[Stage Direction]
Mr. PIERRE-F. C ASCII A IN (Charlevoix-Saguenay) (Translation): Mr. Speaker, I have the honour of presenting a petition from the citizens of Tudoussae, in the county of Char-levoix-Saguenay, requesting government aid in connection with dredging at the Tadoussac dry docks.

[Stage Direction]
Mr. S. C. ROBINSON (West Essex) moved that the second report of the joint committee of both houses on the printing of parliament presented to the house on Wednesday, April 27, be concurred in.
Motion agreed to.

Right Hon. R. B. BENNETT (Prime Minister) :: I beg to lay on the table on behalf
of the Minister of Labour, who is confined to his house to-day, orders in council Nos. 958, 972, 973, 974 and 975, all dated April 28, 1932. One of the orders in council refers to the regularizing of the undertaking in connection with the Manitoba savings office. Another deals with the advance made to Saskatchewan for the purchase of seed grain; another with the advance made to the province of Manitoba for the purchase of seed grain, and another with the advance made to the province of Alberta for the purchase of seed grain. The others deal with the ordinary contracts.



GRAIN CHARGES AT CHURCHILL

[Stage Direction]
On the orders of the day:
Mr. B. M. STITT (Nelson):: I desire to ask the Minister of Railways a question based on an article which appeared in MacLean's magazine under date of May 1, under the title of "Churchill a Mistake." I do not intend to burden the house by reading the whole of this ridiculous article, but I just wish to say in passing that the article in question is the most distorted conglomeration of wild guesses
and half truths that ever appeared between the covers of any magazine in the history of journalism in Canada.


Mr. SPEAKER:: Will the hon. gentleman put his question?


Bernard Munroe Stitt: The paragraph on which I wish to base my question, Mr. Speaker, appears on page 12 and reads:
The test shipments of 545.000 bushels of wheat made from the new seaport last September cost the taxpayers of Canada over $1 per bushel for the Churchill grain elevator alone.
The question I would ask the minister is just how much truth is there in that statement?


Hon. R. J. MANION (Minister of Railways and Canals):: Of course the handling of grain through an elevator does not cost anything like $1 per bushel, and if the article in question is referring simply to the handling of grain I would say that that costs around one cent or a little more per bushel. I did not see the article and I do not know whether it is including interest and maintenance charges, and so forth. But so far as the handling alone of grain through an elevator is concerned it costs from one cent to one and one-half cents per bushel to handle it through the elevator, leaving out any storage charges.



PRIVILEGE-MR. SMITH (VICTORIA-CARLETON)

[Stage Direction]
On the orders of the day:
Mr. B. F. SMITH (Victoria-Carleton):: I wish to correct an impression left on the house last night by the hon. member for Gloucester (Mr. Veniot) in connection with the post office at Lakeville. The words to which I refer appear at page 2472 of Hansard, where he states that when Barter came back from overseas he became assistant postmaster at Lakeville, and that when the postmaster died Barter applied for the position of postmaster, and he was appointed to that position in 1930.
I wish to correct that statement, Mr. Speaker. I know that the hon. member for Gloucester would be the last man in the house who would want a statement to go out which was not correct, and the statement in question is not correct. The postmaster referred to is still alive, but was dismissed by the ex-Postmaster General for political reasons.


Hon. P. J. VENIOT (Gloucester):: Mr. Speaker, I can correct any mistakes I make without depending on the hon. gentleman.

Wharf at Launching



LAUNCHING, P.E.I., WHARF

[Stage Direction]
On the orders of the day:
Mr. A. E. MacLEAN (Prince):: I have received a number of letters and telegrams to date urging that repairs be made to the wharf at Launching, Prince Edward Island, in time so that the farmers will have a chance to move their fertilizer over that wharf, and I would ask the minister to take these representations into his early and favourable consideration.


Hon. H. A. STEWART (Minister of Public Works):: I can only say in reply to the hon. gentleman that I have no knowledge of the situation at this particular wharf, but I will have inquiries made and see what can be done to remedy any defects which may exist.



NEW ZEALAND TRADE AGREEMENT

[Stage Direction]
Hon. H. H. STEVENS (Minister of Trade and Commerce) moved the second reading of Bill No. 62, respecting a certain trade agreement between Canada and New Zealand.
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, before the discussion begins on the second reading of this bill, may I ask the government if they have considered a point which came up when W'e were discussing the Australian treaty. The Prime Minister at that time drew the attention of the house to the fact that where there were certain resolutions to be passed by the committee of ways and means which affected the treaty, they must be passed before the bill respecting the treaty itself would be considered. I do not mention the point to create embarrassment in any way, but where there is a rule of procedure attention ought to be drawn to it. I have before me the Prime Minister's words on the point as they are recorded in Hansard of July 15, 1931, at page 3770, as concerned the Australian treaty. My right hon. friend said:
I consulted the clerk at the table with respect to the matter, and he advised me that under the practice of this house the bill should not be proceeded with until such time as the tariff items in the agreement had been sanctioned by the committee, following which the bill to confirm the agreement will be introduced.
A little later on he said:
These resolutions are now before the committee of the house, and the proper course is to take no further step until the committee have completed consideration of the resolutions which were placed in the votes and proceedings the other evening and proceeded with yesterday by consent of the house, for which I thanked the right hon. gentleman yesterday since it enabled us to advance practically all the items.
I think there are very few items outstanding: we will dispose of those this afternoon.

To make clear that I am not seeking to embarrass the situation, in any way, I would suggest that if there is any such regulation the procedure might be regularized if the house went into committee on the resolutions and took in advance up the one or two items that are mentioned. This may not be necessary; I am not sure.


Richard Bedford Bennett: I think the right hon. gentleman in this instance overlooks at least the fact that the items of wool and hides are not in the treaty at all, and therefore as far as the treaty is concerned may not be dealt with. It was because of difficulties of that character that they are in separate resolutions, which will be introduced by the Minister of Finance, and of which notice has been given as appears from the records of the house. Therefore the difficulties to which the right hon. gentleman refers do not arise.


William Lyon Mackenzie King: The items, however, have been placed as they are in the resolution in consequence of something that has been done under the treaty?


Richard Bedford Bennett: Yes, that is another thing. However, they are not in the treaty.


William Lyon Mackenzie King: Thank you.


Hon. JAMES MALCOLM (North Bruce):: Before the Minister of Trade and Commerce proceeds with the second reading of this bill, cannot he make to the house a statement with regard to the general principles of the treaty? The desirability of a treaty with the sister dominion of New Zealand is not at all controversial. I believe the country has received with considerable satisfaction word that a treaty has been concluded, and I also believe both political parties are glad that a treaty has been consummated.


Richard Bedford Bennett: Perhaps I might help the hon. gentleman. It was the intention of the Minister of Trade and Commerce in moving the second reading of the bill to make a statement. Perhaps my hon. friend did not observe that he was about to do so.


James Malcolm: Thank you.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, in moving the second reading of this bill it is not my intention to go into any elaborate explanation of it. I thought the best procedure would be merely to make a very brief statement, and then when the house is in committee we shall have the material on hand to deal with any questions that may need elucidation.
The new trade agreement with New Zealand is a very simple arrangement. It includes two

New Zealand Trade Agreement
principles, which perhaps are somewhat new in trade agreements. One of them is in the Australian agreement. It is a protective clause which permits the two governments by mutual agreement to come to an understanding upon any one item that might temporarily cause embarrassment to either country. We think it is a very happy addition to trade agreements, and our experience in connection with the Australian treaty has carried out our expectations in that regard. The other principle in the New Zealand treaty, which is not included in the Australian treaty, and which we also think is of merit, is that it is possible for either country to vary the rate of duty on any item in the schedule upon giving notice to the other contracting party. Of course they are at liberty to vary the rates of duty in the tariff generally. So that the treaty is a little more elastic than any treaties that have been entered into by this country with other countries in times gone by. By this process we confidently hope that we shall avoid the necessity of abandoning what may be recognized as, generally speaking, a good agreement because of some difference over any one or more items. That is virtually all that is new or different in this agreement from any other trade agreement.
I should like to add this further observation, that the terms of this treaty have been arrived at after careful consideration by the representatives of both dominions, and we believe it represents the very best that can be secured, having in mind the interests and the rights of each country. It must be obvious of course, and no doubt is present in the minds of all hon. members, that to any bargain there must be two parties, and that neither party can expect to have everything precisely suitable to its interests and its views.


Some hon. MEMBERS:: Hear, hear.


Henry Herbert Stevens: The representatives of the two dominions have endeavoured to arrive at what is thought to be fair and equitable and acceptable to both parties.
There is this also to say-and I think the house and the country should recognize it at once-that Canada being numerically and in the magnitude of its business the larger of the two dominions, naturally has perhaps a greater share in what trade will result from this interchange between the two dominions. Furthermore our products are very much more diversified, and in the manufacturing lines of course tremendously more advanced, than those of New Zealand. Consequently we shall perhaps profit more by the treaty in the volume of trade than it is possible for New 41761-157J
Zealand to do. That was recognized from the commencement. On the other hand, there are a number of articles in New Zealand of comparatively minor importance in which not much trade has developed in the past, but which we hope may develop considerably. These are items which do not conflict in any way with the products of Canada, but in relation to which up to the present very little trade has resulted. The expectation is that by settling between ourselves the status of trade benefit will accrue to both parties. I repeat also what I said the other day when the resolution was before the house, that we must not lose sight of the fact that in both instances each country accords the other the full British preference on items not recited in the schedules.
These are briefly and very sketchily the main features of the treaty. It is not with any desire to be discourteous to the house that I do not make any extended statement now; I feel it will be better to leave detailed explanations to the more informal procedure in committee of the whole, when I shall be very happy indeed to reply to any questions that may arise.
May I add this statement? Naturally we are anxious to conclude this matter as early as possible and to get the treaty into operation from Canada's standpoint for this reason above others, that this is particularly the buying season in New Zealand and in expectation of the treaty many orders are outstanding waiting the conclusion of the treaty, and it will be a distinct advantage to both countries to have it concluded at the earliest moment.
I wish therefore, Mr. Speaker, to move the second reading of the bill and to reserve to-the committee stage any detailed remarks.
Hon. CHARLES A. STEWART (West Edmonton) : Mr. Speaker, would my hon. friend mind enumerating briefly some of the more important commodities in the interchange of which we hope to obtain a larger volume of trade with New Zealand.


Henry Herbert Stevens: I should be happy to give all the details but I do submit that it would be .better to let that matter rest until we come to the schedules.


Mr. STEWART (Edmonton):: May I point out to the minister that he has been dealing with this matter for over a year, while the members who are interested have had it before them for only twenty-four hours. It is not easy, as my hon. friend will readily understand, to appreciate difficult schedules such as these and be able to ask intelligent questions in connection with them. It does appear

New Zealand Trade Agreement
that we might be given some information now. I should not like to say what are my impressions of this treaty at the present time because they may be entirely wrong, but I think my hon. friend might indicate briefly some of the important commodities which are affected, and how they are affected as compared with the treaty which was cancelled.


Henry Herbert Stevens: I submit this is getting to a strictly committee stage and, if the hon. member would agree, I would very much prefer to deal with those questions in committee where we can talk very frankly. I hope we will go into committee very quickly; at this stage it would be difficult for me to answer the queries that may be directed by hon gentlemen opposite. I hope the house will agree to that.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Hanson (York-Sunbury) in the chair.
On section 1-short title.
Mr. POULIOT:: On this section I desire to say a few words with regard to this legislation. First I offer my sincere congratulations to the Minister of Trade and Commerce and to the government as a whole for trying to improve conditions of trade in this country. That requires courage, and I am very glad they have shown that courage.
As the minister pointed out, a treaty is nothing more than a bargain; on the one side one country sells and on the other side that country buys, and the bargain must be satisfactory to both sides. Those are elementary principles with which everyone is familiar. But may I point out, quoting from memory since I have not the exact page of Hansard, that during last session I heard the Prime Minister say he had some anxiety about our trade with the Antipodes. In that respect may I say he had no one but himself to blame. What I am about to say now is nothing unpleasant; I simply desire to recall what was said during the last campaign by the right hon. gentleman and others. Yesterday I would not have made these remarks, because of an event in which we all rejoiced and which made the Prime Minister's face beam, but to-day it is different; we are about to examine cold facts. I quote from the Montreal Gazette of June 14, 1930, where I find a news item headed "Promises Repeal of Treaties Bad for Agriculture." The article is by Thomas Green, staff correspondent for the Canadian

Press, and is dated Calgary, Alberta, June 13, 1930:
In clear and emphatic terms, Hon. R. B. Bennett, Conservative leader, last night gave his pledge that if returned to power every treaty entered into by the Liberal government injurious to Canadian agriculture would be abrogated.
Canada, the Conservative leader declared, had been placed in a position of importance in respect to the tariff on agricultural products under treaties made by the Liberal administration.
"I pledge myself that every treaty entered into by the government harmful to Canadian agriculture will be abrogated if I am returned to power," he exclaimed.
Mr. Bennett scored the government for discontinuing aids to agriculture.
And so on. On July 14, 1930, according to the Montreal Gazette of July 15, the Prime Minister addressed a meeting in Sherbrooke, Quebec. One of the sub-titles of the newspaper article is "Dairymen need help." Speaking of the people who attended the meeting the article states:
They were not all Sherbrooke people. Far from it. There were many city folks, but also dairymen, from various parts of the townships, who wanted to hear some one with authority talk to them of the grievance they had so much at heart, namely New Zealand butter, for the eastern townships and Chateauguay-Huntingdon are the parts of this province which have their very existence in dairying, and many of them have been following the will-o-wisp of American trade, and when the United States put an end to this trade found themselves captured in the rear by New Zealand butter. So the dairymen were out in force.
At that meeting the right hon. Prime Minister is quoted as having said:
Do you think this government of ours has any right at all to make treaties? asked Mr. Bennett, as he proceeded to tell how the countries with which Mr. King has made treaties had raised their duties against Canadian wheat and other primary products. In all treaties the rights of Canadians had not been safeguarded, said the speaker.
The report of the meeting ends there; it is too bad it is not extended.
I wish the house clearly to understand my point. I do not blame the government for bringing in this legislation; I said that in my first remarks, and I repeat it, but during the election the stump speakers of the Conservative party were saying from every platform in the province of Quebec that if the farmers were in bad shape it was because of the New Zealand and Australian butter that was coming in, and that it was a gross mistake on the part of the government, almost amounting to treason, to let that butter enter Canada. I see my good friend from South-east Grey

New Zealand Trade Agreement
(Miss Maephail), some hon. members from Nova Scotia and others from different parts of Canada and I am sure they heard the same thing in their constituencies. I see my good friend from Compton; I am sure he made the same statements. In addition, since the opening of this parliament I have heard that view expressed by my hon. friend from Lanark (Mr. Thompson) who was formerly a director of the Ontario dairymen's association, by the hon. member for Brome-Missisquoi (Mr. Pickel and by the hon. member for Chateau-guay-Huntingdon, (Mr. Moore) who all said they were against the importation of butter from the other dominions. I respect their views; I do not ask them to vote against the legislation before us to-day, but during the whole campaign the farmers were told that it was a great mistake to import so much butter from outside Canada.
Why did we import butter? Canada imported butter to a large extent-I will not quote the figures because they are well known to every hon. member-because production was not equal to consumption. It was because, when President Hoover introduced his high tariff legislation in the United States, the farmers of Maine, of New York and other states came to Canada to buy Canadian cattle. Our breeders were offered high prices for their cattle, and they sold them, and as they had less cattle the production of milk and butter consequently declined with the result that we had to import these commodities, so that the gap between production and consumption had to be filled. Tourists were coming to this country and spending, at that time, according to the statistics, two hundred million dollars, and when they asked for butter we could not expect to offer them xxle grease. That is why butter had to br .reported from the other dominions; the reason was that production had gone down in this country. That has been clearly explained. At that time, notwithstanding imports of thirty or forty million pounds, the price of blitter was twice what it is now. In 1929, the price of butter, as quoted by my hon. friend from Stanstead (Mr. Hackett) last year, was 38-1 cents odd-I am speaking from memory. In 1930 it was 31-60, according to the figures the hon. gentleman gave last year. But when my hon. friend gave his figures of imports and exports he forgot to mention production, which, of course, is an essential point, and it was my hon. friend from Gloucester (Mr. Veniot) who noticed this omission and brought it to the hon. gentleman's attention. A day or so after that I came in with the
statistics showing that if we had to import butter it was because, as I have just pointed out, our production was not equal to our consumption. I will not insist any more upon that; it is elementary. But during the last election every Tory speaker in every rural constituency where cattle are bred told the farmers that the Mackenzie King government has to be blamed for such importations. My hon. friend the Postmaster General (Mr. Sauve) took this attitude. The Minister of Marine (Mr. Duranleau) who is one of the ablest dairymen in Quebec, did the same. The hon. gentleman confounds water with milk-the salt water of the St. Lawrence. All these hon. gentlemen, including, I have no doubt, the hon. member from Long Lake (Mr. Cowan), said to the dairymen of the country, "You farmers are in bad shape because the Mackenzie King government is importing so much butter." An hon. member whose constituency I have forgotten, but who seconded the address in reply to the speech from the throne at the first session this government was in power, also told the farmers that the King government was responsible for bringing in so much butter. I see my hon. friend from Compton (Mr. Gobeil); I am sure he said the same thing and promised to have the situation righted. He is too honest to deny it. He said to the farmers, "If you are not selling your milk and butter at a high enough price, it is because the King government is importing so much butter from Australia and New Zealand." But what did it profit the farmers here to have a Canadian market if they could not sell their butter at a reasonable price? They were not getting as reasonable a price as some people near to my hon. friend are getting for their preserves. I see my hon. friend from Pontiac (Mr. Belec); he too, I am sure, said the same thing. Now, I do not suggest that they did not make these statements in good faith. I see my hon. friend from that fine constituency of which Prescott is the county seat (Mr. Casselman); his attitude was the same. I had occasion to speak in a certain Conservative parish, a beautiful little place, and to discuss the butter question with a distinguished lawyer from Montreal. For the first twenty minutes I spoke only about butter; I did not discuss any other subject. In his thirty minutes that gentleman was very much embarrassed to give any reply because my quotations were from Hansard; immediately after I had finished the quotations I gave him the volume so that he might make himself familiar with the situation. But

New Zealand Trade Agreement
he had nothing to say in reply. Again I ask, What does it mean to the Canadian farmer to have a market in this country if he does not receive a decent price for what he has to sell?


Mr. GOBEIL:: What about other markets?


Jean-François Pouliot: My genial friend is following in the footsteps of the Prime Minister; when he is asked a question which he cannot answer he asks one himself.


Samuel Gobeil: I am not ashamed.


Mr. LAPOINTE:: He admits it.


Jean-François Pouliot: I do not wish to be disagreeable to the hon. gentleman, but he knows that on every platform members of his party were saying to the farmers that the reason they were not getting a decent price for their butter was that the Mackenzie King government was importing so much of this commodity from Australia and New Zealand; it was because of the competition. Was not that what was said?


Samuel Gobeil: At the time, yes.


Jean-François Pouliot: I thank the hon. gentleman for his admission; he is a very good witness. But he is more candid than he was when that statement was being made. At that time he was either dishonest or ignorant, and I do not know whether it is a greater insult to be called ignorant or otherwise.


Samuel Gobeil: Coming from you, it does not matter.


Jean-François Pouliot: Nescient, perhaps. I met these people on every platform, and this is what they were saying: "Shame to those in power! Let us put a stop to this." I see an hon. gentleman from one of the constituencies in British Columbia. He is interested in this matter and I am sure that he will tell us that in that province the catchword given by the then leader of the Conservative party, the present Prime Minister, was, "We will abrogate these treaties as soon as we come into power." But there was no necessity to abrogate them because Mr. Dunning, the Minister of Finance of that day, had declared on May 1, 1930, in the course of his budget speech, that he had given notice to the governments of New Zealand and Australia that the agreements would come to an end after six months' notice. But what was most important was this, that we had then a very good trade with Australia and New Zealand; those dominions were purchasing many commodities from us, such as pulpwood, paper and so forth. The reason Mr. Dunning did not cancel the treaties completely but inti-

mated instead that they would be concluded in six months was that he wished to have some satisfactory agreement evolved in the meantime at the Imperial conference of 1930, so far as these two dominions were concerned. It was most essential that we should retain our trade with these dominions, and what I sincerely regret is that at the time the present government came into power a serious mistake was made through the absence from his department of the Minister of Trade and Commerce. That minister was ill, and I do not know which one of his colleagues took charge of his department, but a mistake was made by someone who knew nothing about trade. I am sure that if the Minister of Trade and Commerce had been in Ottawa, thing* would have been very different, and this country would have kept its trade with New Zealand and Australia, so that it would not have been necessary to introduce this legislation this year. These arrangements should have been made last year according to an agreement previously entered into at the time of the Imperial conference. However, we must take things as they are. I congratulate the Minister of Trade and Commerce upon being persuasive enough to make the Prime Minister understand that trade with other countries is essential and that the Canada first policy, the erection of high tariff walls around this country, is a mistake which should be remedied.
I come again to what was said on the Tory stumps during the'last campaign. It was stated l'agriculture se meurt dans la province de Quebec-agriculture is dying in the province of Quebec. This was the statement made by the hon. member for Compton (Mr. Gobeil), the hon. member for Pontiac (Mr. Belec), and by other hon. members from the rural constituencies and I have no doubt the hon. member for Long Lake said the same thing.


Mr. COWAN (Long Lake):: I never heard of it.


Jean-François Pouliot: I know my hon. friend
would not be saying that in French, but I have no doubt he said it in English. He would not complain that agriculture was dying in the province of Quebec, he would rejoice in it. Probably he issued circulars to the effect that agriculture was dying in the province of Saskatchewan. There is one minister of the crown, the Postmaster General (Mr. Sauve) who understands the French language, and I am sure he is fully aware of what was distributed during the last campaign by the central Conservative office. I heard so much during the last campaign that I cannot help

New Zealand Trade Agreement
but quote from the publications issued by the Tory party in Quebec. One of these reads as follows:
(Translation)
Australian Treaty-Dairy Industry
The Canadian market has been handed over to the Australian farmers; we are permitted to sell our printing machinery, automobile parts and paper on the Australian market. It is a bargain of dupes.
Canada is an agricultural country and we should keep our domestic markets for the benefit of our farmers.
In order to obtain advantages abroad for three Canadian industries, we sacrificed to Australia our dairy industry and home markets, and this, to the detriment of our farmers who make up 63 per cent of our population.
This Australian treaty, at its face constitutes an economic error; at least the King government could put up the plea that Australia had conceded to us certain advan-
To-day, owing to the shortsighted policy of the Dominion government, our dairy industry has been ruined through intensive competition by New Zealand; the millions of dollars paid out to protect our farmers serve in transporting to our markets, in cold storage, thanks to Canadian grants, butter and other foreign dairy products.
The disbursements made by our people are utilized to develop foreign dairy industries, to our detriment.
How can we explain such a faulty system;
This is the reason for the order in council benefiting New Zealand, and the treaty favouring Australia.
I try to follow the teachings of the Lord by loving my neighbour as myself but I find that although I may love Tories, I cannot love Toryism. Most of the Tories I know are very likeable, but Toryism is very hateful. I quote again:
(Translation)
Canadian modern liberalism has set in motion a system of administration disastrous in its effects, which, however, affords to the leaders of the system an opportunity of praising up the government by displaying the seemingly genuine results of an artificial prosperity. Our natural resources were exploited without discretion or discernment, to the advantage of foreigners and to the detriment of our people. Our forests have been cut without making any provision for reforestation; our Liberal governments granted vast timber concessions; the keen competition of timber limit owners, created an overproduction of paper, and the market being unable to absorb the entire output, manufacturers had to lower their prices. This decrease in prices made the payment of interest on bonds issued, uncertain, resulting in the discontinuance of dividends on preferred and common stocks. Finally we had to solve what is known as "the paper crisis."
Federal Liberalism to avert the disaster which threatened provincial Liberalism, had to find markets for the overproduction of _ our paper and thus preserve the profitable friendship of timber limit owners.
The Liberal party was doing its best to improve trade in connection with paper, pulpwood and so on, but because of this action it was strongly attacked. The article continues; (Translation)
There lies the reason of the Australian treaty, it explains the order in council granting to New Zealand, without receiving anything in return, the same advantages that we had conceded to Australia in schedule II of the treaty.
Liberalism boasts of being the _ true and disinterested protector of all that is dear to us, yet it sacrificed lightly the vast natural resources that Providence had placed at our disposal. Liberalism boasts of taking a great interest in the farming class of our province, yet it sacrificed the dairy industry of Quebec to the benefit of the New Zealand farmers. Liberalism loudly proclaims its ostentatious patriotism; it also gave evidence of being very fond of the people at election time, only _ to obtain their support and vote. Liberalism exhausts its lungs in proclaiming its disregard of private interest, yet it leaves the masses in the lurch so as to set aside for its own advantage -the farsighted and generous friendship ol the privileged few whom it has gorged with favours of all kinds, in order to enable it, when the opportunity arrives, to draw from them election contributions of which it is so fond. The country is bled to death, Liberalism is maintained in power.
As I see a good Liberal with the hon. Postmaster General, I Shall inquire from each of them, whether it is not a fact that, in their respective counties, the Conservative party distributed this campaign literature? They are unable to deny the fact.
The following is another extract of this document:
(Translation)
Agriculture is dying: who killed it?
Farmers: read what follows, and you will know how and by whom this crime was committed!
Ever since 1925, the King government has forced on parliament the Australian treaty and adopted by order in council the New Zealand convention.
By these treaties, the King government handed over the Canadian market to foreigners, in exchange for a few miserable concessions to industry.
What I have quoted will give an idea of the literature which was distributed throughout every rural parish, municipality or borough in the province of Quebec, and I have no doubt the same publications in English were distributed to the English farming districts. One thing that strikes me in connection with this butter question is the fact that the Tory party used this commodity as a stepping stone to power. During the campaign it was said that the Canadian markets were of no interest, the results were what counted. The fact is that the farmer received much more for his butter when we were importing sufficient to make up the difference between production and consumption than he does now when the production equals or perhaps is more than the consumption. The hon. member for Compton said during the

New Zealand Trade Agreement
campaign that we must have Canadian markets. At the same time he used despicable words about lawyers. I am a lawyer, I defend farmers and if the hon. member is still a farmer, I shall attempt to defend him against himself. It is hard work for a lawyer to delve into these statistics in order to get at the truth, but I do this with pleasure in order to show my electors, who are farmers, the deep interest I take in their welfare.
The other day I asked the Minister of Marine why he was saying that the government had stopped the importation of butter. They did not stop it completely; some butter still comes in. Otherwise the new treaties could be considered as a joke by Australia and New Zealand. An hon. member points out it is somewhat strange that although we are on an export basis, we still import some butter. The plain question I asked the Minister of Marine, was this: "Are you in favour of a reasonable price for butter with importations, or a very low price without importations?" The answer he gave me was this: "I am in favour of a reasonable price and I am against importations." Fancy a minister of the crown saying that, when he knows very well that last year the house had voted for a treaty with Australia and that it was ready to vote for one to-day with New Zealand! I do not wish my words to be misconstrued; I am not against this treaty; I know we must make some sacrifices in the matter of trade, because trade cannot be one-sided. I know the minister is well disposed, but I speak about those who deceived the people during the last election by making false statements regarding the dairy business. A moment ago I mentioned that Mr. Dunning, in his budget speech of May 1, 1930, said that he had notified Australia and New Zealand that the treaty would come to an end six months after the notice was given, and in the meantime the duty on butter was increased. The duty was four, six and seven cents a pound, and when the present government came into power, they increased that duty to eight, twelve and fourteen cents a pound. The duty under the Dunning budget did not please the people because it was not enough. The Tories were saying on every hustings: The duty is not enough; we will increase it in order that you may receive a fair price for butter. The ex-Minister of Trade and Commerce, I am sure, has heard the same statement made. Every one on this side who has been on the same platform with a Conservative speaker at a joint meeting, has heard him say the same thing. They were deceiving the people; they were saying that as soon
as the right hon. gentleman who is now Prime Minister, gets into power, he will raise the duty on butter in order that the farmers may receive not less than forty of forty-five cents, and perhaps fifty or sixty cents a pound for their butter. In my constituency, a Tory candidate said: I shall see to it that the leader of the Conservative party raises the duty in order that you may get at the very least forty cents a pound for your butter. What does it mean to a farmer if he does not get a decent price for it? What does it mean to the hon. member for Compton? His friends will laugh at him. They will say:	The
Canadian market as it is means nothing to you because you get nothing out of it.
The Tory government were true to their word; they increased the tariff; the four cents became eight cents, the six cents became twelve and the seven became fourteen, or twice as much. Then what happened? This is mentioned in a return that I received last year and that was signed by the Secretary of State, showing that when the tariff on butter was the highest, the price was the lowest. It is perhaps on account of that return that the Prime Minister should be advised by his supporters that they have decided to return to the Liberal policy of reducing tariffs in order to secure trade. Last year the duty on butter under the Australian treaty was five cents, notwithstanding the fact that the Australian government is paying a premium on this commodity; this year under the New Zealand treaty the duty is also five cents.
I do not wish to detain the committee much longer on this, but to sum up, let me say that the Canadian people were grossly deceived by every Conservative speaker in Quebec and in each of the eight sister provinces, when they said first of all, that it was due to imports of butter that the price was low, and when they told the people that under a high tariff the price of butter would be reasonable, just as good as it was the previous year. The people were deceived both ways and now this legislation is introduced into the house. I have no objection to it; it is an experiment and we shall see how it works, but I regret the, if I may say so, silly satements that were made first by the Prime Minister and repeated by his own organization under the control of General McRae in order to deceive the people. This is the feature I oppose most strongly. The public can now see that the guiding star of liberalism is still leading the Conservative party when they want to do the proper thing; to do this they have to come back to the old Liberal trade policy. At the present low price of sixteen or seventeen cents the butter makers
249 V

New Zealand Trade Agreement
are still making money because they do not reduce their manufacturing charges. We shall see whether our trade with Australia and New Zealand increases. If it does, it will bring money into this country. Men will get more work; they will receive bigger wages and if they earn more money, they will be in a better position to j>ay higher prices for their butter.
Mr. COWAN Long Lake): Will the hon. gentleman, then, support and join the Conservative party?


Jean-François Pouliot: The Conservative party
does well only when it follows Liberal policies.
In conclusion I hope every Conservative member who spoke against the New Zealand and Australian trade agreements will go back to his electors and tell them: "We must be honest. We must confess that we made a mistake. We do not say that we lied, but we certainly made a mistake when we said that high tariffs would bring fair prices for farm products to the farmer. We apologize to you for making that mistake." That is what every Conservative member should say to his constituents, and I hope the government will see to it that a copy of those agreements is sent to farmers everywhere, not to discourage them, but to show them that this government is coming around to the good old policies of the Liberal party, not with regard to butter alone, but with regard to trade in general with other nations throughout the world.	[DOT]


Mr. MACKENZIE (Vancouver):: Mr. Chairman, I had intended to make a few observations on the second reading of the bill, but the second reading was passed with such bewildering celerity that I did not have the opportunity on that occasion. I do not believe, sir, that it is of any material use during a discussion such as this to dwell unduly upon the past except in so far as the actions of a party or the inaction of a party in the past may have affected the present situation. I should like, Mr. Chairman, to occupy a little time in going back to the origin of the treaty with New Zealand. Reading section 5 of the Australian treaty as assented to on the 27th day of June, 1925:
Subject to the provisions of The Customs Tariff, 1907, the governor in council may, by order in council, extend the said advantages to goods the produce or manufacture of any British country.
And section 6 reads as follows:
The governor in council may make such orders and regulations as are deemed necessary to carry out the provisions and intent of this act and of the said agreement, and may, upon giving six months notice to the government of
the commonwealth of Australia of his intention so to do, order and direct that the tariff concessions extended to Australia by this act shall cease and determine, whereupon they shall cease and determine accordingly.
Now I come down to the year 1930 and to the criticisms that were made by hon. gentlemen opposite, when they were sitting to the left of the Speaker, in respect to the New Zealand treaty. I am reading now from the report of the president of the National Dairy Council for 1931. Therein it will be found that they made representations to the tariff board, which was then in existence, in regard to the New Zealand tariff. I quote the words of the president as found on page 6 of the annual report:
At the last meeting an appeal to the tariff board was decided upon. The hearings were held in January, 1930, and several months later the government announced an increase in the butter tariff of precisely the amount we asked for. At this point I wish to remind you very definitely that we took the view that a tariff of four cents per pound against the southern dominions, where the imported butter all came from, was about as high a tariff as the industry could obtain any permanent benefit from. We used the argument that a tariff higher than four cents would damage the cheese industry and would introduce very wide and unmanageable fluctuations of price into the butter market if we were to alternate from an import to an export basis and back again, as we have done many times in the past forty years.
Again:
We told the government that four cents was enough for the reason that it was all that could be permanently advantageous.
Now, I wish to refer to the statement made the other day by my hon. friend the Minister of Trade and Commerce that the provisions of the Australian treaty of 1925 were extended to the sister dominion of New Zealand on October 1, 1925, iby a special order in council. Notice was given in this parliament on the 12th of April, 1930, as was stated by the minister of the termination of that arrangement with New Zealand, the arrangement to terminate on October 20, 1930, and on the 20th day of October, 1930, as the minister also stated the other day, New Zealand withdrew her preference from Canadian goods, on motor cars engines, and tires, and on June 2, 1931, she withdrew her preference on all remaining articles. I come now to the declaration of policy made by the Minister of Finance when speaking in this parliament on May 1, 1930, because this has a very distinct bearing on the situation, which has since developed in Canadian trade. Mr. Dunning upon that occasion used these words:
With respect to New Zealand, as already intimated to parliament, the government of

New Zealand Trade Agreement
Canada has proposed to the government of that dominion that a direct trade agreement be negotiated to supersede the present arrangement.
We hope to be able to arrange for meetings of representatives of both countries in the near future in order to endeavour to reach a mutually satisfactory agreement. In any event, the present arrangement will cease on October 12, next. Following that date, Canada will extend her full British preference to New Zealand, pending the completion of a direct agreement.
Then we had the general election of 1930, and we have just had a very vivid and truthful description by the hon. member for Temiscouata (Mr. Pouliot) of the campaign of misrepresentation which was carried on at that time. Those who represent agriculture and the dairy districts of this country realize that the situation of the dairy farmer and of the agriculturist to-day is infinitely worse although they have had the alleged benefit of the eight cents tariff since that day in October, 1930. As against the lack of benefit to the dairy farmer and the agriculturist, may I briefly indicate to this house what has happened to our Canadian trade? I will give the total imports of Canada from New Zealand first:
Year	Value of goods imported
1925		.. $1,191,299
1930		. . 16.282,719
1932		. . 1,080.230
Now I will give the Canada to New Zealand:	total exports from
Year	Value of goods exported
1925		. . $15,083,368
1930		. . 19.187,803
1932		. . 3,728,500
It will be noted that	in 1932, after New
Zealand very properly adopted a policy of	
retaliation, our exports	to that country
dropped from over $19,000,000 in 1930 to	
$3,728,500.	
Take the alleged favourable balance of	
trade, which is so frequently referred to by hon. gentlemen opposite. Here are the	
figures:	Favourable
	balance
Year	for Canada
1925		. . $13,892,069
1926		. . 13,854,626
1929		. . 4.597.109
1932		.. 2,648,270
Now I shall deal very briefly, because there will foe an opportunity to discuss them more	
fully when the schedule	is taken up, with a
few of the items which	are covered by the
	
agreement. Take the article of butter, for instance. Here are our import figures:
Year	Imports
1925	 $	60,000
1929	 8,685,000
1932	 17,000
Take raw	wool, and	Mr.	Chairman, I	amvery interested	to know	.what	will be	the
attitude of certain members of the Conservative party who earlier this session voted for a resolution asking for a tariff on raw wool with respect to placing wool on the free list, with a depreciated currency in New Zealand. Our raw wool importations were:
1925	 $ 230,000
1929	 1,173,000
1932	 305,000
These are the figures for our importations of hides:
1925	 $145,000
1929	 447,000
1932	 141,000
Then let me deal with the export figures, and these are of particular interest to anyone who is a student of our trade conditions. These figures, I think, form the most startling picture of how the policy of hon. gehtlemen opposite in raising the duty on New Zealand butter to 8 cents a pound on the very day when the Prime Minister of that dominion sat on the floor of this house has absolutely paralyzed our export trade in that quarter. These figures are the. most startling in the whole tragic picture.
Automobiles
1925	 $5,930,000
1929		 4,788,000
1930		 5,507,000
1932	 34,000
Pneumatic Tire Casings 1925	 $1,263,000
1929		 2,618,000
1930		 2,119,000
1932	 263,000
Newsprint Paper
1925	 $ 764,000
1929		 1,297,000
1930		 1,364,000
1932	 768,000


Henry Herbert Stevens: There was no change in
the rate of newsprint.


Ian Alistair Mackenzie: Very
well.
Electrical Apparatus
1925	 $217,000
1929		 678,000
1930		 764,000
1932	 238,000

New Zealand Trade Agreement
Canned Fish 1925	
1929		
1930		
1932	
Iron Wire 1925	
1929		
1930		
1932

Iron Bars and Rods
1925	 $244,000
1929		 380,000
1930		 376,000
1932	 8,000
Musical Instruments
1925	 $104,000
1929		 164,000
1930		 186,000
1932	
*So far not a note of music sent from Canada to the sister dominion in this year of grace 1932.
Hardware and Cutlery
1925	 $265,000
1929		 249,000
1930		 321,000
1932	 23,000
Planks and Boards
1925	 $298,000
1929		 202,000
1930		 256,000
1932	 31,000
Rubber Footwear
1925	 $ 325,000
1929		 747,000
1930		 '	1.012,000
1932	 303,000
Farm Implements
1925	 $252,000
1929		 268,000
1930		 308,000
1932	 40,000
Wheat Flour
1925	 $ 3,000
1929		 453,000
1930		 392,000
1932	 242,000
Socks and Stockings 1925	 -
1929		 $326,000
1930		 566,000
1932	 285,000
Corsets and Brassieres
1925	 $113,000
1929		  71,000
1930		 82,000
1932	 19,000
Wheat
1925	
1929		 $ 87,000
1930		 219,000
1932	 115,000
Now, Mr. Chairman, I put these figures on Hansard to give the committee an actual picture of how our export trade with New Zealand has been strangled1 by the tariff policy of this government. I certainly commend the treaty as far as its general principle is concerned. But I must express, especially on behalf of the people of British Columbia, our regret at the undue delay in bringing this treaty before parliament. That there is similar regret in New Zealand is evident by this quotation from the Auckland Herald of March 21, 1932:
Telegrams are pouring into the office of the Minister of Customs, Hon. W. Downie Stewart, seeking light on the present state of negotiations between New Zealand and Canada regarding the trade agreement tentatively reached at the Honolulu conference in December and January. An unexpected hitch has since arisen at the Canadian end, due, it was believed, to Canadas preoccupation with urgent domestic problems.	[DOT]
Mr. Stewart is unable to make any public announcement on the subject at the moment, but it is believed likely that a statement will be forthcoming within the next few days.
I propose now to deal very briefly with one or two items in the schedule, which items perhaps the minister will kindly note so that he may deal with them in his reply later. In votes and proceedings, No. 57, at page 374 will be found the items on schedule A to which I am about to refer. Item No. 16, eggs in the shell. I recall that last year substantial complaints were made by our friends opposite when a similar item was inserted in the Australian treaty to be operative for only two months in the year. Will the minister be good enough when he replies to let the committee know if he has received any complaints from the poultry raisers of British Columbia in regard to this particular item.
Item 93, apples, fresh, in their natural state, free. Has the minister received any complaints whatsoever from the fruit growers of British Columbia or any of the other provinces in regard to this item.
Items Ex. 169, Ex. 171, Ex. 178. This group of items covers books, novels or works of fiction; books, printed; advertising and printed matter. Has the minister received any complaint in regard to these items?
Item 305-306b, building stone, other than marble or granite. This is admitted free for the first time. The minister is aware that we have building-stone quarries in British Columbia and in some of the other western provinces. Has he received any complaint in regard to the item?
Item Ex. 549, wool, not further prepared than combed, free. Has he received any


Mr. NEILL:: I have some appreciation of
the difficulty with which the minister was confronted in negotiating this treaty, and I have no doubt that with his customary thoroughness and energy he not only did the best he could but possibly the best that could be done under the circumstances.
fMr. I. A. Mackenzie.]
The difficulty in negotiating a treaty of this kind with New Zealand is pre-eminently due to the fact that New Zealand, more than any other country of which I know, is wholly agricultural and pastoral in its exports, so anything it exports to Canada must come directly in conflict with agriculture hi this country, which makes it very difficult to deal with the situation. I would have been interested if the minister had replied when the hon. member for West Edmonton (Mr. Stewart) asked him to amplify, or even illustrate, what lines of business from New Zealand he expected would be increased in consequence of this treaty, because I know, from some examination and after having lived there, how little New Zealand can export that will not come in direct competition with one branch or another of agriculture in Canada.
I think the only three products that New Zealand exports and which we do not produce ourselves are rabbits, flax and kauri gum, which is a minor product used in making scents and soaps. It is dug up in the swamps of New Zealand, so we need not grudge them that trade. The same applies to rabbits, so long as they are not brought here alive. With regard to the flax, I am sorry to see anything done to facilitate its entry to this country. It is an inferior article, and has one almost dangerous quality about it. It will make apparently strong rope, which will stand a heavy strain if that strain is applied gradually, but it has the unusual quality of snapping like a lead pencil if you give it a sudden jerk. It is a native product, grown in the swamps of that country.
I would like to make only one comment in regard to the preliminary part of the treaty, and then there are one or two comments which I have to make when we come to the particular items, which I hope we will be permitted to take up one by one. I notice that we are given a preference on Canadian lumber, but unless I am wrong that preference is arrived at by leaving the duty against Canadian lumber where it was and increasing the duty against lumber from other countries. Of course that does give some preference, but it is not one highly calculated to increase the demand for our product.
Then there is the question of our fish. Probably there is a plausible explanation, but after examining the item here I do not understand it. The minister comes from British Columbia, and he must be sufficiently familiar with the need for a preference on British Columbia salmon to see that this preference is given, but the item rather puzzles me. By this item

New Zealand Trade Agreement
New Zealand gives us a preference on "fish, potted and preserved, namely salmon, including any liquor, oil or sauce." Our canned salmon is n-ot potted or preserved; there is as much difference between preserved fish and canned salmon as there is between jam and canned fruit. It seems to me that canned salmon should come-under item 35a, which deals with "canned fish, not including fish paste," but as I say I am sure there must be some explanation, and I only mention the matter so it will not be lost sight of.
I also notice that the preference on this preserved salmon is very small; it is not nearly as large as the preference given by Australia. I see that under item 123 we give New Zealand a preference on shell fish known as toheroas, in sealed tin containers. We let that article in free, but they do not let our main fish product in under the same terms. The articles in which British Columbia is particularly interested are lumber, fish, paper and pulp. Pulp enters New Zealand free in any case, so we get no preference there, and no preference is given to newsprint. There are six paper items, and we are given a preference on only one. These are the things that somewhat detract from what we bad hoped we would get from this treaty.
There is one other comment I should like to make with regard to articles IV and VII. Article IV deals with the method by which the government proposes to stop the importation of goods when such goods are coming in to the injury of our citizens. Under the Australian treaty that section stated that goods, the produce or manufacture of Australia, imported under the provisions of article I, should not be subject to the provisions of section 6 of the customs tariff of Canada. That section excluded the application of the dumping duty. In the New Zealand treaty the wording is different:
. . . shall not be subject to section 6 of the customs tariff of Canada unless previous notice has been given by the government of Canada to the government of New Zealand that the importation of such goods would prejudicially or injuriously affect the producers or manufacturers of similar goods in Canada, and if, at the expiration of a period of thirty days from the elate of such notice, remedial measures satisfactory to the government of Canada are not put into effect . . .
Then Canada can apply the dumping duty.


Henry Herbert Stevens: My hon. friend is overlooking section 9 of the Australian treaty. This is an improvement; it lessens the time limit.
Mr. NEILLI rather doubt if it is an improvement. but I was just going to compare them. In this case, if the government are not
satisfied1 with the way goods are coming in they can- give thirty days notice and then apply the dumping duty. Under the -treaty with Australia they did n-ot do that; if the remedial steps were not taken within three months the ordinary general tariff applied. That is the comparison I desire to make. This dumping duty is a matter of policy, and if the government choose to apply it instead of letting the ordinary duty prevail, I have no objection, but I should like to show how it will work. They give New Zealand thirty days notice, and if at the end of that time remedial measures have not been taken the dumping duty goes into effect. That would seem to give a man whose goods were on the water at least thirty dlays in which to have those goods received and sold in Canada, but there is a further clause included:
At the option of the government of Canada any importation thus complained of, other than perishable goods, may be held in bond during the said period of thirty days.
That is the objectionable feature. It will be possible for this government, without notice at all, to increase the duty over night on an article already on the water, by the application of the dumping duty.
The British government-it has been alluded to here-has already expressed the opinion, or perhaps the hope, in connection with the coming conference, that Canada will abandon the system of enforcing the dumping duty overnight, so to speak, because it leads to great uncertainty when a man buys goods and does not know, while they are on the water in transit, what is likely to be done by means of that duty. It has always been held that a somewhat unreasonable tariff is preferable to a state of uncertainty, when it is not known whether the tariff may go up or down suddenly. Under the Australian treaty they had to give three months' notice and not thirty days; and under that treaty they could not hold goods in bond. But now, to-morrow morning, it could suddenly be announced, "We will give you thirty days' notice and hold your goods in bond, unless they are perishable, and at the end of that time we will apply the dumping duty." So that we have rather put one over New Zealand in that regard.


An hon. MEMBER:: New Zealand can do the same to us.


Alan Webster Neill: That is quite right; I was wrong in saying that we put one over them because it is fifty-fifty.
. Mr. RALSTON: If New Zealand's act is as strong as ours.

New Zealand Trade Agreement


Alan Webster Neill: I am not familiar with the situation there, but they have a dumping act. I do submit, however, it will lead to uncertainty if such a situation as I have described exists. The other item was in connection with Article VII. It states that they cannot raise the duty unless by mutual agreement-that is, the regular duty-and until after three months' notice to the respective governments. I notice that in the trade treaty between New Zealand and Australia the same condition exists, except that it is six months in that case. Three months' notice, with a country so far away as this, would probably work out rather awkwardly. As a matter af fact, I imagine that a good deal of the benefits or otherwise of this treaty will not be fully ascertained until the treaty has been in operation a year or two. On general principles I am glad to see such a treaty inaugurated, and with the explanations which I feel almost sure the minister can give in regard to salmon and lumber, I hope the treaty will be of advantage to our province and to Canada generally.


Henry Herbert Stevens: 
James Malcolm: Were not those the only months in which they came in free?


Henry Herbert Stevens: They did not come in and they are not likely to come in.


Ian Alistair Mackenzie: Did none come in last year under the Australian treaty?


Henry Herbert Stevens: Yes, I was mistaken; there was S53 worth from Australia. With regard to apples, this is a reciprocal item. We have a very handsome business with New Zealand in apples in the season the opposite to their productive season, and there is no objection from British Columbia in this respect.


Alan Webster Neill: Does not New Zealand
charge one penny per pound against nothing on their apples?


Henry Herbert Stevens: There is a duty against
our apples but they have reduced it by half.


Mr. YOUNG:: What about the three per
cent excise tax? Will that apply to apples?


Henry Herbert Stevens: Yes, that will apply to
all the items.


Mr. RALSTON:: The minister must not
forget that British Columbia is not the only apple-producing province in Canada.


Henry Herbert Stevens: That is quite true. I am not certain whether we export to New Zealand any apples from eastern Canada, but we do export to them from this Dominion a substantial quantity of apples-three or four times as much as we import from New Zealand. As I say, I am not sure about the export of apples from Nova Scotia; I imagine that they find their way chiefly to Great Britain.


Mr. ILSLEY:: The minister says there is
no objection on the part of the apple growers. Have the people who are interested in the production of apples had an opportunity to express their opinion?


Henry Herbert Stevens: It must be remembered
that the item simply remains free. It is not made free in this treaty as against a previous duty; it simply remains as is, if I might use that expression. There is no change. As regards the item referring to books, it will be noted that these are books the product of New Zealand. They have certain native authors there and they have asked that this be done, and we felt that, for the production of New Zealand authors, we could very well afford to place this item on the free list. It is really a gesture of courtesy more than anything else.

New Zealand Trade Agreement


Edward James Young: Suppose we bought one of these books in New York; it would not come in free.


Henry Herbert Stevens: It is not likely that it would come in through New York; they would rather ship the book direct to Canada. The people there are largely of Scottish descent.


Mr. CAYLEY:: But the whole trade agreement is based on the assumption that goods will come through Canadian ports.


Henry Herbert Stevens: Virtually, yes. There is a slight modification in one of the articles, as will be noticed. With regard to items 305 and 306, these relate to a soft building stone, a variety of limestone which is very excellent for interior work. It can be easily worked. We import very large quantities of Indiana limestone and it is hoped that some of it will be replaced by this product. Several years ago some of this stone was imported into Vancouver and used in some of the buildings there for easily carved arches, window sills, copings and work of that kind, for which it is eminently suited. As regards the wool items, they simply remain free as they are at the present time. We decided that until the Imperial conference was held it was inadvisable to disturb the duty on wool under the British preference, so that New Zealand simply has the same rate as the British preference, namely, free as it is now. But it is proposed -and this was done as one of the terms of the arrangement with New Zealand-to impose a duty under the intermediate and general tariffs, while the preferential will remain undisturbed until the whole subject is discussed at the Imperial conference. In regard to socks, stockings and so on, there are in this schedule a few items which it will be noted are considerably different in some cases from the British preferential. These are acceptable to our people who are exporting such articles. While the rate on stockings is somewhat higher than the British preferential rate, it must be remembered that our main competitor in this connection is the United States. The rate to the United States is 67-3 per cent while the rate to Canada is 39'8 per cent. In discussing schedule B I ask hon. gentlemen to note that New Zealand has imposed some very high rates of duty. Of course, that is her business and not ours.


Charles A. Stewart: Would not
the British importer come in under that 30 per cent?


Henry Herbert Stevens: I am advised that our
people can compete under this rate. It will be noted a surtax and additional tax has in
many cases been imposed and above the ad valorem rate. This is due to the necessities of raising revenue and as it is New Zealand's business, it is something about which we cannot explain.


Alan Webster Neill: Does the surtax include the
primage, or is it extra?


Henry Herbert Stevens: Primage is applicable to
free goods while the surtax is applicable to dutiable goods. In connection with item 333 (1) cultivators, harrows, ploughs, drills, sowers, seed or green cleaners and separators, it will be seen that the rate to the United States is 42-87 per cent while the rate to Canada is 36-75 per cent. We would have liked to have had a better rate but that was the best we could get. We are given an advantage against the United States, which is our main competitor in this class of goods. The next item is one in which we are interested. It reads:
Unspecified agricultural implements, including ploughs, cultivators and seed drills, handworked; ploughs, single furrow mouldboard, not exceeding 266 pounds; also certain parts of ploughs or harrows.
This item is free with a 3 per cent primage.


James Layton Ralston: It is the same all the
way through?


Henry Herbert Stevens: It is free as against the
other item which is dutiable.


Alan Webster Neill: Ploughs and cultivators appear in both items; how can they be subject to two separate duties?


Henry Herbert Stevens: It is a different classification. Automobiles is perhaps the most important item to us and I am at liberty to state that the rates are satisfactory to the Canadian producer. A large proportion of the automobiles which we will export to New Zealand will come under the 75 per cent Canadian content class which it will be noted carries a rate of 20 per cent in the case of Canada and 40 per cent in the case of the United States. In the case of the 50 to 75 per cent Canadian content, we have an advantage as against the United States but some disadvantage as against Great Britain. However, the cars manufactured in Canada are not the type manufactured in Great Britain and our main competitor is the United States.


Charles A. Stewart: That rate
is not any lower than what we enjoyed formerly.


Henry Herbert Stevens: I will have that information looked up and give my hon. friend an answer later on. The hon. member for

New Zealand Trade Agreement
Comox-Alberni (Mr. Neill) has referred to the fact that it is difficult to find items which New Zealand could export and which would not be competitive with Canadian goods. There is no doubt that was one of the difficulties with which we were confronted, but we believe we have worked it out as satisfactorily as possible.
I was rather sorry to hear the hon. member's comments in connection with New Zealand hemp. I have taken some trouble to investigate this matter and I find that New Zealand hemp has proven satisfactory to a number of large manufacturers. During the past year I went out of my way to get our manufacturers to interest themselves in the importation of New Zealand hemp. Although this hemp may not be as good as the sisal from Mexico and the hemp from Manilla in [DOT]the manufacturing of binder twine, as it has a tendency to curl when it is passing through the eyes of the binder-


Edward James Young: Why encourage it?


Henry Herbert Stevens: We are not encouraging
it particularly for binder twine, but it has proven to be very satisfactory in the manufacture of cordage and considerable quantities are now being purchased from New Zealand. Perhaps the hon. member is not acquainted with the latest developments in the production of this commodity and does not realize that the article has been vastly improved today.
Mr. BROWN. Why is binder twine allowed to come in free under all schedules?


Henry Herbert Stevens: At the request of New
Zealand it was put in free along with hemp, but it is free in any case.


Mr. BROWN:: Do we import any binder
twine from New Zealand?


Henry Herbert Stevens: I will have that information looked up.


John Livingstone Brown: It is something like the hay and straw in the Dunning budget.


Henry Herbert Stevens: No, not necessarily. I
think hon. members should keep in mind the fact that we hope to develop considerable business in lines which have not previously been developed. I do not wish to harp on this point, but I must say that we have been importing a large variety of goods from the United States and it was felt that a large part of this business might profitably go to New Zealand.
I can assure the hon. member for Comox-Alberni that the lumber item is entirely satisfactory to the British Columbia interests, and

I think to the eastern interests as well although they are not affected in the same way. The same observation applies to fish. The description in schedule B is the precise description used in the tariff nomenclature of New Zeal-land, and there is no question but that it includes canned salmon.


Alan Webster Neill: The minister will admit that it uses the words "potted and preserved"?


Henry Herbert Stevens: That is quite true, but
it includes salmon.


Alan Webster Neill: It says preserved or potted
salmon; it does not seem to include canned salmon.


Henry Herbert Stevens: In New Zealand potted
and preserved is the description used for canned.


James Malcolm: There is an item of
canned salmon in the New Zealand customs schedule; what does that refer to?


Henry Herbert Stevens: I am speaking from
memory, but I do not think canned salmon is mentioned.


James Malcolm: Oh, yes.


Alan Webster Neill: Item 35 (a) covers fish, canned, not including fish paste.


Henry Herbert Stevens: That is unique to the
trade agreement between New Zealand and Australia and does not enter into the general schedule; it is left out entirely.
Paper is provided for in the treaty under a satisfactory arrangement. I would remind the hon. member for Comox-Alberni that while a very wide range of paper is not mentioned in the schedule, we get the British preference in regard to the whole of that classification, and this will be of distinct advantage to Canada.
Reference was made to article IV and my hon. friend was under some apprehension that the operation of this would not be satisfactory. I believe he indicated he thought perhaps it was a little unfair. Let me give a brief explanation in regard to it. Article IV must be compared with the article in the Australian treaty dealing with the suspension of section 6 of the customs tariff, that is the dumping clause. It will be noted that in the Australian treaty section 6 is completely suspended and abandoned as far as Australia is concerned, but that article IX, which makes provision for notice where a commodity is being imported prejudicially to the interests of the importing country, provides a remedy in that the commodity goes under the general tariff. In the New Zealand treaty the matter

New Zealand Trade Agreement
is dealt with somewhat differently. Section 6 is suspended, but only after notice and then, at the expiration of the notice, which is only one month as against three months in the Australian treaty, all the dumping clause provisions of the Canadian tariff apply. This is a different method of treatment, but it is the formula presented to us by New Zealand when we were negotiating and the principle being more or less the same, we accepted the New Zealand formula which I think is, shall I say, a little more rigid than that in the Australian treaty. It is different, but equally effective.


James Malcolm: Does the minister not
think thirty days is too short considering the time the goods are in transit? It might be injurious in the case of either country because goods are not transported to and from Canada and New Zealand in thirty days.


Henry Herbert Stevens: In case of notice the
matter will be dealt with by cable.


James Malcolm: There is nothing to
cover that.


Henry Herbert Stevens: It is accepted and the
experts of both countries assented to the idea that a cabled notice would be accepted as sufficient.


James Malcolm: Must it be accepted by cable?


Henry Herbert Stevens: Not necessarily; but of
course my hon. friend will bear this in mind: it is the injured country, so to speak, that will give the notice. If they give the notice in writing, that is their funeral, if I may use that expression. If they are anxious to give the notice, they will cable and the period of thirty days is an added protection to the importing country; inasmuch as it has been accepted there can be no complaint on the part of the other country.


Alan Webster Neill: I have no objection to the
minister using the dumping clause instead of the other method that he used in the Australian treaty, but I should like him to answer this question:	Will the method adopted of
having only thirty days' notice and having the stuff in bond, not have the effect that the dumping provision can be imposed at a moment's notice and that this will lead to disintegration and uncertainty of trade? That is the point.


Henry Herbert Stevens: I think not. The theory
behind that is this, that the exporting country, whether Canada in the one case or New Zealand in the other, may be presumed to 41761-158
export certain goods on consignment. If they export on consignment, there should be no objection to those goods immediately on arrival being placed in bond until such time as the holder, the consignee, is prepared to enter them for consumption. Otherwise this might happen-


Alan Webster Neill: He might lose his sale?


Henry Herbert Stevens: No, the goods might be
exported on consignment and be allowed to lie indefinitely in the importing country, with the latter being able to take no action, but the presence of a large quantity of consigned goods in any market always has an injurious effect upon prices in the importing country where those goods are, as it were, hanging over the market. It was to obviate the danger of that that this form was adopted.


Alan Webster Neill: But in case of selling goods
on order, would not a hardship be created if the duty were raised while the goods were in transit?


Henry Herbert Stevens: We must read the article in this sense: first, it must be shown that the importation of the goods is going to affect injuriously manufacturers or producers in the importing country. That is the basis of the whole thing. Then a thirty-days' notice is given by cable-it is presumed in every case it would be given immediately by cable- that such goods are entering prejudicially. Then it is expected that the two countries by agreement will apply some remedial action. That is, we will assume these goods are billed at a figure that is calculated to injure the importing country. The exporter might undertake not to release the goods except at a price that was consistent with or similar to that of goods in the importing country.


James Malcolm: The minister must remember that those goods may be already sold by the importer. What will he do to fulfil his contract?


Henry Herbert Stevens: Any importer of goods-


James Malcolm: This may be true in the case of Canadian motorcars going into Australia; they may be all sold under contract.


Henry Herbert Stevens: That applies whether this provision is present or not. The importing country may change its tariff at a moment's notice.


Alan Webster Neill: Three months.


Henry Herbert Stevens: But I am speaking of
importing in the absence of a treaty. The importing country might change the tariff

New Zealand Trade Agreement

while the goods were in transit whether they were sold or not, so that in this nothing is being imposed upon the importer that is not present against him whether the treaty were in force or not.


James Malcolm: I submit to the minister that the very idea of a treaty is to give assurance of sale and certainty of business at a known rate of duty, so that business can be conducted and contracts entered into and carried out. If under the treaty anything is permissible that may destroy the business Canada enjoys with New Zealand, it is dangerous. The government of New Zealand might destroy a Canadian contract.


Henry Herbert Stevens: That feature is present,
but I would point out to my hon. friend that it is equally present whether you have a treaty or not.


Alan Webster Neill: Under the treaty you have
three months.


Henry Herbert Stevens: In the absence of a treaty that same eventuality might occur, so there is not imposed by this any risk on an exporter that is not present in normal trade. The provisions of the treaty, of course, postulate cordiality, good will and common sense, and a friendly attempt to adjust any difficulties. That is the basis of the whole thing. It provides for a friendly method of adjusting what might otherwise be a provocative and difficult situation.


Edward James Young: This section says that section 6 of the Customs Tariff, which is the dumping clause, shall not apply, but it makes no mention of sections 35 to 43 of the Customs Act, which give the minister power to raise the duties by fixing values.


Henry Herbert Stevens: My hon. friend will recognize that the sections of the Customs Act to which he refers have no real effect unless under section 6 they are made applicable.


Edward James Young: Oh yes, they have.


Henry Herbert Stevens: My hon. friend will find
if he studies the situation that what I say is correct. The only way you can give effect to the increased duty is by imposing the dump.


Edward James Young: By increasing the valuation you increase the regular duty, and then add the dumping duty. This particular section says that you will not add the dumping duty, but it does not say that the other sections shall not apply.
[Mr. Stevens.1


Henry Herbert Stevens: What I said applies to
specific duties only, but the articles chiefly affected under the agreement are under specific rates.


Edward James Young: There are some items here
where the duty is ad valorem, and in such cases the minister will have power to shut the goods out at will.


Henry Herbert Stevens: No, because we undertake not to change the rate.


Edward James Young: You change the valuation.
Mr. STEVEN'S:	I think that that would
be interpreted under the treaty as changing the rate.


James Layton Ralston: That is what we always
argued.


Edward James Young: What will the port collector do?


Henry Herbert Stevens: He will act according to
instructions given him by the order which puts into effect what my hon. friend is referring to, whatever action that might be.


Mr. MARCIL:: I would like the minister
to complete his speech by telling us something about butter. In the last election in the province of Quebec twenty candidates of the Conservative party won their seats in this house on this question of New Zealand butter, and I would ask the minister to tell me how the position is going to be changed by this treaty. Will the farmer be completely saved by this change in duty on butter, from one to five cents, or what is going to happen?


Henry Herbert Stevens: The answer to that very
reasonable question is that under the old treaty the duty on butter was one cent a pound and under this treaty it is five cents a pound. That is the first point. Then under the provisions of article IV there are remedial rates which may be exercised. Furthermore, as was quoted a short while ago by my hon. friend from Vancouver Centre, the dairy council -when they appeared before the tariff board represented that a four cent rate was sufficient. Presumably, therefore, a five cent rate should be reasonable protection, and in the case of emergency we have remedial powers under article IV.


Charles Marcil: Do I understand, then, that this treaty practically means the prohibition of the importation of New Zealand butter into Canada, that there will be no importations from New Zealand under this new rate? Conditions have entirely changed from what they were when we were importing New Zealand butter into Canada. Then the

New Zealand Trade Agreement
farmers in the eastern townships were exporting their cream to the United States because they could get a better price and we had no Canadian butter in this country, so we imported butter from New Zealand; but now butter is being exported from Canada. We have enough Canadian butter for ouselves, and if this new rate means that importations of butter from New' Zealand will be shut out, I do not see what advantage the treaty will be to the dairy farmer.


Henry Herbert Stevens: Might I answer the hon. member who a moment ago asked for the rates on motor cars


Peter John Veniot: The minister is slipping.


Henry Herbert Stevens: I do not understand that my hon. friend from Bona venture expects an answer, but if he does I find myself in a very happy position. He asks what our expectations are. We anticipate that under this treaty the rather troublesome difficulties of the last two years will vanish, that the relations between Canada and New Zealand will be amicable in all respects, and that the interests of all parties will be adequately safeguarded and protected. Reasonable provision is made for adjusting any difficulties which may arise. In regard to the duty on motor cars, the duty was formerly 50 per cent on all cars. The new rate under the schedule is 26 per cent when there is 75 per cent or over of Canadian content, and 32 per cent when the Canadian content is from 50 to 75 per cent.


John Livingstone Brown: I see that onions are mentioned in the treaty. Has the hon. member for South Essex been consulted about that?


Henry Herbert Stevens: That is a very important item. We get a special rate on onions entering New Zealand, and New Zealand gets a preference on their onions coming here, but we do a much larger business with New Zealand in onions than they do with us. It is one of those cases where there is a reciprocal trade which is advantageous to both countries.


John Livingstone Brown: It pleases me.


Charles Marcil: Potatoes are not mentioned in the treaty. The farmer is now getting only a few cents per bushel for his potatoes. Was any attempt made to develop a market in New Zealand for Canadian potatoes?


Henry Herbert Stevens: We get the British preferential rate.


Charles Marcil: Does that mean we are going to export any potatoes to New Zealand?
41761-158J


Henry Herbert Stevens: If our exporters are enterprising enough and the market in New Zealand is attractive enough, there is a possibility, but frankly I would not expect a very much enlarged market for our potatoes in the Antipodes. There is a duty on potatoes entering New Zealand.


Charles Marcil: Is there any news regarding the potato situation? The situation in Quebec and New Brunswick is critical. New Brunswick No. 1 potatoes are retailing in Ottawa at 50 cents per 80 pounds. I wonder what the New Brunswick farmer is getting out of that. Is there any prospect of getting a market in Cuba or anywhere else for our potatoes?


Henry Herbert Stevens: I should not like to digress too far into a discussion of matters outside of the treaty, but I will answer my hon. friend by saying we are doing everything that is possible at the moment in that regard. There is a special effort being made in regard to Cuba, but I am afraid that the season is too far gone for us to expect to do much business in potatoes with Cuba this year. There is no question that the potato situation is bad, but we are doing everything we can. We have succeeded in assisting in the marketing of some of the potato crop in the maritimes, not of course to the degree that we should have liked, but we have done everything that was possible. I would rather deprecate, Mr. Chairman, getting into a discussion of items outside of the treaty.


Charles Marcil: I see potatoes are not mentioned in the treaty at all.


Henry Herbert Stevens: It is the British preferential rate for potatoes.


Charles Marcil: Is there any news from England about the potato situation?


Henry Herbert Stevens: We are working on that. It is a very difficult task.


John Livingstone Brown: I am glad to notice in this treaty that the government is now recognizing the value of trade, even if it is concerned with the same articles, because in tariff discussions that have taken place in the house during the last ten years it has been frequently objected by hon. members on the other side that goods were coming into Canada in certain quantities, although similar or even greater quantities of the same class of goods were going out of Canada. I think this marks an advance in the trade thinking of hon. gentlemen opposite.


Henry Herbert Stevens: Thank you very much. All compliments are welcome.
New Zealand Trade Agreement


Thomas Merritt Cayley: I am quite well aware that the high duty on eggs from the United States will prevent any importations from that country, but in previous years we have received large importations during the winter months, December, January and February. I well remember that when I was soliciting a certain gentleman's vote during the last election he told me he would not vote for any government that let so many eggs in, and so I lost his support. I want to make sure that the government is not going to imperil its existence by allowing too many eggs to come in from New Zealand under this arrangement during those months when our poultrymen get their best prices and depend upon these returns to carry them through. I think in this morning's Journal I noticed the secretary of the National Dairy Council expressed some regret that the protection against condensed and powdered milk and casein had not been made higher.


An hon. MEMBER:: It is made lower.


Thomas Merritt Cayley: Has there been any cooperation with the National Daily Council in adjusting this rate?


Henry Herbert Stevens: I am in the very happy position of being able to assure my hon. friend by indubitable evidence that there is not any need for apprehension about eggs. The facts regarding eggs are as I have already stated them. Eggs from New Zealand have been free for many years.


Thomas Merritt Cayley: The duty was very low from the United States.


Henry Herbert Stevens: In the fiscal year 1930 Canada imported eggs to the value of $950,000, of which 98 per cent came from the United States and none from New Zealand.


Thomas Merritt Cayley: Under what rate from the United States?


Henry Herbert Stevens: 
Thomas Merritt Cayley: It was hardly worth bothering with then.


Henry Herbert Stevens: Quite true. With regard to powdered milk, we have no representations objecting in any way to the item referred to.


Thomas Merritt Cayley: I was mentioning what I read in the paper this morning.


Henry Herbert Stevens: I did not notice it.


James Malcolm: Mr. Chairman, the minister, I think, fully appreciates the fact that my sympathies are very much with him in his work of negotiating a treaty with the sister dominion of New Zealand. I was disappointed that he had not made just as full a statement at the outset as he has made now with regard to the features of the treaty which distinguish It from the old treaty, and which he expects will be helpful to Canada in enabling this country to secure a greater share of trade from New Zealand and on the other hand will be helpful to New Zealand in enabling that country to secure a large share of our trade.
I propose to make a few general observations with regard to the treaty itself and its desirability, which is not questioned by any hon. member in the house, nor indeed, I think by the Canadian people. I shall not worry my hon. friend the minister in putting through his treaty, with the same kind of political criticisms that we had to face from several hon. gentlemen on the other side, especially the hon. member for Dufferin-Simcoe (Mr. Rowe), when the previous treaty was under discussion. We were told that the government then in power was destroying Canadian agriculture and the butter industry because we imported some of our butter from New Zealand. The minister is not going to be worried by me with any unfair criticism at all. I quite realize what the member for Comox-Alberni (Mr. Neill) has said, that the sister dominion of New Zealand is a country of whose total exports 92 per cent are pastoral products. There are such exports as kauri gum and hemp, but these are infinitesimal compared with the pastoral products which New Zealand exports. New Zealand raises sheep and is probably one of the finest sheepraising countries in the world. Therefore she exports wool and mutton. New Zealand raises cattle; therefore she must sell hides and beef. New Zealand has probably the finest dairy herds that can be found out of doors, and therefore all dairy products, whether cheese, butter, condensed milk and milk products must be a substantial part of her export trade. No hon. gentleman on the opposite side or on this side can expect any minister of trade and commerce, past, present or future, to make a deal with the sister dominion of New Zealand without holding out some hope to that dominion that we will endeavour to take a substantial amount of these products, and no politician need go among the farmers of this dominion and tell them that their com-

New Zealand Trade Agreement
modities will not have to compete with commodities imported from New Zealand if a satisfactory trade treaty is arranged. Therefore I am glad to have the minister stand up in the house and be as frank and as honest about the question as he was in his opening remarks when he said that any trade treaty must be a case of give and take.
But there is a feature which is helpful in promoting trade between this country and New Zealand-namely that our respective seasons are opposite to each other. This feature does relieve the situation to some extent. We can export apples to New Zealand at the very time they are required; and New Zealand can export apples to us at the very time when our apples are not ripening. There are only two or three months in the year when we have not a surplus of eggs and at that time New Zealand's hens are laying. Hansard contains a speech made by me when I was in my hon. friend's position refuting the accusation that we were allowing tremendous importations of eggs. Canada never imported many eggs. Canada always started to accumulate eggs for storage in April, and by December had 175,000,000 to 200,000,000 dozen in storage. True, in January and February we may have run short, and then we probably imported a million dozen or so from the United States. I say to my hon. friend the minister that if the eggs that formerly came from the United States can now be imported from New Zealand, I shall be very glad he has made the arrangement. Likewise in connection with any other commodities which we have to import, I would rather import them from a sister dominion than from a foreign country, whether it be New Zealand apples rather than Oregon apples, or New Zealand eggs rather than American.
There is another point with respect to the treaty that has been referred to in this discussion, which the minister has to a considerable extent cleared up; that is stability of trade is very desirable at the present time. Someone said recently-which I think must appeal to every man who is facing the difficulties of government or of business at the present time-that prosperity was largely based on faith plus activity, and that depressions were usually caused by fear plus inactivity. If business is to progress by satisfactory trade arrangements with New Zealand or with the other parts of the British Empire w'ho will be represented at the conference to be held here this summer, there must be some faith in the country, and there must be some faith in governmental legislation which will allow trade to flow with the fewest possible obstacles. In making a treaty with New
Zealand I think the minister would do well to remove from the treaty every particle of influence of order in council legislation, and let the people of New Zealand and the people of Canada know exactly what will be the rates of duty, for the period of a year. It is all very well to talk about emergencies. Emergencies may arise, but when an Australian exporter comes to Canada and establishes a market, whether it be for eggs, for butter or for condensed milk, he comes here with the understanding that his government has made an arrangement with the Canadian government whereby he may do business. If, after he has begun to distribute his product throughout Canada, some producer of that product in Canada makes a strong appeal to the minister the whole question is held up for negotiation. I submit to my hon. friend that this is not very encouraging to the man who has come here to sell his goods. On the other hand if a Canadian exporter establishes agencies in New Zealand and arranges contracts, and then someone in Australia suddenly discovers that the import comes into competition with industries already established, to have the whole question reopened is not very satisfactory to the Canadian exporter. Therefore may I submit to the minister that my principal criticism of his treaty is that the rates of duty are not definitely established. The privilege contained in sections 35 to 40 referred to of putting a value on goods by order in council in my opinion may destroy the advantages offered in the treaty. We should know definitely that we are going to have an established rate of duty into Canada, and that when New Zealand starts to do business it will not be injured by the application of the dumping duty or by an increased valuation being placed on imports.
W'hat business may be done in Canada in condensed milk I do not know, but I do not think the business in ibutter will bother anyone, because the fallacy of everything that was said from the other side of the house during 1929 and 1930 has been amply demonstrated, and I have no desire to rub it in. At that time we had general prosperity in Canada. I defended the old New Zealand treaty which was an extension of the Australian treaty, and I will defend my hon. friend's treaty when he works out the details. We must buy something from our sister dominion. Under the old treaty Canada was enjoying prosperity greater than was enjoyed by any other country with a similar population. We were consuming thirty-five or thirty-six pounds of butter per capita in this country, and we were not producing enough
New Zealand Trade Agreement

butter to meet the demand. No country in the world ever had such a high per capita consumption of butter. The reason we were importing butter was very simple. There had grown up a trenmendous consumption of fresh milk. The condensed milk business was built up and was taking a large part of the flow of milk of many of the best herds in some of the best dairy districts in Canada. As the hon. .member for Gaspe said, there was a large volume of cream going from the eastern townships to the United States, and the use of ice cream was rapidly increasing. All these lines of business were more profitable to the Canadian milk producer than was the production of butter, even at the price then obtaining. As a result Canada was short of butter to the extent of some thirty to fifty million pounds yearly. Butter importations amounted to about one-sixth of our consumption, and as a result of that importation we were doing a good business with New Zealand in manufactured goods. I said in the house and on the hustings, and I say now to my hon. friend the minister, that if he does have to import dairy products and as a result of this import he can increase the volume of manufactured goods, being sold to a sister dominion, the workmen who will manufacture these goods in Canada will consume much of the condensed milk and butter and eggs imported, so on the whole the trade will be a good trade.
I hope that never again in this country or in this house will we have the exhibition of hypocrisy and insincerity that we had in connection with the criticism of our importation of butter from New Zealand. I shall not offer my hon. frend the minister any political criticism with regard to his treaty, such as was offered to us; when he is prepared to take his treaty item by item and explain the reasons which actuated him in arriving at his decisions, I think he will find that we will agree that in most instances he has made a splendid treaty. Why should we object? This government is continuing the policy which we inaugurated. I know very well that many items are included in the present treaty which were not included in the Australian treaty.
Undoubtedly it was desirable to have a new treaty with New Zealand. Agriculture is predominant in that country; it is not quite so much so in Australia, and it is not so prominent in Canada. In other words, Canada has a larger percentage of manufactured products than either of our sister dominions, Australia is following closely in our wake,

but New Zealand is not so close. Therefore the treaty which might be made by the minister with Australia might not suit the requirements of trade with New Zealand. In 1925 Canada extended the terms of the Australian treaty to New Zealand, and in my opinion that was not as satisfactory as a separate treaty. I am glad the minister is making a separate treaty, and I am also glad that he has made a new treaty with Australia. Everyone has now come to the conclusion that we cannot get out of the present depression by stifling international trade, and we in Canada have agreed that the first way to build up trade is to extend our trade within the empire. Now that everyone in Canada has accepted the policy; now that both sides of the house have agreed on the principle, I hope the minister will have absolutely no trouble. The people of British Columbia should be very well satisfied, though the Fraser valley milk producers may have some grievances; as their condensed milk production is now highly developed.
Butter is on an export basis to-day, due to the lack of prosperity in this dominion. I find from the statistics issued by this government that butter consumption has dropped from 350,000,000 pounds to 217,000,000 pounds, which is a tremendous drop in domestic consumption. Little wonder that we are on an export basis; little wonder that export prices prevail. May I point out to hon. members that when prosperity reigns in Canada our industrial workers undoubtedly consume a larger amount of our agricultural products. Under the conditions which existed from 1922 to 1929, there was an excellent market in Canada for all dairy products, and it was only because prices were high here that New Zealand was anxious to export butter to Canada rather than to England. Now, with the industrial depression which my hon. friend is trying to help relieve by the creation of a market in New Zealand for certain manufactured goods, we have at home an added market for agricultural products, but our surplus supplies must still compete in the markets of the world with the products of New Zealand, Denmark and every other dairying country.
That is the situation. The New Zealand treaty was cancelled by the late government for two reasons, first because it was due for readjustment and secondly because the terms of' the general treaty with Australia were no longer applicable to New Zealand. We had hoped to negotiate a new treaty in a very short time. I am not going to chide the
251L

Neto Zealand Trade Agreement
minister for having let two years go by before bringing in this treaty. I know the difficulties with which he has been confronted, but now the question comes up as to whether under the new treaty or not he has lessened the sacrifice that was supposed to be made by the farmers of Canada under the old treaty. The farmers' wives in this dominion were told in the election that their pin money, their household money, came from butter, and that the iniquitous government which allowed this flood of New Zealand butter to come in was depriving them of a good deal of that money. My hon. friend has thrown his protective arm around the farmers' wife with a five cent tariff on butter. I compliment him on it, but I do not think it matters *whether the duty is five or ten cents, because we are now on an export basis and it will take a considerable period of prosperity before Canadians will consume all the butter that is made in this country and again be on an import basis. I had not the pleasure of being present when wool was being discussed, but the farmers themselves, were told that if we in this country would follow the protective tariff system and grade down our tariffs all the way from textiles to wool, there could be protection for the farmer; they were told that there would be benefits to the farmer through a tariff on wool. Whether or not my hon. friend is going to put a duty on wool when the Imperial conference comes on, I do not know. But I do know this, that the promise which was made by hon. gentlemen opposite that, if it was to apply to textiles, it should apply right down the scale to wool, has not been kept. After listening to the speech of my hon. friend from Dufferin, about how cheaply milk and wool were produced in New Zealand, I am afraid that if the minister has given some protection to the dairy farmer's wife on her butter he has left the farmer himself to face the full force of the New Zealand competition on wool. In other words, the producer of wool is granted nothing under this treaty. My hon. friend knows that the countries from which raw wool would come would be New Zealand and Australia, should we develop the spinning of wool extensively in Canada. Certain manufacturers in this dominion have constantly said that the whole Canadian clip, of which there is a tremendous surplus in storage at the present time, could be used in Canada. It is not being used however, and the fact remains that wool growers are still open to competition from New Zealand. Nevertheless I still believe the minister has worked out a fairly
good treaty. As a party we did not promise protection on wool, nor did we promise protection on butter, but we truthfully explained that there were certain benefits to be derived from trade treaties.
I do not know that the minister could have made a better treaty than he has. He had to sacrifice something; he could not have everything; and I was indeed delighted to hear him say in his opening remarks that, in order to make the treaty, there had to be a certain amount of give and take. I am going to compliment the minister on the treaty. I think his terms in connection with the automobile industry', with the lumber industry, and in connection with pulp and paper, some of which terms are the same as under the old treaty, are very good terms. I think that he has added to the list of goods for which we desire favourable entry into New Zealand, many commodities which were not included in the Australian treaty and for which the manufacturers had asked favourable consideration when the treaty was under revision. In fact, I believe the treaty is probably as good a treaty as could be made, and when it is considered item by item the minister will be able to explain the changes satisfactorily to the committee.
I do submit in conclusion, however, that no treaty, that we may make with any country is going to be as valuable a treaty, if the rates are uncertain, as if they were fixed. It is difficult for me to comment at the present time, not having studied the New Zealand terms and privileges under her customs laws, Knowing the embargoes that have been placed against imports by Australia and New Zealand, knowing the difficulties of these governments on occasion, and the means they have had to resort to-it is not easy for me, to have the faith in the productive results of this treaty, under these circumstances, that I should like. If there were an absolute assurance such as there should be if, for the short term of one year, that terms of the treaty would be carried out without restrictions of any kind; that the right was denied to either country to put in any new tariffs restrictions or embargoes, I should like the treaty better. I do submit to the minister that, with his keen desire to see this trade a success. With the reasonably favourable terms which he has made and on which he has a right to be complimented by the people of the dominion, he should not allow orders in council, or the privileges and powers under the extraordinary legislation which exists at the present time,
Neiv Zealand Trade Agreement

to hamper the business of Canada by applying the dumping or valuation clause. Let business flow, under the terms of the agreement and I think the treaty will be a success.


Henry Herbert Stevens: I wish to thank my hon. friend for his very fair criticism. May I suggest that we proceed item by item. If we did so, seeing that I have answered the very broad and general questions of principle that have been put to me, I think I could explain the items to the satisfaction of the committee.


Mr. COOTE:: I would not speak now, but for some time I have been trying to get the floor to say a few words in regard to the treaty. So far as I can see, the treaty offers advantages to the farmers of New Zealand and advantages to the manufacturers of Canada. I noticed an article in the Financial Post of April 30 under this heading:
New Zealand opens market for many companies.
Canadian auto manufacturers very pleased at new treaty.
"The treaty is very gratifying," said Wallace R. Campbell, president and treasurer of Ford Motor Company of Canada to The Financial Post. . . . General Motors hopeful. General Motors officials questioned by The Financial Post were also hopeful that the treaties would mean more business for the Oshawa plant. . . . Officials of Willys-Overland Limited tell The Financial Post that the preference on the basis of a ear costing $500 in the United States means a benefit to Canada of $95 per car as against $32-$35 heretofore. This is for a car unable to qualify under the seventy-five per cent content law.
The article goes on:
Other lines of Canadian industry which expect material benefit from the new treaty announced in the Commons this week are lumber, iron and steel tubing and rubber, silk hosiery, building products and implement manufacturers.	.
It names certain companies that would be likely to get very direct benefits from the treaty, and then the Financial Post takes up the other side of the picture-the case of the Canadian farmers:
Just what Canadian wool growers will say about continuance of free entry to New Zealand wool is problematical. They probably will object strenuously. This concession to New Zealand, together with a lowering of the butter tariff from eight to five cents, are the two chief items in favour of New Zealand.
I think it is clear from this article that it is this writer's opinion that the advantages, so far as New Zealand is concerned, are for New Zealand farmers, and so far as Canada is concerned, for the manufacturers of Canada. In other words, the concessions given

by Canada are at the expense of the farmers of Canada, if tariffs on the farm products are of any assistance, as members of the party opposite have always claimed so persistently. In the campaign the Prime Minister was reported to have said to the farmers, "I will make tariffs fight for you." It seems to me that so far as this treaty is concerned the word "for" has been left out.
As I read the terms of the treaty now before us, wool is placed on the free list while blankets bear a rate of 22j per cent; wool travelling rugs, 30 per cent and wool floor and carpet rugs, 25 per cent. In view of the discussion which took place in this house on February 22, I am unable to understand why this treaty should contain these provisions. On that date the following resolution was moved by the hon. member for Maple Creek (Mr. Swanston):
That, in the opinion of this house, it is expedient that the government of the Dominion of Canada place a duty on raw wool that would reasonably protect the Canadian wool growers.
That resolution was adopted by a vote of the house. In speaking thereon, the Minister of Agriculture (Mr. Weir) said:
Is it worth while to do something to keep alive this industry into which these men have put so much?
The hon. minister was referring to the sheep growers.
Personally, I feel that it is. If they were not efficient it would be a different thing, but they are as efficient as the sheep farmers of any country in the world. I have no hesitation in stating that we should put forward every effort to keep this industry alive.
The resolution asks that a tariff be placed on raw wool. That alone would not be sufficient to protect the wool industry. I feel that any tariff that will protect the wool industry must be on the whole schedule of wool from wool in the grease, w-ool scoured, wool tops, yarns and so forth. I therefore appreciate this opportunity to put myself on record as being in favour of the resolution.
I cannot help but feel that the next time a trade treaty is to be negotiated it would be only proper that the Minister of Agriculture go along as one of the negotiators. This resolution was the subject of considerable debate, and I notice that, among others, the following members spoke in support of it:
The hon. Swanston).	member	for	Maple	Creek	(Mr. The hon. Stewart).	member	for Lethbridge			(Mr. The hon. Stanley).	member	for	East	Calgary	(Mr. The hon. Thompson).	member	for	East	Simcoe	(Mr. The hon. member for Cariboo (Mr. Fraser). The hon. member for Yale (Mr. Stirling).

New Zealand Trade Agreement
The hon. member for East Algoma (Mr. Nicholson).
The hon. member for Long Lake (Mr. Cowan).
The hon. member for Queens (Mr. Myers).
The hon. member for Rosetown (Mr. Loueks).
The hon. member for Marquette (Mr. Mullins).
I wonder where our genial friend for Marquette was when this treaty was being negotiated? The motion was carried by a vote of 77 to 32, a very substantial majority. So far as I can remember, all the members of the government who were then present supported the resolution. I do not think the wool industry is being treated properly when a trade treaty is negotiated which places wool on the free list but which imposes the rates already quoted against articles made of wool. During the discussion on the resolution the hon. member for Cariboo stated that 30 per cent of the imports of wool into Canada came from New Zealand-at least that is my recollection. It seems to me that the government has not been fair to the house or to itself, considering the vote on the resolution, when it negotiated the treaty now before us.
I should like to ask the Minister of Trade and Commerce if he did not overlook something when negotiating this treaty, and that is the question of depreciated currency. I am informed that the New Zealand pound is quoted in Canada to-day at $3.75. That means that the exporter in New Zealand enjoys a premium on Canadian funds amounting to approximately 25 per cent. In many cases that equals the tariff on the goods he is shipping into Canada. Speaking in the house on April 11, the minister very frankly and forcibly stated that we were justified in placing a dumping duty against British goods because there was a depreciation in the British pound. He put a very definite question to his friends across the chamber when he said:
If a country with a depreciated currency were suddenly to commence shipping goods into Canada at prices obviously below the cost of production, and further assuming that such goods were on the free list and Canadian industries were threatened thereby, would Canada be justified in taking effective measures to prevent the influx of those goods?
Wool from New Zealand has been coming in free of duty and it will continue to come in free of duty. The currency of New Zealand is depreciated 10 per cent below Great Britain's currency and this wool will be coming into Canada at less than the cost of production. If a dumping duty should be applied against Great Britain because of a depreciated currency, should it not also apply in the case of New Zealand or any other country which has a depreciated currency?


Edward James Young: The hon. member wants that done?


George Gibson Coote: If the argument of the hon. minister in connection with Great Britain has any weight, surely it should have the same weight in connection with New Zealand. A shipment of wool sent by a farmer in New Zealand to Canada and netting the shipper $1,000, would return the equivalent in New Zealand currency of $1,250. The Canadian farmer making a similar shipment would receive only $1,000. How can the Canadian farmer hope to compete against the New Zealand farmer under these conditions?
If there is anything in the claim of the government that protection is of value to the farmer, I think that the sacrifice which the hon. member for North Bruce said was necessary is being made by the Canadian farmer. Again using the expression of the hon. member, the giving is by the farmer and the taking by the manufacturer. I think this applies particularly to the automobile manufacturer, who has been the pet of all governments as far as tariff favours are concerned.
Before concluding my remarks I might point out that the Minister of Trade and Commerce is recorded in Hansard as having voted in favour of the resolution to which I have referred, and it is to be regretted that he apparently forgot about the resolution when negotiating this treaty with New Zealand.


Henry Herbert Stevens: After recess I suggest that we take up the treaty item by item.


James Layton Ralston: Will the minister try to have available the information in connection with the New Zealand rates of duty applicable to the goods dealt with in schedule B?


Henry Herbert Stevens: If my hon. friend refers
to the schedule in the votes and proceedings, I think he will find there-


James Layton Ralston: I find there a column on page 377 of the votes and proceedings.


Henry Herbert Stevens: Schedule B.


James Layton Ralston: Items in schedule B. What I find there is a column headed "British preferential tariff," "general tariff" and "rate to Canada." What we want is the rate which was in force under the old treaty on those items. I presume I can take it that the rate which was in force was the British preferential tariff. I want to be sure about that.


Henry Herbert Stevens: When the Australian
treaty and the order in council extending it to New Zealand were in operation, I think it will be found that in virtually every case the British preferential applied.
Private Bills


Charles A. Stewart: Not altogether.


James Layton Ralston: Could the minister make sure of that?-because there are only twenty-five items.


Henry Herbert Stevens: I think I am right in
that: the British preferential applied to Canadian goods entering New Zealand. Before August, 1930, the British preferential generally applied to Canada.


James Layton Ralston: That was the British
preferential generally in force in New Zealand at that time?


Henry Herbert Stevens: Yes.


James Layton Ralston: Our difficulty is that we
do not know whether the British preferential in force at that time is the British preferential that is now set out in the schedule.


Henry Herbert Stevens: There may have been
some modification since then. I do not know whether we have the very latest figures.


James Layton Ralston: The situation is the other way about, the latest figures are given in this column. It is the earlier figures we should like to have.


Henry Herbert Stevens: We shall endeavour to get that for my hon. friend.


James Layton Ralston: In a word, what were the rates under the British preferential tariff in force when the old treaty was in effect, against Canadian goods set out on pages 377 and 378 of the votes and proceedings?


Henry Herbert Stevens: We shall endeavour to
get that after recess.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 47 for the relief of Eva Corker Trill.-Mr. Bell (St. Antoine).
Bill No. 48 for the relief of George Senkler Morgan.-Mr. Bell (St. Antoine).
Bill No. 49 for the relief of Agnes May Jack Evans.-Mr. Bell (St. Antoine).
Bill No. 50 for the relief of Mabel Constance Small Cossar.-Mr. Bell (St. Antoine).
Bill No. 51 for the relief of Olive Pearl Beattie Watkins.-Mr. Bell (St. Antoine).
Bill No. 52 for the relief of Assad Kalil Eddy, otherwise known as Joseph Canile.- Mr. Bell (St. Antoine).

Bill No. 54 for the relief of Georgina Linda Mclndoe Howard.-Mr. Bell (St. Antoine).
Bill No. 55 for the relief of Antonio Poliseno.-Mr. Lawson.
Bill No. 56 for the relief of Dorothy Gertrude Silcock Wilson.-Mr. Bell (St. Antoine).
Bill No. 57 for the relief of Beulah Isobel Phillips Eakin.-Mr. Bell (St. Antoine).
Bill No. 58 for the relief of George Seymour Dixon.-Mr. Bell (St. Antoine).
Bill No. 59 for the relief of Audrey Meredith Mann Redpath.-Mr. Bell (St. Antoine).
Bill No. 60 for the relief of Ethel Seigler Nissenson.-Mr. Jacobs.

[Stage Direction]
The house in committee on Bill No. 62, respecting a certain trade agreement between Canada and New Zealand-Mr. Stevens-Mr. Bury in the chair.
The CHAIRMAN (Mr. Bury):: Is it the
pleasure of the committee to take up first the schedule or the bill?


Henry Herbert Stevens: I think we had better proceed with the schedule first.
On article I.


Edward James Young: What is the purpose of subclause 2?


Henry Herbert Stevens: The shipping between
Canada and New Zealand touches at only two or three of the main ports; it does not touch at some of the sub-ports, and very occasionally there might be a shipment of goods which it would not pay to take to one of the main ports and transship, but which could :be sent by a vessel not running direct to Canada. We are assured these cases are very few, and when they arrive it must be made clear by the government of New Zealand that it is not possible to make the shipment direct.


Edward James Young: Does any volume of goods we now import from New Zealand come here through any other country?


Henry Herbert Stevens: Yes, they are landed at San Francisco, and some at New York; just in what quantity I would not be prepared to say.


Edward James Young: Supposing a Canadian importer wishes to import goods that originated in New Zealand, and finds it to his advantage to buy such goods that came in via San Francisco, would it not be in the interests of all Canada to permit him to do so?

Next) Zealand Trade Agreement


Henry Herbert Stevens: The theory behind direct shipment is of course that when two countries enter into an agreement that carries preferential rates, it is only reasonable and fair that the business developed as a result of such agreement should be carried by the shipping and through the ports of the respective countries as far as possible. Of course, we have subsidized ships.


Edward James Young: I cannot see the advantage in it.


James Lorimer Ilsley: What is the reason for the different wording of paragraph 2, article I, and paragraph 2, article II?


Henry Herbert Stevens: The same situation does not occur in regard to Canada; we have no difficulty in shipping direct to New Zealand. It is a geographical difference.


Charles A. Stewart: Is there any difficulty in shipping direct from New Zealand to Canada?


Henry Herbert Stevens: None at all.
Article I agreed to.
On article II.


Henry Herbert Stevens: This is the same as article
I, except as to subsection 2.


Charles A. Stewart: Is there any conflict with respect to the manufacture of automobiles?


Henry Herbert Stevens: No, it does not conflict. That is the formula adopted by New Zealand in reference to matters of this kind. We followed their own wording.
Article II agreed to.
Article III agreed to.
On article IV.


Edward James Young: Before dinner I drew attention to the fact that although under this section the dumping clause did not apply, still the section gives the minister power to fix the value for duty, and therefore the increased ad valorem would apply in this case. I do not wish to move an amendment lest I be taken to desire to embarrass the government, but I would suggest that somebody on the other side move that that clause do not apply.


Henry Herbert Stevens: Unfortunately we could
not move an amendment without throwing the treaty out.


Edward James Young: I do not think New Zealand would object.


Henry Herbert Stevens: This article was drafted
by New Zealand and accepted by us.


Edward James Young: Did they know about our
laws at that time?


Henry Herbert Stevens: Yes, they know more
about them than we do really. In our original draft we presented precisely the same form as in the Australian treaty; but the New Zealand representatives preferred this, drafted this, and asked for it; we accepted it. So there need be no misapprehension about it at all so far as New Zealand is concerned.


Charles A. Stewart: What would happen in the case of some interested party in Canada objecting to a shipment from New Zealand; would this government notify the New Zealand government that the particular article was more or less under suspension? Surely under the agreement this government would feel bound not to impose drastic methods to prevent importation as they do under the general tariff. I suppose my hon. friend had butter in mind when he entered into this arrangement with New Zealand? He did not wish to get into the same fix as did his predecessors in that regard!


Henry Herbert Stevens: My hon. friend from West Edmonton (Mr. Stewart) has correctly interpreted the theory of the application of this article. It is not anticipated that it will be invoked at all, except under conditions which are extraordinary and abnormal. The whole theory of the treaty is that the two countries will carry on their business in an amicable manner with as little interference as possible with any of the terms of the treaty; but in case such a condition arose it was thought desirable-first in the Australian treaty, and then the same principle was incorporated in this treaty-not to have the whole treaty upset because of disputes on one or more items that might arise from time to time. Therefore this article was designed to meet such a contingency. It would certainly not be invoked simply by an individual indicating that he did not like the importation of a certain article. It must be shown to the satisfaction of the government that interests in Canada or in New Zealand, as the case may be, are prejudiced. I am quite certain that no government would invoke the article unless there were very sound grounds for so doing. We have found the clause very acceptable in the Australian treaty, and there has been no difficulty whatever in working it. It leads really to this, that if there seems to be some danger of competition that it is desirable to avoid, it opens the door for communication
New Zealand Trade Agreement

between the two governments before anything is done at all, and thus we expect any difficulty to be overcome without even invoking the article. I hope I have made that clear to my hon. friend.


Charles A. Stewart: I have been sitting here keeping silent and wondering why hon. gentlemen behind the minister have not raised the objections they brought forward on former occasions. I see that the minister has provided a way out, which will enable them to explain to their electors when they go home why they have now agreed to a treaty somewhat similar to the one about which they raised such a fuss in 1930. There are one or two items in the schedules about which I am wondering why hon. gentlemen are not raising any objection.	.


Henry Herbert Stevens: This principle was not in
the treaty before 1931.


Charles A. Stewart: I quite
appreciate that, and I congratulate the minister on the treaty itself. More than that, I congratulate him on his ability to get around a very difficult and knotty question with regard to his own followers. May I warn hon. gentlemen opposite who were so vociferous in their denunciation of the Liberal government in their treaty negotiations with other countries, and who always found fault with the government whenever any little difficulty arose, that there will be difficulties in connection with this treaty, and they will have a great deal of yelling to do before the next election, because someone is bound to be hurt. I am all for it; the wider you can open the avenues of trade the more I will support that action. I am not alarmed about butter or wool coming to compete with Canadian products, but the amazing fact is that hon. gentlemen opposite receive it so quietly and without protest. I venture the assertion that if the Liberal government were putting this through there would be a horrible row raised by hon. gentlemen opposite, and I am not too sure that my hon. friend who is in the chair would not join in it.


Mr. SPEAKMAN:: The question I have in mind has direct application to the present discussion. A few days ago a member of the government outlined to us the steps it would be necessary to take in connection with goods entering Canada from Great Britain, and he described certain actions which were taken with regard to the exchange situation .and the depreciated currency in Great Britain. We were told that it was found necessary to put valuations on goods and so on to meet that situation.
[Mi Stevens.]
As I understand it, the currency of New Zealand at the moment is at a lower point than that of Great Britain, and the difficulty in connection with the exchange that existed with regard to Great Britain would exist, I imagine, to a greater degree with regard to New Zealand. Did any discussion take ijdace on that point, or was there any suggestion that it might be necessary to take action with respect to New Zealand as was the case with respect to Great Britain?


Henry Herbert Stevens: I think I can explain that in a few sentences. The exchange situation in New Zealand has obtained for some considerable time, much longer than it has in England. I think it is acknowledged by all students of the subject that following a depreciation of currency prices will adjust themselves and price levels will rise.


Alfred Speakman: In the country where the depreciated currency exists.


Henry Herbert Stevens: Yes, where the depreciation occurs. There is usually a considerable lag between the time they go off the gold standard, say, or whatever causes the depreciation, and the time when the price levels will have adjusted themselves to the new standard. In New Zealand that situation largely obtains; the price levels have risen not altogether but in substantial measure to a degree commensurate with the depreciation of the currency.
My hon. friend from Macleod this afternoon referred to the time when England went off the gold standard. If I may use the expression, England went off the gold standard with a bang. There was no notice given; she just went off that standard between Saturday night and Monday morning, and the currency depreciated very rapidlju It went down with one plunge to a very low point; there was not a gradual decline such as occurred in New Zealand, for instance; the decline was very sudden. Between the time of that sudden sharp decline and the time that prices, through purchases of raw material and so forth abroad, could begin to adjust themselves, there was an opportunity for profiteers, if you like, to take undue advantage of that situation in dealing with British goods, to their own individual advantage and to the injury of the country to which the goods were sent. This dominion recognized that fact, as did other countries, and we stabilized the pound for the time being at $4.86, or par value. Some little time having elapsed, we later allowed the price for exchange values to be $4.40.
I do not desire to argue to-night whether or not that was the correct thing to do, or whether it was right or wrong, but I do want

New Zealand Trade Agreement
to point out the difference in the two cases. In my opinion there is no occasion for alarm because of the depreciation of New Zealand currency, although mark you we would certainly welcome the time when the currency of the British nations and of other countries might become stabilized, which would relieve Canada as well as other countries of the anxiety, the worry and the bother of dealing with depreciated currency. I must confess that I think the situation has adjusted itself to a degree, though perhaps not fully.


Mr. BEAUBIEN:: Just one question; I do not want to delay the committee. May I ask if the hon. member for Dufferin-Simcoe and the hon. member for Haldimand approve of this treaty?


Henry Herbert Stevens: It is not customary to make formal reference to indivdual members in this way. I cannot speak for them, but I know that I enjoy the confidence and the good will of the hon. members to whom my hon. friend has referred.


Charles-Philippe Beaubien: They are two very fine members, but may I tell the minister that during the session of 1930 those two hon. members were sent to Manitoba, to Quebec, to Nova Scotia and practically all over the country by the Conservative organization directed by General McRae, who is now in the other house, to tell the farmers of Canada as a whole that if the Conservative party came into power, New Zealand and Australian butter would not come into this country. I do not take the minister very seriously when he says the depreciated currency of New Zealand will have no effect. We have an example in what has been done in England, and that twenty per cent advantage in exchange will bring down the duty on butter. I think before this treaty is finally passed those two hon. members who spoke on this subject so often during the campaign should state their views regarding this treaty. An immense amount of literature was sent out from this building with regard to the importation of New Zealand butter, and I think the whole matter should be looked into in order to see whether those two hon. gentlemen were trying to get into power or whether they were really in earnest in the remarks they made.


Some hon. MEMBERS:: Carried.


Charles-Philippe Beaubien: The hon. member for
Compton was the worst offender in the house.


Alfred Speakman: I had in mind also the statement made last year by the minister in reference to Australia, whose currency was depreciated. Australia was stated by the minister to have a very material advantage over Canada in the oriental market because of the position of her currency. So, like the hon. member who has just spoken, while I hope the situation will not be complicated by the exchange I am not quite certain in spite of the explanation just given.
While I am on my feet I want to say one word about one phase of the treaty itself. It is unfortunate, but I think it is unavoidable, that in making such trade treaties with our sister dominions of New Zealand and Australia, we are inevitably confronted with this difficulty: in the main, the goods which they must sell-leaving out a long list of smaller items-the goods to which they must attach overwhelming importance must be such commodities as meats, dairy products, wool, hides and other products of the farm; and if they are to get any advantage at all from the treaty they must increase the sales of these articles in this country. This is an important matter, and I appreciate that it is unavoidable when you are dealing with these two countries whose exports are of that kind.
I understand, of course, that industrial conditions in this country will be improved by the treaty and the farmers will, of course, receive some indirect benefit. There will be an increase in employment and greater purchasing power among those engaged in industry in Canada, and that will, in a degree, make up for any loss the farmers may suffer. But at the same time I cannot close my eyes to the fact that it is impossible to make a treaty with these countries without, so far as expense is concerned, making it at the direct expense of agriculture and for the direct benefit of other vocations. The amount of indirect benefit the farmers will receive is unknown, and undoubtedly it will be a counterbalancing factor, but I do hope that the minister, in the interests of Canada, and of agriculture particularly, will keep a very close eye on the importations of dairy and other products such as wool, which will come into the country. Wool will oome in free while under the same treaty woollen blankets made from that wool will enter under a considerably protected tariff. I hope the minister will see to it that if it does reach the point where agriculture is threatened without some compensating advantage, some other arrangements will be made; because we all hope that, while the manufacturers of our country will receive the full advantage of the treaty and will prosper, they will not obtain that prosperity over a tariff wall to the disadvantage of the farmers. I trust that this *will be kept in mind when the treaty is in operation.
New Zealand Trade Agreement


Mr. MUNN:: In British Columbia the lumber and paper industry will benefit by this treaty. Normally, the lumber and paper industries employ about 40,000 people, and to-day there are less than 10,000 employed in the lumber and paper industry in that province. Being in the lumber industry myself, I am glad to support this treaty. It has been said that there must be give and take in a matter of this kind, and I can assure you that when these 30,000 people who are now idle are employed, they will not be growing wool or making butter; they will be customers for the farmers .producing those things:


Alfred Speakman: I recognize the indirect benefit to agriculture, and while I believe in the principle of give and take, I hope it will not .be the farmers who will be giving altogether and the others who will be taking.


Mr. KENNEDY (Peace River):: I suppose it is true that some people who will get the advantage of the treaty will be eating more butter than they would if they were idle, but it might be New Zealand butter. I do not think that under tariffs you can have absolute equality; you have to make the best arrangements you can. In a treaty of this kind, I do not know that I would have very much complaint about making certain sacrifices for the fishing industry, the lumber industry and some others that we have in Canada. But what about the automobile industry? We have a tariff on automobiles, and the manufacturers take full advantage of it when they sell cars to farmers and others in Canada. It is very easy to demonstrate that they do take full advantage of the tariff, and on the other hand we are sacrificing to some extent to give them markets abroad. There is an Imperial conference coming and it is just possible that there will be a chance to even things up by means of some arrangement between Canada and other parts of the empire, possibly Great Britain, and I trust that some of these manufacturers at least will be willing to give way in some cases, if it is necessary, in order to assist agriculture.


James Layton Ralston: I want to add my protest to the protest made this afternoon against the principle of this section. This section would not be so bad if the provisions of section 6 of the Customs Tariff Act of Canada had not been completely changed and distorted out of their original application by a change in the sections from 36 to 43, which provide now that the price to be fixed for duty purposes shall be, not simply the domestic price, the usual price in the country -of origin, but any arbitrary price that may be

fixed by the minister. Under these circumstances, this treaty is going to be subject to all the fluctuations and instability of other items in the tariff schedule of this country', and it is a poor beginning in making a treaty, particularly one which at most is to run but for one year, to inject into it such an element of uncertainty as is contained in the provision that section 6 of the Customs Tariff Act may apply. Section 6 permits not only the charging of the difference between the invoice price of the article and the proper domestic price of the article as sold in the country of origin, but the charging of the difference between the invoice price and any arbitrary price which may be fixed by the minister. That is a poor principle to introduce into a treaty, especially a treaty of such short duration as this; and in the interests of stability and of good relations between the countries concerned it would be most desirable to leave this out. Stabilization of tariffs was one of the things on which our friends opposite went into power, but stabilization of tariffs and of economic conditions has been about the last thing they have accomplished, and I do not think that our sister dominion of New Zealand should have such a condition imposed upon her. My hon. friend says that New Zealand has consented to it, but I say that we should not place Canada in the position of having to exercise such a power as is given here. Let me give an example. Suppose any shipment of goods-I will not specify any commodity' -comes from New Zealand, bought by a consumer in this country at an invoice price which he believes is right, and for some reason or other a manufacturer or producer in Canada makes representation to the government, while the goods are on the water, with the result that notice is given under this section. When* the importer comes to pay duty on those goods which he has purchased at a certain price and has probably resold, he finds that section 6 of the Customs Act has been applied, the dumping duty has been put on, and he is subject to loss under the contract of resale which he has made. I submit that that is not good for the consumer in this country, neither is it good for the relations with other dominions. I protest against the principle contained in this article, which makes it not only elastic but introduces into our trade treaties the jumping-jack provision, if I may so term it, contained in section 6 of the Customs Act.
On article V.


James Layton Ralston: Could the minister tell
the committee whether or not sections 11 and

New Zealand Trade Agreement
12 of the New Zealand Customs Amendment Act are the same as section 6 of our Customs Tariff Act?


Henry Herbert Stevens: Those sections are fairly
drastic.


James Layton Ralston: What is the collateral
power? Is it to fix prices and determine the rate of duty to be imposed?


Henry Herbert Stevens: Section 12 reads:
(1) If and whenever the governor General is satisfied:'-(a) that the existence of a duty of customs, or the rate of any such duty, or the exemption of any goods from duty, operates or is likely to operate in an injurious unfair or anomalous manner in respect either generally to the public interest or particularly to any industry, trade, business or occupation;-
And so on.
-he may, by order in council, suspend the existing tariff in whole or in part, and by the same or subsequent order in council may, in lieu thereof, impose on any goods such duties of customs, or create such exemptions from duty, as appear to him just.


James Layton Ralston: At least that section is
straightforward; it says in so many words that the minister has power to amend the tariff. It does not do it in the manner we attempt to do it, by saying that while we have not the power to fix the tariff, we can do the same thing in another way by fixing the value for duty purposes. I assume there is no limitation on the rate of tariff which can be fixed.


Henry Herbert Stevens: Not that I notice.


[Stage Direction]
Article agreed to.
Articles VI, VII and VIII agreed to.
On article IX.
James Layton Ralston: Is there a reciprocal rate in connection with the Cook Islands and Western Samoa?


Henry Herbert Stevens: We get the British preferential rate in both cases, but it is applied in a slightly different manner. The hon. member will notice the words, "subject to part XXI of the Customs Act 1913 of New Zealand." That brings the article into conformity with that act, and the effect is that we get the British preferential rate, although there are some duties which the Cook Islands are allowed to impose which are slightly different from the general New Zealand tariff.


[Stage Direction]
Article agreed to.
On article X.
Alan Webster Neill: Would it not have been
better to have the treaty remain in force until notice of abandonment is given?


Henry Herbert Stevens: The suggestion was made by our friends in New Zealand that we make it for one year, due to the fact that an imperial conference is to be held at which their representatives wall be present. It was anticipated that some unforeseen principle might arise out of the conference which would make it desirable to amend the article to conform thereto.


[Stage Direction]
Article agreed to.

[Stage Direction]
Schedule A-Customs	tariff-7.	Meats,
fresh, n.o.p.: (a) beef and veal, 3 cents per pound; (b) lamb and mutton, 3 cents per pound; (c) n.o.p., 2 cents per pound.
.Mr. COOTE:	What were the importations
under this item?
Henry Herbert Stevens: In 1931 the importation
of beef from Australia was valued at $24,000; from New Zealand, $100,000; from the United States, $73,000, a total of $198,000. I am giving just the round figures. The importations of mutton and lamb from Australia were valued at $133,000; from New Zealand, $11,000; from the United States, $72,000, a total of $217,000. The importations of other fresh meats from New Zealand were valued at $5,000 and from the United States $13,000.


Mr. MOTHERWELL:: What were the rates under the Australian treaty as applied to New Zealand by order in council?


Henry Herbert Stevens: Half a cent a pound.


William Richard Motherwell: For the three items?


Henry Herbert Stevens: Yes.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex-8. Canned meats (other than kidneys and tongues), poultry or game; extracts of meat and fluid beef, not medicated, 15 per cent ad valorem.
Alan Webster Neill: What does the "ex" mean?


Henry Herbert Stevens: It means part of an item.


William Richard Motherwell: Let us consider how article IV will work out when applied to this item. Supposing meats were coming in in large volume and under an export marketing board which might be set up, as was done in Australia under the Patterson plan, the sheep men came to the minister and said that this had a prejudicial effect upon the mutton, and sheep industry. If sufficient pressure was brought to bear upon the government it might decide to take action and inform the New Zealand authorities that unless something were done to correct this difficulty within three
New Zealand Trade Agreement

weeks it would apply the provisions of section
6.	If such a matter was turned over to the Minister of National Revenue (Mr. Ryck-man), we know what he could do to it within a few minutes-he would tear it asunder.


Henry Herbert Stevens: I think my hon. friend
is overlooking the fact that the duty has been increased from one-half to three cents a pound. We are expecting that that rate will have a reasonably satisfactory control over the situation, and I think this should be borne in mind when considering this question. Article IV would be invoked only in the case of an absolute necessity and not at the behest of any individual. I think my hon. friend can let his mind be satisfied on that point.


William Richard Motherwell: These export marketing boards are getting to be quite popular. I notice they have one in South Africa as well as in the Irish Free State.


Henry Herbert Stevens: There is no doubt about that.


William Richard Motherwell: They are talking afoount having one in Canada. My hon friend knows how even the low tariff government that preceded this one invoked the dumping clause against butter coming in under the Patterson plan to such an extent as to keep it out. That is how it came in from New Zealand. Supposing they have a Patterson plan in New Zealand, they can put mutton or lamb on this market at a very cheap rate and this will be considered unfair. I know what will .happen. My hon. friends will have a real old time of it and it will not take the Minister of National Revenue long to settle the matter. He will raise the tariff from stem to gudgeon in a/bout three wiggles of a sucking lamb's tail, as the saying goes. I was hoping I would foe able to take the same attitude on this bill as I did last year on the Australian treaty; but in this they are going from bad to worse and1 from there they propose to go to the imperial conference. This is a great training for that event. Where will it all end? I am astonished at the minister bringing down such a provision as this. For the life of me I cannot see why article IV cannot be rescinded without prejudicially affecting the treaty. Surely we can trust a sister dominion for twelve months. If we cannot, my hon. friends opposite might as well throw up their hands and admit they do not know how to run the affairs of the country.


Mr. GERSHAW:: Might I ask if provision is made for the grading of these food products to ensure against disease coming in?


Henry Herbert Stevens: There is no provision in Canada for grading imports from another country. I think New Zealand has a very fine system of packing and grading of its own.


William Richard Motherwell: That will be
attended to by the live stock branch. I think the work is under way now.


Henry Herbert Stevens: Yes.


Mr. DONNELLY:: Does New Zealand allow our beef and veal to enter? What rate do they charge us?


Henry Herbert Stevens: We get the British
preferential rate into New Zealand.


James J. Donnelly: How much?


Henry Herbert Stevens: The New Zealand tariff is a little difficult for us to find the particular item in it, but I understand the rate is 20 per cent.


Donald MacBeth Kennedy: I do not know whether this comes under the minister's department or not, but I wonder if a good deal of this mutton that is brought in from New Zealand is not sold over the counters as lamb.


Henry Herbert Stevens: I know, from occasionally getting my teeth into some lamb, a good deal of it is, at first, mutton. It is rather a reversal of nature, but I cannot guarantee against that.


Mr. LUCAS:: I notice the rate on this item is three cents as compared with four in the British preferential. Do we get any rates into New Zealand less than the British preferential?


Henry Herbert Stevens: I think not.


William Thomas Lucas: I notice in several of the items the rates are higher than the British preferential.


Charles A. Stewart: This is one item on which the minister should be congratulated. He is giving the farmers protection. This is almost the only thing the farmers have to crow about in this treaty.


William Richard Motherwell: They will get a little more protection and perhaps they can do with it. At present, however, I am a temporary resident of the city of Ottawa, and I have to buy lamb. It makes all the difference in the world whether you are buying or selling. Like other residents, when I buy lamb I will

Neiv Zealand Trade Agreement
have to pay the three cents a pound extra duty. On a four-pound' roast this is twelve cents. Now that we have a cut in our indemnities, how am I going to pay twelve cents more? I protest against it.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex. 8. Canned meats, viz:

kidneys and tongues: 15 per cent, but not more than three cents per pound.
James Layton Ralston: I would point out -that in this item there seiems to -be a reduction.


[Stage Direction]
Item agreed to.
Schedule A-Customs	tariff, Canada-9.
Rabbits, frozen: free.
Item agreed to.
Schedule A-Customs tariff, Canada-10. Meats, prepared or preserved, other than canned: (a) bacon, hams, shoulders and other pork, free; (b) n.o.p., free.
Charles A. Stewart: The minister has not been so generous with the farmer on this.
Mr. -STEVENS: The rate remains the same as it was.


James J. Donnelly: What does New Zealand charge us for our bacon, hams, shoulders and other pork per pound? We want to know whether we made a one-sided bargain.


Henry Herbert Stevens: Twenty per cent -to -us and 40 per cent general. There is -a preference there of 20 per cent.


Thomas Merritt Cayley: What amount was imported last year?


Henry Herbert Stevens: None from New Zealand; about $2,000,000 worth from the United States.


William Richard Motherwell: Do I understand this to mean -that -bacon -can come into Canada free -and if we send i-t to New Zealand, the rate is 20 per cent?


Henry Herbert Stevens: Yes.


William Richard Motherwell: I -can understand some things like that happening, but it is the same four-legged- porcine, whichever way you look at it, It is the same distance across whichever way you go. I should like to have the matter elucidated. I th-ink I know the reason.


Henry Herbert Stevens: I have already tried to elucidate i-t. The rate into Canada is not changed.
41761-159.


William Richard Motherwell: I do not care whether it is o-r not. This is -the situation now: it is free one way and it is 20 per cent the other.
If the ra-te on one side is a matter of antiquity, -that does not render it immune from criticism. Is this -perhaps the reason? They do not engage very much in hog raising over there.


Henry Herbert Stevens: That is it exactly.


William Richard Motherwell: There is very little likelihood of much coming in.


Henry Herbert Stevens: No.


William Richard Motherwell: That is the ground on which it oa-n- be defended?


Henry Herbert Stevens: Yes.


James J. Donnelly: Then is this just for window dressing to make it look like something?


Henry Herbert Stevens: It is one of the few items that New Zealand requested and we did not oppose it. We considered it was reasonable and fair.


James J. Donnelly: But the minister says this is just the same as it was before.


Henry Herbert Stevens: Yes.


James J. Donnelly: Why was it put into the schedule at all? It is just a little window dressing for New Zealand.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada 13. Lard, lard compound and similar substances; cottolene and animal stearine of all kinds, n.o.p.: free
Charles A. Stewart: Surely my hon, friends opposite are not going to let lard enter Canada -free? Is there no protest from the other side?


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-14. Tallow: free.
James Layton Ralston: Will the minister explain
why this article has been put on the free list? It was ten per cent under the old treaty. Were there any representations about it? It seems quite a drop.


Henry Herbert Stevens: It was one of their requests which we have met.


James Layton Ralston: Is any appreciable quantity of tallow imported?


Henry Herbert Stevens: None. It is free under
the British preferential, the same as under the new Australian treaty.



New Zealand Trade Agreement
Mr. MaeLEAN: It is almost beyond conception how the articles mentioned in items 13 and 14 are admitted free. I notice that even our good friend the chairman (Mr. Bury) has a resolution on the order paper which we will not reach this session, asldng that a duty be put on these very articles. This will be another place where it will be interesting to see how our friends on the other side of the house are going to line up behind the minister on this trade agreement. We remember how they went all over the country during the last election campaign claiming that New Zealand butter was ruining the dairy industry, and only the other night the hon. member for Dufferih-Simcoe advocated in this house that a bonus be given to the products of mixed farming. To my mind that was really an acknowledgment by that hon. gentleman that the policy which had been pursued by his own party had proved a failure. He came down to my county with a friend from an adjoining county in Ontario and did me the honour of holding meetings in Prince county during the election, and he told the electors there that the whole trouble was with the New Zealand treaty, that the farmers of Canada were being ruined by it. Now our friends opposite, after having increased the duty on butter up to eight cents a pound and the old treaty set aside, come along with a new treaty putting a duty of five cents a' pound on butter, and by reason of the depreciated currency in New Zealand that duty will practically amount to only three or four cents a pound. By standing up in this house the other night and advocating a bonus on the products of mixed farming, our friends opposite acknowledged the failure of the policy they advocated prior to the last election, and now they are asking the people of this country to come to their assistance and pull their chestnuts out of the fire by bonus-ing mixed farming. I am not surprised, therefore, that a number of hon. gentlemen opposite are absent from the house to-night when this treaty is going through.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-16. Eggs in the shell: free.
Alan Webster Neill: Will the minister tell us the number of the item in the New Zealand tariff dealing with the importation of eggs?


Henry Herbert Stevens: Many of these items are
not segregated in the New Zealand tariff but are included under provisions n.e.i.-"not elsewhere included."


James J. Donnelly: What quantity came
in from New Zealand last year?


Henry Herbert Stevens: None.


Mr. REID:: Suppose New Zealand currency depreciated to a very low point and we were getting a fairly high price for eggs in British Columbia, and New Zealand attempted to ship eggs in here. Would the dumping duty then be applicable?


Henry Herbert Stevens: Oh yes, provided the
matter was treated under article IV.


Alan Webster Neill: But you have made no provision in the treaty for dealing with depreciated currency.


Henry Herbert Stevens: Only in the general articie IV.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff. Canada-43. Condensed milk, the weight of the package to be included in the weight for duty: 2J cents per pound.
Thomas Merritt Cayley: Are these rates on condensed milk and on powdered milk in the next item agreeable to the National Dairy Council?


Henry Herbert Stevens: We have no representations from the National Dairy Council in regard to that matter.


James Layton Ralston: The minister assured us
with respect to the other schedule of articles going into New Zealand that the government had received representations and assurances from those in this country who would be affected by the New Zealand duties, that is our exporters, and it seems to me that the same care should be taken to obtain the views of those who al'e going to be affected by the new duties on goods imported into Canada. The practice should apply just as much in the one case as in the other.


James J. Donnelly: What were the imports last year?


Henry Herbert Stevens: Our imports were $56,000
worth.


Charles A. Stewart: Any from
New Zealand?


Henry Herbert Stevens: No.


James J. Donnelly: How much butter and
cheese came in from New Zealand last year?


Henry Herbert Stevens: Practically none. I have not the figures here.

New Zealand Trade Agreement


Thomas Merritt Cayley: Has the minister figures
indicating how much they produce in New Zealand?


Henry Herbert Stevens: No.


William Richard Motherwell: How does New
Zealand's currency compare with Australia's? Is it lower?


Henry Herbert Stevens: It is higher.


William Richard Motherwell: I thought so. Suppose it should go down; is there any provision for jacking it up so that the protection will remain the same?


Henry Herbert Stevens: I do not think anyone
would be warranted in expressing a dogmatic opinion, but I believe the indications are that exchange conditions in both Australia and New Zealand are improving.


James J. Donnelly: What is the quotation
for the pound in New Zealand?


Henry Herbert Stevens: I did not look it up today, but I am told it was $3.77.


Mr. STITT (Selkirk):: In regard to the
depreciated currencjr of New Zealand in terms of Canadian currency, what is the amount of protection we have at the present time on, say, butter? If butter is worth twenty cents a pound, will the protection be five cents per pound, or four cents, or three cents, or two cents, or one cent? I would like to know just what this means?


Henry Herbert Stevens: There is a specific duty of five cents a pound. The differentiation in exchange would perhaps account for something in the neighbourhood of three cents or a little better, provided-and this is where, 1 think, some hon. members in discussing the question have overlooked an important factor -provided there had been no changes in the price levels in the country where the depreciated currency obtains. I am quite certain the price levels in New Zealand have risen considerably. That is an indefinite and more or less indefinable factor, but it has seriously affected the advantage gained by the depreciated currency. It would be very difficult to give a precise answer, but I think one may say the actual protection is in the neighbourhood of four cents.


James J. Donnelly: If butter is worth 20 cents a pound, the amount of protection would vary from day to day according to the rate of exchange. In other words, our protection would not amount to anything at all, it would be wiped out; New Zealand would be getting more for their butter than we would be getting for ours.


James Herbert Stitt: I do not know whether I am correctly informed or not, but I understand the New Zealand currency is 20 per cent depreciated with respect to our currency. If so, and butter is worth 20 cents a pound, the rate of exchange will diminish our protection to exactly one cent a pound- where it was before the last election. If that is true it will mean we are face to face-


Charles A. Stewart: Every Tory will be beaten.


James Herbert Stitt: I am not worried about being beaten at all; that does not bother me a particle. But I remember that in my constituency, as in many other constituencies in western Canada, we told the electorate during the last election that we would keep out this New Zealand butter.


Charles A. Stewart: Hear, hear.


James Herbert Stitt: I want to know, if the New Zealand currency is depreciated to the extent of 20 per cent, whether that has been kept in mind, because if that is the situation it means the ruination of our dairy industry. I think this is a mighty serious proposition for this committee, for a question of absolute honesty is involved.


James J. Donnelly: It is said the pound is depreciated to $3.77. If butter was worth 20 cents in Canada on account of the rate of exchange, New Zealand would be getting about 25 cents for their butter here in Canada. In other words, they would be getting more for their butter than the Canadians could get, so they could afford to pay three cents duty and have some 22 cents clear.


Mr. HANSON (York-Sunbury):: I would commend to the hon. member for Selkirk (Mr. Stitt) and to the hon. member for Willow Bunch (Mr. Donnelly) article IV of the treaty, which is intended to meet just such a situation as is now being presented to the committee.


Charles A. Stewart: For the information of the hon. gentleman who has just come in, may I say to him that we have discussed that article very fully, and the minister gave us to understand that there was to be some respect shown for treaty rights.


Richard Burpee Hanson: What is article IV in there for, just padding?


Charles A. Stewart: To let them out of a tight corner.


Richard Burpee Hanson: I am not in a tight corner.
4176'.-159J

New Zealand Trade Agreement


Charles A. Stewart: Yes, you
are.


Richard Burpee Hanson: Let me tell the hon>. member for Souith-Edmonton that he could not put me in a tight comer if he tried. It is suggested by hon. gentlemen opposite that the minister has said-I was not in the house during the preceding discussion- that article IV is not to apply to any specific case where it works a hardship. I do not think that is the intention of the treaty.


Charles A. Stewart: May I say for the information of the hon. gentleman that he is wrong in designating me as the member for South Edmonton; I am from West Edmonton; but that does not make any difference. Let me add I am ready to take on my hon. friend at any time, in any place, and in any way. The hon. gentleman is in the habit frequently of expressing his opinion in a very forcible way. Well, there are other members who can also express themselves in forcible terms. I am a man of peace, but I do not take any bluff from hon. gentlemen opposite.


Richard Burpee Hanson: I have sat in this house and listened to the hon. member for twenty years, and all he ever got off with respect to immigration was bluff.


Charles A. Stewart: The hon. gentleman endeavoured very frequently to put me in a fight place with regard to immigration, but he has never succeeded yet, nor have any of his friends.


Ambrose Upton Gledstanes Bury: May I call the attention of members of the committee to the fact that we are on item 43a of schedule A.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-71a. Timothy seed: free.
Alan Webster Neill: Did the minister not get an application from New Zealand to have orchard grass seed included in the schedule? They grow a very fine quality of orchard grass, and a lot of it, and it seems to me that it would be advantageous to our farmers to get it at a low rate.


Henry Herbert Stevens: I think that comes in under field seeds, n.o.p., item 73.


Mr.   CAT@: LEY: What are our importations of timothy seed?


Henry Herbert Stevens: A million dollar's worth from the United States; none from New Zealand.


Mr. TAYLOR:: Is there any change in this item?


Henry Herbert Stevens: No, it was not specified in the old- treaty.


Mr. HOWDEN:: Have the New Zealanders timothy seed for sale in any quantity?


Henry Herbert Stevens: A very considerable quantity.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-73. Field seeds, n.o.p., when in packages weighing more than one pound each, free.
Alan Webster Neill: I hardly think the fanners would import orchard grass or anything else on a large scale in packages weighing not more than a pound each. Farmers do not buy their field seeds in small packages.


Henry Herbert Stevens: My hon. friend is right. It will come under the British preferential.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-84. Onions in their natural state, including onions grown with tops, shallots, and onion sets, the weight of the packages to be included in the weight for duty, free.
William Richard Motherwell: 
Henry Herbert Stevens: 
William Richard Motherwell: 
Henry Herbert Stevens: 
William Richard Motherwell: 
Henry Herbert Stevens: I think with New Zealand it is a question of revenue, since their tariff is largely a revenue tariff.


William Richard Motherwell: Do they need it worse than we do?


Henry Herbert Stevens: Oh, yes.


William Richard Motherwell: Then my heart goes out to them.


Henry Herbert Stevens: My heart bled for them too.


James J. Donnelly: What proportion of the New Zealand importation of onions do we supply? I suppose this duty (excludes us and that is why we do not get into that market.


Henry Herbert Stevens: We export about $20,000 worth of onions.


James J. Donnelly: How much does New Zealand import?


Henry Herbert Stevens: About $100,000 worth.


Mr. GARDINER:: How much did we import from New Zealand?


Henry Herbert Stevens: In 1931 we imported about $5,000 worth, and in 1930 about $26,000 worth.


Robert Gardiner: The balance of trade is in their favour, yet we let their onions come in free.


Henry Herbert Stevens: 
[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-91. Toheroa soup, free.
Jean-François Pouliot: Is this New Zealand pea
soup?


James Layton Ralston: I want to find out about this item, and also about item 123, which deals with New Zealand shell fish. Does the minister know anything about this at all? Is it of the lobster family?


Henry Herbert Stevens: No, it is a delicacy, very delicious and very highly prized by the New Zealanders. It has a very high standing in that country; it is very popular in London and has been introduced also in some of the leading hotels in Canada.


James Layton Ralston: I could not find it in Ottawa, and though I have been in New Zealand I have not heard of it previously.


Alfred Edgar MacLean: Did it come in free before?


Henry Herbert Stevens: No, it came in under the British preferential tariff, at 15 per cent.


Alfred Edgar MacLean: I think this is something that should be very carefully looked into.
Mr. STEVENS I may assure my hon. friend that this article will not compete with any Canadian shell fish. Comparatively speaking, it is a high priced article and is considered more or less of a delicacy.


Peter John Veniot: Is it put up as a soup?


Henry Herbert Stevens: Very largely.


James Layton Ralston: It is also canned; item
123 shows that.


Henry Herbert Stevens: It is used largely in making soup, and I think it sells for 33 cents a pound.


Peter John Veniot: It could interfere with some of our shell fish; it might come in competition with the product of the lobster called tomal-ley.


Henry Herbert Stevens: Yes, it could.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-92. Fruits, fresh, in their natural state, the weight of the packages to be included in the weight for duty:	(e) pears: free during the months
of February, March, April and May; British preferential tariff during the other months of the year.
James J. Donnelly: I see the rate from
February to May is the British preference, while for the other months these fruits enter free, but the British preference is free, so it would appear to be the same the year round.


Henry Herbert Stevens: That leaves us an opportunity to change the British preference if we so desire.


James J. Donnelly: What is the New
Zealand rate against our fruit?


Henry Herbert Stevens: One penny per pound,
plus a surtax of 22J per cent.


James J. Donnelly: This looks very unfair. It seems that everything grown on the farm is given a preference by Canada, while every-

New Zealand Trade Agreement
thing we want to sell from the farm carries a good high duty in New Zealand, so we are getting no preference in their market at all. It seems all one sided.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada

93. Apples, fresh, in their natural state, the weight of the packages to be included in tile weight for duty, free.
Alan Webster Neill: This seems unfair; they
charge us a penny a pound on our apples while their apples enter Canada free. Why should it not be on a fifty-fifty basis?


Henry Herbert Stevens: 
James Layton Ralston: The minister is wrong
about that.


Alan Webster Neill: How can it be in our favour if we let their fruit come in free and they charge us a penny a pound?


Henry Herbert Stevens: We imported from New
Zealand about $36,000 worth and exported about $50,000 worth.


James Layton Ralston: Would the minister check those figures? I obtained to-day from the department the following figures: Fresh apples imported from New Zealand, for the fiscal year ending March 31, 1932, $42,000; fresh apples exported to New Zealand for the same period, $20,655.


Henry Herbert Stevens: I was giving the figures
for the year before; I had not the figures just given by my hon. friend. There has been an improvement of a halfpenny by this present arrangement, and I may say that the New Zealand representatives assured us that they would give consideration to a further reduction. Another point is that we have some very nice business in box shooks, which is worthy of consideration.


Jean-François Pouliot: May I suggest that the
apples under this item should be in the same item as passion fruit?


James Layton Ralston: There is nothing one can say about it to change it, I suppose, since my hon. friend has entered into this arrangement, but I did not know until I began to check up that there is two cents a pound on our apples going to New Zealand while their apples enter this country free. Something was said this 
afternoon about the fact that there are different seasons. I know that, but you will find that our apples, many of them, are good for a month and a half jmt anyway. As someone says, they do come all the year round. I submit that it is not fair to our apple growers to have this one sided arrangement with regard to fresh apples, particularly in view of the fact that the balance of trade, so-called, is against us two to one-at least it was last year. I do not think that the trade in box shooks is going to make up for the sale of fruit which is lost.


Henry Herbert Stevens: We were under the general tariff last year, which affected it to some extent. Now we shall go under the one penny rate, which is a halfpenny lower than last year.


James Layton Ralston: Will my hon. friend give
me the figures for the year during which we were under the general tariff?


Henry Herbert Stevens: 
Charles A. Stewart: AVe had
practically the whole market.


Henry Herbert Stevens: Yes.


Mr. McKENZIE (Assiniboia):: I am not
going to object to apples or anything else coming in, but I wondered, in connection with two or three of these items, what was the significance of the words "weight of containers to be included in weight for duty." Is that for the convenience of the officials?


Henry Herbert Stevens: That is the customary
wording in our tariff in relation to matters of this kind. It runs through the tariff generally and we are accepting the wording of the general tariff.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-95b. Passion fruit (Passiflora edulis): free.
Richard Burpee Hanson: AVhat is
passion fruit?


Henry Herbert Stevens: It is a very delicious
fruit used in the making of salads and much prized by persons of delicate taste.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex. 123. Canned whitebait and canned crayfish: 15 per cent but not more than 7J cents per pound.
James Layton Ralston: This item, I am quite
satisfied, is one that does compete with our Canadian lobster. This kind of crayfish is

New Zealand Trade Agreement
very much like Canadian lobster. There is not a great reduction, I realize, but my hon. friend is giving to the New Zealand producer a better rate by 2i per cent than the British preference, and in addition to that he is fixing a maximum of 7i cents per pound, which is a considerable reduction below the British preference. I do not believe that this is in the interests of Canadian producers, particularly the fishermen who have to sell their product abroad. Our lobsters are possibly sold in New Zealand, they are sold in the British market and I do not think that this is a commodity 'which should have been used to provide a trading point under this treaty.


Henry Herbert Stevens: 
James Layton Ralston: We are more and more putting up canned fish. Isn't whitebait something like halibut in flavour? It is a rich sort of fish.


Henry Herbert Stevens: Canned whitebait sells at 40 cents for a seven ounce tin, so that it is nearly 90 cents per pound. It is quite common in the London market.


James Layton Ralston: Like shrimps?


Henry Herbert Stevens: No, it is very small, a tiny fish.


William Richard Motherwell: It is just a wee little thing; you have to eat the whole of it at once.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex-123. Shellfish known as Tolieroas, in sealed tin containers, including liquid contents: free.
The CHAIRMAN:: Shall the item carry?


James Layton Ralston: With the same reservation.


Alfred Edgar MacLean: Are there any importations under these items?


Henry Herbert Stevens: No.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-142. Tobacco, unmanufactured, for excise purposes under conditions of the Excise Act: free.
George Gibson Coote: How much tobacco comes from New Zealand?


Henry Herbert Stevens: None, I think.


George Gibson Coote: It seems to me I have heard the Department of Agriculture advising the farmers of Ontario to grow less tobacco this year.


Henry Herbert Stevens: It would be of a different kind.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada 232. Casein: 121 per cent.
Thomas Merritt Cayley: Do we receive any casein from New Zealand?


Henry Herbert Stevens: About $3,000 worth.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex-254. Kauri gum: free.
Jean-François Pouliot: What is kauri gum?


Henry Herbert Stevens: It is a resinous gum obtained from a coniferous tree used as raw material in the making of fillers for linoleum and things of that kind.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex-280. Grease, rough, the refuse of animal fat, for the manufacture of soap and oils only: free.
Charles A. Stewart: Is Colonel
Mullins agreeing to this?


Henry Herbert Stevens: We import $1,200,000 from the United States but none from New Zealand.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-305-306b. Building stone, other than marble or granite: free.
John Livingstone Brown: Do you need to go to New Zealand for building stone?


Henry Herbert Stevens: They have a very fine,
soft interior stone that can be used for doorways, arches and so forth. It is easily carved.


John Livingstone Brown: Is it better than Manitoba
stone?


Henry Herbert Stevens: No. I believe that if the people would use Manitoba stone they would get better satisfaction.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex-535, New Zealand hemp (phormium tenax): free.
Edward James Young: In regard to New Zealand
hemp, the minister this afternoon made a remark which should not be allowed to pass unnoticed. He said that this hemp was inferior to sisal imported from other countries for the making of twine, and he told us that he had been busy trying to persuade the manufae-

New Zealand, Trade Agreement
turers to use New Zealand hemp. If he is busy trying to persuade them to use an inferior article and consequently to sell an inferior twine, then I think he could be better employed.


Henry Herbert Stevens: I am sure my hon. friend does not wish to misrepresent me. An hon. member, speaking on this point prior to my remarks, had said that it was very poor material and that it would break if given a sharp jerk. I expressed a little surprise at that and said that I had received word from a number of manufacturers that this was fine hemp for cordage purposes. I induced a number of manufacturers to send orders to New Zealand in preference to purchasing from other foreign countries. I referred to binder twine and stated that there was an apparent drawback to the use of this hemp in that it tended to ruffle or ball up when passing through the eye of the binder.


James J. Donnelly: What is the present duty on hemp?


Henry Herbert Stevens: It is free.


James J. Donnelly: If it is free to all countries, why does it appear here?


Henry Herbert Stevens: Stability.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex. 549. Wool, not further prepared than combed: free.
Frederick William Gershaw: How much wool comes in from New Zealand under this item?


Henry Herbert Stevens: I have only the percentages. In 1931, about one-hailf of the total imports of 2,856,000 pounds of wool in the grease came in from New Zealand; of a total importation of 5,590,000 pounds of washed wool, about 9 per cent came from New Zealand.


Alan Webster Neill: Has the minister the percentages for Australia?


Henry Herbert Stevens: The imports during 193031 of wool in the grease from Australia amounted to 496,000 pounds. I might state that a large amount of the wool from New Zealand and Australia finds access to our markets through the United States or London.
. Mr. SPENCER: What is the tariff on wool coming from New Zealand?


Henry Herbert Stevens: There is no tariff.


Charles A. Stewart: Again I wonder at what has become of the hon. gentlemen who about a week or so ago voted for a tariff on wool.
Mr. VENIOT; They kept away to-night.
[Mr. Young. 1


Charles A. Stewart: There are quite a few of them here, but we have not heard a single protest.


An hon. MEMBER:: They are all subdued.


Charles A. Stewart: We on this side of the chamber are not afraid of free wool or anything else, but I am surprised at hon. gentlemen going to all the trouble they did to have a duty imposed, and then remaining silent when an item like this comes before the committee.


James J. Donnelly: What is the good of putting a duty on wool and then taking it off? Putting a duty on will cause the shippers to ship direct, and that is all the difference it will make.


Henry Herbert Stevens: We have not taken any duty off wool; it was free across the board. We are proposing, and we hope it will be carried in a day or two, an intermediate tariff of ten cents a pound and a general tariff of fifteen cents a pound, and we hope that these rates will divert the business direct to this country. We do not desire to interfere with or touch the British preferential tariff until after the Imperial economic conference.


James J. Donnelly: Practically all our work of a week or so ago in getting a duty put on wool has turned out to be eyewash-it does not amount to anything at all because tonight we are taking the duty off. We are simply saying: You cannot come in through the back door, you must come in through the front.


James Layton Ralston: It seems to me that this action demonstrates to the country just how serious members were when they voted for the resolution, which was carried by a large majority. As a matter of fact, I do not think the government ever has cared very much about the wool grower. It will be remembered that a short time ago the government introduced a system of fixing an arbitrary rate of exchange in connection with the valuing of imports for duty purposes, and they passed an order in council which fixed the value of the pound at $4.40. The manufacturers of worsted and other goods made representations to the government and asked that while this valuation should apply to the finished article which they were manufacturing, it should not apply to the raw material. In other words, the Canadian wool grower was not to have the same protection given to the manufacturer. As an indication of how solicitous this government is of the wool growers, they

New Zealand Trade Agreement
passed an order in council on January 8, the last clause of which reads:
Notwithstanding the provisions of the order in council, and as an exemption thereto, the value of the pound sterling for the purposes of application of special duty on all shipments from Great Britain to Canada of wool, not further prepared than combed, shall be the average value thereof.
And yet the government has stipulated that in connection with other commodities the value of the pound shall be fixed at $4.40 I think we have the right to inquire from those hon. gentlemen who were so vociferous for a duty on wool why they are not protesting to-night against this item. Perhaps they want to let the minister get through his treaty; periiaps the discipline is such that they do not want to interfere. I think it would be more in the interests of the wool growers if they voiced their opinions when these ' schedules are before the committee rather than on an abstract resolution.


George Gibson Coote: Would it be correct to say
that practically 30 per cent of our imports of wool come from New Zealand?


Henry Herbert Stevens: I do not think so.


George Gibson Coote: I think that statement was
made in a recent debate.


Henry Herbert Stevens: The percentage of washed wool is 9, and the percentage of wool in the grease a little over half; it would not average 30 per cent, as the total imports of wool in the grease were 2,800,000 pounds, and washed or scoured wool, 5,590,000 pounds.


James J. Donnelly: Has the minister any
information as to how much wool from New Zealand comes in through the United States?


Henry Herbert Stevens: I have had some of my
staff working for months on that and other similar problems. It is very difficult to ascertain, but we have figures indicating quite a substantial quantity. Wool being on the free list, it is impossible to follow it.


James J. Donnelly: What quantity comes
from the United States?


Henry Herbert Stevens: I have not the percentage of wool in the grease from the United States, but 20 per cent of washed wool comes from there. The quantity of wool in the grease coming from the United States is 511,000 pounds.


Robert McKenzie: When this
bill was first introduced I felt like congratulating the government on their apparent change of heart in at last deciding that we must trade with some other country, but I could
not help noticing, as we went through the items, the minister remarking in the great majority of cases, "no importations." I wonder if, after all, anyone in Canada will benefit from this treaty. If so, who?


Henry Herbert Stevens: As I think I stated before, when I say "no importations," that means no goods coming into Canada. The story as regards exports is different. The largest value of the treaty will be under the British preference, general articles not included in this schedule, a very wide range.


Frederick William Gershaw: The minister must
realize that the sheep men will be somewhat disappointed at this item in the treaty. I am sure he understands the situation, and I hope when this item is under discussion at the imperial conference, some assistance will be given to the sheep men. Our sheep raisers are operating at present at a tremendous loss, and my information is that most of them will be out of business shortly unless they get some help in this respect.


Thomas Merritt Cayley: I notice in 1930 we imported from New Zealand, in round figures,
1,900,000	pounds, and in 1931, 1,744,000 pounds. Roughly speaking, that is the wool off the backs of about 200,000 sheep, and this is quite an item. I think the minister should have it in mind when he is considering the welfare of the sheep industry.


Edward James Young: Wool, I take it, is like
some other commodities that have a habit of finding their way from all over the world to large central markets. Buyers go to those markets and select the kinds of wool they want. According to this year's budget, it is the intention to impose a duty of fifteen cents a pound on wool under the general tariff. New Zealand wool to a large extent comes in through the United States; that is, it finds its way to the United States market where the buyers go and select what they want. Under this arrangement and the clause in the treaty which we discussed earlier in the evening, requiring direct shipment to Canada, it will be impossible for the buyers for our wool manufacturers to get the wool in the most convenient market, and it might be very awkward for them to have to go to New Zealand and select it there. In that regard there is a danger of doing real injury to our wool industry.


Mr. SPENCER:: I should like to ask to
what extent this wool coming from New Zealand competes with the average wool grown in Canada?
New Zealand Trade Agreement


Henry Herbert Stevens: There is no doubt it does compete, but the whole subject of wool is very complex. I have been amazed in studying the question to find the varieties of wool it is necessary to have to produce even a given article. Carpets, which are looked upon as comparatively simple, require wool to be imported from, I think, India, to give them a certain lustre, pile and so forth. Therefore in manufacturing you must have a variety of wool. While there is undoubtedly some competition between New Zealand and Canadian wools, there is still a marked difference between the wools. It would be impossible for me, without careful preparation, to give an exact description of it, but I can assure my hon. friend there is a great difference in the types of wool produced.


Henry Elvins Spencer: Where wool is not competing, it should be brought info Canada free for manufacturing purposes, but the minister knows wool is being sold in Canada below cost-


Mr. CAMPBELL:: I realize item 538 has been passed, but I did not at the time know that it had been called' passed by the Chair. Would the minister mind telling me, if it is not too much trouble, how much binder twine, if any, has been imported from New Zealand in the last few years? I was not aware that we were importing any.


Henry Herbert Stevens: None from New Zealand.


Milton Neil Campbell: Is there any prospect of manufactured binder twine coming from there?


Henry Herbert Stevens: I think the main export will be the raw sisal or hemp.


James J. Donnelly: I notice the rate under the general tariff is to be fifteen cents. This is a change which the minister intends to make at some future date in the duty on wool.


Henry Herbert Stevens: It will be passed when the budget schedules are under consideration.


James J. Donnelly: It seems strange to me, when the farmer in the west is getting about four cents a pound on his wool that a duty of fifteen -cents a pound should be imposed' on that commodity. But when you are getting no wool from foreign countries except what comes in indirectly from New Zealand or Australia through the United States, and when it practically all comes in under -the British preference, this is ia camouflage -to make the farmers think -they are getting some concession.


John Livingstone Brown: Just to show the small quantity of wool of similar quality that enters

Canada in competition with our own wool, I have under my hand the figures for 1927, which I think are the latest:
Leicester, Cotswold, Lincolnshire, South Down combing wools, or wools known as lustre wools, and other like combing wools, such as are grown in Canada:
Quantity imported	Value
259 pounds	$93
If hon. gentlemen who contend for duties on wool would pay some attention to that fact, it might modify -their opinion.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-553. Blankets of any material, not to include 'automobile rugs, steamer rugs nor similar articles: 22J per cent.
Charles A. Stewart: It will be noticed that the -previous items are free, but when we come to manufactured articles they have to carry duties of 22^,	30 and 25 per
cent. Could >the minister not have made a better deal than this, particularly when our Canadian manufacturers enjoy free raw material? I am not asking for 'any protection for the farmer or for anybody else, but I want to protest against this discrimination. The moment we -come to a fully manufactured article, up goes the duty. The manufacturer must always have a tremendous amount of protection or we are -told he cannot live, I have a list of the items of farm produce all of which come in free, but the very -moment we strike wool or wool blankets or wool fabrics wholly manufactured the duty is -put up over twenty per cent. I certainly protest against that. While I am in agreement with the arrangement which the minister has made, I do think this is giving entirely too much protection to men who enjoy the -privilege of getting in their raw material without paying one -cent of duty.


James J. Donnelly: How much came in under this item from New Zealand last year, and what duty do they charge against our blankets?


Henry Herbert Stevens: 
James J. Donnelly: - What is the duty the other way?

New Zealand Trade Agreement


Henry Herbert Stevens: It is rather difficult to get (he exact classification, but I -presume that this one would cover it; "rugs, n.e.i., not supplied for floor covering." We get a rate of twenty per cent ad valorem.


Alfred Speakman: There is just one point I should like to mention in reference to the question which has been raised as to the different treatment accorded under our tariffs to raw wool, for instance, and the manufactured article. I am not going to go into that whole question except to say that naturally enough, it has aroused a good deal of interest and discussion, and a good many suggestions have been made as to how, seeing that we are on a protective tariff and must be in view of conditions throughout the world to-day, the benefit may be passed along right down the line to those who carry on what is certainly an industry indigenous to this country, that is the growing of the wool itself.
I would like to make a suggestion which I have made more than once, and which I believe has merit. It is that when protection is afforded to a manufacturer, such as the manufacturer of woollen goods or of any other article the raw material of which is found in whole or in part in this country, the protection be granted upon a sliding scale and vary in accordance with the percentage of the native raw material used in the production of the manufactured article. I do believe, Mr. Chairman, that if an arrangement of that kind were made, after careful study, of course it would pass down the line to the original producer himself some of the advantages of our present fiscal system, of which the .original producer at the present time has all too few. It would also encourage the greater use of our own raw materials and would inflict little hardship on the manufacturers themselves. If Iby so arranging the tariff that the position of the manufacturer was more advantageous the greater the percentage of Canadian raw materials he used, in manufactures, of course, where Canadian raw material could be used, such as wool, and less advantageous the greater the percentage he used of raw material brought in from outside, I believe one of the greatest objections of the farmers to the protective tariff would be largely removed. I believe also that it would encourage such native industries as the growing of wool, as well as increase the market for raw hides and leather goods and other articles manufactured in this -country. This question is worthy of consideration, and if it could be worked out I believe it would redound to the great advantage of this country.


Edward James Young: Those members of the house who think they are serving the interests of the farmer by asking for more protection on the things he has to sell are making a grave mistake. They know or ought to know that the price of farm products cannot be enhanced by high tariffs. They have preached that themselves many times, and to say that the farmer will consent to higher protection on manufactured goods in order to obtain a worthless protection on his own products is utter nonsense.


Alfred Speakman: I think the hon. gentleman did not catch my meaning. I was suggesting lower protection when the manufacturer did not use Canadian raw material.


[Stage Direction]
Item agreed to.
Schedule A-Customs tariff, Canada-ex. 572. Rugs, floor or carpet, of wool: 25 per cent.
Jean-François Pouliot: Are Sarouk rugs included under this item?


Henry Herbert Stevens: I do not think so.


Jean-François Pouliot: Because the clerk of the house bought a rug for $480. I do not know whether it came from Australia, but it was a pretty expensive rug.


[Stage Direction]
Item agreed to.

[Stage Direction]
Schedule B-Customs tariff, New Zealand-[DOT] 35. Fish, viz:-
(3)	Fish, potted, and preserved viz., salmon, iiieluding any liquor, oil, or sauce, lfd. per pound.
(4)	Fish, potted, and preserved, n.e.i., including any liquor, oil, or sauce, 2d. per pound.
(Note-The term "fish" is used in the tariff in its widest sense, and includes shell-fish, crustaceans, and other foods obtained from the fisheries.)
Alan Webster Neill: I am beginning to regret, I am sorry to say, the eulogies I passed on the minister this afternoon; for I am afraid now that we in British Columbia are going to come at the wrong end of this agreement. The preference given to our canned salmon is very small. We allow the New Zealand toheroa,. which is entirely a luxury, to come in absolutely free. It competes, I am told, with the higher class of lobsters, and people who can afford to have lobster suppers these hard times can afford to pay a duty. But we are allowing toheroas to come in free, and New Zealand gives us only a very small preference on our salmon. It amounts to only one penny and a quarter per pound. There is a higher duty on item 35 (4). That would apply to tinned herrings and tinned pilchards, for which we are anxious on the Pacific coast

New Zealand, Trade Agreement
to get a market. Pilchards and herring are naturally low priced fish and the duty of twopence a pound would be quite considerable. We get a preference of only a penny a pound there, which is not very material. In the Australian treaty, as the minister is aware, he secured for us a preference of three pence a pound, or 6 cents, on salmon, which was really substantial, and, I believe, has enabled British Columbia to secure the greater part of the market.


Peter John Veniot: It will be remembered when the Australian treaty was up I took exception jO what I thought then was sectional legislation-favouring the Pacific coast in the matter of salmon more than it did the east coast in the matter of crustaceans. The minister told me that it was too late, that the treaty had been signed and he could not take the matter up, but he would endeavour later on to see if Australia would come to any different agreement. Did he consider that last year when he discussed this matter with New Zealand, and am I mistaken in thinking that crustaceans put up in cans have not the same preference as salmon put up in cans?


Henry Herbert Stevens: There is a very slight
variation, my hon. friend will notice. I can assure him that the whole question was threshed out at great length during the discussion of this agreement. The position of New Zealand is that canned salmon is an essential food commonly used, and not competitive with any New Zealand fish.


Peter John Veniot: Are crustaceans?


Henry Herbert Stevens: Yes, in a sense they are.


Peter John Veniot: Where do they get them?


Henry Herbert Stevens: They therefore give a
quarter of a penny lower rate on salmon than on the other fish.


Peter John Veniot: Do sardines get the same
rate as salmon?


Henry Herbert Stevens: I think item 35 (4) would
include sardines.


Peter John Veniot: Twopence a pound?


Henry Herbert Stevens: Yes.


Peter John Veniot: Where is the competition
with anything in New Zealand in 'the matter of sardines? They do not put up sardines, and they have been importing very large quantities from Canada in past years. With the New Brunswick sardine we took the Australian market from the Netherlands. Now this is going to put us out of that market.


Henry Herbert Stevens: Oh, no.
[Mr Neill.)


Peter John Veniot: Why not?


Henry Herbert Stevens: I cannot see that.


Peter John Veniot: It will allow the Netherlands to compete very strongly against us. In the face of that, notwithstanding the difference here in this preference between sardines and salmon, you have the extra cost imposed under the budget on the containers, which for sardines are more costly than for salmon.


Henry Herbert Stevens: My hon. friend will notice that that does not apply on goods going out, only on goods coming into Canada.


Peter John Veniot: But you have to apply for a drawback of 99 per cent. Why put them to that trouble?


Henry Herbert Stevens: New Zealand does not
follow that practice I am told.


Peter John Veniot: What practice?


Henry Herbert Stevens: The practice my hon.
friend is mentioning. Australia does, but not New Zealand.


Peter John Veniot: What practice?


Henry Herbert Stevens: With regard to containers.


Peter John Veniot: We impose it on our people.


Henry Herbert Stevens: That is an additional protection here.


Peter John Veniot: I fail to see it. I enter
my strong protest against what appears to be sectional legislation. What is good for the Pacific coast ought to be good for the eastern coast of Canada, and the minister has no right to enter into an agreement by which a difference is made between sea food on the western coast and sea food on the eastern coast of Canada. Our fishing industry on the eastern coast along the Atlantic is in such a depressed condition to-day that the fishermen need all the encouragement possible, and even a quarter of a penny would help them.


Henry Herbert Stevens: We have not changed the rates at all from what they were before we went on the general tariff; we have restored the old rates instead of the general tariff.


Peter John Veniot: If it was wrong then, why
should it continue now?


Henry Herbert Stevens: I agree with my hon.
friend.


Peter John Veniot: I protest on behalf of the
fishermen of the maritime provinces, especially in regard to the sardine and lobster fisheries. It is an outrage.


James Malcolm: Are these various rates
under (3) and (4), item 35, specific?

New Zealand Trade Agreement


Henry Herbert Stevens: They are British preferential rates.


James Malcolm: We cannot alter their
ideas of the British preference.


Henry Herbert Stevens: No.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff, New Zealand- 35 (4). Fish, potted, and preserved, n.e.i., including any liquor, oil, or sauce, 2d. per pound.
James Layton Ralston: I want to add a word
on this item to what I said on No. 123. Item 123 it will be remembered covers canned whitebait and canned crayfish at 15 per cent ad valorem but with a limit of not more than 7J cents per pound. I pointed out that this is 2i per cent below the British preference on these goods coming into Canada. When we sell our canned fish under 35 (4) to New Zealand we have a straight specific duty of twopence per pound, whether the fish is cheap or dear, plus 22i per cent surtax. I submit that that is not fair to those who are producing canned fish in this country. It must be remembered that we are more and more developing the packing of fish in cans, even the cheaper qualities, and a specific duty is particularly hard on this fish.


Peter John Veniot: Herring especially.


Alan Webster Neill: And pilchards.


James Layton Ralston: Yes, and other fish as
well. The minister says we are only restoring the old duty, but the point is these articles were not subject to any previous arrangement, as I understand it. He is now making a treaty with New Zealand for the first time with regard to these commodities, and therefore is in a position to ask New Zealand to give us a quid pro quo. But it does seem to me as if the most of the giving is done by ourselves.


Henry Herbert Stevens: No.


James Layton Ralston: I am speaking of the fish items. We are reducing the duty below the British preferential rate on their fish, but on our fish they are keeping their duty up under the British preference and that British preference is much higher against us than our British preference is against them. Therefore I submit, first, even if our duty were not below the British preference it still would be lower than the duty the New Zealander imposes against Canadian fish, and secondly, we are giving them a duty below the British preference. I protest against it because I submit there is quite a business to be developed, particularly on the part of the maritime province fishermen in connection with lobsters and other fish-sardines my hon. friend has already mentioned.


Peter John Veniot: And large herring.


James Layton Ralston: Even the albaeore or tuna is now being canned. It seems to me we might develop quite a market in New Zealand for various sorts of canned fish.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff, New Zealand- 137. Hosiery, viz: socks or stockings of silk or artificial silk: 32i per cent ad valorem.
Edward James Young: I notice the New Zealand duty under the general rate is 67.3 per cent, while under the treaty we will be able to export our goods at 39.8 per cent, leaving a net advantage to our manufacturers of about 27| per cent. Has the minister any assurance from our manufacturers that they can compete in New Zealand on that basis?


Henry Herbert Stevens: It is expected that they can.


Edward James Young: Have they given any
assurance to that effect?


Henry Herbert Stevens: Yes. We rather excel in the manufacture of hosiery.


Charles A. Stewart: Then we do not need quite such a heavy protective duty ourselves.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff, New Zealand- 196. Boots, shoes, clogs, pattens, slippers, shoettes, sandals, galoshes, overshoes, and other footwear, n.e.i.: 25 per cent ad valorem.
Edward James Young: I want to ask the same question in this regard. The New Zealand general tariff is 61.3 per cent; our goods will enter at 30.6 per cent, leaving almost a 31 per cent advantage. Have our manufacturers given any assurance that they can compete on that basis?


Henry Herbert Stevens: Yes.


Edward James Young: We will remember this when the time comes to consider our -own tariff.


Charles A. Stewart: The items are passed, but I should like to know why we are allowing raw furs to be brought into Canada free while if we widh to ship furs to New Zealand we have a pretty stiff duty against us; in fact it is almost prohibitive.


Henry Herbert Stevens: I hesitate very much to criticise any duty that New Zealand chooses to enforce; my hon. friend will appreciate that. There is no doubt that the general level of their duties is pretty high, but the tariff
New Zealand Trade Agreement

is their chief source of revenue, and for that reason they insist on maintaining these duties. It will be noticed that in many instances the major portion of the duty is made Up of additional surtaxes, which have been put on for emergency purposes.


Charles A. Stewart: I quite
appreciate that New Zealand is not engaged in manufacturing to a great extent, but throughout this whole treaty raw products entering New Zealand carry a duty, while in our case we let practically all their raw products enter Canada free. I do not object to that because 1 do not believe we should put a duty on raw products at all, and as a matter of fact I do not think we should have a very heavy duty on anything. It does seem to me, however, that we are not getting a very great advantage by including some of these articles. Certainly there will be no advantage to the raw fur dealer in Canada.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff. New Zealand- 292. Paper-pulp, for the manufacture of paper: free.
Alan Webster Neill: In British Columbia we would have been very glad if we could have obtained some concession in connection with this item. It appears here on the free list, but there is nothing in that because it is free from all over the world, so we get no preference. New Zealand has a tariff item, No. 284, which reads, "paper, namely bleached sulphite or similar paper which is to be used in the manufacture of twine or imitation wickerware." That enters New Zealand free, but only if it is to be used for those purposes. I do not quite see how it could be described as "similar paper" if it is to be used in the manufacture of those articles, but we would have been very glad to obtain a concession in that regard. We call that material pulp or sulphite. Was the question discussed as to whether or not we could export bleached sulphite under this item, if it was not to be used for the manufacture of twine or imitation wickerware?


Henry Herbert Stevens: I cannot say very much about that, but I may tell my hon. friend that the paper schedule is very satisfactory to the people here in Canada.


Alan Webster Neill: In the west?


Henry Herbert Stevens: Yes.


Alan Webster Neill: To those who do not make paper, but who only make sulphite pulp?


Henry Herbert Stevens: Yes. There is some question regarding pulp, but I do not think it would be fair to New Zealand to disclose all that was privately discussed between the minister and myself. This was the best that could be done under the circumstances.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff, New Zealand- 333. Agricultural implements and machinery, viz: -
(1)	Cultivators; harrows; ploughs; drills;
seed and fertilizer sowers or distributors combined or separate; lime sowers; seed or grain cleaners, and cellular seed or grain separators, 35 per cent ad valorem. The surtax to be levied, collected and paid under section five of the Customs Acts Amendment Act, 1930, on the goods included in tariff item numbered 333	(1) shall be an amount equal to onetwentieth of the total duty of customs otherwise chargeable.
(2)	N.e.i., including ploughs, cultivators, and seed drills, hand-worked, combined or separate; ploughs, single-furrow mould-board, not exceeding 266 pounds net weight; also the following parts of ploughs or harrows, viz:

mouldboard plates unbent, steel share-plates cut to pattern, skeith-plates, plough beam forgings, and discs for harrows or ploughs, free.
Edward James Young: Again the same question, Mr. Chairman: The New Zealand tariff is 42.87 per cent, while the treaty rate will be 36.75 per cent, leaving an advantage of 6.12 per cent to our Canadian manufacturers. I suppose they can compete on that basis?


Henry Herbert Stevens: We would have liked a much better rate but that was the best we could get. There are two plants of considerable size in New Zealand manufacturing these articles, and the New Zealand government desired to maintain a fairly good protection for them.


Alan Webster Neill: The British preference is only 10 per cent.


Henry Herbert Stevens: But Great Britain does not compete very seriously in that class of goods.


Charles A. Stewart: As a matter of fact this is an arrangement as good as we have had in the past, and our manufacturers have sent veiy considerable quantities of farm implements to that country.


Henry Herbert Stevens: Yes, but more under the next item.


[Stage Direction]
Item agreed to.
Schedule B-Customs tariff, New Zealand- 404. Timber, rough sawn or rough hewn, viz:-[DOT]
(2) Other kinds, in pieces having a length of not less than 25 feet, and having a minimum cross sectional area of not less than 150 square inches, 7s. 6d. per 100 sup. ft. The rate of

New Zealand Trade Agreement
customs duty set forth in the general tariff with respect to tariff item numbered 404 (2) shall be deemed to be repealed and the following shall be substituted therefor:-"9s. 6d. per 100 sup. ft."
(3)	N.e.i., 9s. 6d. per 100 sup. ft. The rate of customs duty set forth in the general tariff with respect to tariff item numbered 404 (3) shall be deemed to be repealed and the following shall be substituted therefor:-"Us. 6d. per 100 sup. ft."
Mr. HANSON (Skeena):: I would like to
ask the minister if this item includes poles and pilings. A good deal of lumber of that kind is shipped to the United States.


Henry Herbert Stevens: I am under the impression that poles, piling and that sort of timber would come under the general British preference.


Alan Webster Neill: Of course the minister is
aware of the fact that the success of this item depends upon the continuation of the subsidies to the steamships running to Australia and New Zealand. There was no item for this amount in the main estimates, and I think it behooves the government to place an item in the supplementaries.


Henry Herbert Stevens: Last month we did one
hundred per cent of Australia's soft timber business, and the month before we did ninety-eight per cent. We are really controlling that business very satisfactorily and this item will make it easier to do business with New Zealand. We have not paid any subsidies on Australian steamship lines in the past year.


Alan Webster Neill: Is it the intention of the
government not to pay subsidies this year? I have here very strong resolutions passed by the lumber people of British Columbia which do not sustain the attitude of the minister.


Henry Herbert Stevens: Those have more to do
with the China service, but in any case the matter is under consideration for the supplementaries.


[Stage Direction]
Item agreed to.
James Layton Ralston: I just want to sum up
in a word, so that the committee may understand at least as I view it, what is the net result of these changes. I do not retract anything that has been said; I fully concur in the Statement that an agreement is at all times desirable. If this means good will, better feeling and a likelihood of more trade with New Zealand, then by all means let us have it; but I do not think we ought to fool ourselves as to the net result of all these items in the schedules which have been passed.
I have gone over the items quickly and I think the net result of these schedules, both A and B, is this. First, with regard to goods coming into Canada, the result is that on no fewer than twenty-six items the duty has been reduced-reduced on goods coming into this country in competition with Canadian goods. The duty has been reduced even below the British preference rate and also below the old treaty rate, in so far as these items were contained in that treaty. The committee will bear that in mind. Twenty-six items in this schedule have been reduced for the benefit of New Zealand, so that .they are now below the regular British preference rate; and in the case of all items which were subject to the old treaty, they are reduced below the old treaty rate. Only two items have been increased, namely, the item for fresh meat and the item for butter; but even at that, both these items are still below the British preference rate. In regard to the fresn meat item, the British preference rate was
4	cents, and that has been reduced to 3 cents under the treaty. The old treaty rate was one-half cent. Butter is 8 cents under the British preference rate and that has been reduced to 5 cents. The old treaty rate was one cent. Apricots and peaches, which were not mentioned as we were going through the items, are 2 cents under the British preference and 1 cent under the treaty. So that the net result is that 26 items have been reduced for the benefit of New Zealand, below the British preference, while two items have been increased over the old treaty rate but are still below the British preference. That is what we have done for New Zealand; those are the concessions we have made.
With regard to the item of butter, I would point out that the change to the 5 cent rate will be no protection whatever for this commodity unless we use the power provided for in article IV and fix an arbitrary value for duty purposes. With exchange as it is, the
5	cents will be practically wiped out. If that provision is used and that protection of 5 cents is maintained, then what I am afraid will happen is exactly what happened before, when the 8 cent rate was put on. The butter producer in this country was fooled into thinking that butter was the best thing to produce, and the result was that too much was produced for home consumption, with the inevitable consequence that we went on the export market, and down went the price. That will probably happen under this 5 cent tariff rate. No one knows better than the butter producers of this country, after the last two years' experience, just what will
New Zealand Trade Agreement

happen. The duty of 8 cents did not bring them the prosperity they expected but just the reverse. In fact it was more duty than they asked for, as was pointed out this afternoon in an extract read by an hon. member. Let me read a statement made by Mr. Robinson, the president of the National Dairy Council, at a meeting in Winnipeg. He said:
It has been our opinion that three or four years must elapse before we could make up the deficiency of nearly 50,000,000 pounds of butter. The extra stimulus of the eight cent tariff, together with the enormous fall in grain prices, has caused, however, such a rapid increase in the butter made all over Canada that it now appears that we may be self-sustaining this season, and even have a surplus for export. This seems to be inevitable by next year at the latest. In all our arguments during the past few years, we have stated plainly that the effect of the tariff would be lost when export began. That is, in fact, the chief reason why we believed a four cent tariff to he more lasting than an eight cent one. We are now face to face with this condition.
At the moment, the export surplus of butter if of little value to Canadian farmers. It will cost them money this year. Thus, the immediate benefit to them of the tinkering with the New Zealand treaty that has so offended one of the best customers for our manufactured products is nil.
It is obvious that if Canada is to gain any net benefit from this rapid increase in butter production our dairymen must so improve their methods that they can meet the world on the basis of quality and price. It is conceded that this is possible but that the attainment of the ideal will be a matter of hard work over a term of years.


Charles A. Stewart: It is a wonder he did not see that when he was protesting so strongly before.


James Layton Ralston: That was the statement made by Mr. Robinson, president of the National Dairy Council. And that was the result of the 8 cent duty. But there was one more result. During the last election campaign, and during the debate held in this house in 1930, tears were wept about the number of cows which had disappeared from Canada and had gone over the line. It was said that there had been a decrease in the cow population of the country of 102,000, and our friends on the other side never ceased to lament about it. Even the present Prime Minister was like little Bo Peep who had lost her sheep-he didn't know where these 100,000 cows had gone. Well, I have here a statement of the cow population of Canada for 1930 and 1931; and whereas there were 102,000 cows less in 192728, I find that the number of milch cows in Canada in 1930 was 3,683,000 as compared with 3,513,000 in 1931, when the 8 cent tariff was on. In other words, there was a loss of
170.000	cows in one year.


William Richard Motherwell: We shall have to have an inquiry.


James Layton Ralston: That was under the 8 cent tariff put on by this government. Coming back, therefore, to the outstanding features of this schedule, I say that the butter item is not by any means a sure Shot either for the benefit of the farmer or for the benefit of the consumer. It will be no protection if section 6 is not used, in view of the exchange, and it is a question whether it will do the farmer any good even if 'the 5 cent item is actually effective.


Peter John Veniot: Is section 6 the dumping
clause?


James Layton Ralston: 
[Stage Direction]
Item agreed to.
Schedules agreed to.
Sections 1 to 5 inclusive agreed to.
Bill reported.
On motion of Mr. Guthrie the house adjourned at 10.45 p.m.
Monday, May 2, 1932.