Mr. SPEAKER:

I have the honour to inform the house that I have received the following message:

Ottawa, June 18, 1936.

Sir,

I have the honour to inform you that His Excellency the Governor General will proceed

Agriculture-Implement Prices

to the Senate chamber Saturday next for the purpose of proroguing the present session of parliament.

I have the honour to be, sir,

Your obedient servant,

F. L. C. Pereira,

Assistant Secretary to the Governor General.

Right Hon. R. B. BENNETT (Leader of the Opposition):

I desire to make a few observations with respect to this report. The course which has been taken by the committee is one that certainly does not commend itself to me, in view of the fact that a tariff board has been set up for the purpose of considering the very matter that has been referred to the committee and we have been expending substantial sums of money without obtaining, it seems to me, any real result. I think it desirable to make a few observations also because of the fact that in 1930 we increased the tariff on agricultural implements, and the action taken at that time by the manufacturers was, as has been represented to this house on more than one occasion, an undertaking not to increase the prices. During the period of time that elapsed from 1930 to 1935 they actually reduced the prices; in 1936 the prices were increased to the point from which they had been reduced, and I had hoped that there would have been a little clearer appreciation of and fairness to the interests upon which the west so largely rely for sustenance and support when they are bankrupt. I say that with great frankness. These western provinces are coming to the dominion, asking for money, asking the dominion to find it by borrowing from the people of the country, and then denying to industry the right that it should have to compete in its own territory upon at least even terms with those who would take its market from it.

Mr. McLEAN (Melfort):

That is hardly correct.

Mr. BENNETT:

It is hardly correct?

Mr. McLEAN (Melfort):

It is not correct at all, Mr. Speaker, but I wanted to be polite. I knew I was out of order but I wanted to be polite.

Mr. BENNETT:

Then, if the hon. gentleman knew he was out of order there is no reason why he should depart from his usual custom and be polite.

IMr. Speaker.]

I want to point out a few facts that I think should be borne in mind by every Canadian. First, we cannot build our country if we are going to do it on a sectional basis. I referred to that the other day in connection with another matter. The Canadian manufacturers have at no time during the depression used the tariff to exploit their customers, the farmers. Why have they not done so? Because, having given an undertaking that they would not increase their prices, they have maintained that undertaking and kept their honourable word to the people of this country. Second, the Canadian prices have not been materially, if at all, higher than the United States prices despite the advantage they have in regard to mass production. Third, Canadian prices of implements, as a whole, are not higher to-day than they were in 1930, despite the small increases that took place this year. Fourth, these increases only restored, in any event, reductions that were made in 1932 when the position of the farmers was so difficult. Anyone who is familiar with agricultural conditions in western Canada and who knows the extent to which the farmer has more or less relied1 upon credit for the purpose of obtaining his implements, cannot help but be aware of the fact that the implement companies took enormous losses and wrote off hundreds of thousands of dollars-I am not sure that in the aggregate it would not run into the millions-'because of the depression. Then in 1932 they reduced the prices and the increases of 1936 only put them back on substantially the same basis.

The fifth point is that the Canadian companies made special provision for the wheat producers when conditions were at their worst, providing cash discounts and also reducing the receivables, that is, the obligations of the agriculturists, by very large sums of money when the situation was found to be at its most acute point, in 1933. Sixth, the Canadian companies, as I have pointed out, have taken great losses in notes due and interest due and have given the greatest possible consideration to their debtors as compared with that given any other class in this country. Add to that the Farmers' Creditors Arrangement Act, and you have a situation that is not similar to that in regard to any other class in the country.

There is a seventh point to which I think attention should be directed, and it is this: In opening our markets to the large United States concerns without Canadian plants we have simply further divided the market, lessening the employment in Canada and rendering it more difficult for the Canadian manufacturer to reduce his cost of production. As to that

Agriculture-Implement Prices

I think there is no reasonable doubt. Then there is a further point, the eighth point, that Canadian companies carrying stocks of machines and parts give service and extend credit to those who desire it on terms that are somewhat different from any other enterprise of which we have knowledge.

These seem to me to be compelling reasons why we should at least consider this matter on as favourable a basis as we consider any other enterprise. I am not arguing that any preference should be given these people but I do argue that they should have the same right that is accorded to others. While to others we accord an opportunity to appear before the tariff board to present their case, however, this committee now recommends that this shall be a continuing inquiry. The companies have already intimated that they desire to apply to the Minister of finance for the opportunity to appear before the tariff board.

Mr. DUNNING:

No, my right hon. friend is quite wrong. I have had no such intimation.

Mr. BENNETT:

I certainly saw in the press that they proposed to ask for the opportunity to appear before the tariff board, and I remember passing down, the street with one of the representatives of the companies whom I met. I asked him, "Are you going to the tariff board?" And he said, "Yes, if we get rid of this committee." That is as far as I can go. I certainly accept the minister's statement that no formal application has been made, but my understanding was that they intended to avail themselves of the offer the minister made the other day, when he said if they asked to have this matter considered by the tariff board he would permit that to be done.

Now let us look at it from another angle. Almost every other agricultural industry has some measure of protection in this country. Fruits have an ad valorem protection in the vicinity of 15 per cent. On cereals we have a protection ranging from 15 per cent to 80 per cent. Poultry has an ad valorem duty of between 15 per cent and 20 per cent. Dairy products are protected to the extent of from 15 per cent to 50 per cent, and the ad valorem duty on live stock runs all the way from 15 per cent to 70 per cent. These are the ad valorem duties dealing with farm products, and is there any member of this house who does not recall the agitation in connection with the increased duty on butter coming from New Zealand? The Minister of Finance of that day and' of this day (Mr. Dunning)

12739-252J

was compelled to give notice terminating the New Zealand treaty because the Canadian dairy farmer said he was not able to compete under the uneven terms that resulted from the imposition of so low a duty as that which then prevailed. The then government, the then minister who is the present minister, took steps to terminate the New Zealand treaty and on the very day that the succeeding government came into office the treaty was terminated.

I should like for just a moment to put this from the point of view of one who has been charged in eastern Canada, and especially in these two large central provinces, with having been unduly friendly-in the sense of giving public support-to the wheat grower. There was a time when wheat was sold in the markets of the world on a supply and demand basis, but with the support of various kinds that was given the wheat growers of other countries the Canadian position became such that steps were taken at the public expense to endeavour to improve the position of the wheat grower in this country. We have many things. In the first place we have a duty against importations of wheat from other countries, which is unimportant because we are an exporting country. Then we have the Crows-nest pass freight rates, which involve a very large sum of money per annum, being lower rates than those prevailing in the United States of America. Then we have the stabilization operations which were carried on under the aegis of the government which involved this country, on the application of the Minister of Finance, in an expenditure amounting to in the neighbourhood of $7,000,000. Further, we have the fact that last fall we fixed the price for wheat at 87J cents, which price witness after witness has said is not an unreasonable price to have fixed for Canadian farmers. Wheat is now being sold at from seven and a half to ten cents a bushel less than the price paid for it. The Canadian people must bear the loss. I differ from the policy of the present government which makes that inevitable, but I just want to put it this way: the wheat eaters of Canada do not consume more than one-fifth of the wheat grown and sold. If by reason of the fixed price of 871 cents that we now have we are involved in a loss of five cents a bushel, it means that the taxpayers, that is the wheat eaters of Canada, will pay a premium of 25 cents on every bushel of wheat they consume. That is what it means. And if the loss is 10 cents it means that for every bushel consumed in Canada a premium of 50 cents a bushel is imposed upon the consumers of

Agriculture-Implement Prices

Canadian wheat. That is a matter of computation. I repeat, we do not consume more than one-fifth of our wheat. If it means that we have a loss of five cents a bushel, that is 25 cents a bushel imposed upon the wheat eaters of Canada, the taxpayers; and if the loss is ten cents, it means fifty cents. Now, that will amount to many millions of dollars, $10,000,000, $15,000,000, whatever it may be. I put it to the house whether it is quite fair for the agrarians in the west to say to the manufacturers in the east that they, being in the centre of the most populous part of the country, where the larger part of the wheat is consumed, shall pay an added tax burden of 25 to 50 cents a bushel for what they consume, and expect them to contemplate with satisfaction their market being taken away from them by those who are outside of Canada. Is it fair? That is my point. I leave it at that.

One word more. This country according to the last census is no longer an agricultural country. Over half our population is now in cities and towns. We have become an industrial country, and we are taking our place now as the sixth trade country in the world- last year or thereabouts. That being so, can we contemplate with equanimity a situation which, without a hearing, reduces such measure of protection as was afforded to the manufacturers of implements, who had not raised their prices beyond what they were in 1932. and whose prices were not substantially different from what the prices are in the United States of America? It is true we exported some farm implements to the United States during recent months. Why? Because with the revival of agricultural production they found themselves short of implements, and we were sending implements to them as we did to other parts of the world.

I mention this at this time only because I cannot give concurrence to a report that contemplates sending back to a committee of the House of Commons, which has never been a useful body for the purpose of studying tariff matters, a question of such importance to every part of the country as that which has been under review. When I found the report of the tariff board on other matters accepted by the minister-and I cannot recall any reports made by -the tariff board since it came into being which successive ministers of finance have not accepted and crystallized into legislation-

Mr. DUNNING:

Not in whole, in all cases.

Mr. BENNETT:

Well, substantially that is so. What is the exception?

IMr. Bennett.1

Mr. DUNNING:

The exception is one of the reports this session.

Mr. BENNETT:

To which does the minister refer?

Mr. DUNNING:

I refer to the report which recommended that the government use its powers to increase the tariff when necessary.

Mr. BENNETT:

Oh, that is only a matter of procedure.

Mr. DUNNING:

That is a very important exception.