Mr. BENNETT:

Pardon me, Mr. Speaker; he did not question the value of export trade

at any time. What he did say, and he repeats it, was that it is not a cure for the conditions that exist in this country.

Mr. EULER:

I am very sure that that statement came from my hon. friends in the far corner and not from my right hon. friend, but I quite agree with it. This government, or the supporters of this government, never advanced the thought that by the extension of export trade, by trading more with the countries of the world, we would find a panacea for all our ills, social or otherwise. I do not believe that. I do believe, however, that the promotion of export trade is a mighty factor in bringing prosperity to Canada or any other country.

Mr. BENNETT:

Hear, hear.

Mr. EULER:

My right hon. friend is now

consistent with what he said in the city of Montreal, I think in the year 1933, when he was given a banquet by the board of trade of that city upon his return from Great Britain. He said then, and I shall not give the full quotation because I do not desire to embarrass him-

Mr. BENNETT:

Go on; do not stop on

that account.

Mr. EULER:

plus and import those things which we do not produce ourselves, or do not produce to advantage. I have no particular fault to find with that argument. I think that is exactly the line upon which we are proceeding to-day. With our great natural resources, Canada must be a trading nation. With our resources of the farm, the forest, the mine and the fisheries we produce a great deal more than we can possibly consume at home. What would happen to our population if the men now engaged in farming, the thousands of men engaged in our mines, those employed in cutting timber in our forests and sawing it into lumber in our mills, our fishermen in Nova Scotia and British Columbia, found that because we could not sell our goods they were out of employment? So I say that in a country such as this, where we have great natural products, upon which are founded other industries as well, it becomes an absolute necessity that we find markets in other countries, because of our surplus products.

The complement of that, of course, is that if we expect to sell these goods in other countries we must also expect to buy, and we do buy. We do not produce cotton, rubber, tea, coffee, spices, or even sufficient iron or petroleum, among many other things, and of necessity we are obliged to import these into Canada. But as a general thing I think it is true that Canada is producing, and not importing to any great extent, the things it is best equipped to produce. She exports the surplus, and imports the things I have mentioned.

In developing export trade, this government, as did the previous government, has had to contend with a great many obstacles. Unfortunately, soon after the war, and perhaps more particularly in the last seven or eight years, certain countries, especially European countries, in order to prepare themselves and to make themselves self-sufficient in the event of another war, have tried to produce some of the goods which we sold them formerly. To a very great extent our wheat market in continental Europe has gone by the board, and we have been reduced to the necessity of selling our wheat largely in Great Britain. So, in order to bring about what might be described as an equilibrium of trade, whereby we can sell our goods to other countries and in turn receive commodities from those countries, we have found it necessary to try to arrange trade agreements.

What do we find to-day? Not only are there high tariffs against us but, what is

perhaps even worse so far as obstructions to trade are concerned, we have exchange control by which a citizen, we will say of Germany, might desire to buy a Canadian commodity, but cannot do so because he is not permitted to send money out of the country.

Then, we have to meet the system of quotas, as it is found in Switzerland and some other countries, which brings about an absolute limitation upon the quantity of goods which may be imported into that country. We meet also government monopolies, which operate in the same way. Thus, if we desire to establish markets in these other countries, and not be at a disadvantage with our competitors, it has been necessary for us to arrange trade agreements.

I believe we have been fairly successful in this endeavour. Perhaps some credit belongs to the previous administration because of some of the trade agreements they made. I do say however that we have been successful in promoting a very heavy export trade. As hon. members are no doubt aware, Canada now holds fourth place among the countries of the world in the value of her export trade. Our foreign trade, both buying and selling, is over two billions of dollars, and we had a trade balance-perhaps this is more interesting to the right hon. the leader of the opposition than it is to me-of some $315,000,000 in the past year.

Although I have not the exact number, nearly thirty such agreements have been consummated. We hope to make additions to that number. There has been difficulty in getting into the markets of some of the smaller countries in eastern Europe, and at the present time negotiations are proceeding with respect to them.

I should like to discuss for a few moments a question which has been raised by certain hon. members, namely that of the value of the policy of freer trade. The statement has been made, and perhaps more particularly by our friends to the right, that the recovery Canada is experiencing is not attributable to government policy, but is merely something which is occurring in all other countries. Their suggestion is that all other countries are recovering, and that Canada is sharing in this general advance. I am afraid that suggestion does not hold good when it is submitted to the test of fact. For the information of hon. members in the corner of the house may I place upon Hansard a few figures. In 1935 the increase in world exports was only 2-2 per cent, while the increase in Canada's

The Address-Mr. Euler

exports was 7-1 per cent. In 1936 world export trade increased 8| per cent, while Canada's export trade increased 23 per cent.

Again let us consider our agreement with the United States. Our exports in 1937, over those of 1935-I am taking the period in which the agreement operated-increased 28-2 per cent. I would ask hon. members to consider a further point of first-class importance in judging whether or not the trade agreement had anything to do with the increase in our exports. The increase in exports of products to the United States, on which the tariff was reduced as against Canadian goods, was in those two years 80-8 per cent. On those items which were already free, and which were bound so that the United States could not increase the tariff, the increase was 46 per cent. Those facts become really significant when I say that the increase with respect to items not covered by our trade agreement with the United States was only 7-1 per cent. If that is not an absolute proof that we profited, so far as exports were concerned, by our agreement with the United States, I know of no better method.

Mr. BENNETT:

May I ask a question, without disconcerting the minister?

Mr. EULER:

Yes.

Mr. BENNETT:

The minister must realize, I think, that the items which were not affected by the agreement at all, namely, those which were free and on which there is no change in the tariff, are responsible for the greatest part of the whole increase. All you have to do is to count them, as I did the other day.

Mr. EULER:

I will not make that concession.

Mr. BENNETT:

Well, all you have to

do is to count them.

Mr. EULER:

As a matter of fact, in those two years our exports to the United States increased from 8359,000,000 to the huge total of $470,000,000.

Mr. BENNETT:

Correct.

Mr. EULER:

Then, we received another advantage, through our trade agreement with the United States. Of late that country has also established the practice of entering into trade agreements with other nations. In our present trade agreement with the United States there is a clause giving to Canada what is known as most favoured nation treatment. I need not explain the meaning of that term more than to say that the practical result is that if the United States makes a trade

agreement in which she gives concessions to other countries, Canada automatically receives the same concessions. Of course, that is reciprocal and applies also in the event of our giving most favoured nation treatment to other countries.

I might give another example to show where trade agreements have been beneficial. Something over a year ago we made a trade agreement with Germany. Through that agreement our trade with Germany has increased almost one hundred per cent during the year in which it has been in operation, namely from $6,759,820 to $11,771,565.

Mr. BENNETT:

Perhaps the minister

would tell us what the exports were; that would be very interesting.

Mr. EULER:

Yes, I think I can give my right hon. friend the list, although I have not the complete list in front of me. I was going to come to that later; I will deal with it in a moment or two. I thought I might be interrupted with a statement that the exports to Germany consisted of metals and raw material, and other articles to be used in the preparation of war munitions. It is true that when the agreement was made the German representatives did wish to import into their country more of the raw material, including metals and some others, which they did not produce. But we did not agree to make that kind of arrangement. We insisted, and succeeded in having Germany agree to our stipulation, that 63 per cent of the credits which she will allot for the purchase of Canadian goods must be in the form of other goods, such as wheat, and. to a great extent, other agricultural products.

Perhaps I should give my hon. friends opposite some credit for the arrangements which were entered into with Australia and New Zealand. Our agreement with Australia has been renewed and slightly modified and during the last year our exports to that country increased to something more than $30,000,000.

I should like to deal for a few moments with another criticism to which I have just made casual reference, to the effect that the increase in our export business is due largely to the export of commodities which go into the manufacture of munitions. That is not the case. It would be idle for me to deny that with the speeding up of rearming in Great Britain and other countries there has been some effect upon the exports to those countries, but the exports for munition manufacturing purposes are not by any means the chief factor in the increase of our total exports.

The Address-Mr. Euler

Let me try to give some proof of that statement. Our agricultural exports did drop last year, due almost entirely to the fact that we had a drought in western Canada and made only a small exportation of wheat. Our exports of animal products increased from $97,000,000 in 1935 to $144,000,000 in 1937. It can hardly be said that that increase was due to demands for munitions purposes. The exports of wood and paper products increased from $176,000,000 to $263,000,000. There again it can be said that the increase was not due to munitions needs. It might be said ordinarily that iron and steel products would be used for this purpose, but as a matter of fact our exports of iron and steel products consisted largely of farm implements, machinery and automobiles.

As I mentioned a moment ago, in this two-year period our exports to the United States increased from $359,000,000 to $470,000,000. The United States were not concerned to any great extent in the making of munitions in those two years so that one can hardly attribute this increase to munitions manufacturing. Perhaps at this point I could give my right hon. friend the list of commodities which we export to Germany that he asked me for. The sixty-three per cent of the exchange which is allotted by the German government for the purchase of Canadian goods must be in wheat, asbestos, apples, seeds, lumber, fish meal, salmon, wood pulp and a number of other minor articles. I submit that none of those articles can be said to be used in the making of munitions.

I should like to say a few words with regard to nickel, perhaps a dangerous subject. It seems to be the general impression that our exports of nickel are used entirely for the building of war vessels and making of munitions generally. That is not the case. Some hon. members of this house, certain newspapers and organizations and many citizens of Canada have advocated that Canada should prohibit entirely the export of nickel, especially to those countries which are at war at the present time. I will not yield to anyone in or out of this house in my abhorrence of the outrages that are taking place in countries which I need not name. If, by the total prohibition of the export of nickel and some other commodities, it would be possible to stop the wars in which certain countries are engaged, I would be entirely in favour of such prohibition. That may be a compliment to the hearts of the Canadian people, but I question if upon further consideration it would be considered as a compliment to sound reasoning.

I desire not to be misunderstood on this point. I would not advocate for one moment that because we can make money out of the export of nickel we ought to be willing to export something which might cause the shedding of blood of innocent people with all the horrors attending modern warfare. Let us examine the matter for a moment. In 1910 the total world production of nickel was

25.000 tons. In 1916 and 1918, the war years, this production had risen to 52,000 tons. In 1921, the war being over, it had dropped to 9,100 tons. Then in the succeeding eight years up to 1929, when there were no wars and no great preparation for war, it rose to

62.000 tons, greater than it had been even during the war years.

The fact is that the companies in this country which produce nickel finding that that there was no longer a war demand for their product began extensive scientific researches, the result of which was that this metal was adopted for a great many uses other than for war purposes. Canada produces about ninety per cent of the world's nickel, the other ten per cent being produced largely in New Caledonia, one of the colonies of France on the other side of the world. I have it on very good authority that of the total production of nickel, only ten per cent, or perhaps a little more at the present time with all the war preparations, is used for munitions purposes. Therefore even though we discontinued entirely the sale of nickel there would still be sufficient produced in other parts of the world to supply war needs.

What would immediately follow would be a greater development of fields which are now not profitable to work in competition with the cheaper production in Canada. Substitutes would be discovered immediately, as was the case in Germany during the war. Perhaps I should not say this, but I may as well be frank. Should this country prohibit the export of nickel to Japan, unless the same prohibition were applied to exports to the United States, to Sweden and to other countries, there would be no doubt that nickel would reach Japan just as though it had been exported direct from this country. Perhaps I might offer this final observation. Those of us who have seen the stupendous and humiliating failure of the League of Nations in applying sanctions in the case of the Italo-Ethiopian war perhaps would hesitate before committing Canada to experimenting with sanctions on her sole account.

With the facts I have given to the house I think it may fairly be claimed by the government that at least some of the ex-

The Address-Mr. Euler

pansion in our export trade is attributable to the trade policies followed by this government.

I should like to make reference to certain statements made on Monday by my very good friend, the hon. member for Davenport (Mr. MacNicol). He told the house that last summer he visited the Welsh coal fields and found that whereas in the previous year Canada had taken from Great Britain something like 1,640,000 tons of anthracite, these importations had decreased by about half a million tons. That is the fact. But my good friend goes on to make this remarkable statement, and it is for this reason alone that I refer to the matter. He says, on page 212 of Hansard:

For the life of me I cannot see what the government expects to gain by reducing our importations of anthracite coal from the United Kingdom by 500,000 tons and then going all over the face of the earth, to countries to which we cannot possibly ship our farm produce, in order to bring in 500,000 tons of coal to make up the difference.

The only inference that can be drawn from that statement-in fact the hon. member makes the direct charge-is that we are travelling all over the world in order, as he says, to induce other countries to send us their anthracite coal and displace coal from Great Britain. I have a high regard for the hon. member for Davenport; usually he is very moderate in his statements and shows good common sense in what he says, but I cannot, to use his own words, "for the the life of me" understand how, with the knowledge which he must have, he could make a charge such as that. We have made no agreement with any other country to bring in anthracite coal. As a matter of fact the policy of this government so far as anthracite coal is concerned is exactly the same as it was under the government which he supported. In 1932, when the Ottawa trade agreements were made, my right hon. friend who now leads the opposition put a duty of fifty cents a ton on hard coal from all countries other than Great Britain, from which country coal imports to Canada remained free. That is the position to-day. We have made no change in that respect in our agreements with these other countries. From Germany, from the United States, hard anthracite coal still pays a duty of fifty cents a ton.

Mr. MacNICOL:

May I ask the minister

a question?

Mr. EULER:

Yes, certainly.

Mr. MacNICOL:

Are the conditions prevailing to-day with regard to the importation of Russian coal into Canada the same as they were under the previous administration?

Mr. EULER:

I will deal with that immediately. When the previous administration went out of office there still remained an embargo against practically all Russian products. This government felt that it was not right or wise that we alone of all important countries should refuse to do business with Russia. For that reason we removed the embargo against Russian goods, thus placing ourselves in exactly the same position as Great Britain, the United States and most other countries. We made no trade agreement with Russia; there is none to this day. Not only that; whereas some feared that there would be heavy importations of anthracite coal into this country, the Russians voluntarily consented to limit their exports to Canada to 250,000 tons annually. As a matter of fact they have never taken advantage of that provision, and all they have exported to this country is something like

150.000 tons. Imports of Welsh coal have sunk by half a million tons, but let me tell the hon. member this with regard to the various countries which were exporting anthracite coal to Canada: shipments to

the extent of 141,000 tons which formerly came from Indo-China, the Netherlands and Belgium have practically ceased. In a former year we received from Indo-China 88,000 tons. That has been reduced to nothing in the last year.