Mr. J. G. Diefenbaker (Lake Centre):

Mr. Speaker, history and tradition combine on a motion such as the one which has just been made, to give to members of the House of Commons an opportunity to bring to the attention of His Majesty's advisers such matters as, in their opinion, are of importance. It is the highest privilege that is possessed by members of parliament. It goes back some 475 years. It enables any member of the house to bring to the attention of the executive matters which, in the view of those who take advantage of the opportunity and privilege so offered, should be given immediate consideration.

On this occasion I shall bring to the attention of the ministry and the House of Commons a question that has been discussed on other occasions; and in order to give the house an opportunity to declare its view I shall move an amendment. Hon. members, realizing, as they must, the situation with respect to trade conditions, will thereby have the opportunity of making their contribution towards the solution of this most difficult problem.

I shall not make a lengthy speech at this time, nor shall I enter into a great deal of

[Mr. Weir.)

statistical detail. I listened the other day, with the interest that a declaration by the Secretary of State for External Affairs (Mr. Pearson) demands, and I was impressed by the view that he expressed-the division of the world as between those who believe in democracy and those who espouse communism. He dealt in particular with the situation in Asia, and indicated that some consideration had been given to the question of trade, but apparently left a more detailed discussion in that regard to the Minister of Fisheries (Mr. Mayhew), who we hope we shall hear shortly in this house. All of us in democratic nations must realize that only by the preservation of our trade and the maintenance of a high level of employment can communism in fact be prevented from spreading and existing on an even wider scale than it does.

I am not going into the agricultural side of the trade picture at this time; but food is in general the antidote to communism. Food and a higher standard of living spell the answer of the free peoples to communism, when they are combined with a democratic and free way of life. A depressed economy, unemployment, lost markets and the like, will lead to the spreading of false ideologies throughout the world. The United Nations itself has drawn attention to this within the last few days. A report published on February 17 by representative United Nations economist's is to the effect, among other things, that the world trade situation became worse in 1949, and that all efforts to achieve trade balances have failed. The space devoted to the world trade situation, says the author of this article, Mr. Norman Altstedter, indicated that economists regard this as the No. 1 economic problem. The article states that world production continued to increase and that employment remained at a high level. As far as Canada was concerned it said:

But Canada also experienced some difficulty in finding outside markets for some surplus commodities including wood products. She could expect the same for wheat.

Then the reason was given for this situation in the world:

The basic problem outlined is disruption of the old pattern of three-cornered trade. European countries formerly paid for their imports from the United States by selling commodities to underdeveloped countries for dollars.

The under-developed countries now are short of dollars because their exports to the United States have been reduced through war devastation, development of synthetic substitutes in the United States, and increased consumption in the under-developed countries of their own products.

The same view has been expressed by economists regularly in our own country in national periodicals. I quote only one, Mr. Trade

P. M. Richards, writing in Toronto Saturday Night of February 17, 1950. He not only deals with the problem but gives the reason for its existence and continuance. These are his words:

At this moment the world is completing its division into three separate economic areas, each with its own trade fence around it. One is soviet Russia and its satellites; another is the sterling area; the third is the United States of America and Canada. Scarcely anything could be more economically hurtful to Canada. ... It is important to note that this division between the soft currency countries and ourselves does not originate with them, but with us.

In 1948 the importance of foreign trade to our country was pinpointed in an address by the Secretary of State for External Affairs, at that time under-secretary, when he used these words:

World trade to Canada is the difference between the full dinner pail and the breadline.

Those words were epigrammatic, powerful and descriptive of the situation; for unless we maintain our trade with the commonwealth countries and other countries-without in any way interfering with our trade with the United States, with which I am not going to deal-our unemployment situation cannot improve; indeed it will deteriorate.

There are some who say that our unemployment situation is not serious. In the February, 1950, edition of The Listening Post, publication of the Canadian federation of mayors and municipalities, these words appear:

The federation views this trend, this mounting incidence of unemployment, with grave concern. The municipal governments are in no better position today to meet the cost of unemployment relief than they were during the depression decade of the thirties.

This is not anything new, and for the past two and a half years we on this side of the house, without regard to party, have been pressing upon the government the necessity of taking this house and the people of Canada into their confidence and letting us and them know the situation in reference to this question of trade. We warned, but we were ridiculed, and what we said was answered by so-called statistical information. Statistics do not supply employment for men and women out of work. We pointed out the trade position before the last election, but because of the fact that $460 million was made available in Canada by way of income tax returns and wheat payments, there was extra purchasing power and a higher level of employment than otherwise would have been the case. The deteriorating trade situation to which we referred was stressed in the press: in the

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Financial Post of January, 1949; and in Canadian Business of April, 1949, which contained the report of an address by Mr. Henry G. Birks, in which he used these words:

The enormous shadow of this problem is casting its shadow over this dominion.

The Canadian Exporters Association, made up of men engaged in business, presented a brief to like effect to the government in 1949. In summary they said that Canada was losing old and well-established trade connections with many parts of the British commonwealth and empire. While admitting the need for United States dollars, they argued that the normal pattern of Canada's export trade should not be obscured, and' that the needs of the future should be kept in mind. The Canadian Chamber of Commerce also warned the government in 1949. Instead of information being given to us, information was hidden from us. When members of this house asked to be taken' into the confidence of the government, the reply was that all was well, in spite of the fact that conditions were gradually deteriorating everywhere so far as our trade was concerned, other than our trade with the United States.

Canada's exports to the United States during 1949 were the highest in our history, amounting to $1,503,500,000; it is only fair to admit that. On the other hand, our imports from the United States amounted to $1,951,900,000, leaving a trade deficit of $427,800,000. That was an increase over the previous year of about $144 million, a situation which should challenge our attention.

In 1949 our imports from the United Kingdom reached a total of $307,400,000 the highest in our history. Canada had a surplus with the United Kingdom of $401,800,000, compared with a surplus of less than that for 1948, thereby widening instead of reducing the trade gap. The situation was known, and yet after the last session we went home, as we did in April, with little information about the true situation. Then, as now, we were willing to co-operate, as Canadians, in assisting the government in its endeavour to find a solution to this problem.

How many members in this house, Mr. Speaker, know much about the Geneva trade agreements? Two years ago there was great haste to call parliament together to consider those agreements. I remember well the night of November 17, 1947, when the then prime minister, Mr. Mackenzie King, indicated that those agreements represented the greatest advance in the history of world trade. Parliament was called together, and what happened? We heard no more about it. Parliament had been called for the particular purpose of ratifying those agreements, but

nothing was done about them. What is the situation, so far as Canada is concerned, in respect of the Geneva trade agreements?

I should like to ask the government what happened to the reciprocal trade negotiations with the United States which were undertaken two or three years ago. Much was made of the potentialities of a draft trade agreement with the United States, but we have not heard any more about it. Rumour had it that it was drafted, and then dropped, and all discussion ended by the action of the Canadian government. As recently as March 22 last the Minister of Finance (Mr. Abbott) indicated that when the legislation before the United States congress, known as the Reciprocal Trade Agreements Act, was passed, Canada would have an opportunity of seeking further trade agreements with that country. What has been done? Must we always be in the dark? Are these not matters that affect parliament and the Canadian people? Must we know what is happening in the matter of trade only after the negotiations have been completed and an agreement entered into? Surely the members of this house should be given an opportunity to discuss these matters tentatively, to the end that in a community of counsel there would be some solutions suggested that would be helpful to the government.

As stated earlier, I am dealing particularly with the British commonwealth. I have before me an editorial from the Financial Post, dated January 29, 1949. It is entitled, "Must we write off our British trade?" Near the end of the article, it states:

It is high time we learned how we fit into this new policy of barter deals-

That is, British barter.

-and colonial food development. Literally hundreds of thousands of Canadian jobs, and scores of Canadian communities, are dependent on our overseas trade, not to mention millions of dollars in land, plant and equipment. If we are not to be hurt, and hurt seriously, in the near future, then we must see clearly what is coming, and if necessary make other plans at once.

That article was published over one year ago. I ask you, Mr. Speaker, what has been done during the thirteen months that has since elapsed? We on this side of the house believe that immediate action must be taken to correct the deterioration of our overseas markets. Canada will not build up markets by optimistic government statements not founded on fact. We shall not build up these markets by bland optimism and diffusive satisfaction expressed by the government.

It has never been explained to us what the Minister of Agriculture (Mr. Gardiner) meant by a statement he made in a speech to the board of trade at Brantford on December 5, 1949. I shall read his words, and I

think it is time that parliament and the people of Canada are made to realize their meaning. When the minister used these words he was not speaking off the record; he was speaking from a prepared text. He said:

During the last two years a very decided official effort has been made to drive every one of these products,

He was speaking of apples, pork, eggs and cheese, as well as beef and milk.

-excepting wheat, off the British market. And now that the four-year wheat contract is drawing to a close an effort is being made to drive off a considerable part of our wheat as well. Therefore if Canada's agriculture was to be threatened further in the "cold war" over exchange, even free trade farmers would have to advise all farmers to buy where they could sell.

The time has come when parliament has a right to ask the Minister of Agriculture what he meant by those words. Who were the officials who were making the effort in Britain to drive out those products? Who were the persons who were threatening a continuance of the "cold war?" These are things that only an open conference can determine, when representatives from all parts of the commonwealth get together.

I am not saying the government has not tried to preserve our trade. We have had delegations running all over the world, pilgrimages with boards of advisers travelling hither and yon. What do they bring back but reports? They report on how they enjoyed themselves, how valuable the meetings were; but we never find out what the valuable things are which emanate from these pilgrimages. Certainly it is fine to see our perambulating peripatetic representatives travelling around the world. It is all very well to have Canada attending conferences, but surely we have the right to know what they accomplish, outside of an expenditure of money which parliament is asked to vote for these visits. I am not saying the government has not tried.

Mr. Mcllraiih:

Do you want us to recall

the trade representatives?

Mr. Diefenbaker:

The parliamentary assistant will have every opportunity to tell us. He has not, however, been one of those who travelled. He has not any of the sunburn some of the others have acquired.

Mr. Mcllraiih:

Answer the question.

Mr. Diefenbaker:

I cannot hear these babbling interferences, Mr. Speaker, which are spoken in a voice designed to ensure that they be not heard, except by Hansard.

Mr. Robinson:

The hon. member does not

want to answer.

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Mr. Diefenbaker:

I shall read, Mr. Speaker, from an article appearing in the Toronto Daily Star on February 11 last. Amongst other things, it says:

United Kingdom manufacturers today were told unless they increased exports to dollar countries "we shall have to go without many of the essential foods and. raw materials we buy from the U.S. and Canada."

Then it quotes the Prime Minister as saying:

It is very strongly in our national interests to encourage imports of British goods into Canada.

That is a proper statement. According to the article, the Minister of Trade and Commerce (Mr. Howe) used these words:

For a long time Canadians have wanted to purchase more from the sterling area.

In other words it has not been a lack of governmental desire, but the representations made to Britain have not been made in an open conference, so that all may know where the responsibility lies for their lack of success.

I quote now from a press report, of February 10, of an interview by Mr. Warren Baldwin, while he was in London, with Lord Swinton, deputy leader of the Conservative party in the House of Lords. Amongst other things, Lord Swinton said this:

You and I have our own ideas of things that could be done if we get together around the conference table.

The former prime minister used to say that in a conference, when men have their feet under a table, they are able to arrive at conclusions, and more surely provided they represent the peoples and parliaments. May I point out that Lord Beaverbrook, on February 16, said this, as reported in the London Daily Express:

The Canadian economic situation can only be satisfied if Britain, in her strength, remains the market for empire produce on which Canada's farmers depend altogether. . . .

I shall quote now the chief representative of a group of businessmen, the Canadian Exporters Association. Speaking in Port Arthur on February 22, John A. Marsh, general manager, is reported as follows:

Addressing the Port Arthur chamber of commerce, he made the suggestion as one point in a program which might be carried out by, Canada, the United States and Britain to relieve present trade difficulties.

He asked that Canada call such a conference, to be held in Ottawa, in the belief that the commonwealth and empire is a "good and honourable association of nations for the good of the world and for trade."

Then he used these words:

There are many indications that several of the sister dominions would welcome such a conference.

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and that many of the colonies, particularly the British West Indies, would await the findings with great interest.

That is the suggestion made by a leading representative of a group of exporters. We in this party believe that parliament should be given an opportunity to vote on the question whether such a conference should be convened-not to make the commonwealth an exclusive trading area, but to the end that while continuing our trading relations with the United States and other nations, we might restore to ourselves the markets that have been lost during the last few years. We believe that such a meeting would be advantageous. No longer would information be hidden behind the shrouds of secrecy. Action is necessary.

We have a good trade administration service in most of the countries of the world. The Canadian trade commissioner service has done excellent work. There are now ninety-five commissioners operating in forty-five countries. The men who operate there need as support for their efforts a declaration of policy from all parts of this commonwealth and empire with regard to trade, and particularly the restoration of markets that have been recently lost. Other commonwealth conferences, both economic and political, have resulted in good. None has ever resulted in harm.

As I listened to the Secretary of State for External Affairs the other day I was impressed as he reviewed what happened in Colombo, and as he indicated the pride we have in this commonwealth and in all parts of it. We did not hear much about trade discussions there; we were not let in on that. Apparently it was not a trade conference; in reality it was a conference for discussion and the making of recommendations, but not for implementing in any way the recommendations that were made.

We believe that a trade conference at gov-vernment level would bring results. We believe such a conference should not be a hush-hush meeting. We believe that the British people should know if there is over there, as the Minister of Agriculture indicated, anyone in official circles who has interfered with our trade and is boycotting us in any way. We should know, as should the British people, who those officials are. We believe that if such a conference were convened, bringing together representatives at government level who have a full realization of the situation facing the commonwealth and empire, and the desire to rehabilitate all parts of the commonwealth and empire by the return of trade to at least its former level, it would go a long way toward providing in this

country jobs for the unemployed, whose members may greatly increase within the next few months or the next few years. We believe that if men and women were brought together in such a conference, responsibility would be placed on the shoulders of those who are responsible for diverting trade from Canada; for that is what the Minister of Agriculture's statement means, if it means anything at all. We would have an entire blueprint of production within the commonwealth and empire, and we would have arrangements made in the spirit which has actuated members of this commonwealth and empire in the past, to the end that prosperity may be assured, at least to the extent of preserving the markets which we had and which are lost.

Exercising, therefore, the traditional right of parliament when a motion such as the one before us has been made I move in amendment, seconded by the hon. member for Duf-ferin-Simcoe (Mr. Rowe):

That all the words after "that" to the end of the question be deleted and the following substituted therefor:

"ihis house is of the opinion that the government should take immediate steps to convene at the earliest possible date a conference of the nations of the British commonwealth and the countries of the empire to devise policies to restore our lost markets, and thereby to provide jobs for our Canadian people."

Mr. M. J. Coldwell (Roseiown - Biggar):

The

hon. member for Lake Centre (Mr. Diefenbaker), Mr. Speaker, has proposed an amendment having to do with a subject which is of great interest not only to the house but to the entire country. I have no doubt that at this session much of the attention of parliament will be given, and properly so, to the problem of our trading relationships; and particularly will hon. members be desirous, I hope, of doing what they can to assist the government in restoring Canada's trade position and protecting ourselves against the loss of markets with which we are now threatened.

I agree with the hon. member when he says that for the last two years, after a very important debate in this house, and statements to the effect, as he has intimated, that the Geneva agreements were a forward step in the history of world trade and trade relationships, we have neither seen nor heard anything of the agreements. There was on the order paper for some time in the session, I believe, of 1948, a resolution calling upon parliament to confirm the Geneva agreements to the extent that they had then been entered into. It was left there because other conferences were being held. Since then we have heard nothing about the Geneva agreements. May I remind the house-

Mr. Abbott:

They are in effect.

Mr. Coldwell:

They are in effect, but I am going to repeat what I said: this house has heard nothing about the resolution to confirm the Geneva agreements that we were supposed to consider over two years ago. If the agreements are in effect, I say they should be in effect by and with the consent of parliament, not merely by order in council. That is not good enough, particularly in view of the fact that some of us believed, and so stated, that these Geneva agreements, becoming effective as they did on January 1, 1948, would militate against our trading relationships with our best customer-the United Kingdom.

We adopted the non-discriminatory clauses of the agreement, clauses which need not have been adopted for a whole year if the monetary situation as between Britain and Canada remained difficult. Under the agreement, as I remember it, even at the end of that year we could have gone to the contracting parties and asked for further consideration and an extension of time for putting those trade agreements into effect. That we could have done, and that we did not do. The quotas and prohibitions made effective in 1947 with respect to certain classes of imports into this country, having regard to the trade position as between this country and the United Kingdom, militated more against our trade with the United Kingdom than they did against our trade with the United States.

Mr. Abbott:

Exactly the reverse.

Mr. Coldwell:

Well, let me call the hon. gentleman to witness. A short time ago he made the announcement that quotas and prohibitions were to come off within the next few months, and he said he hoped that would enable the United Kingdom to sell British goods to Canada in larger quantities.

I do not want to interrupt my hon. friend, but when did I make the statement that quotas and prohibitions were coming off?

Mr. Coldwell:

The minister made the statement a short time ago that on the first of April and on the first' of July-

Mr. Abbott:

Just to keep the record straight, again this year, as last year, I announced that there would be further relaxations in the import restrictions, some of them on the first of April and some on the first of July. That follows what was done last year. It implements a policy which I set out as government policy, namely, that they would be removed as soon as our exchange position justified such relaxation.

Mr. Coldwell:

That is exactly what I was referring to.

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Mr. Abbott:

These are the facts.

Mr. Coldwell:

As I understood the announcement at the time it was made, it was suggested that it would be of more assistance to the United Kingdom; that the United Kingdom would therefore be able to market more goods in this country. If it was to be of assistance to our trade with the United Kingdom and with the sterling area generally, then the natural inference for one to draw was that these prohibitions and quotas, when they were put on, were barriers against that same trade with the sterling area, and particularly with the United Kingdom.

The hon. member for Lake Centre referred to the statement of the Minister of Agriculture (Mr. Gardiner) on December 5. I have not the document before me. I recall that on December 10 last I referred in the house to that speech. I raised the question, and we had a debate upon it. While the Minister of Agriculture did not deny the accuracy of the statement as reported he did very considerably modify it-or, shall I say, explained away to some extent the implications of the speech.

I have been watching carefully over a considerable period of time the discussions in Great Britain about her trading relationships, and I have not been able to find, from any statement made by a responsible British minister, that the British did desire to discriminate-that was the interpretation- against Canada in the purchase of supplies from abroad. Never on any occasion have I seen a statement of that kind. On the contrary, as the hon. member for Lake Centre has already intimated, I have seen what the financial editor of Toronto Saturday Night indicated, namely, that this is not entirely a British problem. It is our problem as well; the earning of dollars by Britain will enable her to continue and indeed to increase her purchases of goods in this country. It seems to me that is the crux of the situation.

Reading in the London Times some of the questions asked during the recent election campaign in Great Britain of the British Minister of Food, and the answers thereto- and in other British newspapers as well that come by air mail; I try to read them as thoroughly as I can-I have noted that one of the difficulties which the ministry faced was the constant criticism of the rising cost of living, and the question why certain classes of supplies were bought in Canada at higher prices than those at which they could be bought elsewhere. It is suggested that there is a desire on the part of the British to restrict purchases of goods from Canada. But that is not so; and I am not thinking only of the present government; if there was a

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change of government in Britain, the attitude would be the same. No matter what party-may be in power in Great Britain, every attempt will be made to trade as much as possible with this country, because of course our economy is so largely complementary to theirs. No matter what government may be in power in this country, we too must realize that their economy is complementary to ours, and that consequently our best market is in the sterling area. For these reasons I have suggested-and I am going to make the suggestion again-that we should discuss with the British ways and means of maintaining our market in Britain; ways and means of enabling them during this temporary period of difficulty to purchase in Canada the supplies they need. I know there may be some doubt as to whether this can be done, but I believe it is worth while discussing with them the possibility of our accepting, on a temporary basis at least, sterling in payment for Canadian goods-not sterling that will be frozen in Great Britain and therefore an obligation upon them at some future day. It might be used as sterling was once used on this continent, namely, to invest in the undeveloped areas of the world, and of the sterling area particularly.

If the amendment proposed by the hon. member for Lake Centre contemplates that the conference to be called will bring about agreements of the kind that were arrived at in this city some years ago, then I do not think we could possibly agree to it. I do not think we should endeavour at any time to build up around ourselves, or around the commonwealth of nations, trade barriers that would result in other trade barriers being placed around other areas. I did not understand that that was the idea the hon. gentleman had in mind, but I wanted to make it clear that we could not approve that kind of arrangement.

One other thing I want to say is that we in Canada can do something else; we can look over our tariff schedules. There are many Canadian industries that years ago received protection from competition from Great Britain and other parts of the world because they were said to be infant industries. Their infancy has long since passed-not only have they passed their infancy; they have passed their adolescence. They have now grown up and are able to compete in the markets of the world. Therefore we should look over our tariff schedules and customs regulations to see what we can do to ease the duties against countries in the sterling area, so that we may receive more goods more freely and thus enable those countries to earn dollars in this country with which to buy the goods that we have to sell and must sell abroad.

I should like to hear some further discussion by members of the official opposition on what they have in mind with regard to the proposed conference. I do not believe that a conference is ever a bad thing; as the hon. member for Lake Centre says, it is a good thing. But you must have no ulterior motive in attending or calling such a conference. I should like to hear more about what would be considered and what should be done at such a conference. Anything that will enable this country to restore confidence in our markets, that will protect our great agricultural community from the loss of markets with which it has been threatened over the last few months, should be undertaken.

I believe I speak for my colleagues when I say that one of the principal obligations of this house at this time is to review our trading relationships and our tariff structure to see if there is any interference with the sale of our goods abroad. Let us always bear in mind the fact that a tariff wall is not only a wall against imports; in reality it is a wall against the national income. Therefore what we can do to assist in maintaining our production and our income we should endeavour to do, individually and collectively-individually as members of parliament trying to make our own contribution to the welfare of the state, and collectively through the political parties represented in this house, and, perhaps even more so, as the parliament of Canada.