PRIVILEGE


Mr. JOHN BRACKEN (Leader of the Opposition):: I wish to rise to a question of privilege, Mr. Speaker. It arises out of an interjection made last night by the Minister of Reconstruction and Supply (Mr. Howe) when I was speaking in the debate. The minister questioned the accuracy of some of the figures I had quoted. If hon. members will refer to page 110 of Hansard they will find these remarks reported:
Mr. Howe:	What are you talking about?
What about the years 1943, 1944 and 1945?
Mr. Bracken:	If the minister wishes to base
an argument upon what happened during the war years when the United States was buying war equipment, he can do so.
Mr. Howe:	I am speaking to a matter of
privilege. I do not wish to base an argument; but I wish my hon. friend to tell the truth about it.
Then at another place on page 105:
Mr. Howe:	My hon. friend has overlooked
the minus signs. We had a strong balance of trade with the United States in 1943, 1944 and 1945.
I just wish to say, Mr. Speaker, that; the figures I was using were taken from a document published by the Dominion Bureau of Statistics of the Department of Trade and Commerce. We took the records of the exports and imports, separated them, and showed the balance. Since the question has been raised as to the accuracy of the figures I used, and the minister having raised this point about the years 1943, 1944 and 1945, I think the matter should be set straight. The imports from the United States for those three years according to this publication were:
Millions
1943		 $1,423,672,486
1944		 1,447,225.915
1945		 1,202,417,634
The exports to the United States in those years were as follows:
Millions
1943		 $1,149,232,444
1944		 1,301,322,402
1945		 1,196,976,726
The difference between the exports and the imports, the unfavourable balance of trade, in each case was as follows:
1943		 $274,404,042
1944		 145,903,513
1945		 5,440,908
I raise this question of privilege only because the accuracy of the figures I was quoting was questioned by the minister, and I wanted to explain that the figures were taken from a government document.


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: I do not wish to take part in any debate, but I was going on the balance of payment figures, which include shipmenlts of gold. I think my hon. friend will find that his figures do not include gold.


John Bracken: That is correct, Mr. Speaker; the gold figures are not published in connection with trade at all. If the hon. gentleman wishes to have the balance of payments I have them here also.


Mr. SPEAKER:: Order. As hon. members know, at this point in our procedure they have the opportunity to correct anything which has been wrongly stated or incorrectly quoted, but it is not possible for Mr. Speaker to permit a debate. Already I have been very generous to the leader of the opposition, and have permitted the Minister of Reconstruction to reply. I do not think I should permit further debate.


John Bracken: If I may have your attention for a moment, Mr. Speaker, you agreed to let me say something to correct an error made yesterday by the minister. I am rising now on a question of privilege to correct an error the minister made just a moment ago. He said he was referring to the balance of payments with the United States. That is not wrhat I was discussing when he interrupted me last evening, it was the unfavourable balance of trade, but the minister has now raised the question. The balance of payment figures were as follows, and in each case they also were unfavourable to Canada:
1943		 $161,000,000-loss
1944		 79.000.000-loss
1945		 68,000,000'-loss


Mr. ABBOTT:: So what?
Privilege-Mr. Graydon



MR. GRAYDON-REFERENCE TO PROCEEDINGS OF DECEMBER 8

Mr. GORDON GRAYDON (Peel):: I rise to a question of privilege, Mr. Speaker, arising out of the matter I raised in the house yesterday at the opening of the sitting. It had to do with a rather grave decision which was made in connection with a matter which went to the root of our whole procedure on Monday, which as you know was bitterly contested in the house. At page 72 of Hansard for yesterday I made the suggestion, which will be found at the bottom of the first column on that page, that the original transcript of Hansard might be the arbiter between Your Honour and myself with respect to what had taken place on that occasion, because evidently there was some dispute about it. I want to raise the question of privilege now on this basis. No doubt Your Honour has seen that original transcript. I have seen it, and I want to say to the house and to you, sir- and I do so with a full knowledge and recognition of my responsibilities in this connection- that having seen that transcript I think you will agree with me that the original transcript and Hansard itself show a marked dissimilarity.


James Horace King: Order. I wonder if in the past I have not been derelict in my duty concerning the hon. member for Peel. He knows perfectly well the rule which states that the conduct of Mr. Speaker should not be questioned in the house.


Some hon. MEMBERS:: Oh, oh.


James Horace King: That rule is very well known. Yesterday and the day before I was very generous to the hon. member, perhaps more generous than I should have been, but I do not think I should enter into any argument with the hon. gentleman before this house. I would ask him to be kind enough to consider the matter closed.


Gordon Graydon: If I may continue for a moment, Mr. Speaker, I only want to ask Your Honour this. I do not desire to enter into a dispute or argument. In view of the position you have taken, and in view of the fact that apparently a surgical operation has been performed upon the original transcript of Hansard-


Some hon. MEMBERS:: Order.


Gordon Graydon: -I would ask that the matter be referred to the standing committee on privileges and elections, or to the debates committee.
FMr. Abbott.!


James Horace King: I would ask the hon. member for Peel, for the second and last time, to consider the incident closed.


Gordon Graydon: Then I shall have to pursue it in another way and ask that the matter go to the appropriate committee for
investigation.



WAR VETERANS


Mr. A. J. BROOKS (Royal):: Mr. Speaker, I beg leave to move, seconded by the hon. member for Nanaimo (Mr. Pearkes), the adjournment of the house under standing order 31, for the purpose of discussing a definite matter of urgent public importance, namely, the plight of war veterans and their dependents due to the government's failure to increase the basic rates of pensions and allowances to meet the high cost of living, with the result that the pensioners and recipients of war veterans allowances are suffering extreme hardship and are unable to obtain in full the ordinary necessities of life.
I am sure it must be perfectly obvious to you, Mr. Speaker, and to every member of this house and the people as a whole that this is a very urgent matter as far as pensioners and war veterans are concerned, and I would point out that there has been no opportunity since this session commenced, nor will there be an opportunity, to discuss this matter.


James Horace King: Order. Mr. Brooks asks leave, seconded by the hon. member for Nanaimo, to move the adjournment of the house, under standing order 31-

for the purpose of discussing a definite matter of urgent public importance, namely, the plight of war veterans and their dependents due to the government's failure to increase the basic rates of pensions and allowances to meet the high cost of living, with the result that the pensioners and recipients of war veterans' allowances are suffering extreme hardship and are unable to obtain in full the ordinary necessities of life.
If the hon. member will look at the standing orders of the House of Commons, Beauchesne's second edition, he will see as standing order 31 the following as subsection 3:
He then hands a written statement of the matter proposed to be discussed to Mr. Speaker who, if he thinks it in order, and of urgent public importance, reads it out and asks whether the member has the leave of the house.
I will refer the hon. member to Beauchesne, third edition, page 77, paragraph [DOT] 176, which
states:
The "definite matter of urgent public importance," for the discussion of which the adjourn-

Veterans Pensions and Allowances
ment of the house may be moved under standing order 31, must be so pressing that public interest will suffer if it is not given immediate attention.
And a little further down-
There must be a prima facie case of urgency.
I must call the attention of the hon. member to the fact that we had debate on the speech from the throne extending over a day and a half.


Some hon. MEMBERS:: Oh, oh.


James Horace King: That debate gave at least to some members an opportunity to discuss that matter.


Some hon. MEMBERS:: Oh, oh.


James Horace King: I have just said that the house had an opportunity for debate on the speech from the throne, and I do not see that any change has taken place which would constitute an urgency requiring the adjournment of the house to carry on a discussion in conformity with the hon. member's motion. Therefore I feel that I must not receive his motion, or give permission that he move the adjournment of the house.


Alfred Johnson Brooks: I would refer Your Honour to standing order 31(3), which states-
He then hands a written statement of the matter proposed to be discussed to Mr. Speaker-[DOT]
That has already been done.
-who, if he thinks it in order, and of urgent public importance reads it out and asks whether the member has the leave of the house.
I claim, Mr. Speaker, that having read the motion to the house, Your Honour must ask the house if the member has the leave of the house to proceed. The subsection continues in this way:
If objection is taken, Mr. Speaker requests those members who support the motion to rise in their places and. if more than 20 members rise accordingly, Mr. Speaker calls upon the member who has asked for leave.
I contend, as I said a minute ago, that Your Honour having read the motion to the house, a vote of the members must now be called to see if I and other hon. members are to have the opportunity of discussing this matter.	_


James Horace King: Whenever a motion is presented to the house such as the one which the hon. member for Royal seeks leave to move, it is to be read to the house. I have read the hon. member's motion. I now call the attention of the hon. member for Royal to the rule which states that if the Speaker does not consider that the matter with which it deals is very urgent or requires a motion
for the adjournment of the house, the Speaker refuses the motion. That is what I have done.


Mr. PEARKES:: I have come three thousand miles to discuss this subject. I would like to
discuss it.


Gordon Graydon: Then twenty members
will stand up.
And some members having risen:


An hon. MEMBER:: Too late.


Mr. ROSS (Souris):: It is always too late in a dictatorship.


Mr. MACKENZIE:: What is the appeal
against?


James Horace King: I understand hon. members would like to appeal. I would call their attention to Beauchesne's third edition, page 747, and to the precedent there established by the Hon. George Black, the then Speaker, on February 19, 1932. We will find the same ruling by the Hon. Mr. Glen when he was Speaker. The ruling of Hon. Mr. Black stated:
The Speaker's refusal to permit an appeal from his decision that it is not urgent to adjourn the house for the purpose of discussing an urgent matter of public importance being appealed from was confirmed by the house.
Hon. members will recall that the same matter came up during the last session. I gave the ruling myself, based upon the precedent established by Mr. Speaker Black and Mr. Speaker Glen, where it was stated that the Speaker's refusal to permit an appeal from his decision that it is not urgent to adjourn the house for the purpose of discussing an urgent matter of public importance being appealed from was confirmed by the house. So I believe there is no appeal.


Alfred Johnson Brooks: Then I would ask the Minister of Veterans Affairs if there will be an opportunity to discuss this matter before the Christmas holidays.


Ian Alistair Mackenzie: There will be an opportunity during this session; I cannot exactly say when.


Some hon. MEMBERS:: Oh, oh.


Ian Alistair Mackenzie: I cannot say exactly. It depends upon hon. members opposite as to what progress will be made.


Some hon. MEMBERS:: Oh, oh.


Ian Alistair Mackenzie: And judging by the obstruction of the last two or three days, it is not going to be very great.


Gordon Graydon: The obstruction is over there. The blocking comes from over there, not over here.


Ian Alistair Mackenzie: You are blocking.
Business oj the House



CRIMINAL CODE


[Stage Direction]
On the order for introduction of bills:
"An Act to amend the Criminal Code (illegal organizations)."
Mr. COLDWELL:: What order are we following? Are we following the order for questions?


Mr. MACKENZIE KING:: Orders of the day.


James Horace King: We are considering the introduction of bills.
Mr. WILFRID LaCROIX (Quebec-Mont-morency) moved for leave to introduce Bill No. 2, to amend the criminal code.
Motion agreed to and bill read the first time.
Mr. LaGROIX: Mr. Speaker-


James Horace King: The motion has been carried. Orders of the day.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: His Honour the Speaker has called orders of the day. I wish to make a brief statement on the orders of the day.


An hon. MEMBER:: Questions?


William Lyon Mackenzie King: Because of
the order in which the routine proceedings are printed, some hon. members apparently assume that the first order will be questions, and that the next will be notices of motions. That is not in accordance with the motion the house carried on Monday last which gave precedence to government orders.


An hon. MEMBER:: That was Monday.


William Lyon Mackenzie King: So that today we proceed under orders of the day, with government orders, the first order to be called being:
Resuming the adjourned debate on the motion of the Prime Minister: That it is expedient that parliament do approve the general agreement on tariffs and trade . . .
And so on. I rise to-


Mr. KNOWLES:: I rise to a point of order with respect to the procedure now being followed. We have before us an order paper which says that the next, item, on page 3,

is "Questions". I hold in my hand copies of a number of order papers of last session. These are order papers for days when the ordinary procedure of the house under standing order 15 had been altered. Every time the procedure was altered by a decision of the house, that alteration was reflected in a change in the order paper. Inasmuch as today's order paper has not been changed to conform with what the Prime Minister says was the interpretation of Monday's resolution, I submit we should follow the order paper as it is. I shall not take the time to quote from these order papers of last year, but that was the case when the debate on the speech from the throne was a special order. Then a little later the debate on the speech from the throne was suspended so we could deal with the control bill, and the special order was put into the latter part of the order paper. Later in the session, when we dispensed with Monday as a private members day-for example, here is Monday, June 23-private members resolutions were placed at the latter part of the order paper.
I submit that if the motion passed on Monday governs today, which I challenge, it should have been reflected in the order paper. That not having been done, I submit that we should follow the order paper that is before us. Otherwise what is the use of an order paper anyway?


Mr. FULTON:: Mr. Speaker, this was a point of order which I intended to raise myself. The Prime Minister has said that he consulted with the Clerk of the House, but I regret to say that I am unable to accept his interpretation of the effect of the resolution which was passed on Monday. I submit that that decision should come from Your Honour. Supporting as I do the view put forward by the hon. member for Winnipeg North Centre (Mr. Knowles), I ask for your ruling on the question whether or not the resolution passed on Monday was not confined exclusively to that day. The resolution is to be found on page 40 of Votes and Proceedings, and it is qualified by the Prime Minister so that it applied only to December 8th instant. There was nothing in that resolution which could be taken to govern proceedings on subsequent days. The resolution reads:
That the debate on the address in reply to the speech of His Excellency the Governor General to both houses of parliament be the first order of business on Monday, December 8th instant, and that this order be followed by government notices of motion and government orders notwithstanding anything in standing order 15.
I submit that the inclusion of the words "Monday, December 8th instant," without

Business oj the House
any subsequent qualification, means that the effect of the motion was to be confined exclusively to that day.


William Lyon Mackenzie King: If I may have an opportunity to speak now, I should like to do so.


Stanley Howard Knowles: Are you speaking to the point of order?


William Lyon Mackenzie King: I am trying to answer my hon. friend, yes. The hon. member for Winnipeg North Centre (Mr. Knowles) has drawn attention to what was done last year with respect to the order of business. If I recall aright, what was done last year was done under a motion similar to one that I had in mind making at one stage of our proceedings but which did not come before the house. That motion provided that on and after a certain day government notices of motion and government orders would have precedence over all other business except the introduction of bills, questions of members and notices of motion for the production of papers. A motion similar to that has not been carried at this session, and it was not carried-


Stanley Howard Knowles: That is the whole point.


William Lyon Mackenzie King: -because some hon. gentlemen opposite insisted on the first motion I presented being discussed and voted upon without the deletion of any part of it. It will be recalled I was prepared to delete the first two lines beginning, "and that this order be followed", etc. The motion as passed read:
That the debate on the address in reply to the speech of His Excellency the Governor General to both houses of parliament be the first order of business on Monday, December 8th instant, and that this order be followed by government notices of motion and government orders notwithstanding anything in standing order 15.
Standing order 15 sets forth the routine of the business of the house for each day in the [DOT]week. This motion distinctly supersedes any procedure set out in standing order 15.


Edmund Davie Fulton: But only for Monday, December 8.


Stanley Howard Knowles: That was only for Monday, December 8.


William Lyon Mackenzie King: I do not agree with my hon. friend. I made that clear on two occasions, and exception was not taken *by my hon. friend until this moment.


Stanley Howard Knowles: Oh, yes.


William Lyon Mackenzie King: If I may so describe it, I cannot understand why hon. gentlemen are making a mountain out of a molehill. The object of this session is to get on with certain specified measures. The government is adopting the procedure which it believes will enable the house to get on with that work rapidly. The house has given the government authority to proceed in a certain way notwithstanding anything in standing order 15. The fact that the order paper has been printed in a certain sequence by those who have to do with the printing does not alter in the least the authority which the government has been given under the order which this house has passed. I say to my hon. friend that like other hon. members of the house I was surprised when I saw all these questions and notices of motions printed in advance of government notices of motions and government orders in today's order paper. I immediately went to the Clerk and asked how it was that this order paper came to be printed in that way, knowing that the Clerk had agreed with me before, as I have stated in the house, that under the motion adopted by the house on Monday last government notices of motions and government orders would have precedence over everything else. The Clerk informed me that this was a matter of technical procedure; that notwithstanding what the house had passed, questions and notices of motions were therefore retained on the order paper in the order in which they appear today, but that notwithstanding, the rules which would govern the house and its procedure today would be those which were in accord with the motion the house had passed on Monday last.
What I am anxious to do is to have the house get on with its business. Are my hon. friends insisting at the moment that we should take up questions now and then notices of motions?


Stanley Howard Knowles: We are only asking that it be done in the proper way. If the Prime Minister had asked for unanimous consent for the passing of his second motion on Monday, as we think should have been done, there would have been none of this trouble.


William Lyon Mackenzie King: I wish I had the same faith in what this house is prepared to do in the matter of giving unanimous consent as the hon. member has.


Stanley Howard Knowles: You can get it right now if you ask for it; all we want is to have the rules followed.


William Lyon Mackenzie King: From what has taken place this week, I have come to the

Business of the House

conclusion that no matter what the government proposes it will not get unanimous consent, that that is a deliberate policy of some hon. gentlemen opposite. The only way I see in which matters of procedure can be met is for the government to decide what the procedure shall be, and when that procedure has been approved by the house, then act upon it.


Stanley Howard Knowles: Do it in the proper way.


Mr. MacINNIS:: Speaking to the point of order, what the Prime Minister has said with regard to unanimous consent does not apply to this group. We are very anxious to get along with what the house was called here to do, and we have shown every disposition to help the government in the matter. But we are not going to agree to the rules of the house being set aside simply because the Clerk or anyone else says so.
I should like to draw the attention of the Prime Minister and the house to the situation that existed last Monday. On Monday there were two resolutions on the order paper under the name of the Prime Minister. One of them had to do with the procedure for Monday, December 8-and it clearly stated Monday, December 8. Then if we finished with the debate on the address on that day, if the various leaders and certain others spoke, we were to go on to government notices of motion and government orders. That that is what the Prime Minister had in mind when he put that motion on the order paper is *shown clearly by the next motion, which uealt with business on Tuesday and every day thereafter. All we want the Prime Minister to do is to abide by that resolution dealing with Tuesday and the following days. Then we will do everything in our power to give him unanimous consent.


Stanley Howard Knowles: We will vote for it.


Angus MacInnis: Yes, we will vote for it. We believe that he has adopted a procedure that is contrary to the procedure of this house. In all the time that I have been here I have never seen an occasion on which the order paper has not reflected the order of business that would come up, because in no other way can the members of the house know what business is going to come up. They have to follow the order paper. If the Prime Minister is simply to turn to such and such an item on page 12 of the order paper, page 16 or any other page, we shall have no control over our procedure at all, I submit that the Prime Minister should ask for unanimous consent to put this resolution and get the matter straightened out so that we may proceed in an orderly manner.


James Horace King: The motion on which the point of order has been raised by the hon. member reads:
That the debate on the address in reply to the speech of His Excellency the Governor General to both houses of parliament be the first order of business on Monday, December 8th instant, and that this order be followed by government notices of motion and government orders, notwithstanding anything in standing order 15.
According to this motion, which has been carried by the house, I believe that I should now call government orders. Orders of the day.



TARIFFS AND TRADE


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, I hope on this occasion I shall get unanimous consent to what I am about to ask. In the course of yesterday's debate the leader of the opposition (Mr. Bracken), the leader of the C.C.F. party (Mr. Coldwell) and the leader of the Social Credit party (Mr. Low), in discussing the resolution which I introduced on the Geneva agreement, if I am not mistaken, all said they believed it would be preferable to have the Geneva agreement discussed by itself, and not to have the motion include the words "together with the complementary agreements of October 30, 1947, between Canada and the United States of America and between Canada and the United Kingdom." May I say that I agree with them that it would be preferable to have the debate on the Geneva agreement confined to approval of the Geneva agreement itself, including the protocol of provisional application thereof.
If the house will permit me at a later stage I will have the motion amended or redrafted accordingly, but the debate for the present might continue, with the understanding that the government will not ask the house at this time-I do not know whether it will be asked at any time-to approve the complementary agreement of October 30, 1947, between Canada and the United States of America or the agreement between Canada and the United Kingdom.


John Bracken: Mr. Speaker, as I interpret the remarks of the Prime Minister they mean this. The resolution now before us asks for approval of the Geneva trade agreement and also approval of the exchange of letters which have to do with the British preference. The

Tariffs and Trade
Prime Minister has indicated that he is willing to accept the suggestion made from this side of the house yesterday, that that portion of the resolution relating to the exchange of letters in refetence to the British preference shall be eliminated. I just wish to say this to the Prime Minister, that one of our speakers this afternoon already has an amendment to that effect so it will not be necessary for the Prime Minister to bring in the changes he seems willing to bring in. I hope that the amendment which will be moved from this side will have the support of the government.
I rose at this time to say particularly that no matter what the intentions may be of the Prime Minister we must not be denied the right to discuss the question of the British preference this afternoon on the resolution now before us.


Major James William Coldwell: Mr. Speaker, while to some extent what the Prime Minister has now suggested is more satisfactory than the resolution as it originally stood, my suggestion was that we follow the procedure we followed last year in connection with the I.R.O. constitution. It will be recalled by the house that on April 30, 1947, the Secretary of State for External Affairs (Mr. St. Laurent) said:
With the unanimous consent of the house I move that this constitution and interim agreement be referred to the committee on external affairs.
What I object to is the house being put into the position of having to vote on the principle of the Geneva agreement without having the opportunity to examine the whole basis of the agreement and to have before us, as we had before the external affairs committee last year, those who would be able to explain it to us so that we may understand every line of the agreement. I think the documents should be referred to a committee *where we can go into them fully and understand their full import and then come to a conclusion.


William Lyon Mackenzie King: My hon.
friend's point was dealt with last night by my colleague the Minister of Reconstruction (Mr. Howe).


Major James William Coldwell: I did not understand that. I read Hansard this morning and that was not clear.


William Lyon Mackenzie King: What the minister was seeking to make clear was that the government was wholly agreeable to the resolution going before a committee which would have an opportunity of calling experts and others and obtaining the fullest information before the house would be asked to vote on the resolution.


Major James William Coldwell: I was not in the house at that moment but I read Hansard carefully and I did not find that he gave that definite undertaking.


William Lyon Mackenzie King: Yes, that is understood.


John Bracken: I might just add, Mr. Speaker, that the amendment which it is proposed to move from this side will cover the point just raised by the hon. member for Rosetown-Biggar, that the resolution be referred to a committee.



CIVIL SERVICE


[Stage Direction]
On the orders of the day:
Mr. ALISTAIR STEWART (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of Finance. When does the government intend to increase the pay of civil servants, and will such increase be retroactive?


Douglas Charles Abbott: Mr. Speaker, as the house is aware, the matter is under consideration by the cabinet at the present time, and a statement may be expected shortly.



FOODSTUFFS


[Stage Direction]
On the orders of the day:
Mr. H. 0. WHITE (Middlesex East): Mr. Speaker, I wish to direct a question to the Minister of Agriculture. In view of the statement made by his parliamentary assistant in London, Ontario, yesterday and the minister's answer to the hon. member for Durham (Mr. Stephenson) in the house yesterday, is the minister prepared to make a further statement now regarding prices for meat, dairy and poultry products?
Right Hon. J. G. GARDINER (Minister of Agriculture):: No, Mr. Speaker, I have no information beyond what I had yesterday.


Gordon Graydon: If I may ask a supplementary question, the minister's parliamentary assistant, according to a Canadian Press dispatch from London today, said that an announcement from the federal cabinet would be made within two or three hours, or at the latest within two or three days, which would solve all the farmers' problems. I wonder if the minister would give an answer on that broad base. I have before

Inquiries of the Ministry
me the clipping if the minister would like to see the remarks of his parliamentary assistant.


James Garfield Gardiner: The two or three days have not yet expired.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John Bracken: Mr. Speaker, I wish to direct a question to the Prime Minister with respect to the procedure tomorrow. In his announcement to the house on Friday last the Prime Minister intimated that tomorrow we would proceed with the emergency measures in the name of the Minister of Finance. I would like to be sure whether that is the intention for tomorrow, and further whether it is expected that debate will follow tomorrow on those measures. I would like to know also when we may have the bill before us which we are expected to debate, because it is hardly fair to ask the house to debate the bill tomorrow unless we have it at some time before the debate starts.


William Lyon Mackenzie King: May I say to my hon. friend that the intention is, as I had mentioned to him, that tomorrow the Minister of Finance (Mr. Abbott) will introduce his bill. The bill will appear on the order paper and will be introduced, but we shall not be able, without unanimous consent, to proceed with its consideration beyond the first reading. The order following that will be the order which appears on the order paper in the name of the Minister of Justice, the resolution in regard to The Continuation of Transitional Measures Act, which appears under government notices of motion.


John Bracken: Then, Mr. Speaker, the suggestion of the Prime Minister on Friday last that we should proceed on Thursday to a discussion of the emergency measures bill will not be proceeded with except to the extent that the Minister of Finance speaks.


Douglas Charles Abbott: May I interject, Mr. Speaker? I assume that hon. members would not wish to discuss the emergency measures until they have had an opportunity of examining the bill.


John Bracken: That is the question I am raising.


Douglas Charles Abbott: The bill cannot be made available until it is read the first time. That will be done tomorrow. That is the position I am in with respect to that bill.


John Bracken: The position then is this: aside from what the Minister of Finance himself says, the house will not be discussing that measure tomorrow, in which case we shall have some other order of business. What that other business is, is what I want to know. I understand now that after the Minister of Finance makes his remarks we shall then deal with the interim measures providing for the extension of the transitional powers act and the Agricultural Products Act.


William Lyon Mackenzie King: That is correct.


John Bracken: May I direct a question to the Minister of Finance? Will he be good enough to indicate to the house just how these emergency measures will come before us? We understand that one bill with respect to the emergency measures will be brought down in the usual way, but that some other procedure will be adopted with respect to the Customs Tariff and the Excise Act. What I should like to know is in what order these three measures of the government will come before the house so that we may be ready to discuss them.


Douglas Charles Abbott: Yes, Mr. Speaker. The present intention is to introduce a bill covering the restrictive aspects of the program, to which will be annexed schedules setting out the various articles which are either prohibited, subject to quota or admitted under permit. The fiscal changes will take the usual form of resolutions to be considered in committee of ways and means, followed by appropriate amendments to the excise and Customs Tariff acts. I think these will be the two bills. It is possible that any measures with respect to the gold mining industry may be the subject of a special bill.


John Bracken: I should like to ask one other question. Can the Minister of Finance or the Prime Minister indicate now that the emergency measures bill will come up for debate on Friday?


Douglas Charles Abbott: That is my intention, Mr. Speaker. As the Prime Minister points out, that, of course, is conditional upon the house having completed consideration of the address to extend the Emergency Transitional Powers Act beyond December 31.


John Bracken: May I ask one further question? Is it the intention of the government, before we proceed with anything else, to proceed with its interim extension measures until they are finished?


William Lyon Mackenzie King: Yes, that is right.

Inquiries of the Ministry



WAR VETERANS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to direct a question to the Minister of Veterans Affairs, notice of which I sent him earlier today. I mention that because this subject was raised a few moments ago. This will now give the minister at least a chance to answer it. Can the Minister of Veterans Affairs indicate whether immediate action will be taken in the matter of a cost of living bonus or other supplement to widows of non-pensioned veterans, burnt-out. pensioners, and veterans on disability pensions?
Right Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): The whole question of cost of living bonus as applicable to the three groups mentioned by my hon. friend has been studied now for about two or three months by a cabinet committee. I am not yet in a position to state definitely when action or what action shall be taken.



INQUIRY AS TO ADJUSTMENT IN HOUSES ON BRAEFOOT PROJECT

[Stage Direction]
On the orders of the day:
George Randolph Pearkes: I should like to direct a question to the Minister of Veterans Affairs, notice of which I have sent him. Will he say whether an adjustment has been made to the veterans who have occupied, or still occupy, houses on the Braefoot project?
Right Hon. IAN A. MACKENZIE (Minister of Veterans Affairs): There has already been a downward adjustment of a substantial amount on the Braefoot estate, and it is carefully estimated that there will be a further adjustment by way of write-off. The amount I have not at the moment but I shall very soon get it for my hon. friend. This includes the cost of remedial repairs to the houses, a revised selling price. It is merely a write-off that the public will have to stand. That amount of money has been spent to put these houses in order. As my hon. friend knows, the Braefoot project consisted of twenty-eight houses. Remedial repairs have already been completed on twenty-five houses, and the remaining three houses will be completed on December 15, 1947.


Mr. LOCKHART:: May I direct a brief inquiry to the Minister of Veterans Affairs? While he is delving into the matter of veterans houses will he find out whether the original '	5849-9
contract or selling price to be charged for veterans' houses constructed, but not purchased, has been increased? Has there been anything added to the price in any instance that the minister may know of?


Ian Alistair Mackenzie: Subject to correction and further investigation, I know of none, but I shall be very glad to look into the question asked by my hon. friend and give him a precise answer later.



INQUIRY AS TO LIFTING OF RESTRICTION AGAINST IMPORTATION

[Stage Direction]
On the orders of the day:
Mr. T. J. BENTLEY (Swift Current):: I should like to direct a question to the Minister of Finance or to the Minister of Reconstruction and Supply. Has the restriction against the importation of pyroil from the United States been lifted?


Douglas Charles Abbott: I shall have to look into the matter, Mr. Speaker, and give my hon. friend an answer tomorrow.



FOREIGN EXCHANGE CONTROL


Mr. J. G. DIEFENBAKER (Lake Centre):: Yesterday I directed a question to the Minister of Finance in regard to searches being made of individuals on the boundary, and he said he would be in a position to answer it at a later date. L he in a position to answer now?


Douglas Charles Abbott: I am afraid I neglected to look at it until about half an hour before coming into the house. Therefore I shall have to ask that it stand over until tomorrow.


John George Diefenbaker: Would the minister be prepared to send orders out to some of these temporary employees at the boundary to desist from what one might almost describe as tyrannical incivilities to individuals who are innocent men and women?


James Horace King: Order.



TARIFFS AND TRADE


[Stage Direction]
The house resumed from Tuesday, December 9, consideration of the motion of Mr. Mackenzie King:
That it is expedient that parliament do approve the general agreement on tariffs and trade, including the protocol of provisional ap-
Tariffs and Trade
[Stage Direction]
plication thereof, annexed to the final act of the second session of the preparatory committee of the united nations conference on trade and employment held at Geneva from April 10 to October 30, 1947, together with the complementary agreements of October 30, 1947, between Canada and the United States of America and between Canada and the United Kingdom; and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
Clarence Decatur Howe: and seventy per cent are subject to tariff reductions. Even more impressive, nearly sixty per cent of our dutiable exports as of 1939 will be entitled to tariff reductions of from thirty-six per cent to fifty per cent from present levels. In other words practically the entire range of American tariff restrictions against Canadian goods has been reviewed and very substantially reduced. Furthermore, in general the largest tariff reductions will apply to those exports that are already entering the United States on a competitive basis in spite of the present tariff restrictions. The reductions the United States has made therefore have substance. It will be up to us to take full advantage of the opportunities presented.
I have confidence that Canadian farmers and business men will take advantage of the new trade outlets afforded as quickly as supplies will allow, and that Canadian resources, management and labour will produce the goods for export.
In return Canada has granted concessions of importance, both directly and indirectly, to the United States. In direct tariff reductions it would not appear that we have gone as far as the United States did. In terms ol 1939 trade ninety per cent of our exports to the United States are affected, while we propose tariff reductions or bound rates on seventy per cent of our imports from that country. 'As compared with reductions by the United States on seventy per cent of the dutiable imports received from us, we propose to make reductions on forty-five per cent of the dutiable imports from them. Finally, while most * of the United States tariff reductions will range from 36 per cent to 50 per cent, the majority of our reductions of rates on American imports will range from 15 per cent to 20 per cent.


Mr. GREEN:: Of course the American rates were much higher.


Clarence Decatur Howe: I am going on to point that out.


Mr. MACDONNELL (Muskoka-Ontario):: May I ask whether your percentages are in terms of items or quantities?


Mr.   IIOWE@: They are percentages of . the existing tariff.


Mr. HARKNESS:: Very misleading.


Clarence Decatur Howe: Yes, I know.
Some lion. MEMBERS: Oh, oh.


Clarence Decatur Howe: I like to agree with a Tory occasionally. These comparisons, however, must be qualified. Reductions given by us to other countries will apply to the United

States on a most-favoured-nation basis. Second, a higher proportion of American exports to Canada are dutiable than of Canadian exports to the United States, and the proportion has grown since 1939. Third, the general level of tariffs is lower in Canada than in the United States, so that a moderate reduction in our tariff on some commodity is often more significant than a larger reduction in the United States tariff. Finally an important concession was made by reducing or eliminating the margin of British preference on a number of items.
Coming now to the trade between Canada and the United Kingdom, the United Kingdom and other members of the British commonwealth joined with Canada in reducing the margin of British preference. The Prime Minister has already outlined the history of the British preference in our tariff structure and the position we took on this matter at Geneva. We had, of course, a twofold interest: preferences enjoyed by Canada in other parts of the commonwealth and preferences granted by Canada to other commonwealth countries. These preferences which we gave up in other parts of the commonwealth were given up in return for tariff concessions we had from the United States. These preferences granted by us which were reduced were reduced with the consent of the other countries of the commonwealth which were affected. The United Kingdom report on the Geneva tariff negotiations puts it in this way:
In so far as the reduction or elimination of these preferences affects the United Kingdom, the United Kingdom has secured due compensation in its negotiations for tariff concessions from the foreign country or countries primarily interested, or. alternatively, the United Kingdom has accepted in exchange tariff concessions from the commonwealth country according the preferences, and has thus enabled the latter to claim credit from the foreign country, or countries, primarily interested.
The reasons for the modifications made in the preferences can be put very simply. In the first place there would have been no Geneva agreement had the commonwealth countries not agreed to some reductions in their mutual margins of preference. In the second place all commonwealth countries, including ourselves, were faced with dollar problems, and the preference reductions were in direct exchange for concessions from non-commonwealth countries that offered an opportunity to earn more dollars.
It should be pointed out that while a number of preference margins have been reduced, there have also been many tariff reductions made between commonwealth countries at Geneva, and the volume of trade between common-

Tariffs and Trade
wealth countries should rise. The system of commonwealth preferences has been modified but not abandoned. This can be demonstrated by analysing the effect of changes in our preferential tariffs on imports coming from the United Kingdom in 1938. In that year nearly $200,000,000 of imports were brought into Canada from the United Kingdom, of which about eighty per cent enjoyed preference guarantees. The changes it is proposed to make under the Geneva agreement would affect about 830.000,000 of this trade by lowering or eliminating preferential rates. In other words approximately 58 per cent of the 1938 imports from Great Britain would have been unaffected, because they did not come wfithin the system of preferences. Another 26 per cent would be unaffected though subject to preference guarantees. That is a total of 84 per cent, and the remaining 16 per cent is divided up as follows: about 4 per cent with the same rates as before but minus their preference guarantees; about 8 per cent with rates lowered as much as 35 per cent, and about 4 per cent placed on a duty free basis. The 193S imports that W'ould have lost preferential treatment would be valued at about $13,000,000. This is about seven per cent of the total imports from the United Kingdom or 16 per cent of the imports with preference guarantees. Clearly the system of preferences has not been abandoned.
What will be the effect of all this on Canadian industries? In summary, we have reduced or bound tariffs on about two-thirds of our imports, and in return we have received concessions on about three-quarters of our present exports. As I previously mentioned, of particular importance in view of our current exchange difficulties is that seventy per cent of our dutiable exports to the United States will benefit from tariff reductions ranging in most cases from a third to a half. I think it would be of interest to review briefly some of the implications of these reductions in United States tariffs for the major Canadian industries.
First I should like to discuss agriculture. Virtually the complete range of our agricultural exports to the United States have been accorded tariff reductions, in most cases the maximum of fifty per cent. The most important items are wheat, oats, barley, rye, mill-feeds, screenings, alfalfa, clover and other forage seeds; beef, veal and poultry; butter and eggs, milk and cream, and cheese; seed potatoes, turnips, and other vegetables and fruits. In other words the duty into the United States on those commodities has been cut in half.


Howard Charles Green: Has the minister figures to show what the average duty was before the cut?


Clarence Decatur Howe: That information will appear as we proceed.
In addition the quota on cattle has been raised from 225,000 head to 400.000 head. I am told that 400,000 head of cattle per annum is the maximum this country could possibly ship to the United States in any one year. The quota on calves is raised from 100,000 to
200,000.	The list of Canadian concessions is as extensive, since the principle was generally followed of granting reciprocal rates, but the substance of the agreement is obviously in the greatly improved competitive position in *which a number of Canada's most important agricultural products are put.
Since most of the United States duties on agricultural products are specific, the higher current price level combines with the rate reductions to lower the effective incidence of the tariff. For example, the former 42 cents United States duty on a bushel of wheat was just about the price many prairie farmers received in the thirties; the new 21-cent rate is less than 10 per cent of the current world price.	.
I was most .amazed last night to hear the leader of the opposition ('Mr. Bracken), who has lived almost all his life in western Canada and is an expert in farming, say that the reduction of the duty on wheat to 21 cents a bushel would not be beneficial to the farmers. The rate of 21 cents is less than the freight rate to Fort William from some parts of Canada.


James Arthur Ross: What would the benefit be?


Clarence Decatur Howe: The benefit would be that a seller of wheat could take advantage of the United States market.


James Arthur Ross: But they have a large exportable surplus.


Clarence Decatur Howe: Nevertheless, as hon. members know, today our wheat is under contract to Great Britain and permission is not given to ship across the boundary. But if permission were given, it would permit the Canadian farmer to get for his wheat on the open market the United States price, less 21 cents a bushel.


Mr. FLEMING:: Will the minister say if wheat is to be permitted to pass over the United States border?


Clarence Decatur Howe: That depends entirely upon the length 6f time in which we feel obligated to deliver our wheat to the United Kingdom. So long as o.ur British agreement stands, only our surplus above contract requirements can be shipped to the United States.
Tariffs and Trade

Similarly the new duties on oats of 4 cents a bushel, on barley of 71 cents, and on rye of 6 cents d-o not form serious barriers today. The halving of the former 6 cents a pound rate on beef and veal restores us to the position of 1927 when we exported over 50 million pounds.
Combined with the increased quota on cattle and the 50 per cent reduction in rates on edible offal, the Canadian livestock and associated industries stand to benefit materially. The principle of reciprocal tariff rates, applied pretty well across the board, should lead to a substantial development of localized border exchange in both directions, to mutual advantage. While our present contract commitments to the United Kingdom may prevent Canada from taking immediate advantage of this changed situation, it is obvious that the future security and prosperity of Canadian agriculture has been greatly strengthened.
Turning now to fisheries products, Canada has obtained concessions from the United States on virtually all kinds of fish, both fresh water and salt water, and in all forms, whether fresh, frozen, dried, smoked or canned.


Howard Charles Green: Not on canned salmon?


Clarence Decatur Howe: Is there no reduction on that?


Howard Charles Green: No reduction at all.


Mr. MERRITT:: No reduction at all.


Clarence Decatur Howe: I think you will find the explanation for that from your own fishing industry.
Most of the tariff reductions have been the 50 per cent maximum. It should also be mentioned that some advantageous adjustments were made in the tariffs of other important markets, such as Cuba and Brazil.
Probably the most important single item is the binding of the existing United States 2J cents per pound duty on fresh or frozen fillets of cod, haddock, and some other fish, which applies to all imports in excess of the existing quota. I might point out that the existing quota is 15 per cent of United States consumption. The quota goes in at a lower rate, but the battle was to bind the pound rate on the fish shipped in in excess of the quota. Our negotiators had to fight long and hard for this, and it protects a promising and expanding market. In addition, some changes in the administration of the United States quota are provided for, which will help to protect our fishermen's interests in competition with Newfoundland, Iceland and Norway.

Turning next to forest products, significant concessions were obtained for this industry, which is third in importance in Canada's primary industries, only surpassed by agriculture and mining, We have gained concessions for 90 per cent of our forest products exports, which in 1946 amounted to $626 million.
The most important concession was a 50 per cent cut covering both the duty and internal revenue code tax on softwoods. For pine, spruce, hemlock, fir and birch the combined rate, that is the duty and the I.R.C. tax, was reduced from $2 to $1 per thousand board feet.
There are great potentialities for Canadian exports of softwood lumber to the United States for many years to come. In 1916 the United States consumed some 26 billion board feet with only five per cent of this requirement met by imports, of which Canada supplied about 95 per cent. As long as a high level of economic activity continues in the United States, lumber requirements are likely to be even greater than the 1946 volume- possibly 25 per cent higher. Export restr'e-tions have been eased, and the Canadian softwood lumber industry should be in a position to expand its United States market.
Numerous concessions were obtained on wood products. I mention only one which may have particular meaning for our veneer and plywood manufacturers. The duty on veneers of all types of wood is now down to 10 per cent ad valorem. The old rate for all but birch and maple has been 20 per cent. Red cedar plywood is down from 40 per cent to 20 per cent. During the war we made great strides in the production of plywood and veneers. We all remember the miracle of the Mosquito bombers, which was made possible through the specially developed techniques of producing and treating plywood.
I believe we are today as efficient in the production of these commodities as any other country in the world. I am sure the industry will welcome the opportunity to prove its competitiveness in foreign markets which are now opening up.
An important segment of our forestry industry is the pulp and paper industry. The Geneva trade agreements have assured us of continuing duty-free exports to the United States of newsprint and pulpwood. In 1946 these two items brought us a quarter of a billion in United States currency, and American needs are rising further.
With reference to mineral products, about 85 per cent of our important base metal exports, and nearly 60 per cent of our non-

Tariffs and Trade
metallic, and related product exports, will receive concessions. Of these the most important are copper and zinc, on which reductions are approximately 50 per cent, and aluminum, where the three cent duty is reduced to two cents a pound. No action has been taken on lead, pending negotiations by the United States with Mexico. In addition, reductions on ferro-alloys, a number of non-ferrous metals such as magnesium, tantalum and cadmium, and a wide range of industrially important non-metallics such as cement, crushed stone refractories, and feldspar, should be mentioned.
These changes are of particular significance to us since they confirm a trend which has been evident for some time. As the mineral reserves of the United States are diminished, it was logical that attention will turn increasingly to Canadian mineral and associated hydro power resources. The new tariff rates are a great step forward in achieving an economic integration of North American resources, to the mutual advantage of the northern and southern halves, and they should have some immediately stimulating and expansive effects in Canada.
The various commodity groups I have mentioned contain many manufactured goods. Three other commodity groups I have not mentioned-iron and its products, chemicals and related products, and textiles and textile products-are overwhelmingly manufactured goods. In fact three-quarters of all our exports are now fully or partly processed. It is on the manufacturing industries, in particular, that we must depend to extend our markets abroad, and more specifically to extend them in the dollar area. For this reason I wish to draw the attention of this house to the increased productive capacity and export potential of our manufacturing industries.
During six years of war many Canadian manufacturing industries underwent marked expansion; some relatively small industries were expanded to an extent that it was tantamount to the creation of new industries, such as aircraft and shipbuilding; and new industries were created, as for example roller bearings, magnesium and artificial rubber. In this process of growth many new types of goods were produced, such as optical glass, high octane gasoline, penicillin and sulpha drugs. In the two years that have followed the war most of these wartime gains have been consolidated and further advances made in a large number of fields. We are now producing at least 200 items never before made in Canada, ranging from scientific instruments bo special types
of pulp-mill machinery, from cordless electric irons to diesel engines, from precision instruments to road building equipment, from plywood furniture to prefabricated houses.
What this industrial development means in terms of export potential has been amply demonstrated from a study of applications for special rates of depreciation under the Income War Tax Act. A sample of some 2,250 companies indicated that they exported $325 million worth of goods in 1939, $670 million in 1944, and that they expected to be able to export $1-2 billion after completion of their modernization and expansion projects. This means exports about three and one-half times as much in value terms, or two and one-half times in volume terms, as before the war.
As a result of the many concessions obtained on manufactured products under the Geneva agreement, potential markets have been opened in many directions. In particular two industries that in pre-war days were relatively unimportant and that enjoyed marked expansion during the war stand to benefit. These are the secondary iron and steel industry and the chemical industry. Over 80 per cent of our chemical and allied exports receive concessions under the trade pacts. The United States also granted the maximum reduction on the entire range of metal articles and metal wares of from 45 per cent to 22$ per cent. On the "basket" item of machinery, "not elsewhere specified", which includes a great variety of Rems, the rate has been reduced from 27$ per cent to 15 per cent.
I have had first hand opportunity during the war to observe the growth of our tool making and metal products and parts manufacturing industries. Canadian manufacturers proved often just as efficient as their American competitors and, given large scale production, were in a great many instances able to manufacture goods of the same quality, but at lower costs than in the United States. Proximity, an ample supply of natural resources, and cheap power, were important factors.
I shall give you just a few instances of the possibilities which Canadian manufacturers believe could be developed, based on representations made for the information of our delegates at Geneva. Before the war Canada had exported hardly any auto trailers, but one company has been able to convert its war establishment to the peacetime production of auto trailers at costs which compare favourably with similar products manufactured in the United States. This company alone hoped to achieve exports up to $3 million per year if a tariff reduction could be obtained. The rate
i36
Tariffs and Trade

was cut by 50 per cent. Another Canadian company thought it could work up exports of
81,000,000 worth of canned peas if the United States rates were brought down to the Canadian rate. The duties in both countries were equalized. Producers of specialized equipment, where Canada is particularly proficient, as for example in the manufacture of sports equipment, submitted that they could considerably increase their exports to the United States if the duty was cut. Duties on equipment for exercise and play were reduced by 50 per cent, from the former level of 30 per cent down to 15 per cent. Another company was producing specialized steel bars. It thought it could develop substantial exports to the United States if some tariff adjustment were made. The rate for such bars was reduced by 50 per rent. Another firm was producing an important industrial chemical, acetic acid, more cheaply than it was produced in the United States. This was possible because of the convenient availability of most of the raw materials required and of cheap hydro power. While an export trade had been successfully developed in the past, the company felt that it could substantially expand sales to the United States if existing tariff barriers could be overcome. The tariff rates for this commodity were substantially reduced, from between 25 and 50 per cent.
These are only a few instances. Many other opportunities are opening up, as Canadian manufacturing industries are studying the implications of the tariff reductions of the Geneva agreement for their own business, and are discovering that they will now be able to enter United States markets on more competitive grounds than was the case before. We can rely on Canadian industry, which has grown so rapidly in stature during the last eight years, to make the best of these opportunities.
I have dealt almost exclusively with the tariff adjustments made by other countries, and particularly the United States, which will provide an opportunity for Canada to expand export markets. The reason for this is, of course, obviods; it arises from our United! States dollar shortage. Most of the concessions which we have undertaken to give on imports will of necessity be inoperative for a period owing to the exchange restrictions which we have been required to impose. As I indicated earlier, article XII of the Geneva agreement specifically recognizes our right to take such action when necessary to correct serious balance of payments difficulties.
At first glance it appears contradictory that we are proceeding simultaneously with the Geneva trade agreement and our conservation of exchange measures. One is an expansive

policy and the other, for the time being, must be restrictive. The two policies, however, are balanced and complementary. It is by virtue of developments made possible by the Geneva agreement-and we hope further agreements along the same line-that our present dollar shortage will be overcome.
In looking at Canadian-American trade in the past we see that whenever Canada has been prosperous, our adverse balance of payments with the United States has grown, and that it has only approached a more equal balance in periods of depression and low income in Canada. We are now forced by the United States dollar shortage of our chief overseas customers to find ways and means of achieving a more even and stable balance in our trade with the United States.
One way is to achieve a balance at a low level of trade, as has been done in the past, when Canadian industrial activity was at such a low ebb, and Canadian incomes were so reduced, that our purchases from the United States fell even more drastically than our sales to them. The alternative way and, I need scarcely add, the way that accords with this government's fundamental views on trade, is to achieve the balance at a high level, by our selling more. Even our import controls will be administered to contribute to this end; imports of capital goods for non-essential construction will be drastically curtailed, but imports which will contribute to the development of the Canadian economy, the expansion of our export trade, and the conservation and production of exchange, will have high priority.
It is a fortunate coincidence that at the same time we are faced with a critical balance of paj'ments situation, agreement should have been reached, across such a broad front, with the other chief trading nations of the world on practical ways and means of expanding trade. It is to constructive and expansive development in Canada, stimulated by these agreements, that we look for a permanent and satisfactory solution of our chronic dollar shortage, a solution which will not be at the expense of Canadian living standards and incomes but which will, in the long run, fortify and develop both.


Charles Cecil Ingersoll Merritt: Mr. Speaker, we have just listened
to a very interesting speech by the right hon. Minister of Reconstruction (Mr. Howe) upon the schedule to this agreement dealing with the tariff items. Toward the end of his remarks he made a significant statement "which I think he or some other member of the government should explain to the house in more detail as soon as possible. He said that it was the intention of the government to

Tariffs and Trade
balance our trade with the United States on a high level, instead of a low level. That is a very interesting statement and a very good aim. But in view of the figures put upon the record last night by the leader of the opposition (Mr. Bracken), I should like the minister to take the first opportunity of telling us just how he is going to bring about that monumental achievement. We have never before, in all our history, -been able to achieve balance with the United States of America.
Before I go further, Mr. Speaker, I would draw to your attention that this debate is getting off the track once more. The right hon. gentleman, in an endeavour to sugar-coat the government's restriclion piogram, has given us a great speech in which he hardly mentioned at all the subject of the resolution before us. He mentioned only the tariff concessions, which are the subject of a totally different resolution. So we have gone today from page 14 to page 12 of the order paper. On the resolution before us we should not be discussing at all schedule V of the agreement dealing with the reduction of tariffs. What the right hon. gentlemen should have been doing was explaining to the house the meaning of the main agreement. While the tariff items are -bound for three years, and are subject, of course, to renegotiation, the main agreement is a document from which, if we accept it, we shall not wish to withdraw at any time. It will be our desire once we accept it, to carry out its provisions loyally, and that is why the right hon. gentleman should have explained it to the house.
So that we may get this discussion into a little better order and stick to the resolution we are dealing with, instead of straying to other resolutions, I now move, seconded by the hon. member for Vancouver South (Mr. Green):
That this house is of the opinion that the said resolution should be referred to the committee of the whole house, with instructions to divide the subject matter thereof between -two resolutions, one relating to the general agreement on tariffs and trade and the complementary agreement between Canada and the United States, and the other relating to the agreement respecting preferential tariffs between Canada and the United Kingdom.
This amendment, Mr. Speaker, 'places formally before the house what the Prime Minister (Mr. Mackenzie King) agreed to earlier this afternoon and what we certainly had intended to insist upon, as we consider it to be of the utmost importance.
Unlike the Minister of Reconstruction, restricting myself to the resolution before us I want, first, to comment on what was said 5849-10
last night by the Prime Minister when he placed the agreement before the house. I, like other hon. members, I suppose, approached this international agreement between twenty-three nations with a sort of holy awe. I imagine we all thought it was the result of a great effort of the united nations to get together to show the way toward wider trade. I think we all probably had a wish to approve the agreement and no great desire to criticize it, except for our duty to criticize where we thought it was wrong. I think, too, we all had a great good will particularly toward the eight signatories of the protocol who intend to bring the agreement into effect on the first of January, because, after all, those eight nations, of which we are one, are friends, and one has always great good will toward one's friends.
But last night the Prime Minister brought this discussion down to a narrow and bitter partisan statement, not of the merits of wider trade throughout the world, not of the great things that were accomplished at this meeting of twenty-three nations, but a violent statement of old Liberal doctrinaire free trade, accompanied by an attack on the tariff pol-'icies of the party to which I have the honour to belong, which policies the Prime Minister has always criticized but has ever practised. I do not think it became the right hon. gentleman to introduce the agreement in that spirit, and it certainly relieved me of any awe or respect that I held toward this agreement. If it is to be the plaything of Liberal propaganda we shall all be free to attack it, and that is what the Prime Minister made it.
The Prime Minister also criticized the Ottawa trade agreements. The Ottawa trade agreements were come to in this country as a result of another unfavourable trade balance built up by the government of the right hon. gentleman, as the leader of the opposition pointed out last night. Whatever the right hon. gentleman may have thought of the empire agreements, which he and his whole party opposed so bitterly in 1932, there is no doubt that, had it not been for those agreements, the great timber industry in British Columbia and many great manufacturing industries across this country would not be there for the Minister of Reconstruction to tinker with as he is doing today.
I also wish to say to the Prime Minister that if he did not agree with the Ottawa agreements as a way to get out of the difficulties which he himself was not able to solve in the spring of 1930; if he did not agree wit-h that method of making long-term trade deals with one's friends, then at least such methods are better than the totalitarian ideae
Tariffs and Tra.de

which he is about to introduce in the next fe\v days, and w'hich he is trying to hide behind these present agreements.
I wish to say to him as well that, no matter what he might say now, no matter how he may consent to amendments to these resolutions, he rushed these agreements into the house. It was his intention, as appears from the order paper, and as appeared yesterday up to the time he heard the views of the leaders of the opposition parties upon it, that, these agreements should be given a cursory examination and voted on without going to a committee and being examined by bon. members. It is all very well for him to say, and for the Minister of Reconstruction and Supply to intervene in. the debate last night and say, that there had been reconsideration, and that the government was prepared to let these agreements go to the committee. But I could not help thinking that in regard to "escape clauses" which we heard discussed for a short time last night, the Minister of Reconstruction and Supply himself was an ambulatory escape clause for the government.
Last night when either the Prime Minister or the Minister of Reconstruction and Supply mentioned the fact that these agreements would probably be modified at Havana, I wondered why the necessity for bringing them to the house now and asking us to approve them. It seems to me that is another example of an attempt to treat this parliament as a rubber-stamp for anything agreed to by the government. Why was that done? There is no question about it. It is perfectly clear from what has gone on throughout this session that these agreements are here before us now, not with the idea of our giving them a satisfactory examination, but only so that a red herring may be dragged across the path and the Canadian people fooled into thinking that these agreements are going to guide our ways in the next few years instead of the restrictions which have already been imposed1 upon us.
In attempting to use this agreement as a cloak for the other measures, the Prime Minister was being fairer to his party than to the country. These agreements are not just formal matters to be brushed awray lightly. They contain new principles upon which international trade is to be founded. They will change or they could change everything we have known in international trade over the years. They can change what has been Canada's settled policy since confederation, and they should be examined very, very carefully and very, very closely, not only by a committee of this house, but also by the country at large. We may then get some

general idea, not only of how world trade is affected, but also how Canada itself is affected by the agreement.
The practical effect of these agreements upon the economy and the whole future of this nation may be very great indeed. They may affect our power to control our levels of employment, our standard of living and even the political alignments we have always had with other countries of the world. All these things follow trends of trade just as trends of trade follow political and social thought as well as economic thought.
I would not have expected from the Prime Minister a Liberal propaganda speech; I would have expected from him an explanation of what the consequences of these agreements were likely to be to Canada, because it is Canada which will be chiefly affected by these agreements so far as this parliament is concerned. I would not have thought we would have been given the momentary and immediate effects of the tariff concessions; I would have thought the whole future of Canada was bound up in this main agreement and we should think of it with an eye to our future as a nation. I hold in my hand the Whaley-Eaton news-letter of November 18, 1947, which probably most hon. members have had in front of them. I wish to read from paragraph 8, which is headed "Canada". It reads as follows:
This week has also seen a trade development in many ways transcending the foregoing in importance. While the press concentrates on Canada's luxury-import restrictions, virtually overlooked. because unannounced, is the fact that economic fusion between Canada and the United States is being negotiated.
I skip the bit about the export-import bank loan because the Minister of Finance has denied it, and I come to this:
Also, in consequence, Canada would tailor her whole production in such manner as to supplement that of the United States; as far as could be achieved without damage to the immediate needs of Europe's recovery, she would concentrate her agriculture, mining and industry on the chinks in America's productive armour. "This is a super-Hvdc Park agreement"; and an authoritative comment is that, if this should raise difficulties over the U.N.-ITO concept (most-favoured-nation, etc., etc.), a way of reconciliation could be found.
That is a very blunt statement and is expressed as if the negotiations are now a fact, and that these negotiations are going on. It is not only this United States publication which has set the rumour going or sounded the warning. It appears also in a more modified form in the Financial Post and has appeared in several publications over the past two or three months as a possible solution of our

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problem. I would have thought the Prime Minister would take the opportunity to tell the country if anything is going on in that direction and if, in fact, something like that is happening, what he sees to 'be Canada's future as a result of the new' alignment. I think there are many people in Canada who would be most interested to know whether there is any foundation whatever for reports like these.
When I hear the Minister of Reconstruction and Supply say, as he did a moment ago, that these trade agreements will lead to a greater economic integration of the north and south, I want to know what that means, and I think there are a lot of people in Canada who also want to know.
With some of these ideas in mind, I wish to examine, not the schedule, but the agreement itself, and I am going to examine it critically because I think it is our duty to do just that. I think it is our duty to find out what this means, not in terms of world trade, but in terms of its effect on Canada itself. It may be that the criticisms which I shall make will be overcome in my mind, and I shall be very happy if that can be done. But I think the criticism should be made in this house and an answer be given by the government upon it.
Confining myself to the agreement only, and not referring to the tariff schedule or exchange of notes on preferences, I say that this agreement is intended to be a permanent document. It is, of course, possible for any country to withdraw from it at the end of three years, on giving six months' notice. But that is not the intention, and it would not be Canada's intention if we went into it. It is intended to be permanent, and I think it is intended principally to be an agreement whereby nations forbear regulation of external trade save by way of tariffs. If it stopped there I think it would be good; I think it would be splendid. But it does not stop there. It goes on to import, not a principle of wider trade, but a principle of non-discrimination, and it assumes that non-discrimination between nations will bring about wider trade. I am not here to say whether that is right or wrong. I do not think there is any one among us who can say whether non-discrimination between all nations signatory to this pact will bring about wider trade, because that has never been tried before. We are breaking completely new ground when we accept that principle as one which will lead us to wider trade.
Let us examine a little more closely the principle of non-discrimination. I like it at first. It has a nice sound. I do not like dis-5849-10i
criminating against anyone. I am not so certain that, in many cases, one would not be justified in discriminating in favour of people. I am not so certain either that discrimination in favour of people is an evil thing. I think it might often be a good thing. I think it might often be a necessary thing. No matter how high our ideals might foe for the world, I am afraid that discrimination in favour of people might be a necessary thing.
But let us see what it means. First, the agreement says that Canada can not discriminate in tariffs between other nations; that is the most-favoured-nation clause. What is given to one must go to all. Is that a sound principle, Mr. Speaker, upon which to base our international trade for all time to come? Certainly it means the end of preferences. The Minister of Reconstruction and Supply, in his speech just a few minutes ago, said that there wouldi have been no Genera agreements at all if the preferential system had not been breached. I think the logical application of the principle of non-discrimination must be eventually the end of empire preferences. That seems to me one result of the application of this principle.
Let me examine for a moment more whether this principle is sound.
It would be sound between countries which are equal at the start. Between soldiers in the ranks we do not discriminate. They all wear the same uniform; they are all equal. But unfortunately the nations of the world are not all equal. There is the United States, a great country with great national resources, a great population and now at the height of her great industrial power. There is Great Britain, a small country with a large population, with great industrialization, but whose natural resources are greatly diminished and not as rich as those of the other country I mentioned. There is Norway, a country which depends greatly upon her forest industry and her shipping industry, which has a small population aud has her place in a northern clime. There is China, a huge nation with
400,000,000 people or thereabouts, with a low standard of living, different educational standards, and no great industrialization. There is Canada, a nation on her way up, a nation which is going on to a great future, but which has a great deal of development to do, as the Minister of Reconstruction and Supply very-well knows, before she will reach her great, position in this world.
These nations are all different in every way; the economy of one nation is complementary to that of another, while it is competitive to that of a third. These are differences which we have been unable to avoid in the past.
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We have never before been able to practise non-discrimination in trade. If we have a surplus product in the future, under article I of this agreement we shall no longer be able to make a discriminatory concession to a country that wants to take our surplus product, unless we give that concession to another country that does not want to take our surplus product. If we want to discriminate in favour of a country which owes us money, so that her goods can come in free and so nelp to balance the terms of trade, we shall be unable to do that without making similar concessions to other nations.


Clarence Decatur Howe: Thank God for that.


Charles Cecil Ingersoll Merritt: The Minister of Reconstruction and Supply says: "Thank God for that". It may be so. I simply want to bring this matter to the attention of the house and to suggest, for instance, that what the government is doing right now, namely, lowering the tariff against Great Britain under the War Exchange Conservation Act, we shall not be able to go on doing if this agreement is adopted' by Canada.
So much for discrimination between outside nations. Here is another angle of non-discrimination that I never realized before I read this agreement. We shall not be able to discriminate in favour of ourselves. We shall not be able to discriminate in favour of our own home-produced goods in our own country, which goods are not exported to other parts of the world. I want to give the house a few examples of this doctrine. For instance, under article III, section 1, in our internal taxation we cannot grant special relief to home-produced products by, let us say, a tax concession on Canadian-produced petroleum. We would not be allowed to do that. I am not saying at this moment that we want to do it. I do not think we do it at this moment But will there never be a time when we might want to do that in order to stimulate one of our home industries?
Under paragraph 3 of article III we cannot grant special treatment with respect to the domestic sale, transportation, distribution or use of home-produced goods. I ask the Minister of Reconstruction and Supply what effect that will have on the payment of subventions to bring coal to Ontario from Nova Scotia or Alberta. Again, under paragraph 3 of that same article we cannot raise the Canadian content of goods being manufactured in Canada beyond that which obtains at present. The minister may say we shall never want to do that in future-


Clarence Decatur Howe: What is that again?


Charles Cecil Ingersoll Merritt: We cannot raise the Canadian content of goods manufactured in Canadian factories; we cannot insist that a greater percentage be Canadian, either for consumption in Canada or for export to other countries.


Clarence Decatur Howe: We do that every day.


Charles Cecil Ingersoll Merritt: But we cannot do it under article III, paragraph 3, of this agreement. There is no question but that we are free to do it today. I ask the minister seriously to consider whether we shall be able to do that in future if we accept this agreement.
Then, under article V, of course the restrictions we have imposed upon trucking in bond and so on, are denied us. That may be good or bad, but I want the house to know that is the position.
Then we come to an interesting clause in article XI, which provides that no prohibition or restriction, other than a duty, tax or other charge, may be placed upon the import of goods to Canada or the export of any product from Canada. I have considered the wording of that section very carefully, and I am satisfied that, in terms, it prevents us from placing an embargo upon the export of raw materials in their natural state. When we accept this agreement we shall not be able directly to prohibit the export of pulpwood or logs from British Columbia, for instance, or salmon before it is canned, or anything of that nature. I do not suppose we could directly prohibit the export of iron ore or base metals before they were manufactured. It may be that the minister will say we shall never want to do that. But I thought he made the statement not so long ago that he was going to build up and develop the economy of this country. Certainly, under these clauses his power to do that in any of the usual ways will be vastly curtailed.
I have stated some of the absolute prohibitions. I would not want the house to believe there were not escape clauses from them, and for a moment I want to discuss those escape clauses. The most important escape clause as far as Canada is concerned is article XVIII, which gives power to adopt, for the promotion of economic development, any non-discriminatory protective measure, but with the qualification that the plan must first be submitted to and approved by the international trade organization. I think we should consider that clause very carefully and see whether we want our plans for the building up of Canadian industry or for the development of Canadian mines and forests to be subject to approval of the international trade organization, no

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matter how benevolent the intentions of that organization may be. It is possible that we want to do that; it may be that the Minister of Reconstruction and Supply, for instance, will never want to apply any of those practices again. But he is applying them now and he is. going to continue to apply them for quite a few years, so he is going to have to take advantage of these escape clauses. Can he say or can the government say we shall never want to take advantage of these escape clauses after the present monetary crisis is over? Can he say conditions in the world will always be so good that we shall not have to avail ourselves of any of these clauses in connection with our economic development?
Another important escape clause is article XVI, which permits the payment of subsidies, subject to the right of the international trade organization to protest and to negotiate limitations. I think the minister mentioned this clause this afternoon. It may be that the method of subsidizing is the only way we shall ever wish to restrict imports to or exports from Canada. I do not know if that is so; certainly on that point I should like the advice of experts.
Then, under articles XII to XIV, power is given to deviate from the agreement if necessary to preserve our external financial position and balance of payments. Well, Mr. Speaker, these clauses concerning the preservation of our external financial position and the balance of payments must be in use by the government already. It seems to me a bit unfortunate, if we may adopt these discriminatory methods to bring us back to a certain level, that, once we reach that level, we must immediately desist and not carry on farther. I wonder if our principle is not leading us astray when we consider this application of it. I should like also to draw to the attention of the house the fact that the principle of non-discriimination is carried so far that exceptions to it are permitted only subject to the provision that such action does not cause unnecessary damage to the commercial or economic interests of any other contracting party. Surely the principle of non-discrimination is being carried a bit too far there, when we provide that a country like ours, surrounded by other countries under the same crown and in the same financial position, must have regard to the economic and commercial interest of still other countries in working its way out of a difficult situation.
I want to discuss that point farther, but before doing so I should like to say one thing about escape clauses generally. I do not like them. I should like to see an agreement between these nations which did not have all these escape clauses. When Canada accepts
this agreement I do not think she will want to use escape clauses. Already in the attitude of the government over restrictions I think we have seen that they want to adhere closely to the spirit of the agreement. I suggest to the government that it would be much better to limit any codification of world trade practices to the real principles upon which the nations can agree between themsleves without exception. Then you could go on to build up new principles as a result of experience, instead of attempting to codify at once the whole practice of international trade and provide so many escape clauses that the document will bind only those whose conscience binds them. I think Canada would be one of those countries with such a conscience.
There are some very good things in this agreement. Those clauses which standardize regulations in respect of anti-dumping duties, valuation for custom purposes, and regulations made by the customs departments of the various countries are good indeed. And the idea that the tariff shall be the sole regulator of external trade is, I believe, a fine one, although the government is not practising it and will not be able to practise it. It might be that an agreement limited to definite things would make a greater contribution to wider trade in the world than will this attempt at an over-all codification.
After all, as I said in the beginning, this is an agreement between friends. Friends should be able to talk frankly to each other and agree on real things, rather than agree loosely and then wreck the agreement with escape clauses.
So much for that. I raise these points because I believe that the implication of this untried principle of non-discrimination, even in favour of ourselves, upon our whole destiny as a nation, has not yet been put to any test or fully considered. When I first heard of this "non-discrimination'' principle I wondered if it was a sound principle. Certainly it conflicts with past settled policy in Canada, since confederation.
It is not this country which lea the way to economic nationalism, such as this agreement sets out to prevent. It was not this country; rather it was Germany and Italy which started on the road to political and economic nationalism. Yet in this document there is a perfect escape clause for countries like that. At page 58 we find an absolute exception in respect of any steps taken in time of war or other emergency in international relations. A country such as Italy or Germany, or one similarly situated, on the ground that an emergency	has arisen in international
relations, may be completely freed from this
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document. But Canada, which never led the way in that direction, will be bound by its conscience and by these clauses in its own domestic development.
The economic development clauses affect our sovereignty over our domestic affairs. Within the last few days we have had several examples of their effect. Ministers agreed that they knew' in the spring of this year that we needed to take steps to conserve United States exchange. They knew that about seven months ago; and had they taken those steps, our loss of dollars might have been S500 million less. And that $500 million saving would have obviated any need for borrowing from the export-import bank the sum of $300 million.
In the press in the last few days we have read that the United States have been bringing pressure on the Canadian government in respect of its gold subsidy policy. We have seen non-discrimination work hardships on other countries suffering from dollar deficits, too. It is all very well for the Minister of Finance (Mr. Abbott) to say, as he did last night, that only $5,000,000 worth of trade from Great Britain and $13,000,000 worth of total trade of non-dollar countries has been affected. But the fact is that individual shipments from all these countries have been affected. They have been delayed or cancelled, and they need not have been either delayed or cancelled. Canada could have had the goods represented by those cancelled orders.
I see in the Financial Post the statement that the devaluation of the dollar, which many Canadians think would provide a good answer to some of our difficulties, is not considered favourably by United States authorities, and that is one of the reasons why the Canadian government is not taking what may be a very necessary step. On top of it all, we have these hints and rumours of a bilateral pact with the United States which will get around the Geneva agreement.


Mr. DEPUTY SPEAKER:: I would inform the hon. member that his time has expired.


Some hon. MEMBERS:: Go on.


William Ross Macdonald: With unanimous consent.


Charles Cecil Ingersoll Merritt: I do not wish to take up further time of the house. I have raised these matters because I think they are points w'hich all of us in Canada should consider. I have raised them, not with the certainty that all of them are closed doors, not with the idea that they cannot deviously be got around. I have mentioned that there are escape clauses.

However, I believe that in this document are contained principles which may make our whole place in the world, our whole future as a nation, different from what many of us have expected.
I hope there will be agreement at Havana. I hope the international trade organization flourishes and succeeds in widening the trade of the world. I wonder whether this document and its underlying principle really go in that direction. For myself, I cannot believe that it does.


William Ross Macdonald: It has been moved by the hon. member for Vancouver-Burrard (Mr. Merritt) and seconded by the hon. member for Vancouver South (Mr. Green):
That this house is of the opinion that the said resolution should be referred to the committee of the whole house, with instructions to divide the subject matter thereof between two resolutions, one relating to the general agreement on tariffs and trade and the complementary agreement between Canada and the United States, and the other relating to the agreement respecting preferential tariffs between Canada and the United Kingdom.
The hon. member's motion purports to be an amendment to the resolution now before the house. I am rather doubtful if it is an amendment. Hon. members will notice that the opening words are, "That this house is of the opinion that the said resolution should be referred to the committee of the whole." It is an expression of opinion which can be moved only on second reading of a bill. The proposed amendment does not amend the resolution at all. I ask hon. members to note that if the proposed amendment is passed the resolution will not thereby be referred to the committee of the whole. I wonder what would happen if the amendment were passed. It merely expresses an opinion.
I would refer hon. members to page 604 of Beauchesne, third edition, where it states that a motion to refer a question 4o a committee of the house is not an amendment. If I might be permitted to try to be helpful, I should like to do so, on the understanding that hon. members would take what I have to say in the spirit in which it is given. I did notice that the Prime Minister suggested that the agreement should be referred to a committee before the house was asked to approve it. I would make the suggestion that the mover of this amendment could achieve his purpose by moving that all the words after the word "kingdom"-
. . . and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.

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-be struck out. I would suggest that words be inserted similar to the following:
That the said resolution and the subject matter thereof be referred -to a committee of the house.
It does occur to me that the proposed amendment achieves nothing and is not an amendment.


Howard Charles Green: Mr. Speaker, I should like to say a word with regard to your suggestion. I appreciate your kindness in making the proposal, but that would not achieve the purpose we have in mind because it would not divide the subjects. In the first place, there are the Geneva treaties and the letters between Canada and the United States, and in the second place, there are the letters between Canada and the United Kingdom. We wish to have those matters considered separately. We have made our position perfectly clear that we are unalterably opposed to the policy enunciated in the letters between the Prime Minister of Canada and the United Kingdom and your suggested amendment would defeat our purpose.


William Ross Macdonald: I appreciate what the hon. member for Vancouver South (Mr. Green) has said, and to a certain extent he is correct because I did not cover the point which he has raised. It is my recollection that the Prime Minister intimated that he was prepared to drop the second part of the resolution.


Ian Alistair Mackenzie: Another point occurs to me. We have not yet set up these special committees, and I do not know what committee my hon. friend has in mind, whether it is the committee on banking and commerce or some other committee.


Howard Charles Green: The committee of the whole house.


Ian Alistair Mackenzie: Then that clears up the whole thing.


John Bracken: That is the way it reads.


Gordon Graydon: That is why it does read that way.


John Bracken: I am sure the house appreciates your effort, Mr. Speaker, to clarify this situation, but may I suggest that the matter be left as it is in order that you may give further consideration to finding some way of achieving the purpose aimed at by the mover of the amendment.


William Ross Macdonald: I am not ruling the amendment out of order at the moment and I shall allow the matter to stand.


Mr. VICTOR QUELCH (Acadia):: Mr. Speaker, at the outset of my remarks may I say I am glad that even at this late date the government apparently have come to realize the utter futility of depending upon sucli fantastic agreements as the one signed at Bretton Woods to deal with the unbalance of trade with the United States of America and also, incidentally, to deal with the shortage of United States dollars throughout the world. I realize that the Minister of Finance (Mr. Abbott) will probably say that was merely one of the things which were going to help with that situation, but I would remind the house that during the discussion on those agreements we were told that they would be the means of meeting the post-war financial needs of the world. In case there is any doubt in anyone's mind about that, I should like to quote a statement made by the Hon. John W. Snyder, secretary of the United States treasury and chairman of the board of governors of the international bank for reconstruction and development and the fund. In his address at the first session of the fund held in 1946, he had this to say:
The fund and the bank were designed to meet both the immediate post-war and longer-term monetary and financial needs of the world.
That statement was made in September, 1946. Then, one year later when the second annual report of the international bank for reconstruction and development was published we find this on page 7:
When the bank's charter was drafted at Bretton Woods in the summer of 1944, high hopes were held that the bank would prove to be the principal instrument for restoring the war-torn nations of the world to economic life. The critical short-range relief needs were -to be met through donations by UNRRA; the external financing needed for the more permanent recovery programs was to be supplied by loans from the bank. Recovery was conceived of primarily in terms of rebuilding of factories, mines, railroads and other specific productive facilities.
We now know that the problem is deeper and more difficult than was envisaged at Bretton Woods.
At the time of the discussion we pointed out that UNRRA could not begin to deal with rehabilitation. In the early stages it might have, but it was amended into a straight relief project. We suggested that mutual aid or lend-lease should be adopted after the war until such time as the war devastated nations had rebuilt their industries and were once more in a position where they could pay for imports with exports. At that time our proposals were called idealistic, but today we have the Marshall plan which is nothing more or less than a system of mutual aid. But it
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is just two years too late. Had that plan been brought down immediately after the war, a great deal of the grief and hatred which have been generated in Europe might have been avoided. Incidentally, the result has been that many nations have been driven into the sphere of the Soviet Union.
Ever since the end of the war, government officials have been emphasizing that a system of multilateral trade and convertibility of currency would help to solve our unbalance of trade with the United States of America. While United States and Canadian monetary experts have been busily engaged in extolling the great benefits of this proposal, the situation throughout the world has been growing steadily worse. It will be remembered that the financial agreement signed last year by the United Kingdom with the United States committing the United Kingdom to a policy of non-discrimination and convertibility of currency, by July of this year precipitated a serious crisis in that country, while in Canada our unbalance of trade with the United States has been steadily increasing.
I find it hard to understand why the government has been so long in moving to correct that situation, instead of blindly depending upon such proposals as the convertibility of currency and multilateral trade to deal with the situation. I recall that when we were discussing the loan to Great Britain, the then Minister of Finance pointed out that we would not be obliged to use the credits we obtained in that country for the purpose of bringing imports into this country, that we would be able to use those credits for the purpose of meeting an unbalance of trade with the United States. When that was stated, we pointed out that the United Kingdom would not be able to convert its currency into United States dollars unless the United States were prepared to buy from the United Kingdom, thereby providing them with dollars for that purpose.
We in this group have emphasized the need for the re-implementation of the Hyde Park agreement in a modified form, and failing an expansion of exports to the United States and a restriction of imports from that country. Otherwise the result must be an increase in debt to the United States, a situation that should not for one moment be tolerated by this house or this country.
The justification I think for the re-implementation of the Hyde Park agreement is that Canada has unquestionably, since the war. made a far greater contribution, on a per capita basis, than the United States. I base that remark.on a statement which appears in

the report of the international bank for reconstruction, where at page 7 it is stated:
Total post-war assistance extended by Canada has been more than $2,050 million. Swedish aid has been the equivalent of about $800 million and the total credits and grants from the United States have aggregated approximately $15,000 million.
Taking the population of Canada at about 12,000,000 and that of the United States at about 140,000,000, the United States contribution should have been well over S20 billion, in order to be on a parity with the contribution made by Canada. [DOT]
The people of Canada are today being told that they are living beyond their means and that they must accept some form of austerity program. I listened to the Minister of Finance as he modified the term "austerity" program; nevertheless that term has been taken up by the newspapers of this country from one end of the dominion to the other.
I would say, in the first place, that there is no truth in the statement that we in this country are living beyond our means. Nor is there any justification for the second statement so long as we follow sane foreign trade practices, apart, of course, from our moral obligation to help the war devastated countries of Europe.
Let us take the first charge that we are living beyond our means. If that charge is true, then unquestionably Canada must be consuming more than she produces and we must have an unfavourable balance of trade with the world at large. But what is the actual situation. Page 12, table 2 of the foreign exchange control board's report for 1946 show's that we had a net favourable balance of payments with the world at large of S450 million, and deducting from that mutual aid and relief we had a net balance of S351 million. So it cannot be argued that v'e are consuming more than we produce. If we take the first nine months of this year we shall find that the balance has been reduced, but in spite of that fact we still have a considerable balance in our favour. So I would say that it is not so much a question of living: beyond our means as that we are buying too much from the United States and not enough from the other countries of the world. Of course that is not a new situation for Canada, nor is it peculiar to Canada alone. It was the situation of many countries throughout the world prior to 1939, with the result that the gold reserves of the various nations of the world were drained away into the United States and we had the great depression of the 1930's.

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Therefore it must be quite evident that a great deal of the chaos which existed between the two world wars was due to the international trade policies of the United States of America because the United States failed to realize and live up to the principle that international trade must be a two-way street. Instead, she demanded, in return for her exports, either gold or United States dollars, instead of being willing to accept the products of other nations.
I realize that this government is a great exponent of multilateral trade and1 the convertibility of currency. On paper both these schemes look fine. So did the old gold standard look fine on paper. But in practice it is absolutely impossible for such policies to work unless the great trading nations of the world are willing to live up to the very purpose of international trade and accept goods and services in payment for their exports. That is the real purpose of international trade -barter for mutual advantage. That is one of the main reasons why the members of this group so bitterly opposed the Bretton Woods agreement, which was supposed to facilitate the balancing of international trade. But it placed the main responsibility for accomplishing that result upon the debtor nations and imposed severe penalties upon those nations which failed to balance their trade. On the other hand, we realize that today there is also a direct responsibility upon the creditor nations for bringing about a balance of trade. Yet in spite of that fact, no pressure or penalties were applied against creditor nations which failed to accept goods in payment of their exports and thereby forced other nations to have an unbalance of trade. When we were discussing that point we were told time and again that the need for pressure upon creditor nations which we were emphasizing would be taken care of later by certain international trade agreements. Now we have the international trade agreements before us. Like other members, I have found it very hard to get a thorough understanding of these agreements in the short time we have' had them before us, .but I have read the agreerrents through several times very carefully, trying to find some single article or section or clause that places any pressure upon the creditor nations to accept goods in payment for their exports. That is what we were told, during the discussion on Bretton Woods, would be done under these international agreements. Yet we find that absolutely no pressure whatsoever is being placed upon these creditor nations to accomplish that result.
I was interested in a statement that appeared in Saturday Night of November 15.
headed "Trend of world trade is still bilateral," by John L. Marston, Saturday Night's financial correspondent in London. He had this to say:
In the long-drawn-out negotiations at Geneva the real stumbling-block was the United States* t reluctance to open up the home market in return for the freeing of overseas markets for United States exports.
So in exactly the same way that they refused to allow pressure to be brought upon creditor nations under the Bretton Woods agreement, they are still taking the stand that these great nations shall have no pressure applied against them to open up their markets and accept imports in payment for exports. He goes on to say:
These agreements do undoubtedly satisfy the Americans to the extent that they allow rather more freedom of trade to U.S. exporters, while not seriously weakening the great protectionist structure behind which U.S. industry is sheltered (to the detriment, as all the world can now see i-n the dollar famine, of U.S. exporters).
But the agreements are not such as to open the way to multilateral trading in the true sense, and it is quite unlikely that they will reverse the trend towards bilateral pacts, on -the barter principle, which have characterized postwar trading.
I think all members will agree that the lowering of tariffs denes not necessarily mean that any nation has any intention of increasing its imports to balance its exports. This situation was also referred to by the deputy minister of trade and commerce in an address to members of the Electrical Manufacturers Association on October 9, as reported in Foreign Trade of October 18, 1947, from which I quote briefly. He had this to say:
But unless some ways can be found by which the United States will buy more of our products, it is difficult to see how we can continue to be such a valuable customer of the United States.
This is a subject that I suggest is worthy of most serious consideration. It is to be hoped that the I.T.O. conference, in Geneva, will result in some real improvement in such barriers as undoubtedly do exist at the present time. I would like -to repeat, how'ever. what I have said on other occasions, that in the difficult years that are immediately ahead of us, it is, more than ever before, our own resourcefulness that is going to count.
And I should like to interject that if we are to depend upon our own resourcefulness it is important that we do not enter into international agreements of this kind that may restrict our ability to develop our resources.
Then, on the last page he has this to say:
Now that the multilateral system of payments has suffered a serious breakdown for the second time, or perhaps one should say for the third -time in the last generation, Canada and all
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other countries that are engaged heavily in international trade are facing a difficult stage in their affairs. The balance of trade between pairs of countries-that is, the bilateral balance -has become a matter of first importance and will remain so until the mechanism of the multilateral system has once more been placed in ' good order.
Therefore, Mr. Speaker, it seems to me that until the United States of America prove by their action that they recognize their obligation to accept payment for exports with imports, Canada should refuse to take any action which would limit its ability to execute bilateral trade agreements. Multilateral trade can be achieved only when nations recognize and live up to the principle that international trade is a two-way street. Therefore, having in mind the tragic consequences of previous attempts to bring about convertibility and multilateral trade, I am somewhat surprised that Canada should today propose to place itself in the type of strait-jacket provided for in the final act, thereby greatly restricting our ability to develop our resources for the benefit of our people.
Why have attempts at multilateral trade failed in the past? I would say, because the true purpose of foreign trading has been lost sight of, namely, the exchange of goods and services on a basis of mutual . advantage. Instead, nations have attempted to use international trade for the purpose of maintaining full employment in their own country at the expense of some other nation; in other words, an attempt to export their unemployment problem. Therefore I would say that until nations are definitely committed to the true purpose of international trade, multilateral trade is doomed.
I wish to discuss briefly the policy laid down in the final act with regard to the general elimination of quantitative restrictions and the policy of non-discrimination. I turn, first of all, to article XI, the heading of which is "General elimination of quantitative restrictions." Then, if we turn to article XII we find the following, "Restrictions to safeguard the balance of payments." Quantitative restrictions are allowed where a nation has an unfavourable balance of trade. But when we turn to article XIII we find that a nation with an unbalance of trade can only place restrictions against the imports of one nation, provided that it places similar restrictions against all other nations at the same time. It is true that in article XIV there is an escape clause.
I just wish to read it. It states that the rule of non-discrimination need not apply to nations with an unbalance of trade provided, and this is the point I want to read:
Provided that
(i) levels of delivered prices for products so imported are not established substantially 
higher than those ruling for comparable goods regularly available from other contracting parties, . . .
I understand it is under that clause that today we are prohibiting imports of certain goods from Britain. It might be argued that, under section 6 of this article, we need not follow that section because section 6 states that this need not come into force until 1949. However, I understand it is the intention or the desire of the government to live up to the principle of the agreement and not make use of the escape clause to a greater extent than absolutely necessary. The point that we take great exception to in that type of policy is this. Surely, when a nation has an unfavourable balance of trade with one nation and at the same time has a favourable balance of trade with other nations, in order to protect its unbalance of trade with the first nation it should have the right to place a restriction on the imports from that nation without having to place any restriction on the imports from those nations with which it has a favourable balance of payments.
Take the position of Canada today. We have an unfavourable balance of trade with the United States of America; we have a favourable balance of trade with Europe, and yet under these agreements we are not allowed to place a restriction against imports from the United States of America unless at the same time we place similar restrictions on imports from other countries. When you have an unfavourable balance of trade with one nation and a favourable balance of trade with another, surely the logical thing would be to restrict the imports from that nation with which you have an unfavourable balance of trade and actually increase the imports from the nation with which you have a favourable balance of trade. But that is not permitted under this act. As I said, we are not actually governed by it until 1949; but when we reach March, 1952, if the contracting parties decide that the situation is such that that escape clause is no longer necessary it is wiped out, and then a nation is compelled to place restrictions against all nations, even though it may have an unfavourable balance of trade with only one.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Victor Quelch: Just before the house rose at six o'clock I had been discussing the policy of so-called non-discrimination under the Geneva agreements, which is, I believe, a policy that might very well become one of

Tariffs and Trade
vicious discrimination against the weaker nations; and I was somewhat surprised at the defence put up by the Minister of Finance (Mr. Abbott) regarding this policy. He appeared to rest his case chiefly upon the fact that the United States of America were insisting upon a policy of non-discrimination and that therefore Canada should tag along and play Charlie McCarthy.
Before leaving the agreements, I should like to touch briefly on article XVI and article XX. Article XVI deals with the question of subsidies. Before we leave this matter, I very much hope that a minister of the government will give the government's interpretation of exactly what that will mean to Canada. The article reads as follows:
Article XVI Subsidies
If any contracting party grants or maintains any subsidy, including any form of income or price support, which operates directly or indirectly to increase exports of any product from, or to reduce imports of any product into, its territory, it shall notify the contracting parties in writing of the extent and nature of the subsidization. of the estimated effect of the subsidization on the quantity of the affected product or products imported into or exported from its territory and of the circumstances making the subsidization necessary. In any ease in which it is determined that serious prejudice to the interests of any other contracting party is caused or threatened by any such subsidization, the contracting party granting the subsidy shall, upon request, discuss with the other contracting party or parties concerned, or with the contracting parties, the possibility of limiting the subsidization.
It seems to me that at least in principle that does limit our ability to subsidize agricultural products in this country or to maintain parity prices. If we establish parity prices in this country, and export wheat, at a price well below the parity price, and then one of the contracting parties, say the Argentine, claimed that that was to the detriment of their nation and the contracting parties so decided, then at least in principle we would be under an obligation to reduce the amount of the subsidy on wheat in this country. The same thing would apply to subsidies on any other primary product or, for that matter, on any commodity in this country.
Then let us take article XX. It is headed "General exceptions", and reads as follows:
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures-
And then I go down to (g):
Relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.
I take it that means that if we have certain resources of an exhaustible character which we are exporting, and decide that we must conserve these resources, then we would not be in a position to reduce the amount of exports of that commodity unless at the same time we reduced the production or consumption of that commodity in this country. Personally I cannot see any justification for allowing outside authorities to dictate our internal policy in such a way, especially when it might be greatly to the detriment of the people of this country.
In closing, I should like to say it seems to me that this measure will still further encourage the federal government's game of passing the buck. In the 1930's we were continually being told that we cannot improve our condition because it is due to an international situation. In the future, no doubt we shall be told that we cannot do this or we cannot do that because it is contrary to the regulations under the international trade organization, the Bretton Woods agreement or some other form of agreement that we have signed. It seems to me that this, along with some of the other measures that have been passed in recent sessions, is just another attempt to introduce world dictatorship through the back door and reduce this nation to a state of impotency. Fortunately, I do not believe that this house will be so easily hoodwinked on this measure as they were on the Bretton Woods agreement. For that reason I was glad to hear the Prime Minister (Mr. Mackenzie King) say that this measure would be referred to a committee of the house and that every opportunity would be given for a full investigation into it.
Mr. GORDON B. ISNOR (Halifax): I wish to take part very briefly, Mr. Speaker, in this discussion dealing particularly with the Geneva trade agreement as we understand it. I want to say a few words because of the effect it will have on the eastern section of our country from which I come, particularly with relation to the maritime provinces. In connection with the negotiation of the trade agreement, may I first say how pleased I was that the deputy minister of fisheries, Mr. Stewart Bates, attended at the trade conference. I think in a measure we can thank him for the representations made on behalf of the fishing industry, and for some of the features of this trade agreement. I was somewhat surprised this afternoon at the attitude adopted by the hon. member for Vancouver-Burrard (Mr. Merritt)
Tariffs and Trade

in making his approach in a rather political manner and accusing the Prime Minister of this country (Mr. Mackenzie King) of placing this big and important question before us in a political sense and giving it a political background. Coming as the hon. member does from British Columbia, I would have thought that he would be particularly pleased with the terms of this agreement, with one possible exception, namely, canned salmon.


Howard Charles Green: The hon. member had better stick to Nova Scotia and he will not go so far wrong.


Mr. ISNOR:: I will stick to Nova Scotia. But naturally, when these foreigners travel all the way from the west to Nova Scotia, we have to set them right.


Howard Charles Green: We shall be glad to have the hon. member out at the coast at any time.


Gordon Benjamin Isnor: I recall that last year, early in July, when I endeavoured to make a few remarks I was continually interrupted by hon. members from British Columbia and other sections-


Mr. CRUICKSHANK:: Not all of them.


Howard Charles Green: Do npt blame us.


Gordon Benjamin Isnor: Just a minute-from British Columbia and other sections sitting to the left of the Speaker. I had that in mind when I just made brief reference to the attitude of the hon. member for Vancouver-Burrard. Surely he does not overlook the fact that, in the 1911 election, his party created and carried throughout Canada the cry, "No truck or trade with the Yankees." It was unfortunate, I say, that the reciprocity agreement was not brought into effect in 1911, as far as we in the maritimes and particularly those of us in Nova Scotia are concerned. I say with regret that perhaps we would have been in' a far better position than we are today if that had been done. But the fact that the country made that mistake is no reason why we should not continue the practice adopted in later years and make trade agreements which will benefit the country.
I do not want to go back over the imperial preferences, which date back some fifty years, having been created in 1898, revised in 1932, and enlarged in a more beneficial manner in 1937. I want to deal with this agreement as it affects my section of the country. We are particularly interested in two items; that is, fish and lumber. Lumber is among those items on which new and greater concessions have been given. The imposts on sawn and dressed boards of fir, hemlock, larch pine and spruce

have been reduced from $2 to $1 per thousand board feet, a reduction of fifty per cent. The duty free entry of other species of soft wood is bound, so we have no loss there. There is also a reduction in the tariff on cedar to seventy-five cents per thousand board feet, and certain hardwoods enter duty free. Others are bound at 81.50 per thousand board feet. This gives us an enlarged natural market for the lumber of the maritimes. In 1946 Canadian lumber exports to the United States were valued at $59,199,000, a sizeable business in itself.


Mr. MacNICOL:: What year was that?


Gordon Benjamin Isnor: double; nor have I mentioned hay, which jumped from a value of $3S0,000 to S2,720,000.
Is it any- wonder I believe trade in the maritime provinces will continue to expand in like manner in the future under the new Geneva agreement which has just been concluded and is scheduled to come into effect in the new year? Concessions have been obtained on practically every item in the United States tariff of which Canada is the principal supplier.
The President of the United States could not, until 1946, cause more than a fifty per cent reduction to be made in the Smoot-Hawley tariff. In 1946 he was authorized to make further reductions of as much as fifty per cent from the duties existing in January, 1945.
I return to a discussion with respect to lumber, because of the maritime interest in that product. I know the hon. member for Cumberland (Mr. Black) is keenly interested in this subject and will appreciate the terms of this agreement. Canada's lumber and sawmill industry will also benefit by the changes. Both the duty and the tax on most soft lumber have been cut by fifty per cent.
May I offer a further word to my fishermen friends of the maritime provinces, particularly? The fishing industry will benefit from the United States concessions on nearly all species of processed fish. Certain branches of the industry which, in the spring of 1947, were faced with a sharp drop in demand will now have greater access to the United States market.
The duty on fresh or frozen salmon and halibut has been cut from one cent to one-half cent a pound. The rates on fresh mackerel, formerly at one cent a pound, and on frozen mackerel formerly at li cents, have both been reduced to j cent a pound. On fresh or frozen fillets of cod, haddock, hake, pollock the rate has been bound as at present.
There also have been reductions on many textile products of which Canada is a large importer. If I remember correctly, there are something like 600 items listed in the most-favoured-nations schedule. Some of the Canadian reductions will not immediately affect importations, as was mentioned a minute ago; but I do feel that, taking the long view of this agreement, we in the maritime provinces will certainly benefit to a very great extent.
There is one observation I should like to express to the government, and I hope Your Honour will not call me to order if I interject a thought respecting the shipment of goods through Canadian ports. I was pleased the other day when my colleague from Halifax (Mr. Dickey) spoke as he did with respect to

a greater use being made of our Canadian ports. I should like to compliment him upon his excellent presentation at that time, and upon the able manner in which he placed his case before the house. It was an indication of the fine type of man we have, when we see this young man in the house as a representative from my constituency. I am sure all who listened to him were much impressed, and I feel that, as the years go by, the people of Halifax will be proud to have him as their representative in the House of Commons.
I wanted to say a word or two about shipping through Canadian ports. I think shippers in.all parts of Canada should make every possible use of Canadian ports, and I have more particularly in mind those fine ports on the Atlantic. I believe all hon. members know what a wonderful harbour there is at Halifax and I need hardly mention it. I have spoken of it quite often, and the port received considerable advertising during the war because of its fine performance. I sincerely trust that, when I again bring this matter to the attention of the Minister of Transport (Mr. Chevrier) and others, they will not overlook the possibilities of using this port to the fullest extent.
I close by again expressing the thought which, I feel, is uppermost in the minds of maritimers, that these agreements will expand our trade and be of real benefit to the people of those provinces.
Mr. HOWARD C. GREEN (Vancouver South): Mr. Speaker, I know that you and eveiy hon. member of this house will bear with me for a few moments before I begin to discuss the resolution before us, while I say a word in appreciation of the Hon. Grote Stirling who is no longer with us. It is much nicer to be able to pay a tribute to a man who is alive than to someone who has passed on. In this instance, we are fortunate in being able to say a word of praise for our former colleague who sat for so many years for the constituency of Yale. For a long time he was the senior member from my province of British Columbia. He represented his riding for twenty-three years and won seven elections. He served, not only his constituents, but all the people of Canada, in a remarkably fine way. Every hon. member will agree with me when I say that he had the respect and admiration of this house. He did much to keep the standard of public life high in Canada. Now being unable to carry on, he has felt it his duty to resign so that his constituents might have a representative who could be here to look after their interests. On behalf of all hon. members I extend to him, not only our sympathy, but our good wishes for the future.

Tarifjs and Trade
I urge the government to call a by-election in Yale just as soon as possible so that the riding may be represented here when we reconvene after the New Year. I make that request because the riding of Yale is . vitally interested in these trade treaties. I doubt if there is another riding in Canada w-hich is so directly concerned with the treaties now under consideration by this house. The riding is made up of the Okanagan valley which runs for many miles north and south between two mountain ranges. Off to the southeast there is another fertile area known as the Boundary country, and to the southwest another known as the Princeton area.
In this riding there are important mining and lumbering industries, but the main one is the growing of fruit. Not so many years ago men and women came into that portion of our province and, by their energy and foresight, brought the waters from the mountains out onto the dry bench lands and thus developed a remarkably fertile area. Not only did they develop ranches for the growing of fruit, but over the years they have gradually built up a splendid processing industry for the making of fruit juices and various by-products of fruit. I do not believe that there are three finer or more progressive small cities in Canada than the cities of ''Vernon, Kelowna and Penticton which lie in the Okanagan valley.


George Alexander Cruickshank: And Chilliwack.


Howard Charles Green: Because of my friendship for the hon. member for Fraser Valley, (Mr. Cruickshank) I will put the city of Chilliwack in the same class. The principal fruit grown in the area is the apple. When you think of apples anywhere in Canada you think of the Okanagan. When members from the fruit ridings of Ontario or the fruit ridings of Nova Scotia want to buy an apple here in Ottawa even they ask for and always get Okanagan apples.
This development has been achieved only through a long and hard struggle. There has always been the stiffest competition between the Canadian Okanagan valley and the Washington state Okanagan valley, which is really a continuation of the same valley. There is a larger area under cultivation in the state of Washington; their fruit ripens a bit earlier, and they have a much larger home market than the Canadian Okanagan valley. The result has been stiff competition from the state of Washington as well as from the state of Oregon.
British Columbia apples have been dealt a very severe blow by these Geneva treaties. I do not believe there is an hon. member from British Columbia who will deny that fact, no
matter what party he represents. I submit that the people of Yale have been sacrificed by this trade treaty, primarily because they have lost their preference in the United Kingdom market. I would refer hon. members to a press release which was issued by the government to explain the treaties. On page 11 we find an explanation of just what has happened to apples, and I quote:
One of Canada's most important contributions to the general agreement on tariffs and^ trade which has for its purpose the reduction of tariffs, the elimination of tariff preferences and other trade restrictions is the relinquishing of the apple preference in the United Kingdom.
The apple preference in the United Kingdom is gone. The press release goes on to explain that Canadian apples have always enjoyed free entry to the United Kingdom, but that by virtue of the Ottawa agreements a tariff was placed against apples from other parts of the world. So far as British Columbia was concerned, the important factor was that tariffs were placed against apples from the states of Washington and Oregon.
The press release goes on to say:
At Geneva Canada agreed to the elimination of the apple preference during the northern hemisphere marketing season so that now apples from all sources enter the United Kingdom market free of duty from August 16 to April 15 inclusive.
That is the important period. The apple growers have been called on to make more than their fair share of the contributions necessary to make these treaties possible. The compensation that is given is also listed in this press release. Here it is:
Compensation for the apple concession is obtained mainly from the United States hut it cannot be matched with any single item among the United States concessions. It is a part of a mutually advantageous agreement between Canada and its neighbour and other contracting parties.
What has happened in effect as between Canada and the United States is that there has been a small reduction of the Canadian duty against United States apples and a small reduction of the United States duty against Canadian apples. But in normal times it is impossible for Canada to market her apples in the United States. The United States has made a reduction of 16-66 per cent and Canada has reduced her tariff by 37-5 per cent. The result may very well be that the Okanagan apple growers will also lose their market on the Canadian prairies. Time and again they have had great difficulty in holding that market against the United States, and these changes may make it impossible once again for them to do so. The situation is very
Tariffs and Trade

well summed up in a press dispatch of November 18 from Kelowna, reading as follows:
Elimination of the British preference market will mean a return to the old "cutthroat competition'' between fruit producers for markets, A. K. Lloyd, president and general manager of British Columbia Tree Fruits, said here in commenting on the new trade agreements.
Mr. Lloyd, as the British Columbia members know, is the outstanding figure in the fruit industry in British Columbia. The article goes on to say:
Growers who produced nearly 7,000,000 boxes of apples this year fear that Canadian apples and other fruit will have to compete with U.S. produce for the British market under new agreements.
However growers are also worried that they may lose the prairie market to U.S. fruit which ripens earlier than that grown in the Okanagan.
In addition to apples, other fruits grown in that valley and in other parts of British Columbia, including the Fraser valley, will, I think, suffer from these trade agreements. And so I repeat, Mr. Speaker, that when this matter is discussed in the new year there should be a member sitting in this house speaking for the riding of Yale, and once again I ask the government to call that by-election in time to have a member here when the house sits again.
I have dealt only with apples. There is also something to be said about lumber. Lumber is the main industry in British Columbia. Under the Geneva treaties, lumber has lost half of its preference in the British market. At the same time it has been given wider entry to the United States market. No one can yet tell what the result will be, whether it will be of benefit or whether there will be a loss.
Another important product in my province is canned salmon. Canned salmon has also lost half the preference it had in the United Kingdom market, and on that commodity there lias been no compensation given to the fishing industry. If members will refer to page 20 of the press release they will find the reason why, in these words:
This does not-	.
Referring to canned salmon.
This does not, 'however, apply to canned salmon, of which the United States ordinarily has a large exportable surplus, where the duty is bound at the existing rate of 25 per cent ad valorem.
In other words, the United States have refused to give any concession on canned salmon because they have an exportable surplus themselves. What has happened is this, and I am sure that the hon. member for New

Westminster (Mr. Reid) will agree with me because he is an expert on commercial fishing-


Mr. REID:: There are other reasons for the twenty-five per cent ad valorem.


Howard Charles Green: Here is what has been done. The United States duty on fresh salmon has been cut from one cent to half a cent a pound. Fresh salmon are already being bought by United States canners. The price is higher in the United States than in Canada, and it will be that much easier for the fresh salmon to get into the United States market once these treaties go through. The United States buyer is buying our salmon to process them, and the result will be that the Canadian canneries will be unable to get fresh salmon. That will affect the livelihood of at least 10,000 people who are working in our canneries. The result may very well be that Canadian canning companies will be forced to go across the boundary and set up canneries in the United States in order to can Canadian fish, and young Canadians will probably have to follow them across the boundary to get work. There has been a very strong protest made to this government by the minister of fisheries of British Columbia. I have here a press dispatch containing his protest. He points out the various factors to which I have referred and says, for example :
Action which has the effect of shipping raw material out of the province which can be manufactured or processed here is a most retrogressive step.
The cuts in the British preference so far as British Columbia is concerned are serious. But what remains of the British preference is of great value to us. The preference that remains on lumber is of great value and also the preference that remains on canned salmon. Under these Geneva treaties, these preferences which remain need not be touched. Provision is made in the Geneva treaties that the preference agreements may continue in effect.. Take, for example, what is called the Canada-United Kingdom trade agreement. That'.can continue in effect, also, the agreement with Australia and the ones with New Zealand, South Africa and Rhodesia. All these continue in effect, but of course they contain a six months' termination clause. If either country wishes to terminate the agreement all that needs to be done is for it to give six months' notice, and that is quite permissible under these new Geneva treaties.
But the sad fact is. Mr. Speaker, that the Prime Minister of Canada (Mr. Mackenzie

Tariffs and Trade
King) has gone much farther. He has demanded and he has obtained from the British government the right to reduce or eliminate the British preference; to reduce or eliminate the British preference overnight. That will be found in the exchange of notes appearing on page 100 of the final act which the members have in their hands. In the letter from Canada to the United Kingdom of October 30, 1947, we find this provision telling them what they have to agree to:
The government of the United Kingdom recognize the right of the government of Canada 'to reduce or eliminate such preferences.
Meaning what remains of the British preference. That has this effect: if the government wishes to negotiate again with the United States covering some commodity on which we still have a preference, then that particular commodity can be taken out of the British preference; over-night one commodity can be taken out; next month another commodity can be taken out, or they can be all taken out- without the formality of giving any notice whatsoever. That means there is no stability remaining in connection with the trade covered by these preferences. It may very well mean that the preferences are ruined.
It is interesting to read the reply- from the British government to this long letter written by Canada. It consists of just four lines, showing that they had been put on the spot. Here is what it says on page 106:
Sir,
In acknowledging receipt of your letter of today's date in regard to the 1937 trade agreement between the United Kingdom and Canada, I wish on behalf of His Majesty's government in the United Kingdom to express their agreement with what is stated therein.
That is addressed to the chairman of the Canadian delegation at Geneva. In the press release we find the government boasting of what has happened. I refer hon. members to page 4 where we find these words:
There has been concluded on Canada's initiative-
If you please.

a revision of the Canada-United Kingdom trade agreement, 1937. The exchange of letters in this regard is being made public with this announcement. Under this exchange of letters each country undertakes, with respect to goods covered by the relevant schedules of the multilateral agreement to continue to accord to the products of the other treatment no less favourable in general than has been accorded under the existing agreement of 1937, but in^ which also each government recognizes the right of the other to reduce or eliminate preferences. In taking such initiative the Canadian government has had in mind the histori i Canadian
attitude respecting preferences, namely, that these concessions, freely given, are not matters of rigid contractual right or obligation.
That is stating what has happened with regard to the United Kingdom. But we also find this:
It is the intention of the Canadian government to propose to the other commonwealth governments concerned agreements with them similar to that now concluded between this country and the United Kingdom.
In other words, the Canadian Prime Minister is now going to go to Australia, New Zealand, South Africa and to the other empire nations with which we have agreements and say the very same thing to them, that Canada insists on having the right to cancel these preferences or change them over-night. That is why we moved the motion we did this afternoon. We think this policy of the government is wrong; we do not think it can be justified. We think it is very much against the best interests of Canada, and once we get the procedure straightened out, I propose to move the following amendment, seconded by the hon. member for Davenport (Mr. MacNicol).


William Lyon Mackenzie King: Is it the same as the other one?


Howard Charles Green: No. I shall move:
That the said resolution be not now proceeded with, but that the same be referred to the committee of the whole house with instructions to divide the subject matter thereof into two resolutions, one relating to . . .
And then we list the general agreement on tariffs and trade.
. . . and the other resolution relating to the complementary agreement of the same date (April 30, 1947), between Canada and the United Kingdom.


William Ross Macdonald: Order. To keep the record straight, I shall rule the amendment moved this afternoon by the hon. member for Vancouver-Burrard (Mr. Merritt) out of order for the reasons which I gave this afternoon.
Mr, GREEN: I now move the new amendment, Mr. Speaker. You see, the Prime Minister's stand on this question is very peculiar. He is willing to make binding agreements for a period of at least three years with any nation in the world that is not a British nation, but he is not willing to make a binding agreement with a sister nation of the commonwealth. He tells the story in his radio speech made in London, if you please, on November 17. Here we find the story:
If Canada is to play its part in furthering the objectives of the international trade organization, it is important that the Canadian government should have freedom to detei mine the
Tariffs and Trade

extent to which it shall maintain preferential arrangements while carrying out its obligations under the charter.
We do not consider that a system under which the power to reduce the Canadian tariff may be dependent upon the consent of other governments is consistent either with the spirit in which preferences were originally extended by the Canadian government, or with those principles upon which continuing co-operation in economic matters can be carried on between the countries of the British commonwealth.
That is from the Prime Minister's speech in London on November 17. In other words, he said to the other nations of the commonwealth, you accept this proposal of mine, or else. This is a policy of isolation within the commonwealth and, Mr. Speaker, that is a very dangerous attitude for a partner to adopt in any partnership, no matter whether it is a partnership of nations or partners in a commercial business or in a profession. It is a very dangerous attitude for a partner to adopt, and it is a very dangerous attitude for Canada that has been taken by our Prime Minister.
Why did he take it? He gave us some of the story last night, leaving out all the gaps that were unfavourable to him. I never before heard such a smug speech in this house. Everything done by the Right Hon. William Lyon Mackenzie King was perfect!


Douglas Charles Abbott: Hear, hear.


Some hon. MEMBERS:: Hear, hear.


Howard Charles Green: And some hon. members across the way are simple enough to believe it.


James Garfield Gardiner: The electors agreed with it.


Howard Charles Green: The electors have been fooled at times but they are not going to be fooled this time. _ For example, the Prime Minister said that the unemployment came about between 1930 and 1935 when Mr. Bennett was in power; actually unemployment was here in 1930 before Mr. King went out of power, but he would not admit there was any unemployment in Canada until he found himself an unemployed Prime Minister.	*
Last night the Prime Minister very carefully forgot that the Smoot-Hawley tariff had been enacted by the United States in 1930 and that the Ottawa agreements were not an offensive measure by Canada and by the sister nations of the commonwealth, but were a defensive measure to save this country and to save the other nations of the commonwealth.
The present Prime Minister and the Minister of Veterans Affairs (Mr. Mackenzie) from my home city of Vancouver-and he should have been ashamed of himself-fought in this house day after day against these Ottawa agreements, fought them at every stage.


Ian Alistair Mackenzie: I rise to a point of order.


Some hon. MEMBERS:: Sit down.


Ian Alistair Mackenzie: I submit to you, Mr. Speaker, as a simple elementary proposition of parliamentary procedure that no hon. gentleman has the right to say of another hon. gentleman who has conscientious convictions in regard to this matter, that he should be ashamed of himself. In this case the judgment of Canada vindicated the judgment of the Prime Minister and of the Minister of Veterans Affairs.


Howard Charles Green: Well, now, I tell you, Mr. Speaker, there is one conviction that the minister has, and it is a very wise one. He has the conviction that he is going to hang on to the ticket for one of the vacant seats for British Columbia in the senate.


Ian Alistair Mackenzie: Who told you that?


Howard Charles Green: I do not blame him for that. That is the only way he will get a seat in this building.


George Alexander Cruickshank: That is pretty small.


Howard Charles Green: W'hat about the present Minister of Justice (Mr. Ilsley)? He was the one exception in the Liberal party. He voted for the Ottawa agreements. It would be very interesting to hear him say in the house what he thinks about the treatment the Prime Minister is now meting out in connection with these preferences. The Prime Minister has now announced this Liberal policy, to the effect that the empire agreements are voluntary undertakings. They are not agreements any more; they are now just voluntary undertakings. In 1937 he had the chance to enunciate that policy, because he brought in and put through this house an act extending the agreement with the United Kingdom. At that time we did not hear anything about this new Liberal policv on preferences.


Ian Alistair Mackenzie: You will find it in the 1897 declaration of policy. You will find the word "voluntary" used frequently.


An hon. MEMBER:: Sit down.


Ian Alistair Mackenzie: I will not sit down.


Mr. CASE:: Then stand up.


Howard Charles Green: Now at last the Prime Minister and his Minister of Veterans Affairs have the chance to scuttle these preferences, and that is exactly what they are trying to do in this exchange of letters.


Ian Alistair Mackenzie: We heard that before.


Howard Charles Green: And you are going to hear it again.

Tariffs and Trade


Ian Alistair Mackenzie: It will not do you much good. Remember, "No truck or trade with the Yankees".


Howard Charles Green: So much for the preferences. Now I go on to a further point, Mr. Speaker. The purpose of these Geneva treaties, so we are told, is to free trade, to make for freer trade across the world. That was the lovely, rosy picture the Prime Minister painted here last night. If he believes that-if he really does believe something this time-there is a move he can make at once and it is this. He can lift the prohibition on imports into Canada from commonwealth nations and from countries to which we have lent money. We demand that that be done at this session. Here, under this austerity program, we actually have an embargo placed on importations from those empire countries and from the very countries to whom we have lent hundreds of millions of dollars, and that embargo is placed on their imports because we have been buying too much from the United States.


Alfred Johnson Brooks: That is Liberal logic.


Howard Charles Green: That is some more of this wonderful Liberal trade policy. Canadians need these goods. Britain, Australia and other nations of the commonwealth, as well as France, the Netherlands and Belgium want to be able to send us goods in order to pay off the loans that we have made to them. Let us consider Australia; and we on the Pacific coast are vitally interested in Australia. Certain imports from Australia were cut off over-night. I have here a press dispatch of November 26 from Canberra which reads as follows:
Prime Minister Chifley has told the parliamentary Labour Party that Australia's dollar position is deteriorating daily and further severe import restrictions from dollar areas will have to be imposed soon, Reuters News Agency said todav.
The report came as Canada's import ban on Australian canned fruits shocked Queensland pineapple growers. The growers said first news of the embargo, caused by Canada's own import restriction policy imposed last week, was cancellation of a Canadian order for 3,006 cases of canned pineapples packed from the winter crop.
Our trade with Australia is one-sided as it is. I have here the figures for each of the years from 1941 to 1946 inclusive and for the nine months ended September, 1947. Our imports from Australia in those years were S104 million odd. Our exports were almost three times as great, namely, $321 million odd. The balance of trade against Australia was $217 million odd. And now the Canadian
government just arbitrarily shuts off these imports from Australia. That is shabby treatment of a sister nation, Mr. Speaker, and the prohibition of imports is shabby and foolish treatment of our allies who want to repay us the money they have borrowed from us. The ridiculous part of it all is that such a procedure was not necessary under these Geneva treaties. Provision is actually made under article XIV, paragraph 6, clause (a), whereby Canada did not need to take that course at all. Yet it has been done. Last night the Minister of Finance (Mr. Abbott) gave the answer, this Minister of Finance who takes all these things so light-heartedly, although out across the country he has made hundreds of Canadians face ruin by his actions in the last few weeks, and by his delay of months in taking steps to meet this emergency situation. He gave the reason last night and it will be found on page 95 of Hansard. The reason is this:
The United States in particular attaches great importance to the non-discrimination principle. While it possibly could not be called a fetish with them, it is a principle to which great importance is attached. The success of this emergency program and the smooth functioning of our economy depend upon the whole-hearted cooperation of our friends to the south. That has been evidenced by their willingness to make us a loan of $300 million.


Douglas Charles Abbott: Does my hon. friend deny that statement?


Howard Charles Green: That has been pleaded.


Douglas Charles Abbott: May I ask my hon. friend a question? Does he deny the truth of the statement I made yesterday, that we need the whole-hearted co-operation of the United States for the success of our emergency program and the smooth functioning of our economy? It is a simple question and can be easily answered by my hon. friend.


Howard Charles Green: If the Minister of Finance will wait for about two minutes, he will find out exactly what I think about him and his
policy.


Douglas Charles Abbott: If my hon. friend does not wish to answer, that is all right.


An hon. MEMBER:: Sit down.


Douglas Charles Abbott: I should like to point out, Mr. Speaker, that I answered every question that -was asked of me yesterday.


An hon. MEMBER:: Sit down.


Douglas Charles Abbott: If my hon. friend does not want to answer the question I asked, that is fine.


William Ross Macdonald: I rather feel that this whole discussion is out of order. If I
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recall correctly, the Minister of Finance has not yet spoken. The reference, therefore, is to a debate on another subject, in the same session of parliament, which is not allowable.


George Alexander Cruickshank: This is a new bid for a new leader.


An hon. MEMBER:: We had one last night.


Douglas Charles Abbott: My question remains unanswered.


William Ross Macdonald: Order.


Howard Charles Green: I have not the slightest intention of being discourteous to the Minister of Finance.


Douglas Charles Abbott: I know that.


Howard Charles Green: May I say in all seriousness that I think he will find in my next remarks that I answer his question very fully and, I hope, to his satisfaction.	.


Douglas Charles Abbott: I think I asked a simple question, but I shall be glad to wait.


Howard Charles Green: Most of your questions are simple, and this is one like the others.


Douglas Charles Abbott: Most of my hon. friend's answers are equally simple.


Howard Charles Green: The Minister of Finance gave the answer, and the answer he gave can be summed up in these words, which I think the Canadian people should consider very carefully. The words are, " The United States wanted it done that way." Once again, right through the Prime Minister's story-and this is not the first time with this Prime Minister -ran the thread that we must not do anything that the United States would not like.


George Alexander Cruickshank: "No truck or trade with the Yankees."


Howard Charles Green: What a pitiful attitude for the government of any free nation to take!


Ian Alistair Mackenzie: "No truck or trade with the Yankees."


Howard Charles Green: Certainly that attitude will be laughed at by the people of the United
States.


Douglas Charles Abbott: Is my hon. friend going to answer my question.


Howard Charles Green: Today, instead of a drive
to develop Canada, we find a drift into dependence on the United States, with this Mackenzie King government leading the way. The Prime Minister spoke of the wonderful timing he had given this austerity program. Actually the timing was this: the government was waiting for the Marshall plan, leaning on the United States, hoping the United States

would come along and drag us out of our troubles. One result is that Canada now has to go to the United States on bended knee and ask for a loan, which never would have been necessary if this government had moved to meet the situation earlier. I may tell the Minister of Finance (Mr. Abbott) that this American loan is not popular in British Columbia with the people of any party, even among his own followers.
This drift into dependence upon the United States is admitted here in Canada; it is being talked about in the press. I have here an editorial from the Vancouver Sun of November 25 and the Sun is a supporter of this government.


Ian Alistair Mackenzie: Oh?


Howard Charles Green: The minister has had a good deal of help from it. The Sun said:
The great plan

of which Mr. Howe is to be principal designer-to re-orient Canadian industry fits neatly into this Washington picture. That plan, as presently understood by the Canadian man in the street, is intended to reduce Canada's dependence upon American-made goods, and at the same time increase Canadian sales to the United States. As it is understood in those Washington circles which have bothered to think about it-
This is the point I emphasize:
[DOT]-it means that Canadian production would be tailored to supplement that of the United States.
A week ago Suhday we had Walter Winched, the famous American radio commentator, saying something to this effect:	"At a
very early date Canada and the United States are entering into an economic union." Then there is this foreign letter from the Whaley-Eaton Service, a reliable Washington service, which was read this afternoon by the hon. member for Vancouver-Burrard (Mr. Merritt) but part of which I should like to repeat:
Also, in consequence, Canada would tailor her whole production in such manner as to supplement-
To supplement, if you please!
-that of the U.S.; as far as could be achieved without damage to the immediate needs of Europe's recovery, she would concentrate her agriculture, mining and industry on the chinks in America's productive armour.
If this drift continues there can be only one end: Canada will be a satellite of the United States, and that is a very dim future for this nation. We must not sponge on the United States economically or for our ideas or for our defence. Mind, you, Mr. Speaker, the temptation to do so is perfectly natural. It has always been there and always will be. Ours is a far-flung nation, with the people settled in a narrow strip along the boundary,

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living beside a much stronger nation of many more people. The temptation will always be there. It is here now; the temptation is great now, because the United States is the greatest power in the world. Mind you, that country could not be more friendly to us than it is at the present time, and for the United States we have the most friendly feelings in return. That nation is now leading the world. It did not ask for the position but had it thrust upon it by virtue of the war, and is accepting the responsibility in a splendid way. So I say that today there is a tremendous temptation for Canada to lean on the United States. And there will be that temptation in future.
But from the very beginning of this nation, right from the time when there were no English-speaking people in Canada at all, that temptation has been resisted. It was resisted by the ancestors of our French-speaking compatriots hundreds of years ago. They had the same temptation and stood out against it. At various times in the history of Caanda we have stood out against that temptation.
I suggest to you, Mr. Speaker, that the destiny of Canada is not to be a satellite of the United States but to be a great world power standing beside the other nations of the commonwealth and beside our trusted ally, the United States. If Canada makes that her aim it will be in the best interests, not only of ourselves, but also of the United States They want a strong Canada, standing on her own feet. They want a strong commonwealth able to stand beside them to meet the terrible problems facing the world at the present time.
This is one of those vital times that come every so often in the life of a nation, one of those periods that affect the trend in that nation for decades and perhaps for generations. I urge upon all the members of this house and upon Canadians from coast to coast: let us stop this drift to dependence upon the United States. Instead, let us go all out to develop Canada, our own nation.
Therefore I move, seconded by the hon. member for Davenport (Mr. MacNicol):
That the said resolution be not now proceeded with, but that the same be referred to the committee of the whole house with instructions to divide the subject matter thereof into two resolutions, one relating to
"the general agreement on tariffs and trade, including the protocol of provisional application thereof, annexed to the final act of the second session of the preparatory committee of the united nations conference on trade and employment held at Geneva from April 10 to October 30, 1947, together with the complementary agreements of October 30, 1947, between Canada and the United States of America,"
and the other resolution relating to "the complementary agreement of the same date (April 30, 1947), between Canada and the United Kingdom."
Right Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): Mr. Speaker, I wish to take only a moment of the time of the house, and I do not wish to be controversial in the slightest degree. In case I wish to take part in this debate later on,
I may have to ask the house for the privilege of doing so, but at the moment I wish to identify myself in the closest and warmest personal way with the remarks of the hon. member for Vancouver South (Mr. Green) concerning a gentleman who has left our ranks within these halls, whom I regarded as one of the finest parliamentarians I ever met. In a word, as one who was politically opposed to him, I want to say I never heard this gentleman say an unkind word against a political opponent. He was one of nature's grandest gentlemen. His departure is a great loss to this assembly. Let us hope that he may yet spend many years with his gracious wife and that it may be long before those of us who remain within these halls, may say of him:
This be the verse you grave for me;
Here he lies where he longed to be;
Home is the sailor, home from sea,
And the hunter home from the hill.


Alistair McLeod Stewart: Mr. Speaker, I do not join those who have greeted this general agreement on tariffs and trade with eulogies. On the other hand, neither do I join in the condemnation which has been heaped upon it in some quarters. I prefer to reserve judgment. I should like to see this measure submitted to a committee of the house, perhaps the banking and commerce committee, where we can, with the aid of witnesses and preferably those who had some hand in formulating these policies, ascertain the facts and make up our minds with respect jo them. I have formed certain tentative conclusions at the moment, but I am withholding judgment as to whether they are right or wrong. I fear, however, that this general agreement is now only an admirable historical document.
The nations who have signed the general agreement- hope to see the rebuilding of multilateral trade. The success of multilateral trade depends upon the free convertibility of currency. I suggest that there will be very few freely convertible currencies in the world in the predictable future; and, if such is the case, multilateral trade is going to fall by the wayside.
1,58
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I say that if we do not have free convertibility of exchange we shall have no multilateral trade and, regrettably, this agreement will die a-borning. Twenty-three nations have signed it, and I believe that of those 23 only one has what we would call free convertibility of currency. I refer to the United States. We do not in Canada; and we cannot at this juncture afford to have controls raised from our exchange. Anybody who suggests that Canada should return to free exchange is guilty of economic lunacy, because the effect on the workers and farmers of this country would be little short of devastating.
We are faced with the fact that throughout the years we have had an unbalance with the United States. In the past we have made it up by converting currency from other nations into United States dollars. If currencies are frozen we cannot do that. How then do we meet this unbalance with the United States? Since confederation we have imported roughly $27 billion worth of goods and we have exported about $18 billion worth. As I say, this unbalance is perennial. We may try to balance our trade with the United States by increasing exports and by reducing imports, but I do not think either of these measures will solve the problem.
Therefore we are faced with this distinct possibility, that for our economic preservation Canada will be forced into a bilateral agreement with the United States; and when we do that we shoot galley-west the principles which underlie the general agreement on tariff and trade.
I point out these facts for the consideration of the house. I think there is great validity in my fears. Unfortunately, if I a.m right, I am forced to this pessimistic conclusion that this general agreement is not an ignoble memorial of days which are dead and gone.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, let me say I am very much surprised to hear some of the views which have been expressed in the house recently regarding the liquidation of the British empire in the matter of preferential trade within that empire. After all is said and done, those of us who come from Ontario, including Mr. Deputy Speaker who now occupies the Chair, know that is so.
Let me point out that during the last session of parliament, as far back as February 10, I saw this disaster coming, in view of the fact that the house had passed, almost unanimously, the Bretton Woods agreement, and the further fact that we had accepted the principle of the American loan which, by sections 6, 7 and 8, eliminated any hope of

preferential trade treatment, inasmuch as agreement was given in that loan not to have any discrimination or trade barriers against the United States.
Let us look at this thing from a common-sense point of view-and there is very little common sense shown in the house on some occasions. The people back in the constituencies know more than we do about preferential trade. You, Mr. Deputy Speaker, will know that about 2,500 American industries had to cross the border, under preferential trade, in order to locate their Canadian plants. They established plants and we saw the amount of labour that that produced for Canada.
We in Ontario have supported the principle of preferential trade. Speaking to a meeting in my constituency the other day, I said:
Preferential trade which had saved Canada from an even more severe depression between two wars had received no support other than lip service from any party at Ottawa.
Here we have a proposal with regard to the Geneva agreements. They selected a great place when they chose Geneva for their conference. We spent six or seven millions of dollars of this country's money on trips of members to Geneva. It was supposed to be known as "the booby prize" for those government members appointed by the government for a nice, soft trip there to its sham meetings. The place is ruined today. One can read only two or three lines in the London Times with regard to the closing of the whole sham thing. But they selected a very favourable place for their work on the international trade talks last February.
As I say, we have had nothing but lip service for preferential trade. The government sent its representatives to Geneva who have refused to ask for empire preferences. Away back last spring, the British government asked for an empire conference. With whom was it to be? It was to be with the senior dominions before the Geneva meetings of Canada, Australia and New Zealand, and was to deal with preferential trade. New Zealand and Australia supported the calling of that conference. Where was Canada? She was nowhere; she would not go or attend it. However, as I say, the American loan and the Bretton Woods agreement were agencies in the liquidation and scuttling of the British empire.
In my opinion, terms of the loan from the United States were more like the ruthless and vindictive demands of a victor over a fallen and vanquished foe than an agreement between allies, and it was apparent that but for Britain and the dominions holding out as they did, all would have ended and there would have been a complete collapse of civilization.

Tariffs and Trade
When I addressed the meeting to which I have referred I said:
Geneva crucified any hope of bringing preferential trade up to date and, like John Brown's body, they hanged it on a sour apple tree. Widespread unemployment in Canada would be an indirect consequence of the Bretton-Woods agreement and the American loan tied to it, with the Geneva agreements.
That is correct. There is very little difference if you look at this problem from the beginning, very little difference between it and the reciprocity which was proposed away back in 1924. I spoke in the House of Commons at that time.
I would ask particularly the attention of hon. members from the Toronto district, because we know the value of preferential trade. In the Parkdale riding, and in other Toronto ridings, United States firms, because of the British preference, established plants. I refer particularly to those established in ward 6. Here is what I said back in 1924; and when I said it I was supported by a powerful newspaper, the Toronto Evening Telegram, the only paper I know of which stood up and, as a great British pioneer, supported this principle from the beginning. There may have been one or two others, but I do not know of them.
Speaking in the house in 1924, I said:
All I can say is this that if such a policy of free trade and reciprocity is adopted by the people of the country it means that we will go back to where we were in 1878. Industries will be ruined; people will be out of work and the times will be ten times worse than they are now. I may say further to the Canadian Council of Agriculture that free trade and reciprocity with the United States would make a Lazarus out of a country that Sir Wilfrid Laurier professed to have made a nation. That proposal would exhibit the Canada of Queenston Heights, of St. Julian, of Vimy Ridge, of Passchendaele, of Aimiens and many other fields of glory, as a beggar for the poor favour of reciprocity and free trade.
That is correct. How did this belated proposal come to the house? Why do we have this proposal from the government of the day. who signed it, and is it in effect now? This matter should have been referred to the Supreme Court of Canada on a reference, which has the power to decide such things, as to whether it is legal. The matter came up in the house on February 10 last. The leader of the government, the Secretary of State for External Affairs (Mr. St. Laurent) replied to a question which I asked on February 10 in connection with empire preference by saying that the government would look into it. I had said to him in the house that the Hon. Doctor Coombs, director general of reconstruction of Australia, had said that "the
empire preference was doomed," no matter how much Australia or other food producing countries wanted to keep it. I asked if the government were prepared to make a statement and the minister said he could not make one then.
There was a meeting in London on March 11. Then the hon. member for Danforth (Mr. Harris) moved for the production of certain papers, but they were not brought down, only a copy of a speech by Mr. Attlee in the House of Commons at London, evading it and saying by the American loan clauses 7 to 9 it was out.
This matter may be referred to the committee of the whole house, and all that that committee can do on it now is to conduct a post-mortem. The agreement has been made, signed, sealed and delivered over our heads by the government. The trouble is that we have surrendered all along too much political, financial, economic, military and social power initiative to Washington. That has been the trouble all along. If this agreement goes to a senate committee all they can do is just conduct on it a post-mortem. The United States would respect us much more if we were to tell them the truth, the whole truth and nothing but the truth. All along Great Britain and the British fleet have protected these shores. They have protected them for a hundred years and have given them the best security during four wars, for two centuries. Allowance should be made for that.
This is just playing Santa Claus to America, for Christmas which is two weeks away tomorrow. Some people say, "There ain't no Santa Claus," and a lot of people back home are saying. "There ain't no House of Commons." All these things are being conducted over our heads without any authority. What about the freedom and supremacy of parliament and all that? I have always been a supporter of the British empire. If we take the resources of the motherland and the other countries of the empire it will be found that they are vastly superior to the total resources of either the United States or Russia.
In my opinion, we are going back to the days of the Family Compact in 1837 when the executive ruled the country under crown authority. We have to go back to those days to find anything like what is being proposed here now. The government is going over the head of the law courts and the House of Commons in all this.
I notice that there is a difference between the notice of motion in yesterday's order paper and the one appearing today. The one under date of Wednesday, December 10, is
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at least ten lines shorter than the one that appeared yesterday. The Prime Minister yesterday read the resolution:
Resolved that it is expedient that parliament do approve the general agreement on tariffs and trade

In the motion today, the word "expedient" does not appear. This thing is not expedient, and yet it is going to create widespread unemployment in this country and cause the closing up of a great many industries. It is just free trade and unrestricted reciprocity with the United States. It will mean the ruination of all business, large and small.
On May 9, 1947, I raised this question in the house when reference had been made to preferential duties in the budget. I reasserted the policy of Sir John A. Macdonald who had said back in 1844 that the prosperity of Canada depended upon its permanent connection with the mother country. In 1878 he introduced the policy of protection which made this country great. That is the policy we should follow, the empire first, last and all the time.
Trade, should follow the flag and the flag the trade. We should not give up British preferences. My hon. friends opposite and my hon. friends to the left used to believe in free trade. They said that the grain trade should flow north and south instead of east and west to Britain and our allies, and the result was that on one occasion wheat went down to thirty-eight cents a bushel. Mr. P'ielding and Sir Wilfrid Laurier in 1897 brought in preferential trade within the empire and the six cents preference on grain. That policy should have been continued, but it was ended in 1938.
The budget of last May forgot that. I was the only one on these benches who voted against the Bretton Woods agreements. I have always been a strong supporter of preferential trade within the empire and shall *continue to be. I believe that a large body of public opinion supports it at the present time. What did free trade ever do for the [DOT]dominions or for the people of this country? As a result of British preferential trade, 2,500 United States branch plants and affiliated industries were established in this country, many of them being manufacturing establishments. These branch plants were set up in [DOT]Canada to take advantage of the British preference. I will oppose any change in that policy.
In 1945 when Germany was beaten-the mother country with the help of the dominions ' which went it alone for two years was mainly .responsible for the victory-the mother

country was at the height of its power. The same was true of the dominions. Before the announcement was made on November 17 last, we had agreements in force in connection with preferential trade with Great Britain, Eire, Australia, New Zealand, South Africa and the British West Indies, as well as with the United States and twenty-eight other countries.
The government has no mandate from the people of Canada for all these leap in the dark agreements. We have tossed empire preferential trade to the four winds just at a time when business, both retail and wholesale, is hamstrung. We launch all this wave of internationalism and totalitarianism without any mandate from the people. No one, not even the Canadian government, knows where it all will lead to. The people, like parliament, are all in the dark with all this maelstrom of countless agreements and petty meddling with trade and commerce. Business has not been consulted and no one knows, where all this will lead to. Our main mistake has been the surrendering of too much financial, military, economic and social initiative to Washington.
Australia, New Zealand and the other dominions held a meeting before the Geneva meeting. Canada refused to attend it. However, we now have these series of agreements which are nothing more than a Chinese puzzle. The empire has been sold down the river. All we have in return is a Marshall plan which, after a year, is still in the blueprint stage. Even the right of Canadians to call themselves British subjects has been cancelled by the Ottawa folly of separatism, isolation and drifting out of the empire.
We are to have a standing army of bureaucrats with autocratic powers. We are losing every semblance of liberty in Canada. For two years the government's economic policy has been made up of controls, rationing, restrictions, priorities, exhortation and inflation. Now that it has landed the country m such a mess, all the government can think of to do is to prescribe a lot more of the same medicine. There are to be new controls over capital investment, and all trade and commerce and imports, the one sure long-term remedy. There are to be tighter allocations of materials.
I received a letter from the founder and author of this policy of the Ottawa agreements of 1932 shortly before he died, from our great Prime Minister, Lord Bennett.
In a letter to me Lord Bennett said:
The only great agricultural market left in the world is Great Britain. We acquired a preference in that market for wheat at six cents a bushel, which Sir Wilfrid Laurier said he

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would give almost anything to secure. It is equally true that the preference on apples and pears, et cetera, meant the sale of 1,000,000 barrels from Nova Scotia in one year. What we lack is markets for our exports, and if anyone thinks that we are going to find in the United States a market or either agricultural products on any substantial scale, or for manufactured goods, I think he will be mistaken ami find that the only thing they are willing to take from us is raw material from which to manufacture finished products.
There is one thing that you must be proud of and that is that you have consistently during a long term of public life realized the value of British markets to Canada, and I am satisfied that on analysis it will be found that there is not much to be obtained by us in foreign countries as markets except for small quantities of our products, and then only when they cannot be secured more cheaply and near at hand.
Keep up your courage. You will not surrender the convictions you have held so well during a fairly long lifetime. I really find it difficult to think that Canadians do not realize that except for agricultural products we have no substantial markets except those of the United Kingdom. We will hope for the best.
In his last speech in the House of Lords just ten days before he died, Lord Bennett made a prophecy when he saw what was being done then. He said that, in the days to come, history would say that the abandonment of the British preference was the empire's darkest hour.
The government of the day has no mandate from the people of this country to put through these agreements. I have a great admiration for the United States. I admire what they have done. They deserve great credit for lease-lend and for their plan to aid Europe, but I regret that for two and a half years Britain, with the aid of the dominions, fought the last war alone. The United States today is going back to the days of the economic power politics.
This policy is short-sighted and wholly mistaken from the point of view of the United States' own interests. If successful, it can lead only to a repetition of the disaster of 1931, from which the United States suffered more than the rest of the world. Any loans which the United States grants to Europe on its terms cannot possibly be repaid, while the loans will, sooner or later, be universally repudiated. Mr. Amery said that the fatal mistake made by Great Britain and, in large measure, by other countries had been its endeavour to conciliate the United States and facilitate the securing of its help by pretending to agree with the aims of the United States policy when we knew those aims to be out of date and impossible of fulfilment. The only way to avoid further misunderstanding and embitterment for all concerned, he said, 6849-11
was to speak frankly and to point out that, while grateful for such help as the United States may in her own interest care to give toward recovery, it must be free from all conditions which make that recovery impossible. On that issue there is today no room for further pretence or equivocation. Mr. Amery said:
Our self-respect, as well as our sheer necessity, demands a clear and unmistakable declaration of British independence.
These trade agreements should, in my opinion, be defeated.
The failure of the government at Ottawa to grapple with the urgent problems facing it, its "wait and see" policy, is responsible for the conditions in which we find ourselves today. Its "wait and see" policy has brought on this dollar crisis. Ottawa has failed to put recovery before party legislation. We have had nothing but party legislation from the Minister of Agriculture, (Mr. Gardiner). Ottawa has completely failed in the last two years to put Canada's recovery before party legislation. Canada supported the loan to Britain and the Bretton Woods agreement but failed to put first things first. It should put its own house in order and have a new deal and a new wage policy such as I have enunciated.
These agreements would upset our whole economic policy, the policy which we have followed since confederation. They mean out-and-out free trade. They sound the death knell of preferential trade within the empire. Our primary duty is to secure redress of the grievances of our people. The government at Ottawa has shown no evidence of vision, and "without vision the people perish".
The totalitarian state over-run by internationalism is a menace and socialism, of the Marx and Lenin type now copied in Britian, has a real threat to the freedom and liberty of the individual. I am absolutely opposed to dictatorship over the people of Canada by Ottawa and the handing out to a vaster bureaucracy than has ever been attempted here the control over lives and property of individuals proposed by the present government. I clearly saw in December. 1945, the coming of this tragedy when I opposed strongly the Bretton Woods and American loan agreement which has been the cause and effect of this dollar situation and, along with the United States loan, has led to attempts to liquidate and dissolve the British empire.
I would use the old national policy of protection for capital and labour and make both of them conform to humanizing industry in Canada and not nationalizing it. I would
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harmonize industry, not nationalize it. I stand where I have always stood, for a national policy brought up to date to meet after-the-war conditions and for the mother country. I have never abandoned and never will abandon such a position reached by me over the years from intensive study and deep conviction. I am for liberty and freedom for industry. I am for eliminating its being hamstrung and being placed in a strait-jacket. I would humanize it and create a spirit of good will, with harmony, companionship and comradeship individually, providing a means and incentive to all workers and toilers to rise to the top by their own free will and by theit own ability, with a fair chance of equality of opportunity so as to acquire increased production and a higher standard of living. That is what is being done by such industries as the Bell Telephone Company and others, which are now doing so well. They are seeing to it that their employees take stock in these companies.
I do not know that I have anything further to say, except that we are at the parting of the ways, as I said in the house on the budget speech last June. I criticized the budget because it forgot all about the British empire. The policy that they should follow is the empire first, last and all the time. Trade should follow the flag and the flag the trade. I voted against the Bretton Woods agreement because I saw the dangers of liquidating empire trade and preferences. I said that the whole future of the mother country depended on the dominions. Without them she would become a second Denmark at the edge of Europe and we would have little or nothing to say in the peace. The resources of the empire are vastly superior to those of Russia and the United States because they are land entity propositions, while the empire is spread over the seven seas. At no time has it been more necessary for Canada to give support, even if it is only moral support, to the motherland. Our foreign policy should be wrapped up with that of the mother country.
Britain has forty-seven million people. She can feed only some twenty-seven million of them. Where is she to find the food for the others without the help of the dominions? Mr. Churchill said the other day that twelve million people would have to migrate from the United Kingdom unless the policies in that country were changed because she is unable to support them.
Here we are sitting for weeks and months doing nothing. We sat here from last January until the 17th of July and the government of the day told us nothing about the Geneva agreements. We heard not one word about them, although the meetings were going on all 
the time. On February 5 the Secretary of State for External Affairs (Mr. St. Laurent) told us something about them. Canada refused Britain's bid to join Australia and New Zealand in empire conference before the Geneva trade talks, and these new Ottawa deals have upset the whole tariff policy of Canada since confederation.
As a matter of fact the present government never believed in the British empire in the first place. Many of them were free traders. Some hon. members to my left are free traders. They believe that the grain growing industry is north and south. Our best customer is Britain. She stood by us during the two wars.
I am glad to see the hon. member foi Temiscouata (Mr. Pouliot) in his seat tonight. I was down in his constituency in which Sir John A. Macdonald had a summer home. Sir John A. Macdonald visited Riviere du Loup for seventeen summers, from 1873 to 1890. I wanted to find out what was going on in Ottawa. I was told, "If I want to know what has been going on in Ottawa for the last eight months do not hang around Ottawa; do not hang around Montreal or Toronto or Quebec." That is why I went to Riviere du Loup and learned a lot. I asked one gentleman what he thought of Sir John A. Macdonald. He said to me with much respect that he was loved by the clergy and by the people. He said to me. "I do not know what you call it, but he had sixty-five seats in Quebec."
I do not object to the Prime Minister (Mr. Mackenzie King). I have a great respect for him; I have known him for a long time. In fact his father used to sit on the bench with me when I was the manager of the Osgoode Hall football team, but that has nothing to do with the question before the house. I would not object to any prime minister, be he Liberal, Conservative or anything else, during the war when the enemy was at our gates, announcing policies himself, and all that kind of thing. But the war is over. What should a political party do? A political party should stick to its principles. Hon. gentlemen opposite have forgotten all about their principles. They abandoned the British preferences in 1938 and others followed them. The present Minister of Agriculture was a free trader. He did not believe in protection. What has he done since the war? They have had fifteen or sixteen different forms of protection. If you have 400 acres and you sowed only 100 acres the government would give you a war bonus of some kind, a bonus not to grow a crop at all.

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As I say, if a party sticks to its principles it need have nothing to fear, but when it runs away from its principles that is another matter. People sometimes forget why political parties were formed. They were formed to protect the greatness of the country and the welfare of its people. When one criticizes the party system he forgets its great virtues; he forgets what the mother country gave to the dominions and what she has done for the people of the world.
The central provinces of Quebec and Ontario are great industrial provinces. These provinces should be consulted before this house is divided. I did not like the idea of Bretton Woods and I oppose it. I believe this measure should go to a committee of the House of Commons, and if we have not time to deal with it before Christmas, then we should take a recess. We should not give up the British preference.


Mr. JEAN FRANCOIS POULIOT (Temis-couata):: I thank the hon. member for Broadview (Mr. Church) for his reference to his trip to my constituency. Everybody was delighted to meet him. We had heard about him as the great and perennial member for Toronto during the first war and several years thereafter, and we know he has done more for the city of Toronto than any other living man. Therefore, when he came to my constituency he was not a stranger. Everybody was delighted to meet him. I invite all my colleagues to come to my constituency. The Conservatives will have an opportunity to make a pilgrimage to the house where Sir John A. Macdonald spent so many summers, at St. Patrick; and the Liberals may visit Mr. Taschereau, a former premier of Quebec; so that everybody will find some reason to visit that finest part of the lower St. Lawrence district.
We are discussing now, Mr. Speaker, an item under the international trade organization which is not yet in force. We have the Geneva draft charter, but it is still a draft charter because the international trade organization is not yet in force, and it will be in force only when it is ratified at Havana and is approved by the various parliaments of the countries which sent representatives to Geneva. We are discussing the future of trade, naturally; and if this parliament adopts this agreement, we shall not gain much from it if it is not adopted by all the other countries.
At the opening of the house I took the first opportunity to say that I do not believe in multilateral agreements. I remember the time when Mr. Bennett was Prime Minister and when there was a world economic conference which took place somewhere in London. It was a complete failure. It was impossible for 5849-lli
the nations to come to an agreement regarding trade. It will not be surprising to me if the' same thing happens now. In my humble view these world conferences are just an opportunity for some people to travel all over the world and discuss various matters without any fruitful results. I mentioned that Russia was-trying to cut the grass under the feet of Uncle Sam. In the New York Times of May 5 of last year, one will see that Russia outbid the United States for Mexican sisal.


John Ritchie MacNicol: For Mexican what?


Jean-François Pouliot: Mexican sisal. My hon. friend knows about it. He knows everything Also they were looking for henequen. The report states that Yucatan henequen purchasers seek modern machinery but found difficulties in the United States, and the Russians were ready to supply the machinery in order to have the contract. What was surprising was that they had gold to offer in payment. It was probably gold that was coming from the bank for international settlements. They were controlling the governments of some of the Balkan countries. That gave them some opportunity to get gold. Whether the gold came from the Ural district in Russia I do not know, but they were outbidding the United States in South America and they were offering gold there. In the New York Times of May 12, 1946, I see this headline, "Russia penetrates Argentine markets", and the article goes on to state as follows:
The Soviet trade mission that has been working quietly but effectively since its arrival in-Buenos Aires several weeks ago has offered such-attractive. prices for linseed oil and other products in which .Russia is interested, that other nations are finding the competition intense. The United States representative of the combined' allied food board, William Jasspon, has been-unable to consummate what is regarded as a reasonable agreement for purchases.
And so on. I cannot read it all. But it shows that there was a trend in- Russian trade to take advantage of t-heir gold- to outbid United States purchasers of primary commodities in Central and South America. Some time ago I also read in one of the Montreal papers a dispatch from Reuters or the Associated Press to the effect that Russia was desiring more trade. Gold is not the only thing that is used for trade. During the war there was another standard of exchange, namely, cigarettes. In some countries of Europe one could go much farther by using cigarettes as a means of exchange than by any other means. But now the position is entirely different. We have two standards of currency at the present time. There is gold and there is the United States dollar, and there is also wheat.
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During the war I could never understand the reducing of wheat acreage, when it was so [DOT]easy to keep wheat and grain not only for ihuman consumption but for future exchange. At the present time Russia is bartering wheat or selling wheat to the western European [DOT]countries such as Belgium, the Netherlands *and France and is also selling wheat to Great Britain. To show that multilateral agreements *are not worth anything, according to published information which has appeared in the press, the government of Great Britain is trying to make bilateral agreements with Sweden and three other countries. If multilateral agreements were so good, do you think, sir, that Great Britain would not be satisfied with them but would go to the trouble of making bilateral agreements with Sweden and three other countries now, and probably the rest of the world afterwards, as has always been the case? How is it that we have to change the trade practices that have existed for such a long time? From the beginning of the world trade has been between two persons, two groups or two countries. Now everyone is [DOT]called together to reach an agreement and [DOT]we have a tower of babel and an agreement that can be a success only when all the interested parties have approved it and assumed some responsibilities in accordance with it.
At the present time some people find it strange that the Canadian Press does not pay much attention to what is going on at Havana. Since the beginning of the session, I have bought the New York Times; I am not a regular reader of that newspaper, though I appreciate it. I have gone through all the copies of the New York Times since last Friday, and the only reference I found there to the Havana conference was in the issue of Saturday, December 6. It was a special dispatch by Russell Porter from Havana, under the heading, "United nations body accepts Mexican project." That project was an amendment to article 70 of the draft charter, to create another committee.
You know, Mr. Speaker, in the first place the international trade organization consists of the conference to which all member nations belong. In addition, there is an executive board, a tariff committee, a staff commission and a technical commission. The Mexican delegate suggested, in addition, an economic development committee whose purpose it would be to improve communications and transportation facilities between various countries. In the two and a half hours debate, this amendment was supported by the delegates of Venezuela, Cuba, Greece, Turkey, India, Costa Rica. Egypt and China, and .opposed by Australia, Britain and Sweden. It
	,
was the divergence of views between economically developed countries and economically undeveloped countries which gave the Mexican delegate the idea for the formation of that new committee. The amendment obtained a majority of the votes in spite of the fact that it was opposed by Britain, Sweden and Australia. Apparently Canada did not vote on it. My point is that here was at least one of the best informed newspapers in America, the New York Times, with news from all over the world, giving such little space in its jumbo edition of Saturday; and even the news given there is not of very great importance.
I regret very much the acreage reduction which took place during the war. It is unfortunate that we did not have a reserve of wheat to trade with other countries, which would have put us on the same footing as Russia. Then we would have been able, not only to help other countries, but to give them help without imposing political considerations, as Russia has been doing for some time. If we had sent large quantities of our gold to the United States we would have had that reserve of wheat to trade with the whole world, and would have been able to impose Canadian conditions in regard to trade.
I can imagine what it was like at Geneva. There would be a large table, and sitting around it would be delegates from all over the world. How could they discuss the sale of their goods to other nations? God has established different climates throughout the world so that men could trade together. There is the cold climate, the temperate climate and the tropical climate. Each part of the world produces different commodities. Probably this was done in order to give mankind the opportunity to practise brotherhood. And of course transportation facilities are required to bring to each country the things it does not produce. But how can anything be done when the delegates are sitting together at these world conferences? Any progress made is not achieved at the sittings of the conference but through private talks between the delegates of the various nations. Therefore I imagine, if there are worthy trade representatives of some nations there, they take advantage of the conference to promote the trade of their own countries. They try to get in touch with the delegates of other countries to discuss privately the things that concern them. So what happens at the general meetings is just academic talk about the reduction of tariffs.
How can we speak about the reduction of tariffs when there is a wall preventing exchanges between neighbour countries such as Canada and the United States? Sometimes

Tariffs and Trade
it is necessary to put an embargo on the export of certain Canadian products when we do not have enough for our own consumption, but on the other hand we must do our best to trade with the other nations and facilitate that trade as much as possible. One reason we are insisting upon an embargo on grain, for instance, is that livestock is about to be destroyed because of the present shortage and high prices of coarse grains. How shall we be able to fulfil the obligations entered into by the Minister of Agriculture (Mr. Gardiner) with the government of Great Britain and other governments if our farmers are not helped to raise their stock?
These matters are very difficult. There is a feeling held by some that we must have broad views on trade and that we must consider the future of other nations. I am for that, to a certain extent, provided that we look after our own people first and follow the old principle that charity begins at home.
Yesterday I heard my hon. friend the leader of the Social Credit group (Mr. Low) speaking about economic nationalism. He did not dare to use the word "patriotism." It is only patriotism to help the people of our own country. If we have to exteriorize our charitable feelings, then we must do so in the first place for those who are near us. Our country must be kept in good shape if we want to help others.
What is the use of giving all we have to other countries, when we deprive our own fellow citizens of what they are entitled to get from the soil of this country of ours? I may be called names because I express that view; but my deep feeling is that in the first place we must assist those who are citizens of this country. They must be as prosperous as they possibly can be in order to help others.
What is happening with those financial policies, extolled so highly in later years? We are destroying the purchasing power of the Canadian people. We are destroying private ownership. Not so many years ago in France the communist party was banned. France was a country which was against communism. How did it become communistic? It was precisely because the right of ownership was destroyed and the middle class lost its property. And, with the devaluation of the franc the French people said:	"We might as well
be communists, nothing is left to us."
I warned the government, during the war and after it, about foolish expenditures. I live in the country, and I know very well that when the tap on the first floor is left wide open the tap on the second floor does not flow very well. During and after the war everything was good if it was not done for Canada.
We had to do this; we had to do that:	we
had to finance the British empire. What do we know about our trade? Let me at this point read to the house a question I asked in 1943 of the then minister of Finance:
Mr. Pouliot:	We have totals of exports to
Great Britain, so many millions of dollars. Do these totals include exports in virtue of the gift legislation of last year, or of the lend-lease act.
Mr. Ilsley:	Our export figures would include
all that we exported, whether paid for out of the billion dollar gift or not. It would include those.
Afterwards, when I asked him if he could establish the difference between our exports which were paid to us and our exports which were paid from the credit that we were giving to another country, he said he could not tell us.
Trade figures are not real. What we called our trade was not real. It was paid from what was coming from the taxation of Canadian citizens. What happened with that? Taxes piled higher and higher, and those who voted for the loan-gifts had not the right to complain about increases in taxation because those gifts were the cause of the taxation. If we had strikes and difficulties among working men it was precisely because their salaries were cut at the source for the payment of taxes resulting from prodigality and excessive expenditures during the war. And, during the war those who protested against it were pointed out and described as bad Canadians, unworthy of our famous Canadian citizenship, and as disloyal British subjects.
We were ahead of our time. We were telling the house at that time what some lion, gentlemen arc telling it now. But they have-not the right to speak at this time, because-if we go back to those days we see what they did at that time and find that their record is not enviable. That is that.
What I regret is that those men who were placed in key positions by the Bennett administration at the time of the great depression and who, to a large extent, were responsible for that depression, have been maintained in office. When I denounced them I was always rebuked, and they were described as wizards. It is hard for a member of parliament to stand alone, or nearly alone, and to protest on behalf of his fellow citizens in order to protect them against the folly and stupidity of those who have been described as great geniuses.
Let us look at the Department of Finance; look at the Bank of Canada. There you see the men who hold the strings of power in this country. It is impossible to kick them out. I suggested at one time that we pay an
Tariffs and Trade

annuity of SI00,000 a year to one of them, to get rid of him. It was scandalous. But at the present time we have to stand by them.
During the war the economy of Canada was that of Schacht in Germany. Not only that, but the yearly reports of the Bank of Canada explained to us that the only possible economy of Canada during the war was tnat of Germany. Germany was only self-supporting. However, not only did we do that, but we supported the whole British empire; and it was not called the British empire, because in this country some people, not I, are afraid to call things by their right names. It was called the sterling area. We financed the whole sterling area. We had not enough backbone for that and now we are suffering for il.
Some people will say: "We have dominion ."status and are much better off." We are not only a dominion, but we are Canada just Canada now. How have some English writers described the status of various parts of the [DOT]empire? I quote here from a release of the British Information Services, which is an agency of the British government located at 30 Rockefeller Plaza, New York City, which states at page 6:
Thus "Dominion Status" is the most advanced stage of a process of political evolution or change -like the change from the frog's egg through the tadpole stage to the complete frog. ^ If we had some sixty frogs, tadpoles and frog's eggs of various age3 in a pond, they would change and grow"; the eggs becoming tadpoles; the tadpoles frogs; the frogs growing bigger and perhaps leaving the pond. At any moment, of course, .*some would already be changed into frogs; some -would still be in the egg. some in the early tad-[DOT]pole stage; and some nearly transformed, but -with a rudimentary and fast disappearing tail. :Some might be very slow to hatch out of the egg, and others might stay too long in the tadpole stage-but in the end they would all change and grow up. This is a parable of the British commonwealth and empire.
If hon. members are not satisfied I will quote what was said by a former secretary of state for the dominions-it used to be for the colonies-Malcolm MacDonald. When he spoke before the Royal Empire Society in London he said:
Some day Great Britain could conceivably lose Canada as a member of the empire, if she ever forces Canada to choose between the United States and Britain. If she wishes to avoid that loss, Britain had better recognize the toughness of Canadian-United States ties. Britain must "conduct her affairs so that Canada will never have to make the choice between .1 . the United Kingdom and . . . the United States."

Canada is under the influence of American thought and ideas, but she is still essentially British in instinct. Britain's job is to keep Canada that way.
They are here to create trouble. I am not speaking of the governor general for whom I have the highest regard, but I do say that the office of the high commissioner for Canada is just a nest of spies. One woman who worked there for fifteen years unmolested is now in jail. I am all for the people of England because they are thinking along the right lines. I could quote to the house many letters which women in England have written to me telling of their despair under the socialist government that they now have in Great Britain. Why should we be tolerant of the government of Great Britain when the British people themselves complain about it and when we read in the press that Winston Churchill has called the present government of Great Britain incompetent? I think he was unjust to Mr. Attlee because I believe he is a great man, but he is surrounded with many incompetent ministers. Everyone knows that, and no one knows it better than the English people. If hon. friends are doubtful about this I can show them letters , that I have read outside the house. I can show them letters which I have received recently, in which these people state that they expect a black Christmas because of the stupidity of some of the ministers and the measures they have put through.
In trade there is nothing so good as to mind you own business. I cannot praise the Minister of Trade and Commerce (Mr. MacKinnon) too highly for the trouble he has taken to visit other countries in order to promote Canadian trade. He was exceedingly well received in South America, but it was Canadian businessmen who paved the way for his trip there and to South Africa, and to countries in Europe. His trip would have been a complete success if he had not changed his mind when he arrived in England, for what reason I do not know.
It is possible to trade with England. It is possible to trade with the old merchants of London, Liverpool, Manchester and other places. How is it that with a socialist government it is impossible for Canadian people or any other people to trade with British people except through their stupid government? Because the British government is socialistic, are we bound to adopt socialistic measures in order to deal with them? Are we to deprive Canadian businessmen of their rights and initiative in connection with trade with Great Britain and other nations of the world? Merchants and traders must have the opportunity

Tariffs and Trade
of access to all markets of the world in complete freedom and the necessary transportation facilities must be provided.
Has the businessman of this country been paid the tribute he deserves? Was the government alone responsible for the magnificent war effort of Canada? What about the businessmen big and small, the middle class of the country, who suffered so many hardships and sacrifices during the war in order to give their staffs employment and to make a success of their business and of the war effort of Canada? Who else did that if it was not the Canadian merchant, the Canadian businessman, the Canadian importer and the Canadian exporter? That is why it is so dangerous to interfere with personal trade and that is why I am opposed to socialism which is the control of all human activities by the state.
There is no practical difference between socialism and communism. We have free enterprise when the businessmen of the country are not-fearful of the government, when they do not have to depend upon the government for the success of their business, when they can go on by themselves without the need of any crutches. There should be complete freedom so that every citizen can deal with whom he wants to deal, so that he can buy his products from whom he wants to buy. He may have to pay some duty which will go into the coffers of the state for public business, and that is all right, provided that the amount is not exaggerated.
You have socialism in a country when the businessmen, both large and small, are fearful of bureaucracy. You have socialism when a man cannot consider himself independent, when he cannot consider himself a free man. We cannot speak of free initiative in this country.	I remember the ramblings and
mistakes and blunders made by the same men who are in charge today. At the time of the Bennett government they were, considered geniuses. I can remember how the tariff board was composed of Tories who were not kicked out when the Liberal party came into power in 1935. They were there until the war came on, in order to draft Liberal tariff policy. It was impossible to kick them out; they were there forever. It was the same thing in the Bank of Canada, the Department of Finance and other departments. I am not censuring all the high officials of this country because some are very good. But others are dangerous and there should be a combing out and a clean-up.
I look at hon. gentlemen who complain about bureaucracy in the abstract, and I challenge them to denounce any one of the key men who are making the policies of this
country but who cannot draft a motion for the order paper. They know nothing. They are considered great because my hon. friends and the people of this country are too credulous and ready to accept everything that is said by them.
I think of the farmers of my country and of the merchants and businessmen. I want to see them prosperous and happy. There is no change in the present policy. It is no different from the policy of the time of Bennett. There was a world conference then, and we have a world conference now. It was called an economic conference then. Now it is the Geneva conference. Only the name is changed. It is the same policy. It is the same people who were there. They have no imagination. They are ready to ape everything they see anywhere else, and they are not helpful to the Canadian businessman. Every time we approach them they are like the Almighty, and the member of parliament is always wrong and the bureaucrat always right. It is impossible to make them change their minds. There is the procrastination of bureaucracy that we have here today. It is time to stop it, and unless those men are put out, the agreements that are before us now will be worth nothing.


George Randolph Pearkes: Mr. Speaker, as representing a constituency which has a- large proportion of men engaged in the fishing industry, either directly or indirectly, I should like to say a few words as to the effect which these trade treaties may have upon that industry.
But before doing so, I would crave permission to say a word of welcome to an old comrade in arms of mine, the new Minister of Fisheries (Mr. Gregg). He and I have shared the difficulties, hardships and anxieties of two world wars. I wish him well in the very difficult task that he now has taken on. I do not believe that there is any industry in Canada which needs a firm and guiding hand more than the fishing industry of our country because, even before these agreements were brought in, that fishing industry was in a precarious state owing to the drop in prices and the tremendous price increases there have been in all types of fishing gear.
I said, sir, that many of the people of my constituency are engaged in fishing. They are the fishermen who live in small villages and who go out in boats to catch the fish. They are those who are engaged in the canning industry, and they are those who service the boats of the industry.
Before the war, the great bulk of the canned salmon put up on the coast of British
Tariffs and Trade

Columbia was sent to the British market. I believe that somewhere in the neighbourhood of 400,000 cases of salmon annually went over to Great Britain. When the war came, that amount was increased. Great Britain was prepared to take 100 per cent of our pack, with the result that literally over 1,000,000 cases of salmon per annum wont to the British market, and we had very small quantities made available for our Canadian market. Prior to the war, I believe that our Canadian market was able to absorb somewhere in the neighbourhood of 600,000 cases. As the war went on and finally was won, the demand was perhaps not so great in Great Britain, while the demand in Canada increased and a certain small percentage of the canned salmon pack each year was saved for the Canadian market.
Now we come to the conditions which arose during this year, and in which, owing to various causes, one of them being a shortage of United States dollars available to Great Britain, Great Britain was not able to take as much of our pack as she had taken previously. She is taking none at the present time. She turned elsewhere for the canned salmon that she needed for her market. She went to our old competitors, the Russian and Japanese markets, and within the last year she has been buying Kamchatka salmon as put up by the Japanese for the Russians and sold to Great Britain.
This year Canadian packers were not permitted to sell salmon to the United States market. The export permit controls prevented that. But these were lifted in September so far as pink salmon is concerned, and in October for other types of canned salmon. The result of that has been that, since September of this year, the equivalent in raw salmon of 150,000 eases of canned salmon lias been sent to the United States market. I cite that as an instance of what may happen when these trade agreements are brought into effect. I repeat, this year the equivalent of 150,000 cases of canned salmon has been exported in the form of raw salmon, not canned, but salmon caught by Canadian fishermen, to be canned in the United States.
What is the situation with reference to this great industry of British Columbia in so far as these new trade agreements are concerned? I suggest that there is no division of the fishing industry which will feel so sharply the effects of the new agreements as the canning industry of British Columbia. That industry will, when these agreements come into force, have lost fifty per cent of its preference in the United

Kingdom market and a large percentage, I believe thirty per cent, of its preferences in the markets of Australia and New Zealand.
The customs tariff on canned salmon entering the United States, as the house has been told, by the hon. member for Vancouver South (Mr. Green) earlier today, is twenty-five per cent ad valorem, and the duty is bound at that figure. At the same time the tariff on fresh and frozen salmon entering the United States was reduced by fifty per cent. The result of all this is that our canning industry is doomed. There is consequently an extreme shortage in the pack of canned salmon available for our domestic market and for Canadian export markets. This year there were a million cases of canned salmon allowed for the domestic market. That has been a case of filling up the pipeline with an amount in excess of what is normally used in Canada. But if this flow of raw salmon is to be permitted to go to United States canneries I see that our own Canadian canneries and all those who are employed in that industry will be in the gravest possible danger of being forced out of employment and the trade going from Canada to the United States.
I wish to draw this matter to the attention of the Minister of Fisheries because I believe it is essential that measures be taken at once to remedy that situation which I foresee. I know that in the trade agreements there are protective or escape clauses. I hope that they will be studied and that it will be seen possible to find some solution. When these agreements are put into force I hope that we shall be able to retain something of our British market and that we shall be able to retain our domestic market and the personnel who depend on that industry for their livelihood in British Columbia will be kept employed.


Mr. L. E. BAKER (Shelburne-Yarmouth-Clare):: Coming from the constituency of Shel-burne-Yarmouth-Clare, I wish to say that I am heartily in favour of this Geneva trade agreement, and so are all the people from the southwest corner of Nova Scotia. Being a fishing area, we have always depended for our livelihood on free trade. Without free trade, or the greatest, measure of free trade possible, we starve. We suffered from that in the early days after confederation; but this Geneva agreement has given us the brightest outlook that we have seen since confederation. When I was a youngster I was brought up to look upon the days of 1911, when the Liberal government of Sir Wilfrid Laurier was defeated, as black days for my section of the country and for the maritime provinces in general.


Mr. GILLIS:: What is going on there now?

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Loran Ellis Baker: I want to say that, as far as the fishing industry is concerned, we shall benefit from the United States concessions upon nearly all species and preparations of fish. Certain branches of the industry, which this spring were faced with a sharp drop in demand, will now have greater access to the United States market. The duty on fresh or frozen salmon and halibut has been cut from one cent to a half-cent a pound. The rates on fresh mackerel, formerly one cent a pound, and on frozen mackerel, formerly li cents, have both been reduced to three-quarters of a cent a pound. On fresh or frozen fillets of cod, haddock, hake, pollock, cusk and rose fish, within a quota, the tariff has been bound at li cents a pound. That is important news to the people of my constituency and they will welcome this trade agreement.
I think we all realize that, in these days of complex trade, multilateral agreements are necessary. Bilateral agreements are no longer sufficient in themselves. As the Prime Minister (Mr. Mackenzie King) said, we must be interested, not only in our customers, but also in our customers' customers. That is the only way whereby we can establish a freer form of world trade which will bring eventual prosperity, not only to Canada, but to the nations with which Canada is dealing and hopes to deal.
There is no doubt about it, if we want to bring about world peace and happiness we must bring about world prosperity. This Geneva trade agreement is the greatest step in that direction that I have ever seen or heard about. If we do not bring about healthy trade conditions among the nations of the world, eventually we shall probably drift back into hostilities. We have seen that before and might see it again, and this is our one great chance. I believe, sir, that this is no time for us to be playing politics. I am definitely not playing politics; I am in dead earnest.


Donald Methuen Fleming: What about the Prime Minister's speech last night?


Loran Ellis Baker: I am speaking for myself. I am not playing politics.
On motion of Mr. Baker the debate was adjourned.



BUSINESS OF THE HOUSE

Ian Alistair Mackenzie: Tomorrow we shall take up, as was indicated by the Prime Minister previously this day, first of all the item in regard to the transitional measures act, which is No. 5 on the order paper for today. Second, the item in the name of the Minister of Justice dealing with the Agricultural Products Act which is also on the order paper for today at page 13; third, the resolution:
That the tariff treatment to be accorded to goods imported into Canada as provided in schedule V to the general agreement of tariffs and trade annexed to the final act of the second session of the preparatory committee of -the united nations conference on trade and employment held at Geneva from April 10 to October 30, 1947, be approved so that there may be introduced a bill to give effect thereto.
These are the three resolutions, and in the order in which it is intended to bring them up tomorrow. If there is any change whatsoever in the proposed sequence I have suggested, the leaders of the various groups will be notified in ample time.


Stanley Howard Knowles: Was it not understood this afternoon when the Prime Minister was speaking that, first of all, the Minister of Finance would introduce a bill and give it first reading, notice of which appears on today's order paper?


Douglas Charles Abbott: That comes under routine proceedings.


Ian Alistair Mackenzie: That is correct.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
12
[Stage Direction]
Thursday, December 11, 1947