Mr. HARTIGAN:

What do they show

for the working man, the labourer?

Mr. BENNETT': Will you, Mr. Chairman, be good enough to tell that hon. gentleman to talk to himself outside? May I go further and point out that in England every encouragement is given for big profits. The bigger the profits, the better; that is their theoiy. They now make no bones about that. They say that they want industry to make money so that they can get their slice of it to maintain the country. Look at industrial life to-day and consider what our profits tax yields, compared at least with similar taxes in other countries. Banks pay twenty per

Canada-U. S. Trade Agreement

cent in Great Britain, no one complaining, no one making a hullabaloo, everyone rejoicing, glad that the banks are able to do this, because the state takes so much. In industrial life, if you pick up the reports, you find industrial companies making their final dividends, twelve, fifteen, eighteen per cent, and the state is always glad that is so. But listening to hon. gentlemen during the progress of this discussion one would think nothing was quite so bad as that industry should make money. If hon. gentlemen would only take the trouble to turn up the reports of those industries that they suggest have been so highly protected, and see their returns during the last few years, would they say that those industries have made any money, produced any returns? Their shareholders have been without dividends during this period. Some of them have recently gone on a dividend basis on a small scale, but in the main industry in Canada has not been prosperous. Can we afford at this moment, this period when industry is recovering, to confront it with a form of competition which it has never had to meet before?

The minister the other day said a very fair thing; he said: Look at the intermediate tariff, how high it is; it is not very much different from the general tariff. But that is wholly beside the question. In the United States are industries supplying the wants of 120,000,000 people. To maintain that output ninety per cent of the people are employed to produce for home consumption. The other ten per cent produce a surplus that they can ship to Canada, and so maintain complete capacity as distinguished from limited capacity, and they can afford to sell that ten per cent at low prices and still come within the provisions of our law with respect to dumping without any difficulty, for we gave one other concession I should have mentioned; I wanted to deal with it. We said that we would have no more fixed valuations for duty. Hon. gentlemen cheered loudly when that announcement was made. Well, I wish they had to deal with our problems during the period from 1930 to 1935 when I was in the finance department. There was brought to the office by an industry in Canada a sample felt hat which was offered for sale delivered in Canada at $3.60 a dozen, which was of course less money than we could gather the material for, it being a subsidized product. We put upon it a fixed valuation, a value that bore a proper relation to the cost of production of the article. We say that we provided in our customs act safeguards with respect to duty that would properly care for that. Go to the border cities: what has been

the result there already? Look at the closed doors now that were open in December last.

Hon. gentlemen may say that the automobile industry is not indigenous to this country and we should not have it. But, sir, we have it. The export business to British countries has been enormous under the British preference and the Ottawa agreements. As was mentioned this afternoon, we are selling our goods in every part of the British commonwealth, including New Zealand, Australia, in some instances carrying on much the same business as American industries have been carrying on in Canada with respect to assembling parts. Some countries have provided, as in the case of New Zealand, that there should be some fabrication in their own country by way of completion of the finished article, so that they might supply employment to their own people. That is the position so far as we are concerned.

Those of us who have voted against the agreement certainly have not done so with any joy. I tried to point out something which I know hon. gentlemen opposite do not credit, namely, that I would have infinitely preferred an agreement which I could have supported, and when I make that statement I know I speak for those about me. But we cannot by any process of reasoning convince ourselves that what we are giving is in any way comparable with the benefits we should receive. What we are giving is so much greater than any possible benefits that we cannot give the agreement our support. That is the whole story. If by measuring the agreement in any terms one could use one could arrive at a satisfactory conclusion, I would be satisfied.

I give these illustrations, although very hurriedly, because they are important. The situation resolves itself into this: Can we point to renewed opportunities for work by Canadians in Canada? I have not been here all the time the matter has been under discussion, but I can say that during the time I was here nothing of that kind was done. Certainly my reading of the debates does not show me anything which indicates that by virtue of this agreement any more workmen are to find employment in Canada. But we have the admission that there is a lessening of employment. It is true that the statement is made that there is unemployment in large industries which should not have come into being, because they have had to be supported by too high a tariff.

There is the position. We have a lessening of employment in a period of unexampled unemployment, and with more people on relief than we have had before. That is what we must face. On the other hand we

Canada-U. S. Trade Agreement

have given to our great competing neighbour not only an opportunity to sell in our market, but an opportunity to sell their surplus products as well, under terms and conditions which we did not think possible before. A year or two ago I gave illustrations to show that prices fixed for duty purposes did no more than give Canadians the measure of protection they had under the tariff, before exchange values had so altered. I took the pound at S3.76; I took it at $4.00, and I was able to show that unless we had done what we did, in view of the terms in our tariff, we would be giving our goods practically no protection at all. With respect to the United States, where the general tariff prevailed, the same condition was equally true. Now, having abolished any provision for fixing values for duty purposes we still say that we have adequately protected the situation. I think it will be found that that is not by any means so. We have abolished any opportunity to do that which was our very safeguard, and all that stood between us and irretrievable ruin in Canada at one time, because the relation between goods and our exchange was so intimate and so closely allied that we had to take the steps we did to preserve our position. I might say something about exchange, but I shall not do so to-day.

I wish to say only one thing more, and that is that we have increased competition and have lessened the opportunity for the Canadian workman. We have been given no corresponding benefits, except in the manner I have mentioned, and they were in the very nature of things such as we might expect, in any event, under the application of the flexible provisions of the American tariff existing prior to the power given to the president in 1934.

We have done more. We have lessened the possibility of the establishment of new industries in Canada. Listening to addresses made with respect to mineral development, how can one do more than hope for a great improvement in the industrial life of this country? But we have lessened the opportunity. Why? Because we have said to Japan that when production in Canada is not equal to ten per cent of the consumption it is not an article made or produced in this dominion. That applies to every country having favoured nation treatment; it applies to the United States. Now, the industry in Canada which is not producing ten per cent of Canadian consumption is no longer producing an article made in Canada, and cannot launch out in support of itself. Therefore it has no choice; such industries will never be established.

Mr. HARTIGAN:

The last five years.

Mr. HARTIGAN:

Five years is a period.

Mr. HARTIGAN:

Mr. Chairman, I have just listened to the case put up by the right hon. leader of the opposition (Mr. Bennett) against the benefits accruing to this country from this trade agreement. In that conjectural brief, so to speak, which he put forward, it will be noticed that the right hon. gentleman gave no concrete example. The consumer was not mentioned from beginning to end of his remarks although the secondary industries were.

I should like to give a concrete example of the benefits of the Japanese treaty to a basic industry. Only to-day I was talking to a well-informed lumberman from the maritime provinces and he told me that the effects of the Japanese treaty have been felt already by the lumber dealers. It is an indirect effect, but it does exist. At one time Japan took a considerable quantity of the lumber produced by British Columbia. When the Japanese market was shut off, this British Columbia lumber came into competition in England with lumber from the maritime provinces. As a result of the treaty with Japan, British Columbia is now able to get her lumber into that market and the result has been that the whole cut for next year in the maritimes has already been contracted for in England. My authority for making this statement is quite good and I stand to be corrected by hon members from British Columbia. This is a concrete example. It is not a case of saying, "I am apprehensive," or "I am afraid." It is a concrete example of what the Japanese treaty has done for Canada; it is not leaving to conjecture what may happen or what will happen.

At six o'clock the committee took recess.

After Recess

The committee Tesumed at eight o'clock.

Mr. HARTIGAN:

He comes under ordinary laws.