May 18, 1933

CON

Donald James Cowan

Conservative (1867-1942)

Mr. D. J. COWAN (Port Arthur-Thunder Bay):

Mr. Speaker, one has only to listen to the observations which have been made by members on all sides of the house to realize the difficulty which arises in framing legislation dealing with the grain trade which will appeal to all interests. The bon. member for Peace River (Mr. Kennedy) has spoken on behalf of the western Canadian farmer and he has stated the position in which he finds himself when he comes to contemplate the legislation now before us known as the amendment to the Canada Shipping Act. We are on common

Canada Shipping Act-Mr. Cowan

ground in slating that the grain, trade and the shipping of grain to market is one of the most important functions in our economic life. The growing of grain is important and the means by which that grain reaches the market is also important. The hon. member has pointed out only one side of the picture. There is another side in which I am particularly interested, representing as I do one of the ports at the head of the lakes which relies almost exclusively upon the shipment of grain for the maintenance of its industrial life.

We have built up in Canada a merchant marine which must be protected and must be given the opportunity to function. Otherwise, the fear which the hon. member has expressed as to the possibility of an absolute monopoly in the transportation of our grain will be realized. The desire of the men who are employed in this merchant marine is that it be given an opportunity of functioning and that -they be given the right to labour in preference to seamen employed by the American merchant marine. I think I am on common ground' when I say that everyone desires that Canadian grain should be transported to the British market in Canadian owned ships manned by Canadian seamen, *that is, provided that no other interests are jeopardized or prejudiced. It seems to me that that is the sensible conclusion at which we should arrive and I propose to address my remarks in an effort to allay t'he fears which seem to be in the minds of certain western members that their interests would be jeopardized by the passing of this amendment.

If hon. members would read the evidence given before the Senate committee I think they would discover that there is in existence to-day a sufficient tonnage of Canadian ships to handle all the Canadian crops. This may not have been true ten or fifteen years ago but I think the evidence was conclusive that there are in existence to-day sufficient bottoms to handle the entire Canadian crop. If that be the case and the rates charged are not exorbitant, what good argument can be advanced that Canadian wheat should not be shipped in Canadian bottoms from Canadian ports? We have the facilities and the Canadian seamen have a right to work in preference to the seamen of other countries. At Port Arthur and Fort William I have seen American ships, fitted out and supplied at other ports, leaving with a cargo of Canadian grain while our own seamen stood idle on the docks. Such a situation should be remedied and it is intended to remedy it by this amendment to the shipping act. As I said a 53719-320

moment ago, I do not think that anyone would disagree with this proposal provided there was no increment in the rates. In my opinion there are at least four ways in which this can be prevented.

0 . . .

In the first place, there is the competition

between Canadian companies. I dio not think anyone needs to be told at this time that the shipping companies are working in the red.

I believe that every company operating a fleet of boats on the great lakes to-day is losing money and has lost money for some time. I mention this only to show that there is competition amongst such companies as the Patterson Company, the Canada Steamship company, the Matthews line and so on. When companies are insolvent or facing bankruptcy there is always a desire to get business even at cut rates. This has been the case in Canada during the past year. In order to get business and meet competition these companies have been willing to cut rates.

There is a second reason why these rates will be kept within bounds. There is an alternative route available to grain shippers by way of Buffalo, the Erie canal and New York. A Canadian shipper or exporter in Winnipeg is bound to take advantage of the cheapest route and if he finds that the route via Buffalo and New York is cheaper than via Port Colborne and Montreal, he will ship his grain over that route. There will always 'be that competition Which will prevent the Canadian companies making the rates unduly high. If they do that they will find that their route will be forsaken in favour of the Buffalo route.

If that argument is not strong enough to convince my bon. friend, theTe is the further argument of the Inland Water Freight Rates Act which provides that the board of grain commissioners may fix a maximum rate. It is true that they do not fix actual rates, that being left to competition and other factors, but they do fix a rate which cannot be exceeded. This act forces the shipping companies to keep their rates within bounds.

Then there is the further fact that the governor in council may exercise their powers to suspend this law. That provision is an advantage to the shipper because if the rates become unduly high, the governor in council have the right to suspend this act. In all frankness I say that in my opinion that would be done only when the rates became exorbitant. I do not think there is cause for fear on the part of hon. members of this house that a monopoly or combine would be brought into being. I think it would be impossible

*152 COMMONS

Canada Shipping Act-Mr. Cowan

for such a thing to happen. Consequently, I approve of the principle of this bill.

There are a number of other sections with which I do not propose to deal other than to say that I give them my support. These have to do with safety devices, the providing of better working conditions for the men and so on. Such provisions will always meet with hearty approval at my hands. The Seamen's union is at one in saying that they are to their advantage. I do not propose to speak at any greater length on those sections of the bill. With regard to the section dealing with the coastal laws, I think it will be to the advantage of Canada to see that this , section is put through and at this session so that the resultant changes can be made during the current year.

Correlated with the business of shipping is that of dry dock construction plants. It appears to me that it would be to their advantage to have this legislation go through so that a greater amount of repairs, when damages occur, might be completed at Canadian dry docks. A United States boat will not go into a Canadian dry dock for repairs, because of the regulation that there must be paid to the United States government a tariff of 40 per cent of the cost of such repairs when the boat returns to its United States registry. This bill is designed to put us on a parity with United States shippers; it is their law practically word for word. I do not see that anything could be said by interests adverse to us as to our giving them a sample of their own medicine, because if this measure goes through, Canadian boats will have exactly the same privileges as United States boats and the latter will have no advantage over Canadian boats in Canadian waters. I therefore commend the government for bringing this bill down at this time and I intend to give it my hearty support.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. J. L. BROWN (Lisgar):

Mr. Speaker, the only clause of this bill that I shall discuss in any detail is the one which deals with the proposed amendment to the coastal laws. As regards those clauses dealing with the interests of labour engaged in hazardous employment, we can only say that we would give them our hearty support. I say therefore, it is regrettable that this highly contentious clause of the bill should be introduced along with those clauses that we would like to support, and we shall therefore be compelled, because of this contentious clause, to oppose the whole bill, notwithstanding the fact that there are some clauses which we would like to approve, sympathetic as we are towards

all legislation that would protect men who are engaged in hazardous employment.

The proposed amendment to the coastal laws is one that we as producers of wheat cannot view without alarm. Anything that has within it the possibility of increased freight rates must, to say the least, merit the keenest scrutiny on our part and we are not going to be very easily convinced that this bill does not contain that possibility. The avowed purpose of the bill is to protect Canadian shipping and when any measure is introduced that has for its object the protection of a particular class of the community, it almost inevitably results that that protection is given at the expense of somebody else. That that protection can be given only by taking something more from the Canadian producers of wheat is the opinon that we on this side of the house hold, and we intend to protest against any such course. I am not going to say that it is the deliberate purpose of the government to overburden the producer of wheat. I do not know whether the hon. member for Bow River (Mr. Garland) made that statement as he was quoted by the Minister of Trade and Commerce (Mr. Stevens). Certainly we would not say that it was the deliberate purpose of the government to place additional burdens on the producers of wheat, but I say that the almost inevitable result of this bill will be to impose such burdens on him and that is something that at the present time he cannot stand.

There is nothing of greater concern to the wheat producer than freight rates on wheat. Situated as we are in the middle of the continent, competing as we have to do with other wheat producing countries more favourably situated, the question of freight rates is to us of prime importance, infinitely more important than to our Australian, or Argentine, or even our Russian competitors. The question of raising the freight rate on wheat by even the fraction of a cent, with wheat at its present low price, is to us a matter of prime importance. The wheat trade and the production of wheat constitute our principal industry. I do not underestimate the importance of the live stock industry; our cattle, beef, hog products, poultry and dairy products are all important, and in spite of the opinion which is sometimes given expression to in the east, we are engaging in those industries to the utmost extent that we find profitable. Nevertheless it is true that for many years to come, the agriculture of western Canada will be based on wheat, and therefore freight rates

Canada Shipping Act-Mr. Brown

that are paid on that commodity are to us of first importance.

The Minister of Trade and Commerce will pardon us if we are not so readily convinced as some hon. memibers opposite seem to be that this will not result to our disadvantage. We are not going to be very easily convinced that there will be no increase in the freight rates on wheat. We have had similar assurances in regard to the tariff and there has been no indication as yet that the assurances of the government in regard to increases in tariff have not been prejudicial to those of us who have to buy the products of Canadian manufacturers. The hon. member for Port Arthur-Thunder Bay (Mr. Cowan), who has just spoken, says that the interests of the producer will not be jeopardized. We have reason to fear that they will be because we have had some experiences in the past when there has not 'been sufficient competition in the carrying of grain. They tell us that there will be no increase in local rates. Will hon. members opposite explain to us why it is that wheat is carried to Buffalo cheaper than it is carried to Georgian bay ports? Does anyone imagine that on the basis of actual cost, it costs more to carry wheat to Georgian bay ports than it does to Buffalo or that it costs more to carry wheat to Port Collborne than it does to Buffalo? The figures that have been furnished by the board of grain commissioners absolutely disprove any 6uch statement. I have before me the figures for the years 1930, 1931 and 1932, covering the months from April to December and so far as the figures I have are concerned, there is only one month in which the freight rate to Buffalo was higher than either to Port Col-borne or Georgian bay ports. Yet, with these figures before us, they ask us to expect that rates will not be increased if Canadian steamships are given the monopoly of the carrying of wheat. We on this side of the house are not going to be so easily convinced as some hon. members opposite seem to be.

Like the hon. member for Comox-Alberm (Mr. Neill) I was interested when, after the minister had presented his case, he was followed by a speaker on the other side of the house who proceeded to show from the evidence given before the Senate committee that -.here was strong reason at least to believe fiiat the bill would be prejudicial to our nterests. I wondered in my own mind where the hon. member was going to land, but it was quite evident before he got through that he was preparing a soft place on which to fall.

The situation at Buffalo is unique. It is unique in that it has always been to the advantage of the producer of wheat in western Canada and to those who export wheat. As has been said, Buffalo is the strategic point at which wheat can be stored. Wheat stored there can be carried to any of the American ports or to the port of Montreal, and as I have said, that is a unique situation which has been to our advantage. We do not propose to lose that advantage through any failure on our part to make our fight against changing it. We have no prejudice against Canadian ports; we have no prejudice against our wheat going by Montreal or Halifax or Saint John; but the position to which we are going to adhere is that we must have these alternative routes open. It is only by keeping them open that under the present conditions under which grain is handled we can expect to get the utmost possible return to the producer, and that, is the important thing to-day.

I have said that the situation at Buffalo is unique. The government tell us that they, introduced into this bill the exact wording of the United States bill dealing with similar matters. That may be, but the situation in the United States is not parallel at all. What would be a parallel situation? It would be the shipment of grain from, say, Duluth to Port Golbome in Canadian vessels, and then an American law stepping in forbidding the carrying of that grain from Port Colborne to another American port. It may possibly be that the American law as at present existing would forbid such a transaction. I suppose it would, but that is a situation which simply does not arise to any extent, because to what other American port could the grain be carried from Port Colborne? Perhaps across that little bit of water to Buffalo or down through the canal to some points on the south shore of lake Ontario-

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Or through the Erie canal to New York and Albany.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

But does that happen to

any great extent? If it does, we want the minister to give us the facts and figures with regard to that situation when we are in committee.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

It does not happen at all so far as Canadian vessels are concerned. The law prohibits it.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

That is what I say. Then

that thing in itself is not a matter of importance to the Americans so far as protecting the situation from their viewpoint is con-

5164 COMMONS

Canada Shipping Act-Mr. Brown

eerned, but it is of importance to us that the strategic point at Buffalo should be preserved.

After all, Mr. Speaker, this bill is the product of an attitude of mind that sees the necessity for ensuring a profit to everyone in the secondary industries in this country at the expense of the primary industries. It is one of the problems that concern us. I do not know how we are going to get away from what seems to be an inevitable situation, that the farmer is compelled to take simply what is left after everybody else has been paid. Since we have nothing to say at all, or only under very rare circumstances, in regard to the price we shall receive for our products, it is almost inevitable that the farmer has to take what is left after everybody else has been paid. In view of that situation we 'have to resist to the utmost extent of our ability any move that increases the costs that are taken off our product between the time it leaves us and the time it reaches the world's market. We have to make demands, as we have upon every occasion when we were dealing with the tariff, that our production costs shall be kept as low as possible. That is the only way we have to protect ourselves. It is the only kind of protection that the government can give to us, to ensure that our cost of production shall be at the lowest possible point, and it has always been upon that ground that we have resisted the impositions that have been made upon us for the benefit of other industries.

I wonder if the government have considered some of the possible results of this legislation. It is generally found that when established trade routes and established trade methods are interfered with there are some unforeseen and unintended results. We cannot foretell all the results in this case, but I am prepared to believe that the first result will be an increase in freight rates by Canadian ships. Do we imagine that the Americans are going to lie down entirely on the question of carrying Canadian grain? I wonder if the hon. member for Port Arthur-Thunder Bay (Mr. Cowan) fully realizes the significance of the admission he made when discussing this question, when he said that the exporter of grain would have the alternative route via American ports, and that if the grain went cheaper that way the exporter could ship that way. Here is what may happen. American steamers will not lie down on this job. They will carry Canadian wheat to Buffalo, where it will be stored, and let us rest assured that they will carry it in competition with Canadian vessels

carrying grain to Port Colborne or to Georgian bay ports. Now has not that situation the possibility in it of sending a larger quantity of Canadian grain via American ports and less via Montreal?

Topic:   CANADA SHIPPING ACT
Permalink
CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Has my hon. friend

lost sight of the fact that Canadian ships can compete in that trade? They can carry grain from Fort William to Buffalo.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

I realize that they can, but rest assured that if there are lower rates or if the spread between the rates to Buffalo and Port Colborne or Georgian bay ports is wider than it is at present, it matters not whether that grain is carried by American ships or Canadian ships. The situation still has in it the possibility of sending a larger amount of grain by American ports. Not that we as grain growers could object to that; I am not advancing it for that reason. But I am asking the government if they have considered the possibility of the adverse influence it may have upon the port of Montreal. So that, as I pointed out, these changes are very far reaching. One cannot be sure that the results intended to be achieved will be achieved, and that no ill effects will be the result.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I should like to ask a question. If as the hon. member has argued the result of this legislation will be to divert the grain trade from Canadian into American channels, how can he complain that in using that route his interests will be prejudiced?

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

I am not complaining that this legislation, particularly, is prejudicial to that route. When I spoke of that I was simply dealing with a general proposition, namely that we want the alternative routes preserved. That portion of my argument was not addressed to this bill. We want the alternative routes preserved. I simply pointed out to those who are strongly advocating the use of Canadian ports that this very step they are taking to help Canadian ports may have the opposite result.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

You cannot have it both ways.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

I am not trying to have it both ways. All I intend to do is to point out that the thing you are going to do may not have the result you expect. Much of the legislation of this government has had unexpected results. All restrictions upon trade have had unintended effects. I am simply

Canada Shipping Act-Mr. Thompson

pointing out that this legislation may be prejudicial to the interests of those who are advocating it, and who think that they are speaking in their own interests.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Alfred Duranleau (Minister of Fisheries; Minister of Marine)

Conservative (1867-1942)

Mr. DURANLEAU:

Does the hon. member not think that the six cent preference will be protection for the port of Montreal?

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

If you ask me my opinion in regard to preferences, I would say that we have yet to see that they have been of any value to us.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

They certainly have.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

When we go into committee we are going to ask the minister to prove conclusively that grain has been shipped through the port of Buffalo, and that it has received a preference. That is a matter I had not intended to discuss at the moment. My attitude towards the preferences in general is that up to the moment they have meant nothing.

We have heard something about maximum rates, and that competition ha3 kept the rates below the maximum. That may be true, so long as there is free competition. But when competition is removed the inevitable tendency will be for the maximum rate to become the minimum rate. That is almost certain to be the result. Further, I do not wish to be unduly offensive concerning any hon. member of this government, but I must state frankly that we have not confidence in the governor in council, under this government-

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

We understand that fully, because we have heard it so often. We know it, and we do not expect anything else-individually or collectively.

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

We have not confidence in the governor in council because their attitude has been to give secondary industries first consideration. How can we be expected to have confidence in the governor in council, after some of the things to which we have had to submit? Let us consider, for instance, repairs to farm implements, to which we have had occasion to refer.

Topic:   CANADA SHIPPING ACT
Permalink
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Are you dissatisfied with what we have done in that connection?

Topic:   CANADA SHIPPING ACT
Permalink
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. BROWN:

No, we are not dissatisfied with what you have done. The minister tries to get away with that kind of stuff, but it won't go.

Topic:   CANADA SHIPPING ACT
Permalink

May 18, 1933