say that the latter request was made before the tariff board?

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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

That is my information. This concentrated grapejuice comes in at a four to one strength. A given gallon at an increased price, will, when water is added, produce four gallons of grapejuice.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Does my hon. friend say that this was developed before the tariff board?

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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

That is my understanding. I am subject to correction. All that the government has done with regard to that tariff is that grapes are to be allowed to come in free in future under the British preference; the intermediate tariff has been reduced; the general tariff remains where it was, and the duty on crushed grapes and grapejuice has not been altered so that they will continue to come in under the old item. The minister shakes his head. As I understand it, after giving the matter some thought, that is the situation.

Canada also produces peaches. Peaches are grown in Ontario and British Columbia. A good many go to the canneries. The peach grower, realizing that the old tariff of one cent a pound was quite insufficient for his purpose, considered the matter first in his district organizations, then in his national organization, and coming with a united front before the Tariff Advisory Board, suggested that that one cent be raised to H cents a pound. He suggested that figure because in his opinion it was the minimum amount of duty under which he could survive, and that H cent a pound duty which he suggested was

to apply during the ten weeks of his production. The proposal of the government is that the one cent a pound duty shall be raised to 1-J cents and that it shall apply all the year round, and that alternate to it there shall be a 25 per cent ad valorem duty; so that when Canadian production is drooping and there is no Canadian produce to temper the price, the price tends to rise, with the result that I have indicated previously.

In July of last year there entered Canada from the United States all but 1,500,000 pounds of peaches. Many of the peaches find their way to the canneries, and even there they find sorrow because the Canadian canneries are chock-a-block with canned peaches largely brought about by an immense increase in the importations of canned peaches from Australia. That is a fact which undoubtedly will be taken into consideration by the canners when they come to make up their figures both as to price and pack for the canned peaches of 1930.

Let me put on record the importations of canned peaches from Australia in the last few fiscal years. Canned peaches, which enter Canada under a tariff of half a cent a pound came into this country in 1926 from Australia to the amount of 166 pounds, a mere nothing. In 1927, the importation was rather over half a million pounds; in 1928. a little over 200.000 pounds; in 1929, over 1,000,000 pounds, and in 1930, over 2,500,000 pounds. That amount of peaches entered Canada under a tariff of half a cent a pound under the Australian trade agreement-one instance which I remember we on this side of the house pointed out to the government in the debate in 1925 on the Australian trade agreement, when the gov ernment were so certain that the items contained in that treaty would not bear heavily on the farmer and when we pointed out to them, and we have been proved correct, that every benefit that Canada receives under the trade agreement is paid for by the Canadian agriculturist.

Onions may be cited as yet another case. The old tariff on onions was 30 per cent ad valorem, or half a cent a pound with the price at $35 a ton. The grower came to the tariff board and asked for a specific rate of three-quarters of a cent a pound to apply during the period of his production and the subsequent period during which economic storage is feasible. The government has put-forward the proposition of three-quarters of a cent a pound all the year round, and as an alternative 30 per cent ad valorem, and whichever is the higher will be collected.

The Budget-Mr. Stirling

It is interesting to note that the United States tariff against our onions is 2 cents a pound, and now they propose to raise it to 24 cents a pound. Our tariff against their onions, as I have just stated, is three-quarters of a cent a pound. The grower is being continually advised by officials in the department and by the government to do more in the way of storing his produce rather than rush it on to an unready market in its glut-to be in the position to feed the market as the market requires the goods. In the city of New Westminster recently there was built a cold storage plant, probably the last word in cold storage plants. It was largely assisted by a Dominion government grant and you may be sure, Mr. Speaker, that in their relations with the producer the government has lost no opportunity of instancing this as one more evidence of its intense desire to do everything it can for the producer-not of course in their unregenerate days by doing anything with the tariff, but rather by cold storage. In December last the associated growers of British Columbia placed twenty-seven carloads of Okanagan onions in that cold storage building, onions excellent in quality, in prime condition to serve the spring market. They had incurred storage costs, which are by no means light. They were held for the very reasonable figure of $40 a ton f.o.b. Around the first of April there was unloaded at the coast 130 tons of New Zealand onions, which entered Canada free under that order in council which the government flipped across the ocean to New Zealand five days after the Woodstock speech, receiving nothing in exchange therefor. What is the good of advising us to store our onions if we are to be met by unfair competition, as we think it, even from the dominions? Following that 130 tons, at a later date came another 50 tons, and we have to market our onions, which have incurred cold storage costs, in competition with onions entering this country free. Australia has a tariff against our onions of $40 a ton. New Zealand's tariff is considerably less than that. But our doors are open, and the government now, with a magnificent gesture, opens the door to onions from the British possessions, which in future may come in free.

In passing, let us notice cauliflower and celery. Cauliflower is not a commodity which lends itself readily to storage. Celery can be stored, and is stored to a certain extent. The grower asked for a specific duty of 2 cents a pound on these two vegetables. That is the amount which he has been given. But he asked for it during the time of his production and during the time of economic

storage. The duty is to be there all the year round, and it is to be subject to an alternate ad valorem duty of 30 per cent, and both these vegetables, so far as they can, may come in from British possessions free.

Lettuce arrives in boxes. If it arrives in prime condition those boxes contain ice in between the layers of heads. The producer asked for a specific duty of 2 cents a pound for a certain period. He has been given it all the year round with an alternate 30 per cent ad valorem duty, but the producer never for a moment imagined that the ten or twenty pounds of ice contained in that box would also be subject to 2 cents a pound duty. The minister again shakes his head. My evidence is pretty strong on that point, and if the minister will examine it he will find that that is what has been happening since t'he second of May.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

My advice is to the contrary, but if my hon. friend is correct I can assure him that that will have to be fixed.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Good. The fixing process has begun.

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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

Now, will the minister go one step further and fix the emergency tariff? There is another item with regard to strawberries. The grower asked that the rate on strawberries be raised from 2 cents to 3 cents a pound during the eight weeks of his production. The rate has been raised to 3 cents a pound; it is to be in effect all the year round with an alternative 25 per cent ad valorem. The grower fully expected that, as in the past, the thin baskets, the immediate container of the strawberries within the box, would be included in weight for duty. So they are. But he never imagined that the wooden box outside the baskets should also be subject to 3 cents a pound. Those boxes weigh 11 pounds. The trade having to pay 33 cents per box on strawberries for the pleasure of passing that rate on to the consumer, the consumer, when he realizes these little jokers in the budget, must in fairness to the producer not lay the blame on him.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

This was to be an "orderly" tariff.

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?

Some hon. MEMBERS:

Order.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Perhaps some of the

lumbermen over there will have something to say about it.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The lumber comes from the United States.

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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

These illustrations I use to make my point that the government in its latter day has set aside its free trade principles

The Budget-Mr. Bothwell

and in accepting protection has gone crazy. When these results are known and are resented, the consumer, the press and the public of Canada must not in fairness to the producer attempt to put the blame on him.

When a bricklayer's labourer lays to his hand a trowel and starts to build a wall, he slobbers the mortar over himself, over the wall and over the passers-by. His job has not been to use a trowel, but to fetch and carry bricks. Sometimes he drops a brick, just as this government does. The Prime Minister dropped a brick when he made his "five-cent" speech.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

It lit on his head.

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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

He dropped another brick just two years ago when in addressing a tense and anxious collection of farmers who crowded into the railway committee room he based his argument in reply on what was an absolute misstatement of fact. Now, Mr. Speaker, I am not asserting that the right hon. gentleman rose to his feet with the deliberate intention to say what was not true. Rather do I believe that that galloping tongue of his ran away with him. Although his attention was drawn to the fact in the subsequent debate which ensued in this house, so far as my knowledge goes he has not corrected it, he has not withdrawn it, he has not substantiated it, and I am quite sure he has not apologized for having made it. But he based his case on it. Those who listened to the Prime Minister's reply to the grievances which the farmers laid before the government were but the ears of a far greater multitude scattered throughout Canada, and that incident, I can assure this house, has neither been forgotten nor forgiven. Like the bricklayer's labourer, this government has in its latter end taken into its hand a new tool-a tool which in the past it has condemned as useless, pernicious, provocative, a tool that it is unaccustomed to use, and the first piece of work that it has turned out with it is this amateur budget, this piebald suggestion. Throughout Canada during the campaign and on election day the people will be turning over a thought in their minds, "Can we trust this government?"

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

No.

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May 13, 1930