without the authority of parliament in the first instance. Here I would draw the attention of the house to the terms of that agreement.
The Canada-United Kingdom agreement has a provision which enables the parties, after conference, to modify the agreement in any particulars which may be of mutual advantage. I might say that the hon. member for St. Lawrence-St. George (Mr. Cahan) and the government of which he was a member were glad to avail themselves of that provision in the Canada-United Kingdom agreement of 1932 in order to obtain certain modifications in the preferences which had been granted to the United Kingdom in this country for the purpose of working out the agreement which at that time he was negotiating between Canada and France. Thus Canada was the first to ask the British government to permit it to take advantage of that clause in its agreement to modify an existing agreement. This fact placed the present government in a position where it would not have been at all easy to object when the British government itself asked this government to make such modifications in the existing agreement as would enable it to negotiate an agreement between the United States and Great Britain. I mention these points in advance so as to remove any doubts in the minds of hon. members that the government has proceeded in any particular beyond its immediate authority, or has taken from parliament any power with respect to the approval of this agreement in complete form before it actually becomes law.
Hon. members may ask, if this parliament should refuse to approve the agreement, what would happen to the numerous reductions that have already been made in the customs tariff. Well, what would happen would be that the reductions would cease to exist and that we should go back to the tariff schedule as it was on the first of January of this year, and the same would be true as respects concessions made to Canada by the United States. All that meanwhile will have happened is that for a period of a few weeks there will have been a reduction of duties both in the United States and in Canada on the articles specified in the schedules.
As I have said, after the committee have reported there will then be a further opportunity for hon. members to discuss any of the details of the agreement. I would point out, however, that it will probably expedite discussion and business generally if, when the schedules are before the committee of ways and means, they are examined very thoroughly,
and the debatable points with respect to them discussed as far as possible at that time. Then, after the bill itself giving the effect of law to the agreement has been introduced, while there will be still another opportunity to discuss the schedules, hon. members will probably not feel the necessity so to do at that time. What I wish to make perfectly clear is that before members of the House of Commons are asked to give their final approval to the agreement, they will have had full opportunity to decide for themselves upon the merits of the tariff changes.
I mention this point because the government's procedure in this matter is different from the procedure of the government that was in office in 1932 when we had the Canada-United Kingdom agreement before us. It will be recalled that at that time the opposition of the day took strong exception to the course adopted by the then prime minister in asking the house in the first instance to accept the agreement in toto and then later to discuss the schedules attached thereto. In other words we were being asked to approve of an enactment which would put the agreement into force without knowing what the effect of the changes in the tariff were going to be. A different procedure was adopted in England in respect of the same agreement. All details of the tariff schedules were' discussed in committee of ways and means before the bill itself giving legislative effect to the changes was considered by the British house. We are following at this time, as we did when we had the agreement of 1935 before us, the practice followed at Westminster.
As to the agreement itself, in a word, considering it in relation to the agreement of 1935, it constitutes an implementing of the pledge with respect to tariffs and trade which was given by the Liberal party to the country at the time of the last general election. While by itself it is not a complete implementing of that pledge, combined with the 1935 agreement and other changes in the tariff and its administration made by the present government, it carries out faithfully the undertaking then given by this party to the electorate of Canada. May I recall to hon. members the statement of Liberal policy with respect to tariffs as it was set forth by myself when in opposition in this House of Commons on February 27, 1933. In a statement of Liberal policy with respect to a number of outstanding problems there was one which had special reference to the liberation of external trade. In that statement, which was kept to the fore throughout the general elections of 1935 the Liberal party set forth its belief that trade was the basis of industrial and commercial development, and
Canada-U.S. Trade Agreement
that what Canada needed was trade. Canada's need of trade was emphasized because of the fact that trade means increased production, increased consumption, increased distribution, increased transportation, increased employment, increase in the standard of living and consequently increased prosperity. The statement of Liberal policy went on to say:
The Liberal party will promote trade with all nations and negotiate trade agreements with any countries willing to trade with Canada on a reciprocal basis.
I shall not mention this aftemon other trade agreements that we have made while we have been in office, but the agreements with the United States of 1935 and of 1938 taken together are the outstanding trade agreements with a country that was prepared to trade with us on a reciprocal basis.
A further statement was that:
The Liberal party will abolish the extravagant increases in the tariff made by the present administration-
That referred of course to the Conservative administration which was in office at the time the statement appeared and was being quoted.
-which have had the effect of strangling trade, exploiting consumers and robbing the railways of business.
I have examined with some care the effects of the tariff changes that have been made by this administration since we came into office in October, 1935, the changes with respect to the British preference and with respect to the duties upon commodities coming into Canada from other countries. Briefly summarizing the whole position it may be said that the trade agreements completed since the accession of the present administration to office have effected a major reconstruction of the Canadian tariff. The rates of duty chargeable under the British preferential tariff on United Kingdom goods are on an average lower than they have ever been before, and the rates chargeable on United States goods have been reduced in two stages to a level that on most commodities is below that effective when the Liberals were last in power in 1930.
I think, Mr. Speaker, that is all I need say at the moment about the general effect of the tariff changes which we have brought about in one parliament. I doubt very much whether careful examination of the records of previous parliaments would disclose that in any two or even any three parliaments combined there was the extent of tariff reconstruction downwards and lessening of taxes on trade comparable to those which have been made by the present administration in the course of this one parliament.
May I next draw the attention of the house to the fact that reciprocal agreements with the United States have been sought by most administrations in Canada since confederation. There had been one agreement prior to confederation, which had shown the advantages of reciprocal trade with the United States, but that agreement ended in 1866, the year before confederation came into being. Since confederation there have been repeated efforts on the part of different administrations to effect reciprocal trade agreements with the United States. It is, I think, significant and worthy of note that the only successful attempts at negotiation were effected by previous Liberal administrations. The first of these resulted in the signing of a trade agreement between Canada and the United States during the administration of the late Alexander Mackenzie. That agreement was signed at Washington by the late Hon. George Brown for Canada and by Mr. Hamilton Fish for the United States, but the United States senate did not accept the agreement, and as a consequence those negotiations came to naught.
Then we had the all important agreement reached by the late Right Hon. Sir Wilfrid Laurier and his administration in 1911, a very far-reaching agreement of reciprocity in natural products between this country and the United States. I need not review in any detail what took place at that time in order to make clear why this agreement was defeated. On that occasion responsibility for the defeat did not rest with the United States. I recall the discussions quite well, for I was a member of Sir Wilfrid Laurier's administration at the time. The arrangement then reached was not a treaty to run for a number of years. It was felt that if a treaty were entered into for a number of years the opposition of the day would immediately say that we had bound ourselves irrevocably to the United States and that on this score the agreement might be defeated. The course adopted to avoid that sort of criticism was to provide that each country' should enact its own legislation as agreed upon with respect to tariff changes; and that when each government had carried out its side of the arrangement, the terms of the agreement would thereby and then become operative and remain in effect as long as both countries believed it to be to their mutual advantage.
The United States passed the necessary legislation to admit Canadian products entry to the American market. When announcement of the agreement was made by the late Right Hon. Mr. Fielding in this House of Commons its members were as enthusiastic concerning it as any house of commons possibly could be.
