Mr. Victor Quelch (Acadia):

Mr. Speaker, I wish to direct a question to the Minister of Trade and Commerce. Has the government given any further consideration to the making of a deficiency payment on the 195657 wheat crop?

Mr. Quelch:

Mr. Chairman, we had no intention of holding up the passage of interim supply, but in view of the fact that quite a bit has been said regarding the international trade situation I would like to make a few comments. The hon. member for Essex East tried, I think, to place the blame for the action by the United States of America in cutting her imports of Canadian oil on the propostion of the present government to try to divert some of our imports from the United States to Great Britain. I personally think you have to go back a bit further to find the reason for a good deal of the bitterness which does exist in the United States today. You have only to read the United States newspapers to find that that bitterness has been developing.

I first noticed it about a year ago during the time we were discussing the pipe line in this house when a number of very bitter statements were made in the course of debate regarding United States investment in this country. Such statements were made by members of the C.C.F. party opposite-and also by members of the party now forming the government. Many of the members of the Conservative party who made such statements are now cabinet ministers. They used extremely harsh language in describing the actions of United States capitalists who were investing money in this country and were obtaining a stranglehold on certain of our industries. As I say, I think that is when this feeling of bitterness first developed.

Since then, of course, there has been much criticism of the United States surplus disposal policy, a lot of which I think has been unjustified. As a matter of fact, I feel a lot of praise is due to the United States of America for dealing with a problem which needed to be dealt with, a problem of a surplus of food on the one hand and starving people on the other. At least that country has made it possible to get that surplus food to the hungry people.

Now in so far as the shifting of imports from the United States to Great Britain is concerned, I think everyone would have to agree that to a certain extent this is a logical procedure when you have a situation where one nation has an adverse balance of trade with another nation amounting to $1 billion on the one hand and a favourable balance of trade with another nation amounting to over $300 million on the other hand. Surely in such a case the logical thing is to try to reduce the imports from the nation with

Interim Supply

which you have an adverse balance of trade and to expand the imports from the nation with which you have a favourable balance of trade. That seems to me just plain common sense and I cannot believe for one moment that the people of the United States would resent action on the part of Canada to try to bring about a better balance of trade in that regard.

The United States of America could remedy that situation if they wanted to by buying more goods from Canada, thus enabling Canada to achieve a more favourable balance, but if the United States refuses to buy more Canadian goods then it seems to me that the logical thing for Canada to do is to try to reduce our imports from that country and to expand our imports from other countries which have an adverse balance of trade with us. I do not for one moment think the United States would resent such action because, after all, they are sound business people and realize that such action would be plain common sense and good business.

I think probably an even better way of trying to reduce our imbalance of trade with the United States, rather than diverting that trade to Great Britain, would be to expand the production in Canada of those goods which we are importing from the U.S.A. We have, after all, around 230,000 unemployed and we have had that average number of unemployed for the past year. If those men were employed they would be producing around $2,500 worth of goods and services each and we could expand our production by half a billion dollars. Increasing the domestic production of the commodities we are importing from the United States would be the most logical means of reducing our imbalance of trade. It would also bring greater wealth and prosperity to this country. I think we should be doing everything in our power to find ways and means of expanding the production in Canada of goods we are at present importing from the United States, and as we have a surplus of labour in this country it could be used for that purpose.

I would now like to say a few words with regard to finding new ways and means of expanding the markets for our agricultural produce. We in this group have for a number of years urged that where countries are unable to obtain farm products from us through the normal channels of trade, we should explore the possibility of accepting their currency or of making long-term loans to such countries so that they could buy our commodities. Provided we were willing to have a firm agreement with those countries that when we made them a loan we would accept payment of that loan in commodities and not demand payment in dollars I believe there

would be a greater willingness on the part of other nations to obtain loans from us in order to buy our farm products.

The Minister of Trade and Commerce stated that the government was giving consideration to both these propositions; to the suggestion of accepting foreign currency and to the possibility of making long-term loans to nations who were not able to pay us in dollars. As I say, the Minister of Trade and Commerce told us that just a few weeks ago. But I realize that no matter how much the Minister of Trade and Commerce might like to initiate action of that kind he would have to persuade his colleagues in the cabinet to agree with him on such a policy and I wonder if the Minister of Finance could tell us some time just what his attitude toward such a policy would be, that is toward the acceptance of foreign currency where nations are not able to pay us in dollars, or to making long-term loans on the definite understanding that we would accept payment of those loans in commodities.

The United States has been able to expand its sales tremendously along those lines. I understand that they intend to expand this program even further. I do not believe we will accomplish anything by continuing to criticize the United States for this policy. I think that country fully intends to continue it, and rather than just protest I think the best thing for Canada to do would be to do likewise; not to the same extent as the United States is doing, but at least to go far enough to make it possible for nations which have an adverse balance of trade with Canada to balance their trade with us by accepting their currency and then using that currency for the purchase of their goods.

I think it is always better to try to solve our own problems rather than to expect other nations to solve them for us as we seem to be trying to get the United States to do at the present time.

(Translation):

Mr. Victor Quelch (Acadia):

Mr. Speaker, I should like to ask the Minister of Trade and Commerce whether or not we are losing any trade with the West Indies as a result of the Canadian National steamships being immobilized, or is that trade being carried by ships of other countries?

Mr. Victor Quelch (Acadia):

Mr. Speaker, [ think the point raised by the hon. member for Rosetown-Biggar was well taken. At the present time we have the bill before us. The minister has referred to certain amendments, and these amendments are not before rs at the present time. But we are supposed :o debate the bill as it is, not as it may be, and I think the suggestion made by Your Honour is a good one. If these amendments could be printed and distributed to us and the debate then resumed I think most of the objections could be overcome, but I certainly think it is a mistake to continue to debate this bill until such time as these amendments are before us.

Mr. Quelch:

Which is a fixed base parity. He has been very critical of the idea of having a fixed formula inserted in the bill. Now several references have already been made to the stand taken by the Prime Minister of this country. On April 9, 1957 the Prime Minister was quite upset because certain farm organizations were criticizing him for the stand he took on a certain amendment that had been made to the speech from the throne and he stated on page 3305 of Hansard:

Throughout the years we in this party have advocated that action be taken on behalf of the farmer, and I am going to set out in detail some of the suggestions we have made and the motions we have moved in order to answer the propaganda that is sometimes spread that the Conservative party has no interest in the welfare of the farmer.

And then he quotes a number of motions and amendments that he or his party had moved since 1941 and in every case they had advocated either a parity price or a fair price-cost relationship. And then, on March 12, 1956 at page 2021 of Hansard he defined exactly what he means by parity. I will only

Agricultural Products-Price Stabilization quote a few of his words because his statement has already been referred to, but he says:

As far as parity is concerned, it must be related to a basic period which is regarded as one in which prices and costs are in approximate equivalence one to the other.

That is something of which the present Minister of Agriculture is very critical. Apparently he cannot see eye to eye with his own leader on this question. I believe in the absolute soundness of the statement made by the Prime Minister at that time, but apparently the Minister of Agriculture does not agree with him, otherwise he would never have brought into the house the insidious type of bill before us. It still seems to me that he is referring to the Prime Minister as being irresponsible in bringing such a suggestion before the country.

Now 1 think it is quite easy to understand why the Minister of Agriculture does not want a fixed formula in the bill because if we have a fixed formula for parity in the bill, then we will have a support price fixed by law, and the government would then have to pay that support price on the basis of parity. But under the bill that we have before us, even with the amendment, it is of such a general character that there would be absolutely no guarantee whatsoever that the farmers would receive a parity of price. It says that the governor in council will have regard to the cost of production but also will have regard to other things and among the other things which the Minister of Agriculture listed was the supply and demand situation. No doubt, if there was a fairly large supply of any commodity then they would consider they would be perfectly justified in refusing to maintain a price that would give the farmers their whole cost of production and that is why the farm organizations have insisted from time to time that a parity formula should be written into the act so that support prices would not depend upon the whims of the minister whom we have today, or the minister who may follow him at some later date.

Now the Minister of Agriculture at the resolution stage stated, as reported at page 2393 of Hansard, that he opposed the parity price on a fixed formula. He said:

Any price support program which attempts to use as its formula a base period in the past and apply an index to it, and so forth, immediately gets you into a rigid formula. I think the experiences of all countries in the world demonstrate the fact that a rigid formula just does not work.

And then he went on to explain that we should have a prescribed price based upon the average price for the past three years. But when he was discussing the resolution he said that altogether too much emphasis

was being placed upon this three-year period, and he had this to say at page 2396:

I should like to make the point that the base price is arrived at by taking the average of prices for three years previous and is used the same as a foot rule is used in measuring length. In other words, it is a measuring device to a large extent and therefore one should not try to put a great deal of emphasis on the particular type of measuring device.

The minister expects parliament to accept that as a measuring device even after it was agreed that it was not a satisfactory period to have chosen. Thus, he is asking the farmers to accept a measuring stick which is not satisfactory. How would you like to buy so many yards of cloth using a measuring stick which had only eleven inches to the foot? Would you be satisfied with that kind of measuring stick? That is exactly the same as the kind of measuring stick the farmers are asked to accept. It has been admitted that in the past three years the average prices have not been satisfactory as far as many farmers are concerned, yet the minister expects farmers to be satisfied to use that period as a measuring stick.

When I spoke on the resolution I criticized the government for failing to embody in the act a parity or fair price-cost relationship. On page 2197, I say:

I look upon the main essential of a support price program as the assuring to farmers of the maintenance of a fair relationship between the prices of farm products and the prices of other commodities. The present proposal appears to ignore that relationship entirely.

Well, when the minister replied, he had this to say:

The hon. member for Acadia said that the legislation ignores the relationship between the cost of goods bought and the prices received for agricultural products. That is absolutely not correct. I think the hon. member just did not understand the explanation that I gave, or he did not pay any attention to it.

Well, I challenge the minister to show anywhere in the bill as we have it where there was any mention of a fair cost relationship or a parity price. These words do not occur anywhere in that bill. And I think the fact that the minister has now felt obliged to bring down these amendments placing these words in the bill proves that he himself at that time either did not understand the implication of his own bill or, if he did understand them, that he was misleading the house.