Right Hon. R. B. BENNETT (Prime Minister):: I desire to lay on the table two copies each in English and French of the convention between Canada and the United States, with respect to certain complaints arising from the operation of a smelter at Trail, British Columbia, dated the 15th day of April, 1935.



ROYAL CANADIAN MOUNTED POLICE


Hon. HUGH GUTHRIE (Minister of Justice) :: At the request of the hon. member for Gloucester (Mr. Veniot), I desire to lay on the table the evidence and exhibits, which only came to hand on Wednesday, in connection with the inquiry by Chief Justice Baxter into certain irregularities charged against the Royal Canadian Mounted Police. This is the only copy of the evidence that has come to hand. I have not yet had time to read it but I will place it on the table in the meantime.



BANK OF CANADA ACT

[Stage Direction]
On the order for the introduction by Mr. Reid of a bill to amend the Bank of Canada Act:
Richard Bedford Bennett: Before this matter is further pro-



Bank of Canada
ceeded with I think I should say to the hon. gentleman who proposes the bill that perhaps he is not aware of the fact that under the international agreement made between various countries, including Canada, regarding silver, there is an obligation undertaken by Canada that the government shall purchase or otherwise arrange for withdrawing from the market, as in the attached memorandum of agreement, 1,671,802 fine ounces of silver in each calendar year beginning with the calendar year 1934. The agreement does not terminate until the first of January, 1938, and I hardly think that the hon. gentleman would desire, by the legislation which he now contemplates, to endeavour to destroy the international agreement to which I have referred.


Hon. IAN MACKENZIE (Vancouver Centre):: If I may refer to the point raised by the Prime Minister, I submit with all respect that the legislation proposed to be introduced by the hon. member for New Westminster (Mr. Reid) does not in the slightest degree interfere with the agreement to which the right hon. gentleman has referred. It only implements it and strengthens it, proposing that the Bank of Canada shall not have less than that actual amount specified in that agreement. With respect to the point raised by my right hon. friend yesterday, I submit that this cannot possibly affect either revenue or expenditure as suggested, nor can it affect the Bank of Canada even if, Mr. Speaker, you construe the Bank of Canada to be the agent of the minister. I think the point raised by the Prime Minister now is raised more or less on grounds of public policy, and I suggest with the utmost deference, after a careful examination of both sections of the proposed bill, that it does not in the slightest degree interfere with the international agreement; an the contrary, it seeks definitely to implement the terms of that agreement.


Mr. SPEAKER:: I am going to ask the hon. member for New Westminster (Mr. Reid) if he will allow this matter to stand for another day. I may say that I have given the matter very careful consideration and I am in considerable doubt as to whether or not the bill is in order, but I certainly do not wish to rule that it is out of order unless I satisfy my own mind on the subject. Is that satisfactory?


Mr. REID:: Yes.


Mr. LAPOINTE:: That is reasonable.


Pierre Édouard Blondin: Stands.
iMr. Bennett.]



FRUIT, VEGETABLES AND HONEY

[Stage Direction]
Hon. ROBERT WEIR (Minister of Agriculture) moved for leave to introduce Bill No. 95, respecting fruit, vegetables and honey.
Motion agreed to and bill read the first time.

[Stage Direction]
On the orders of the day:
Ian Alistair Mackenzie: I would like to ask the Prime
Minister a question with reference to press dispatches to the effect that certain men who were formerly in unemployment relief camps in western Canada are now proceeding to Ottawa. Is he prepared to make any statement with respect to the general situation or any statement of government policy with regard thereto?


Richard Bedford Bennett: So far as the government is
aware, a number of men have left Vancouver as trespassers on freight trains and are travelling east, some by the Canadian Pacific and some by the Canadian National. No complaints have been made by the railway companies against these trespassers, and until such time as such complaints are made, the provincial authorities are not, as I understand the situation, disposed to take any proceedings against these men. The government is ready and willing, if called upon by the provincial authorities, to render such assistance as may be necessary in the premises, but at the moment no such occasion has arisen.
I should add that the communist societies in Canada are proclaiming it as a very great victory on their part that these men have moved east. I need hardly say that there are several well known communistic societies under varying names; they have sought to embroil the government in some discussion in respect to these matters, and we have declined to enter	into	any	discussion	withthem. Doubtless	the	hon.	gentleman	hasseen the statement	that	has been made	as tothe victory that	has	been	achieved	with
respect to these trespassers on the trains.


Ian Alistair Mackenzie: Have
there been any requests from the government of Alberta or the mayors of cities?


Richard Bedford Bennett: A number of telegrams
have been received from various communities apprehending difficulties, but we have told them that when complaints have been made against these trespassers, at the request of the provincial authorities we are ready to render such assistance as may be within our power and as they may require.

Unemployment Relief
One telegram did come from the premier of Alberta, one, I think, from the mayor of Calgary and one from Edmonton. I speak subject to correction as to Edmonton, but I am sure as to Calgary. Obviously it is hardly necessary to say that we are not in a position to render any assistance until some complaint is made, and that matter, as I repeat, is one that rests, in its inception and in its carrying forward, with the provincial authorities.



FEED AND SEED GRAIN EXPORT

[Stage Direction]
On the orders of the day:
Hon. R. C. MATTHEWS (Minister of National Revenue):: Last Wednesday, on
the orders of the day, the hon. member for South Battleford (Mr. Vallance) asked how much hay, straw, feed and seed grain was exported to the United States from each of the western provinces during the past season. I find that the statistical returns of exports do not distinguish between seed and feed grain, all of each class of grain being grouped together in one item for statistical purposes.
I have had a statement prepared, however, of the exports of hay, straw, barley, rye, wheat and oats from each of the western provinces during the fiscal year ended March 31, 1935, and during the month of April, 1935, and with the permission of the house, I shall place this on the record. The statement is as follows:
Statement of exports of barley, rye, wheat, oats, hay and straw: to the United States through ports in the western provinces of Canada during the fiscal year ended March, 1935, and the month of April, 1935
Province:	Barley
Fiscal year, 1935:	Bush.
Manitoba	 254,436
Saskatchewan	 ' 1,333
Alberta	 2,930
British Columbia	
Month of April, 1935:
Manitoba	 5,278
Saskatchewan	 1,580
Alberta	 130
British Columbia	
Rye	Wheat	Oats	Hay	StrawBush.	Bush.	Bush.	Tons	Tons386	569,094	17,806	22,639	25,266172	136,181	23,168	13,108	20,800558	702	429	326	20308,000	192	13	3420	22,150	490	3,281	10025,377	8,807	1,686	100	56



UNEMPLOYMENT RELIEF


[Stage Direction]
On the orders of the day:
Hon. GROTE STIRLING (Minister of National Defence):: I informed the house
yesterday that the report of the Macdonald commission which had been inquiring into the relief camps in British Columbia had just reached me. I wish to state that it is now receiving the consideration of the government, and I anticipate being in a position to table it early next week, probably Tuesday, and to make a short statement at that time.


Mr. ANGUS MacINNIS (Vancouver South):: Might	I ask the Minister of
National Defence whether copies of the report of the Macdonald commission will be printed for the use of members?


Grote Stirling: That matter will be considered by the government and I will make a statement thereon when I speak to the tabling of the report.
92582-216}
HYNDMAN COMMISSION On the orders of the day:


Ian Alistair Mackenzie: Might I be permitted to suggest to the
Minister of Pensions and National Health (Mr. Sutherland) that I will ask him next Monday with respect to the government's intention as regards referring the Hyndman report on unemployment among ex-service men to a special committee?
CANADIAN FARM LOAN ACT On the orders of the day:


Mr. E. L. BEAUBIEN (Provencher):: I
would like to ask the Minister of Finance a question in regard to the Farm Loan Act. When a man has a loan made prior to the act which was passed this year whereby a person can borrow at five per cent, will the old loan be released?


Hon. B. N. RHODES (Minister of Finance):: A decision upon that point has not been arrived at as yet.
Meal and Canned Foods Act



MEAT AND CANNED FOODS ACT

[Stage Direction]
Hon. GROTE STIRLING (Acting Minister of Fisheries) moved, that the house go into committee on Bill No. 25, to amend the Meat and Canned Foods Act.
Motion agreed to and the house went into committee, Mr. Morand in the chair.
On section 1-Power to prescribe fees for inspection.
Mr. NEILL:: Might I ask the minister
why he is making this amendment to section 17 which deals with fish and shellfish canneries and1 their inspection? It seems to me that it should have been made to section 18 which deals with fish and shellfish packed in cans. The minister is aware that inspection of canneries lies no longer with the dominion but with the provincial authorities and this section is reaLly obsolete. The amendment would seem to be more appropriate if it were made as an addition to section 18 of the act.


Grote Stirling: The object of the amending bill is to clear up any doubt which may have existed as to whether under this section the government have power to collect fees. The insertion of the clause as suggested, appears to me to meet the difficulty. It states:
The governor in council may from time to time prescribe a tariff of fees that shall be charged for the inspection of canned fish and shellfish.
And attached to section 17, it appears to me to be quite appropriate.


Alan Webster Neill: Surely the minister did not catch my meaning. I am not finding fault with the wording of the clause in the bill. I am merely saying that it is being put into the wrong place. It is being attached' to a section which has no standing in law to-day. Section. 17 reads:
All fish and shellfish canneries shall be inspected as provided by the regulations.
But that is ultra -vires of the jurisdiction of the dominion at the present time and has been since the decision of the privy council somewhere around 1927 or 1928. It would seem appropriate to put it in the proper place instead of the wrong place. I admit it would have sufficient significance wherever it is put, but it would be much more appropriate to put it in the section that is within our jurisdiction, section 18, dealing with canned fish, rather than in the one dealing with canneries over which we have no jurisdiction.


Grote Stirling: The output of canneries
can certainly be inspected under the act. It (Mr. Rhodes.]
does not seem to me to make any difference whether it is under section 17 or section 18.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. ROBERT WEIR (Minister of Agriculture) moved the second reading of Bill No. 72, to amend the Live Stock and Live Stock Products Act.
Motion agreed to, bill the second time, and the house went into committee thereon, Mr. Morand in the chair.
On section 1-Definitions.
Mr. COOTE:: Would the minister give a word of explanation as to what the changes are?


Mr. WEIR (Melfort):: The changes are, first, to leave no doubt as to meat, not only for export but also for interprovincial trade, being included for inspection. Also in order that packers' yards through which direct shipments are made to packing plants may, if necessary, be brought under the same regulations as public stockyards; to give effect to the recommendations of the price spreads commission.


Mr. STEWART (Edmonton):: Is not export from one province to another taken care of by the present inspection in meat packing plants? Is it the intention to bring the small butcher doing a domestic business under it?


Robert Weir: No.


Charles A. Stewart: Well, what is the idea concerning trade between province and province?


Robert Weir: At present the act defines "live stock products" as including meat for export, but that does not cover interprovincial trade. The definition "for export" has been changed to include inter-provicial trade.


Charles A. Stewart: That is what I am asking. What will be the position of a farmer who lives on the boundary line between two provinces, or a local butcher who slaughters say in Alberta and sells the meat in Saskatchewan? It is not now inspected because it does not go through a packing house. Will he be an offender under the act if he does that?


Robert Weir: No.


Charles A. Stewart: Well, in that case there is not much use making the change,
if it can be evaded as easily as that.

Live Stock Act


Robert Weir: There are many plants that are not inspected establishments. At the present time there is only provision for inspection of plants doing interprovincial trade, but not of the product itself in transit. It will not in any way affect these small butcher shops.


Mr. MOTHERWELL:: I think the minister will admit that there is not very much to this bill. I do not suppose it is meant to be one of the reforms bills at all, just the regular dressing up that usually takes place from time to time in these measures as circumstances require. Section 1 that we are now discussing defines "export," and the meaning is the same as it has been all along. "Export" has meant export out of the country and also interprovincial trade.
Then the other changes have grown out of that to some extent; such as the definition of what "domestic consumption" means. These are very trifling amendments but they are necessary. I do not despise them, but they do not by any means conform to the majority report of the price spreads commission. When the Minister of Justice was dealing with the amendments to the criminal code the other day he seemed to be very anxious as nearly as possible to follow along the lines of the price spreads report, which seems to be looked upon as the sacred ark of the covenant; but in this bill the minister seems to be getting away from the recommendations of the price spreads commission as far as possible. Maybe he is right in that respect. One recommendation of the majority report as I recollect is that there should be a live stock marketing board appointed. I do not see anything of that in this bill; perhaps the minister will explain why it is not here. I am not criticizing him for it not being here, I do not think it will be missed; at the same time I would like to understand why the Minister of Justice is so religiously desirous of carrying out in every detail the price spreads report, even to the point of absurdity, in the amendments to the criminal code.


Hugh Guthrie: Oh no.


William Richard Motherwell: Well, pretty nearly. My good friend the Minister of Agriculture seems to disregard it by overlooking the major report of the price spreads committee on the live stock industry.


Robert Weir: Provision is being made, with the exception of those amendments, to give effect to the recommendations of the price spreads report. The hon. member who has just taken his seat was right in his suggestion in that connection.


William Richard Motherwell: Are we through with section 1?


The CHAIRMAN:: Not yet.


William Richard Motherwell: Then I shall wait until we are before saying anything further.


Mr. GERSHAW:: May I ask the minister if a man taking meat across an interprovincial boundary must fill in reports and give information or call at any office to get permission to do such a thing?


Robert Weir: No. But if complaints are made and abuses arise this gives power for action to be taken.


Mr.   LESLEY@: Has the minister anything definite in mind, any particular regulation that he proposes to make under this section?


Robert Weir: With respect to hogs passing from one province to another it might be necessary to take certain action.


Mr. ILSLEY:: In what way? It would be interesting to know whether there is anything definite in the mind of the minister or of the department as to what is to be done under this section. From reading it I do not know just what is aimed at.


Robert Weir: One example might be the failure to observe grading regulations in connection with hogs, for example, or anything else that might arise in this connection. The whole point in the change of this definition is to give further power not only in connection with exports but also in connection with interprovincial trade in order to correct any abuses that may arise.


James Lorimer Ilsley: That does not say anything at all. We do not know what abuse the legislation is designed to remove or what offence is expected to be created under it or what punishment there is to be for the offence; in fact we are entirely in the dark as to what the government have in mind. Does the department intend to prevent certain kinds of meat from moving from province to province while they may be moved from point to point within a province? Is that the point they have in mind?


Robert Weir: Previous to this amendment "export" meant only international trade. The definition is changed here to include interprovincial trade, to which the same regulations can apply.


James Lorimer Ilsley: What kind of regulations; regulation in what way?


Robert Weir: In any connection, either as to inspection or any of the powers
Live Stock Act

contained in this act, that previously applied only to export for international trade. Now they will apply to interprovincial trade.


James Lorimer Ilsley: What provisions do apply to export trade?


Robert Weir: That is given in the regulations, which I have not here.


Ernest Lapointe: I should like to support
the objection to this section of my hon. friend from Hants-Kings (Mr. Ilsley). I think there is danger in creating barriers between the provinces. I believe what we should have in mind in Canada is the development of a national sentiment instead of the creation of different provincial territories separated and divided one from the other. If you start with small matters such as this in connection with the regulation of cattle, hogs and so on it may spread to other fields, and I think that is a dangerous principle to develop in this country.


James Lorimer Ilsley: In the explanatory note a
reference is made to the recommendation in clause 11 of division 2 on page XXII of the report. So far as I can see that is an incorrect reference; I cannot find the recommendation referred to. I should like to know what recommendation is referred to so that I may see what the government have in mind.


Robert Weir: This reference deals specifically with the grading of meats.


James Lorimer Ilsley: Where is the reference? It
is incorrectly stated in the explanatory notes.


Robert Weir: I am referring to
the reference now, "consumer grades for meats."


James Lorimer Ilsley: What page is that?


Robert Weir: Page XXII of the preface. Recommendations have come to the department from time to time, and the department itself has also felt, that in connection with meats it would be advisable to make available to the provinces, if they so desired, an inspection of meats for domestic purposes. A good deal of work has been done in connection with the grading of meats during the past number of years with the hope that if the consumers had some assurance as to the quality of the meat they were purchasing, through a grade placed upon it-red label or blue label beef, for example-it would encourage the consumption of meat. I think perhaps it has come to the attention of every hon. member of the house, in travelling throughout the country and stopping at hotels and other eating places, that possibly nine

times out of ten they have been disappointed in the quality of the meat served to them, particularly beef. I know that opinion is held very strongly by the live stock producers themselves, and each person who is disappointed in the quality of the meat he gets is a lost purchaser, to a certain extent, of live stock products. So far this inspection has not been pressed in the domestic market but it is felt that if the province of Ontario, for example, should wish to carry further this policy of grading meats for consumption, they should be given the privilege of doing so.
Personally I feel that because of the large percentage of our meat, for instance beef, that is consumed locally, it would not take very much of a stepping up in the consumption to take care of a great part of our present surplus for export, and it is felt that the one move that would go further than anything else to bring about that end would be to make it easier for the consumer to be assured of the grade or quality of his meat, so that the purchaser might know as nearly as possible what he was getting. I believe during the investigation by the price spreads committee complaints were registered that stores would advertise for sale red label and blue label beef. These stores would have some of that beef for sale but on some occasions, without an explanation to the purchaser, they sold beef that was not graded either red or blue label. In that way the consumer was misled, with no possibility of redress. I know there is a very strong feeling among those who are anxious to make better use of our domestic market that we should carry further the grading of beef in order to encourage thp consumption of higher quality beef and to make more difficult the misrepresentation that undoubtedly has occurred in some cases in this regard. In order to do that the definition of "export" has to be changed in order to take care of the interprovincial movement; so that if the province of Ontario decided to have compulsory provincial inspection of beef, for example, that would not be effective if beef could be shipped in from other provinces without undergoing the same inspection.


Mr. KENNEDY (Winnipeg):: Would the
minister indicate to the committee what percentage of our annual production of various live stock products, including hogs, cattle, sheep, lambs and so on, goes to the export market?


Robert Weir: I regret very much that I have not those exact figures with me.


Donald MacBeth Kennedy: I think they are rather important in view of the minister's

Live Stock Act
observation that a slight stepping, up of the domestic consumption would largely take care of our surplus for export.


Robert Weir: That is the point I was endeavouring to make. We have a market for all the lambs we produce, and an export market is unnecessary. Our consumption of beef is in the neighbourhood of 85 per cent of production.


Donald MacBeth Kennedy: I believe the figures are shown at the bottom of page 145 of the price spreads report.


Mr. McGIBBON:: What percentage is rejected on account of disease?


Robert Weir: About one-half of one per cent is rejected and condemned.


Peter McGibbon: Does that apply to beef.


Robert Weir: That applies to live stock, as a whole. Dairy cattle run higher than that figure.


Peter McGibbon: A few years ago the percentage of tuberculosis in pork was very high. Has it been decreased?


Robert Weir: Some tubercular infection shows in about 20 to 25 per cent of the hogs marketed. In a great number of those cases certain glands in the neck are mildly affected. Those hogs or parts thereof are discarded and not allowed to go into consumption. In my former statement however I did not take that into consideration.


Donald MacBeth Kennedy: Does the amendment give authority to apply grading regulations to meat in all packing plants engaging in interprovincial business?


Robert Weir: Yes.


Donald MacBeth Kennedy: It makes no difference whether or not all the meat going through a particular packing plant leaves a certain province; it applies to the whole product. The grading applies to the whole product of that packing plant?


Robert Weir: That is the intention, yes.


Donald MacBeth Kennedy: What about meat imported from other dominions into Canada. I am thinking particularly about mutton. It is imported, and I believe is sometimes sold over the counter as Iamb. Having tasted some of the lamb that is sold I have a suspicion that I am correct in my assumption.


Robert Weir: If a province decides that all meat within that province shall
be inspected and graded and that no meat within the province may be sold otherwise, this measure gives power to prevent an interprovincial movement of uninspected meat, and would take care of the difficulty mentioned by the hon. member.


Donald MacBeth Kennedy: Does the act as it stands give the federal government the right to insist upon the grading of mutton or lamb brought into this country from other countries?


Robert Weir: I do not think we have power at the present time except as I have explained.


Donald MacBeth Kennedy: I consider that a very important matter, and on previous occasions have made reference to it in this chamber. H it were possible to have an amendment to the act or to obtain the cooperation- of the provinces in the matter I believe the live stock industry would be greatly helped.


Donald MacBeth Kennedy: I agree
with the views expressed by the hon. member for Peace River, namely, that if live stock products are to be imported into Canada and are to come in direct competition with our own production it is highly important that they be under a strict system of inspection and grading, the same as domestic products.
In- respect to the question asked a few minutes ago I would refer the committee to the information at the bottom of page 145 of the report. I shall read some of the figures:
The following figures from the Dominion Bureau of Statistics show the relation of domestic consumption in 1933 to production:
Per cent
Dairy products	 95-4
Butter	 98-5
Cheese	 31-4
Cattle (beef and veal) estimated by
pound	 95-0
Hogs	 90-8
.Eggs	 99-1
These figures indicate clearly that only a very small surplus of domestic production goes into export trade.


Mr. DONNELLY:: I can readily realize that there will not be many cattle raised in Canada for export purposes if the prices remain at the point they have been in the last year or two. Cattle have been sold by the farmers at one-half cent or one cent per pound on the hoof. That price does not pay for their keep, and the farmers are not going to raise many of them. There is not much encouragement for the farmer to go
Live Stock Act

into the production of live stock, and there will not be much difficulty in persuading the Canadian people to eat the total production. I do not think there will be much necessity for grading for export unless the price can be raised.
What will happen in the southern part of the province from which I come when we wish to pass through a customs port to cross the line-because I presume before this session is over we will have a measure of reciprocity with the United States? We have been looking for it for two or three years. This government has promised it and of course it always keeps its promises. When we have that measure of reciprocity cattle will cross the line without duty, and we do not want to have to take them to Moose Jaw, a distance of about 150 miles, to have them graded. We want to have some system of getting through customs ports and across the line without having to make that long trip for grading purposes. Even to-day we are taking cattle across the line in the southern part of the province and are paying the duty. They are being sold in the Chicago market because it pays us to do that. It is better to sell them there than to sell them in Canada. What provision has been made for the grading of cattle going out in that way?


Robert Weir: We have power to grade beef cattle leaving the country in that manner, but it has never been exercised. We are doing it in so far as dairy cattle are concerned in connection with shipments going to the United Kingdom. No person regrets more than I do the condition the hon. member has described, namely, the difficulty of getting an export market, and the fact that the market in the United States was lost before the present government took office.


Charles A. Stewart: This is a huge joke that the Tories put over on every occasion, namely, the loss of this market. For two evenings we have been treated to a dialogue about the loss of markets. The hon. member who acted as chairman of the price spreads commission was desperately anxious to indicate that the people of Canada could eat the domestic supply. That is the sort of stuff the Tories will feed to the electors at the next election, in the hope that the Canadian people will fail to remember that there was a day when prices were sufficient to warrant production, when we had large amounts of dairy products to export-in one year 24,000,000 pounds. Those >vere days when people drank more milk and ate more butter than they ever did before in the history of Canada.


Mr. GOBEJL:: You remember the Hawley-Smoot tariff?


Charles A. Stewart: Yes, I do; and I remember what you said about it. Go back now and tell the same story to your electors, and see whether or not you will be elected. The electors are becoming fed up on this sort of thing. We sit here day after day and listen to hon. members opposite tell us how the market disappeared when the Liberals were in office. What justification has the government for what has happened in the last five years with regard to price reductions, when because of lack of markets production has fallen off? Hon. members opposite have been advising the fellow who wants to eat to tighten up his belt and to eat less. They have advised him to eat less eggs and butter in order that they might take up the slack in home consumption. You have closed every possible market by various devices since you came into office, and I would advise you to go very slow in talking about any restriction of markets because I have in my desk statistics demonstrating how badly the markets both domestic and export have fallen off. So far as the export market is concerned, if prices continue as they are we shall not need any export market or domestic market either because, if present conditions continue, one of these days you will find yourself in the happy position of not having a market and of having no people to eat your products anyway. It will be a Godsend when there is an election and we can have this moribund outfit cleared out and give somebody who will do business for Canada a chance to do it.


Robert Weir: Does the hon. member state that during the time his party was in power, when the United States tariff was raised against our cattle to three cents a pound, that did not shut practically the whole of our cattle out from the United States?


William Richard Motherwell: May I draw the minister's attention to this fact, that simultaneously with the loss of the American cattle market we secured the British market, and that is where our cattle went to. This government think that they took the embargo off cattle. It is true that they attended to the frills and tagends in the way of restrictions that still remained after 1023, but the major part of the embargo was taken off in 1923 under the Liberal administration. But we never claimed that all the credit belonged to us but to all who had preceded us and had been endeavouring to remove it for thirty

Live Stock Act
years back. Immediately we were shut out from the United States market our market in Great Britain was opened up, and in the second or third year after the embargo was removed, in 19(26, we shipped over 100,000 cattle to Great Britain, which is twice as much as we ever shipped since. So when we lost one market we got the other, and that is the advantage of having two markets. You cannot have it both ways. When the British market is bad, it is an advantage to have the United States market. But who is losing the British market now? I might just as well castigate this government on that score. When the United States market prices become attractive naturally our cattle gravitate to the United States in spite of their high American tariff but this year we have shipped to the United Kingdom only between 5.000 and 6.000 head-the minister will correct me if I am wrong-and if the quota next year is based on our shipments this year we shall be limited to shipping 5,000 or 6.000 head to the British market. So there is no use in the minister indulging in these bedtime stories about our losing markets because if we lost one we gained the other, and we did not lose the American market as the result of any action on our part but because the American government conceived that the action they took was the proper thing to do for the protection of their own farmers. But the Liberal government did do something to gain the British market by removing the embargo in 1923.


Robert Weir: On each occasion that I have made reference to this matter I have been careful to state this, and I did so specifically in the house the other night, that we were not accusing hon. gentlemen opposite of losing the market but simply that the market was lost when hon. gentlemen opposite were in power, and that we objected to them blaming us for losing the market.


William Richard Motherwell: What could we have done to retain it?


Robert Weir: I did not say you could have done anything.


William Richard Motherwell: Then what is the
use of chewing the fat about it?


James J. Donnelly: The minister says that
it was under Liberal rule that we lost our market for cattle. Anyone who knows anything about raising cattle in western Canada knows that there is only one market for cattle, and that is the United States, and that market was lost in 1911 when the Conservative party defeated reciprocity. There is no doubt about that. Anyone who knows political history knows that that is when we lost our market. More than that, the American government kept the terms of the reciprocity pact open for our acceptance up to 1919, when we had a Conservative-Union government in power, and it would not accept it. After that government went out of power and a Liberal government came in here, we had a Conservative government in office across the line. Now we have a Democratic government in office across the line which is willing to give us a measure of reciprocity, and our government here says that we are going to have reciprocity. What I want to know is why we are not having it. Why is this government not doing something about it? They have told us for the last two or three years that they are negotiating with the United States for reciprocity, but it is just another promise like those they made five years ago. We all remember the wonderful things that they were going to do then. The farmer was going ,to get wonderful prices for his eggs and butter and wheat, and there was going to be heaven on earth, but it has turned out just the opposite. The farmers have learned what this government and its promises mean. It was not long after this government was in power that our farmers realized how little its promises meant, and it is the same with all these stories that you are telling them now of the wonderful things you are going to do for the farmers. To find out what the farmers think of this government and its promises all you have to do is to go out in the country and ask them how much money they have saved, to put their hands in their pockets and feel the money that the Conservative government has saved to the farmers. The farmers will soon tell you: That money is not here; if you have saved any, it must be some place else in the country. They know that they have not got the money. They know that the packers or someone else got it, and not the farmers throughout the country. And when any of you come out and tell our people of these1 reforms and the great things you are going to do for our farmers by regulations of this kind, I say it is just so much balderdash so far as the farmer is concerned. He does not believe a word of it, and he is only waiting a chance to tell you what he feels about it.


Donald MacBeth Kennedy: I take issue at once with the statement of my hon. friend from Willow Bunch (Mr. Donnelly) that there is nothing in regulation of this kind. I do not know that there was anything done by the former Liberal government in
Live Stock Act

connection with a product that helped that product more than the grading of eggs. We all know that the regulations in regard to egg-grading which were established by the Liberal government when it was in office were of tremendous assistance, and how on earth the hon. member who has just taken his seat can argue that regulations of a similar sort such as we have here for the grading of beef or meats can be of no benefit to the farmers of this country is amazing to me. I do not know that I am willing to give credit or blame to any government for all the ills or benefits that have come to agriculture during a period of years, but I am sure of this, that there is a desperate need in this country for the grading of .meats and I think the grading of cattle as well. I am fond of beef but I hardly ever eat it when I am away from home because I am tired of chewing shoe leather, and I have good teeth at that. I think it is the greatest mistake for anyone to get up and say, when the government is attempting to put through legislation that will guarantee that the consumers of this country will receive the quality product raised on the farms of this country, that that is of no value to the producer. It is of tremendous value, and every step that has been taken along this line by a Conservative government or by a Liberal government has been all to the good both for producers and consumers.
I would like to ask the .minister, while I am on my feet, what provinces have been cooperating with the dominion government in connection with the red and blue label grading. I understand when that was put into effect it was necessary to get the cooperation of the provinces, and I was wondering just how many provinces have entered into an agreement with the federal government in connection with the matter.


Robert Weir: My information is that they are cooperating in all the provinces. They do not require any enabling legislation for the grading of beef up to the present time because it is purely a voluntary matter.


Donald MacBeth Kennedy: Does the minister think that he has sufficient power under this section and the amendment to the Live Stock and Live Stock Products Act to enable him to cooperate thoroughly with the provincial governments which are willing to cooperate for the grading of beef within the provinces as well?


Robert Weir: I believe so, yes. If the province of Ontario wishes to establish grades for their beef we can protect them 
against beef coming in ungraded from other provinces, and that will give them full control this far, that no beef within that province can- be sold except in accordance with their grades. It really gives them full power.


Donald MacBeth Kennedy: The hon.
member for West Edmonton (Mr. Stewart) took exception to my reference to the large percentage of domestic consumption of live stock products. I was merely quoting figures which were absolutely authentic, secured from the bureau of statistics. He may not have liked to hear them but that is his own concern. I would also call the hon. gentleman's attention to this. Those who, in season and out of season, have claimed that the Ottawa agreements have not been beneficial, with reference to the export trade, would do well to look at a statement that appears in this morning's Ottawa Journal by Sir Francis Floud, British Hi^h Commissioner, made at Hamilton yesterday in discussing 'Canada's exports to Great Britain. He is reported as follows:
Canada had received far greater advantages from the Ottawa agreements than the United Kingdom, Sir Francis said, in appealing for a greater share of trade.
Every farmer in this country knows what that has meant to the Canadian hog industry during the last few years.
Mr. MaoLEAN: Last season in our province there was put into effect a certain regulation -I do not know whether it was a dominion government regulation- or not-which prevented the shipment out of the province of dressed pork. Under that regulation, the Shipper was compelled to ship his dressed hogs to the packing plant at Charlottetown. A great many of the merchants and dealers there have been in the habit of buying dressed pork from the farmers and shipping it to Saint John, Halifax, -Montreal and other points; but under this -regulation they were not allowed to ship dressed pork out of the province. Of course, the dealers, the farmers and everyone else were up in- arms over this regulation and it was lifted. I would ask the minister whether he has any knowledge as to how that -regulation came to be put into effect, whether it was a departmental regulation from Ottawa or some local regulation- which the packers were able to have put into force there.


Robert Weir: The question does
not -come under the Live Stock and Live Stock Products Act-that is to say, the regulations that control the movement of products. At one time, about a year ago or perhaps a little more, but at any rate up to that time, the three maritime provinces were considered- by

Live Stock Act
the health of animals branch inspection department as one area, and under the regulations of that branch the interprovincial movement of meats was prohibited except as processed1 in plants that had been approved by the officials of the health of animals branch. The three provincial governments requested that there be a change and that rather than being dealt with as one area they should be dealt with separately. The federal department conformed to their wishes because we felt that it was only fair to do so. Some complaints have been made with respect to the working out of this arrangement, and later at the request of two of the provincial governments the regulations were rescinded. That does not come under this act but under the health of animals branch regulations.


William Richard Motherwell: I am a little bit
concerned about these packers' yards. If things keep on the way they are now going it looks as if we shall have nothing left but packers' yards. I remember when it was my privilege to have charge of the administration of this act. We featured strongly the building up of stockyards where both buyers and sellers could assemble in fairness under proper regulations, where butchers, feeders and packers could go to buy and others who had to sell could go to sell, both groups meeting in a common market. As pointed out in the commission's report, in recent years, since the truck has been introduced, it has been a great convenience to both seller and trucker to go direct to the packing plant. If that is to continue and we are to eliminate the stockyards-because I do not see how we can maintain them both; there is not enough turnover-there must be some radical change in the packing plants before they can be put on a parity with the stockyards as to weights and grades. The great value of the stockyards, in addition to the features I have enumerated, was that you could get government weight and grade, and that means a good deal because it determines to a large extent the price. But in the packers' yards, unless the government establishes public weighing, and I do not know whether that is intended or not, they are at the mercy of private weights and private grades, except in regard to hogs. I believe we have hog graders in the packers' plants.


Robert Weir: Yes.


William Richard Motherwell: But outside of
hog grading the rest is graded by the packers themselves. So that unless these packers' yards give us great safeguards to the farmers as to weights and grades as the stockyards, they will be out of luck and the first thing
we know there will be no market at all as far as stockyards are concerned, especially if the trucks keep multiplying as they have been. What value are these packers' yards to the producers unless- you have official weights and grades?


Robert Weir: That is the purpose of this. I agree with the hon. member as to the difficulty with which the department has been confronted in trying to maintain stockyards as they have been built up, to give the very best service and at the same time not to impose any unnecessary hardship on farmers and cooperative societies who felt that it was more beneficial to them as individuals or groups of individuals to ship direct to the packers, thus obviating certain charges. On various occasions the federal department has been petitioned to establish in the packers' yards the same services as in the stockyards, but the objection to that was felt to be that if we did establish the same services in the packers' yards-that is, compulsory weighing and reporting, and in addition to that competition, where there would be buyers the same as in the^ public stockyards-we should be virtually giving the same service in the packers' yards as in the stockyards, and there would be no reason why the stock should go through the stockyards For that reason this part of the recommendation received very serious consideration. There was no lack of appreciation of what was in the minds of the members of the commission when they made the recommendation. It was felt that it might defeat the end which they were endeavouring to reach. The hogs going into the packers' yards are inspected exactly the same as in the stockyard. Cattle are not inspected in either case. But the purpose of this is so that we will be able,, if necessary, to protect the farmers with certified rates, and also that there will be available to the public through the officials of the marketing branch of the Department of Agriculture prices paid for hogs delivered directly to the packers' plants themselves, so that in this we have met what the hon. member for Melville feels is desirable and at the same time we have avoided doing that which we felt might be more destructive to the stockyards themselves.


Mr. GARLAND (Bow River):: I have followed the discussion so far with some interest, and I am not at all convinced that the minister is meeting the difficulty in the proposal he has made. I notice the report builds up a very strong case showing how the packers manipulate their prices through the handling of direct shinments by truckers. Having
Live Stock Act


Robert Weir: There is power at present within the Live Stock Act, section 8, subsection 4, which reads:

The minister may require a live stock exchange operated under this act to adopt new by-laws, rules or regulations, or to amend such by-laws, rules or regulations as may be m force in such manner and to such extent as he deems necessary.
That covers licencing and there is power in that regulation to deal with the majority of those problems. I am and have been decidedly inclined to think that in some of these stockyards there are more commission firms than are necessary to do the work and at the same time give competition in purchasing. There is now power within the act to change the charges of those commission firms. Before this commission sat, the Department of Agriculture had taken steps to insist upon a reduction of the commission men's charges. Some of the commission men complied voluntarily with it; others did not, and the objection raised was that because the whole matter was under investigation by the committee on price spreads and mass buying and later by the royal commission, it should be delayed until this report had been submitted and a decision made as to what action should be taken. That is why the matter was not forced, but the hon. member for Bow River will agree with me that the ideal condition would be for all stock to go through the stockyards, which would make the cost a minimum, and that there should be only sufficient commission firms to give the necessary competition.
One of the difficulties in passing all stock through the stockyards is of a practical nature.^ For example we have a number of processing plants away from localities in which there are public stockyards. We purpose making an investigation and it will not take long to do it, because we have practically all the information- on hand. When the report is in, we intend to decide what reduction we feel will be warranted with this implementing of the recommendations of the commission to enable commission firms to carry on with a profit but not to take undue remuneration for the services that they give to the farmer. But to make all stock go through the present stockyards, or to set up sufficient stockyards to make their service available to those various plants, it -was felt would be perhaps starting something that might not be used if the livestock producers of the dominion take advantage, as we have every reason to hope they will, of the Natural Products Marketing Act, because they as producers themselves will have it in their own power to bargain with the packers and any other purchasers for direct shipments. At the same time, if they wish, they will have all their bargaining

Live Stock Act
power before the live stock leaves the farm, though they might also decide to sell their cattle on the basis of grade on the rail, the same as hogs. To show how the farmers realize the importance of rail grading as being the soundest grading in connection with hogs, an experiment was made a little over a year ago to make it available to farmers at certain Canadian plants, namely Peterborough and Stratford so that they could have their hogs graded voluntarily on the rail if they so wished, and at the same time those who did not wish that might continue to receive the service of our grading in the public stockyards. The result has been that during the last year, although this is purely voluntary, more than 90 per cent of the farmers have asked that their hogs be graded on the rail. That has been so satisfactory that we have had demands to extend it. We have been asked to start the same practice in western Canada, and demands have also been received from eastern Canada. This week we are starting grading on the rail in plants in western Canada. If that continues to be as satisfactory as we hope it will it might be possible that the live stock men themselves, if they were organized as a body, would prefer to ship directly to the packing plants with a price set in advance on the basis of the grade or quality of the product when it was graded on the rails by independent graders. I may say for the assurance of the hon. member for Bow River (Mr. Garland) that we believe that with the small amendments we have introduced, together with the power we have under the Live Stock Act of changing our regulations, we have sufficient power to deal with the whole situation.


Edward Joseph Garland: I am glad
to hear that the minister has all the powers necessary under existing legislation. May the committee be assured that the minister proposes to exercise those powers, and. for example, to license commission men? I ask that first.


Robert Weir: They are licensed
through the exchange at the present time. We believe that we have the power to license them directly, and in effect to do away with the live stock exchange. But it is believed that if we could achieve the same purpose without wiping out the live stock exchange it might be desirable, because the exchange performs a service that it would be difficult for the department to perform. But I can assure the hon. member that nothing will be left undone to give effect to their recommendations in the interests of the producer.


Edward Joseph Garland: Then I understand that part of the recommendation is not going to be carried out at the present time? The minister is still going to permit the commission men to be licensed by the exchange.
Then what about this question of shipment of live stock direct by truckers? The recommendation in that regard is in my opinion most important. If direct shipment is to continue it is going to be, as the hon. member for Peace River (Mr. Kennedy) said disastrous to the market, to the producer. Packers are not going to be easily regulated, I have no information of any country yet that has been successful in regulating a private monopoly, and the packers are shown by this report to be operating a private monopoly. Unless the minister takes his stand in this matter to legislate religiously in accordance with the report, I am afraid all his efforts are going to be futile. He suggested that I was in agreement with him as to what can best be done. I share his opinion that the producers must themselves undertake cooperative organization, and I think they have opportunity to do that under the Natural Products Marketing Act. I am sorry that they have not succeeded so far in establishing a nation wide scheme in regard to live stock. But even that is not going to settle this problem. As long as the price depends upon an export surplus, or may be affected iby it, it is still going to require governmental action in the event of_ the price level falling below cost. If the minister really wants to know what I think about it, I think we should have our packing plants owned as public utilities, or cooperatively. Until the producer is in a position, both in intelligence and in finance, to take over and operate them cooperatively I think they should be operated as a public utility. I would ask the minister to turn to page 146 of the report and he will find what my opinion is after that stage has been reached.


James Lorimer Ilsley: Does the hon. member mean that the government should operate them directly?


Edward Joseph Garland: A public utility.


James Lorimer Ilsley: Well, that may be publicly or privately owned.


Edward Joseph Garland: My hon. friend knows something about public utilities.


James Lorimer Ilsley: Yes, so I am wondering what you mean.
340S
Live Stock Act


Edward Joseph Garland: At page 146 of the report we find the following:
The pri,ce received for this, exportable surplus, however, under present conditions becomes the basis of the domestic price; one result of which, during the last few years, has been extremely low prices for agricultural products in Canada. These prices, indeed, have often reached a level far below the cost of production.
. This means that the agricultural population, which constitutes a large proportion of the total population of the country and consumes large quantities of manufactured goods, has had little or no buying power. This, in turn, has restricted' the consumption and hence the manufacture of manufactured goods.
If the necessity for increasing the farmer's buying power is admitted-
And I presume the committee is prepared to admit that.
-and if world conditions prevent this being accomplished by international action, the question arises whether domestic prices are to continue to be controlled by the price of the small exportable surplus. The alternative is to maintain a domestic price, if necessary by governmental action, in keeping with the domestic cost of production and allowing the exportable surplus to get what it can.
I am strongly in favour of that implied recommendation of this committee. I submit to the minister that if he really is looking far enough ahead in the matter he will be now organizing his department for the purpose of operating the packing concerns of this country as public utilities. In my opinion it is a crime that we should leave them in the hands of a few exploiting concerns-two in fact, seventy-eight per cent of the business being controlled by them, and they having power as a result of that to swindle flagrantly and brazenly the poor devils who are working to produce the real wealth of the country. It is time some direct action was taken in regard to that.


Robert Weir: In reply to the hon. member's suggestion that this industry is in the hands of a combine, if we take that for granted for the sake of argument-


Edward Joseph Garland: It is contained in the report, no one has to take it for granted.


Robert Weir: My fear in that connection is that if all live stock were forced through the stock yards in Montreal for example, we know that it could not be held for any considerable length of time in those yards, live stock being in almost every sense a perishable product, and so under those conditions, if there was no competition in buying, as there would not be with a com-
bine, the producers would be more than ever in the hands of the combine. It was because of that fear that we resolved to make it possible for the producers to organize so that they would have the whole volume of the ^product behind them, and in that way they would he rather the masters than the servants in setting the price.


Arthur-Lucien Beaubien: A monopoly on the other side.


Robert Weir: A monopoly of a different kind. Also they would be in this position, that by making a small levy, or by whatever means would be devised, they could take care of the small exportable surplus and prevent it having a disastrous effect, as I think we all agree it has now, on the domestic price. The only difference between the hon. members' opinion in that connection and my own is this: I feel that those people who have built up a very successful business are particularly anxious to give the best service that they can, and if the producers were organized to have control of their own product I am sure that they can find common ground with the people who are now in charge of the processing. They would be able to negotiate with them in a very different way, and would have a very different respect for them if they realized that they had power to put into effect what they wished to put into effect. This is a large question, but we have given serious consideration to the recommendations of the commission, and no time is being wasted.


Edward Joseph Garland: For fear the committee may not quite have understood the character of this monopoly it may be necessary to give one or two quotations from the report itself. At page 55, dealing with the meat packing industry, I find the following, referring to the Swift Canadian Company and Canada Packers Limited:
It may be fairly stated, therefore, that these two companies dominate the industry. Their buying and marketing policies affect their smaller competitors and largely determine the operating method's of the industry. A proper appreciation by the managements of these companies of their responsibilities to producers and consumers is manifestly of supreme importance.
On the following page we find:
The manner in which these results-
Referring to profits.
-have been achieved has a direct relation to the monopolistic character of the structure of the industry.

Live Stock Act
That is clear enough. Then again ah the bottom of page 56 I read:
Further reference will be made to the profits of these companies, but we should here consider the view expressed by the president of Canada Packers Limited, of the relations of the industry to producers and consumers. This witness summed up his estimate of the situation as follows:
"The total live stock is sold for the total sum, whatever it is; from that sum is deducted the packer's expense and the packer's profit and the farmer gets the balance."
According to the president of Canada Packers the farmer gets the leavings, if there is any balance left, andi in recent years there has been no balance. At the top of page 57 there is a further paragraph dealing with the opinion of this witness, and the thought of the commisison in that regard is contained in the last two sentences:
We cannot, therefore, escape the conclusion that the continued prosperity of Canada Packers Limited during the depression bears some relation to the enjoyment of relative freedom from competition. That the inadequacy of such competition has operated to the detriment of the primary producer seems evident.
That establishes clearly the monopolistic character of this industry, and since it is a monopoly which affects the well being not only of the consumers but of a most important body of producers it is obvious logical1 to accept the suggestion that it should be either publicly owned or, as I personally prefer, owned by the producers themselves. If the minister could only give the producers some real encouragement and financial assistance in order to enable them to take over and operate these packing plants in the interests of the country it would meet every objection I have, but until he does that he is not even touching the problem. You cannot regulate a private monopoly; it has not been done successfully anywhere. All the anti-trust laws of the United States were successfully evaded, and trust and combine conditions in that country are as bad as if not worse than they were previously. So it will remain under private ownership of monopolies in this country.


Mr. SPROULE:: When the minister speaks of the grading of hogs on the rail, are those grades marked, whether they are butchers or what grade they are? Is that done also with lambs? Do they brand them so that the consumer can see the grade and whether $2 has been taken off or whether it has not?


Robert Weir: There is no grading of lambs on the rail. There is grading of hogs on the rail, and they do carry the
identification mark of the producer, so there is returned to him the premium to which he is entitled according to the grade, bacon or select. The way that works out is best illustrated by the fact that ninety per cent of the farmers in areas where this grading was started on a voluntary basis asked for that rather than the other method, because they feel they are getting paid for their products on the basis of quality.


John Thomas Sproule: I do not think the min-nister quite understood my question. I quite understand that the farmer has the right to ask with regard to the grade, but what about the consumer, the man who goes in and buys the meat? What right has he to ask what price was paid for the hog? I understand that the packers take a dollar off a light hog and two dollars off a butcher hog and so on. Has the consumer any way of knowing the price paid for that hog?


Robert Weir: It is not graded to the consumer. We are now making provision so that if a province wishes to grade for domestic consumption within that province we can protect them by preventing ungraded meat from being shipped to that province. The federal government has no control over provincial matters, of course, and the grading for domestic consumption is a matter entirely in the hands of the provinces.


John Thomas Sproule: I appreciate this information, because I am very much interested in this matter. One thing is certain; the producer is the man who pays the shot; he is the man who has to pay the $2 or SI or whatever it may be. My understanding always has been that these animals were not branded, so that when the consumer went in to buy meat he had no way of knowing what the hog cost or anything about it. It seems to me they should be branded so that the man who buys the meat can have some idea of what it cost. The packers always have had the right to take off so much a head for condemnation. I am not prepared to say whether or not that is legal; possibly the minister can tell me. I know in connection with the stock that goes across the border there are no restrictions of that kind at all. Perhaps that practice is legal; possibly it is not, but I should like the minister to tell me.


Robert Weir: The hon. gentleman has reference to condemnation insurance?


John Thomas Sproule: Yes.


Robert Weir: The question of condemnation insurance has been investigated
Live Stock Act

many times, and in that connection there are two opinions. Those in areas where the condemnation insurance is high feel that it is the best protection they can have, and that if there were no condemnation insurance deducted the tendency on the part of the purchaser would be unduly to depress the price in order to protect himself. On the other hand in some areas from which a good deal of our beef cattle comes, where disease is not prevalent, they feel that this should be wiped out altogether. I believe the records show that the condemnation insurance does not actually take care of the losses in that connection.
I omitted one point, the question of whether or not this is legal. This whole matter has nothing to do with legislation or regulation; it is simply an agreement that has been arrived at between the purchasers and the producers. The only part played by the federal department is really to be the third' party witnessing that agreement.


John Thomas Sproule: I never heard that the packers ever asked where live stock came from; apparently the condemnation insurance is taken off anyway.


Robert Weir: The packer does not need to know, but if that agreement were broken he would have to take that into consideration.


John Thomas Sproule: The minister said the losses were not covered by the amount deducted. Possibly I am wrongly informed, and I presume the minister would be in a better position to know, but I have been told that a good deal more has been taken off than the packers have had to put up. This is something that is not done in the United States at all. A good deal of Canadian stock goes to that country, but they never ask anything about it. When you take your stock there they do not say, "Well, these come from such an area; very likely some of them will be condemned, and we will have to take off five cents or ten cents a hundred." From what the minister has said there is one thing certain, and that is that the consumer does not receive the benefit of the amount deducted. If the packer deducts $2 from the price of lamb which is not branded he is just that much ahead. The same condition would apply to hogs, $1 being taken off a certain grade and $2 off the heavy hogs. If the meat is not branded the packer is the winner.


Mr. SPENCER:: I understood the minister to say that condemnation insurance arises as
[Mr. R. Weir.)
a result of an agreement between producer and packer. That is news to me. Who made the agreement for the producers?-because it is my understanding that this matter is arbitrary on the part of the packers.


Robert Weir: I am informed that my former statement is correct. This very point has on various occasions been discussed with representative producers organizations. If they feel it would be to the advantage of the producers as a whole to remove the condemnation insurance I am quite sure the packers would be willing to do so. At the present time however if any producer wishes he may ship his stock to the packers with the understanding that there will be no charge for condemnation insurance, and that he will stand the loss on any carcass unfit for consumption.


Henry Elvins Spencer: He has that option?


Robert Weir: Yes.


Donald MacBeth Kennedy: I should like to speak about another point closely related to a discussion of packers' yards, namely, the grading of live cattle. Is it the intention to grade live cattle?


Robert Weir: At the present time it is not the intention unless there is a demand from producers' organizations. If any organization desired to have certain animals at the bottom of the class, tail enders, set aside as being injurious to the trade, that could be done. Such action could be taken in the event of a submission by the producers.


Donald MacBeth Kennedy: I believe we should have live stock grades because not all cattle are sold through stockyards. It may be sound to argue, as is contended in the minority report, that commission men can grade cattle fairly well. But I say the livestock yards have a function in addition to that of the selling of stock by commission men to packers and other buyers, that is they establish standards. Other sales throughout the country are to a great extent based on the records made in and published through the stockyards. A considerable percentage of cattle is sold direct. My conviction is that the average farmer who sells is not a very good judge of cattle, but if he had a check in the nautre of a grading system he could check the price he obtains for his live cattle not being sold through the yard against grades in and prices paid at the yard.
This is one of the great advantages of records in connection with live hog grading, and at least to some extent I believe it to be necessary in connection with cattle.

Live Stock Act


Robert Weir: We have authority
to do that.


Donald MacBeth Kennedy: The minister's position is that if live stock men demand it-


Robert Weir: Or it might be done without a request on their part.


Donald MacBeth Kennedy: I should like to ask a question about truckers. What is the significance of paragraph (n) ? I can read the words, but I should like to have an explanation of them.


Robert Weir: Formerly we had
a definition of a public commercial vehicle, but not of a trucker or the operator of a truck. The definition has been inserted so as to have more control over truckers.


Mr. YOUNG:: What control is contemplated?


Robert Weir: To require them
to furnish security when they are handling funds. There have been some losses in western Canada, and we wish to bring truckers in every way under the control of the live stock legislation.


Edward James Young: The first part of the explanation is all right, but I do not understand what the minister means when he talks about bringing them under control. I should like a little more light on that.


Robert Weir: It may be desired to have control so that they would have to submit a bill of lading indicating the ownership of the animal and that such animal will be sold according to the instructions issued by the producer.


William Richard Motherwell: I know of only
one way of furnishing security, and that would be by a bond. Will truckers be bonded?-because they will be handling large amounts of money belonging to producers.


Robert Weir: If they handle
money other than their own they may have to furnish a bond.


William Richard Motherwell: They have not
been doing that in the past?


Robert Weir: No.


Henry Elvins Spencer: Will truckers be allowed
to buy stock outright?
Mr. WEIR (Melfort) They cannot be prevented any more than we could prevent drovers doing the same thing, under present arrangements.


[Stage Direction]
Section agreed to.
On section 3-regulations.
Donald MacBeth Kennedy: What is the significance of the expression "for voluntary application only"? Who will undertake to ask for it?


Robert Weir: If without passing legislation a province wishes to get some information on which to base contemplated legislation it may ask for voluntary grading of domestic meat, and this gives us authority to do it.


Donald MacBeth Kennedy: It would not be made by butchers or packing plants handling a product, but would be a request by a provincial government to enforce regulations within a province?


Robert Weir: Yes.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On the preamble.
Donald MacBeth Kennedy: I should like the minister to give us a statement with respect to the whole bill and the recommendations of the commission indicating what powers will be in the hands of the minister, after the passage of this bill, which would enable his department to implement the recommendations of the commission?


Robert Weir: Department officials believe that with these amendments to the Live Stock and Live Stock Products Act together with other legislation on the statute books every recommendation the commission has made, with the exception of providing a live stock board, can be made effective. We believe that with the present legislation we may accomplish what it was believed would be accomplished by a board.


Donald MacBeth Kennedy: I do not suppose it will be possible simply to apply immediately all the legislation and regulations. For instance, there is the question of the grading of live cattle. But the minister has indicated it is the intention to go ahead and through this legislation bring about that which has been suggested in the recommendations.


Robert Weir: Yes, as already stated.


Donald MacBeth Kennedy: I should like to say a word about the live stock board. The Ottawa agreements in my judgment, combined with the restriction of imports into Great Britain, were of tremendous advantage to the hog producers of this country. Even

Live Stock Act

if we had a surplus of only ten per cent or thereabouts it was necessary to find a market for it under the conditions existing in this country. Of wheat we had a very large surplus, but through government intervention and assistance, with the cooperation of the grain pool and through Mr. McFarland's efforts, wheat has been bringing to the farmers of this country, notwithstanding the tremendous surplus, a return much nearer to the cost of production than we have had in the case of cattle, for instance. I would say roughly that wheat has been bringing the farmers of western Canada from eighty to ninety per cent of the cost of production. Hogs, as a result of the Ottawa agreements, have been bringing easily the cost of production and maybe something better. But there was deliberate government intervention, by the Canadian government and the British government through the Ottawa agreements, in regard to the hog situation. There was the same thing in connection with the wheat agreement, and we had a very bad situation there.
The cattle situation is very bad. Cattle were selling until recently for about three cents a pound to the farmer. They were bringing more, from 4 to 4| and 5 cents, in the stock yards, but to the farmer the cost of production is certainly close to five cents. There was a very small exportable surplus, less than in the case of hogs and much less than in the case of wheat, and yet the price in relation to the cost of production was relatively far lower. That in my judgment is an illustration of the value of reasonable government intervention, and one of the reasons why I at least wanted to see a board established was because of our experience with regard to wheat. I have had the opinion that the various branches of the live stock department were somewhat scattered, but a commission of a few men, either inside the department or any way you like to organize it, would have its duties definitely defined and it should be held directly responsible for the carrying out of those duties. It could be organized in various ways. It may not be necessary to call the board a commission or to call the people who are saddled with this responsibility commissioners, but I believe that something of this sort is necessary. I believe that there is need for something to be done because of the delicate situation with regard to the surplus of cattle in this country. It is a small surplus. The chairman or president of Canada Packers made a statement when he was before the commission and it simply meant this, that

because we had a surplus of ten per cent of cattle, 100,000, the price was down from three to four cents below what it otherwise would have been.


Peter McGibbon: How much would it take in money to buy up that surplus?


Donald MacBeth Kennedy: Not a very great deal.


Peter McGibbon: Can you give me any idea?


Donald MacBeth Kennedy: They would be worth about S50 a head, and the surplus was given as 100,000. The United States market has opened up and I have given you Mr. McLean's estimate of what the prospect of the export of our surplus of cattle of 100,000 would mean in higher prices to the producer in this country. There are other factors that enter into the situation.


Mr. BROWN:: How long would the surplus remain at that point if you paid that price?


Donald MacBeth Kennedy: I am not arguing that. I say that I can see no reason why the farmers of this country and the government should not be able to do something with regard1 to that ten per cent surplus, which had the effect of causing the price to drop fifty per cent. We have heard all sorts of theories advanced for the Salvation of this country, and I believe in a good many of them, but unless we can correct to some extent the prices 'received' by the primary producers in- relation to the prices received1 by the secondary and other groups of producers in this country, I do not believe that any policy will save this country. I believe it is necessary to correct that situation. I believe it is necessary to have an organization in this country to study the matter and to watch it very carefully. We are out of the British market to some exent, if not altogether, because of the exports of the United States, and nobody yet knows whether that is a permanent export or not or whether something will happen, something that others may do or that may depend- on natural and other conditions in other countries, to bring about the conditions of 1923 or 1929.
The favorite policy of most people is to expand the markets in order to absorb the surplus. What if we -cannot do that? There is no guarantee that we can do it, and I think that the recognition of that fact at least implies that if we cannot expand the market we ought- to reduce the supply. I believe it can be done. I do not believe in scarcity, but I do believe that with reasonable conditions in agriculture you have to balance your

Live Stock Act
supply with your market within reasonable limits. That has been attempted I believe with a good' deal of success with regard to wheat, andi certainly with regard to hogs and hog products in the British market, and we are a party to that scheme. It may be possible to do something with the present set-up in the Department of Agriculture and the Department of Trade and Commerce but I think that the question should be definitely studied and definitely placed before some officials who at least will do what they can to study it and try to get cooperation from the organized farmers throughout the country and scattered producers to try and stabilize the price.
My hon. friend from Weyburn (Mr. Young) was on the commission and he recommended that it might be necessary to reduce the surplus. He wants to do it by ruthless economic law. Well, that is his opinion and I respect it as his opinion, but I cannot see any reason why if a thing must be done we should leave it to ruthless economic law if we can do it by intelligent methods, and the application of human sympathy to the situation. The whole progress of human society in m3' judgment has taken place through the exchange of intelligence and1 sympathy and1 humanity for ruthless economic law and rugged individualism.
I want to say a few words in regard to the hog situation. We want someone who is in a position to insist that there will be the most rigid application of approved methods and that grading be applied to our bacon exports to Great Britain as it has been applied to hog raising in the Dominion of Canada. The hog grading system and the hog grading regulations have done a very great deal for the hog industry in this country.
It was stated by the president of Canada Packers, Mr. McLean, that there was a lack of confidence between the farmers and the processors. That is so. I believe that if we could convince the farmers of this country that there should be applied to the bacon exported to Great Britain, where our standards are set, the same rigid requirements as are applied to live hogs, a great deal would be done to remove some of the misunderstanding between packers and farmers. Of course the packers have their problems just as the farmers have theirs, but everyone representing the packers, everyone representing the primary producers and, I think, the government officials who came before us, admitted that there had been going into the old country bacon of a grade that should not have been exported-certainly bacon that was not beneficial to Canada.
92582-217J
Every effort of this department, of the live stock board set up, and the boards representing the primary producers, should be directed to the fixing of a standard of bacon the product of select and bacons only and this bacon should fix the price of bacons and selects in Canada There is a dispute with respect to the lower grades, but there is definite evidence by one of the packers that in the A grade there were not only selects and bacons but heavies and lights. I do not think you can satisfy the hog producers of this country if hogs that are brought on a differential go into the grade that sets the price for bacon and select hogs in the dominion. It is for that reason that I recommend the setting up of a live stock board.
The problem of the organization of cattle marketing in this country is to endeavour to get the farmers a decent price, and that is a very important matter. Important also is the problem of maintaining the confidence of the live stock producers in marketing methods so far as the British product is concerned. The permanent prosperity of agriculture depends on live stock. We have heard a good deal about grain mining, and whether or not it is a just phrase to use in connection with grain farming, we all know that any country which has continuously produced grains has usually had to quit that system and go in for mixed farming, where there is live stock and particularly cattle. I do not think there is any country in the world that has done more in the same number of years to improve its live stock than some of the ranchers in Canada have done, and the plight in which they have found themselves in the last five years has been desperate. Because of its importance to the national economy, because of its importance to the continued welfare of agriculture, I believe that a deliberate effort should be made to deal with any future problem of surplus in at least as effective a way as was done in regard to the wheat problem of this country.


Robert Weir: With reference to
the remarks of the hon. member for Peace River, I agree with him one hundred per cent: there can be no permanent prosperity unless the efficient primary producer receives a profit for his labour over and above cost. The problem of a small surplus and its effect on the domestic price is perhaps the most depressing factor, but to deal effectively with that problem except by direct bonus has been felt to involve taking control of all the product. The organized producers themselves, especially the producers of live stock, have stated emphatically that in their opinion
Live Stock Act

not only must steps be taken to take care of this small surplus but that the industry itself should carry the load; and they have made very considerable progress towards forming an organization among themselves by which to a certain extent they can get rid of this small exportable surplus. In their work in this direction some might have considered their progress to be rather slow, but because of the numbeT of people involved and the different opinions expressed it must of necessity be slow. We are informed, however, that three of the provinces in the west at. least have brought their ideas into line to such an extent that they believe they will be able to combine that one large area into one organization, or at any rate to have three organizations cooperating as one. Ontario 'has also taken steps to deal in some way with the surplus wdiich at one time was going to the united kingdom market, and the fact that they did go as far as that shows that the live stock dealers in the province are very much alive to the danger of this small surplus. The producers feel that a solution is possible, but they think that the industry itself should carry the load, and they have every hope now that in the not distant future they will themselves be able to cope with this problem. They may have their own live stock board and in addition there will be available to them the services of the officials of the department. One thing more than anything else which the officials in the live stock branch have been concerned with during the past few years has been the problem presented by all the difficulties and the obstacles in marketing.
In connection with bacon grading for export, a recommendation has been made by the price spreads commission that only graded and select hogs should be allowed to go into the product exported. About a year ago it was decided that definite grades should be set up in connection with bacon that was being exported from this country in order that we might overcome some of the criticism that had been made, to the effect that much of our bacon was not a credit to the Canadian people and had a detrimental effect on other prices obtained for the rest of the bacon in the old country. This has proved to be a difficult matter, especially considering the varied feeds used and the varied conditions that exist from one end of Canada to the other; it has been considered difficult to set definite standards in connection with bacon for export in view of these circumstances. It was felt at one time that only the top grade should be sent over, that a selection should be made of the best bacon processed and that this only should be ex-

ported. But those in the best position to advise, not only those personally interested but others as well, claimed that if we set a top standard only and set it too high there would not be sufficient of our bacon going into the United Kingdom to supply the demand that might be created for it. The endeavour was to hit a happy medium so that a sufficient quantity would go forward to meet the demand and at the same time as far as .possible not be detrimental to the reputation of Canadian packers.
There were three grades established first. They have been carefully checked on this side and also on the other side in the reception they have received from consumers in the old land.. After some time the three grades were cut to two, and now only two grades are going forward. On the basis of putting in selects and bacon that would be graded, say on the hoof, there would be no assurance that they would give the best finish, because the quality depends on the finish, and that cannot be told by those who would grade the hogs on the hoof. That is one of the difficulties in that connection. As to grading on the rail, with our complete control of bacon going to the United Kingdom, only the top bacon can be exported; I do not mean the very top selects, but bacon and selects.
The hon. member will remember a letter I showed him this morning in this connection ; it was a confidential letter and cannot be read into the record of the house. About a year ago we sent over a man who, we felt, was eminently qualified to check the quality of our bacon and its reception in the United Kingdom, after having visited packing plants in Canada and being fully conversant with government machinery and the department on this side. He was not sent to a position in England, because he is still on the staff of the Department of Agriculture in Canada, but to make confidential reports. The value of his work has been much greater than we even expected when he went over, because by his manner and tact he has had a very fine reception and has received every assistance from every person on the other side as well as those in the trade. He writes directly to the packers who are sending over bacon that is not what it should be. He is candid in his criticism and in pointing out the criticisms that are made over there. If the bacon is not brought up to standard as a result of the letters he sends, the licence to export given to such a packer may be cancelled. Therefore we have all the power necessary, but as long as the packers make

Live Stock Act
every possible effort to put the best product on the old country market, we feel that we should not be too drastic in any action we take. But we think now we have reached a point where if there are certain packers who may not step up the quality of their bacon, a licence may have to be refused them. There is however ample power to do what has been asked in that connection.


Mr. LUCAS:: Has the minister any information to show that the packers have a uniform grade themselves? I wa9 led to [DOT]believe some time ago that each packing plant had a grade of its own and that they did not conform, so that when the bacon went on to the British market, there were different grades of Canadian bacon. I think every hon. member will agree that there is no other oountry in the world that should be able to produce as fine a quality of bacon hog as Canada. Nevertheless it is humiliating, when we take the prices that are given in these, I think, weekly reports that are issued by the Department of Agriculture giving the comparative prices of bacon that goes on to the British market from the other countries of the world, to find the price for Canadian bacon is the lowest of that of any country reported. I am strongly of opinion that if we are going to build up a market for Canadian bacon, there should be some standard for export to which all these various packing companies would have to conform. The minister says that he has the power. I trust, if he has it, he will see that a standard is set so that all packers who are exporting will have to conform to that standard and that there will be brought about some more uniformity in our bacon on that market in order that we will get a better price for it


Robert Weir: The hon. member
is right in what he stated at the commencement that when we endeavoured to set a standard for bacon, among the different packing plants that were exporting, although in one sense each was producing a high class article, there was a difference in the finish or in the cure so that it was not a uniform bacon. That was the first problem the officials of the department ran into in establishing a fixed standard or grade. They felt that the only way in which that could be overcome was to call various meetings of the packers. A number of meetings were held and after a good deal of consultation and showing beyond doubt that they did intend to fix a standard and that if the packers were not willing to cooperate, a standard would have to be set that might be more injurious
to some of them than if they sat in and endeavoured amongst themselves to investigate the cure of bacon in each of the packer's plants, and from such investigation each take what he felt was best in the way of curing and see if in that manner he could not come to some more uniform standard. I think it is only fair to state that one of those packing plants was creating a very favourable impression in the markets of the United Kingdom because of the uniformity of its cure, and this was due to certain machinery that was being used in this packing plant. We received the full cooperation of the packers and the undertaking that they would each visit the others' plants and then have another meeting and see what steps could be taken to work out a uniform standard. After a number of such meetings a certain standard was reached, and it was reached by every person cooperating. The packers are very generous in their praise of the officials of the department, stating that their getting together and each learning from the other has been perhaps more beneficial than anything else in regard to bringing about a uniform standard for our bacon in the old country. We have now an artificially fixed standard for export that must be lived up to.


Donald MacBeth Kennedy: I would like to ask the minister whether all the bacon exported to the old country is examined there by a representative of the Agriculture department?


Robert Weir: He sees it opened
at the docks at London, and besides that he checks it through the different sales agents.


Donald MacBeth Kennedy: This is
not a very good time to recommend additional expenditure, but in view of the importance of the matter and the tremendous figures involved as outlined before the commission by the president of Canada Packers, I think at least a reasonable expenditure is necessary to put on more inspectors in the old land so that we may do everything possible to raise the standard of our bacon in the British market.


Robert Weir: I am inclined to
agree but we felt that before this was done we should have the best man possible go overseas, investigate and make recommendations.


Mr. ELLIOTT:: The minister will remember my calling to his attention some time ago reports from the old country in regard to the quotas on cattle, beef, veal and hogs from Canada exported overseas. At that time the
3416	COMMONS
Supply-Agriculture-Marketing Act
reports indicated that there was going to be some -reconsideration of the agreement between the United Kingdom and the dominions. Has any change been made since then?


Robert Weir: Not so far as
Canada is concerned. The discussion of that quota applied more to New Zealand and Australia because it was in their agreements with the United Kingdom that a quota should be set up in the first place.


Mr. POULIOT:: The other day in answer
to a question the Prime Minister said that there were quotas for hams and bacon and oats and oat products. Cattle was not mentioned. Is there a quota for cattle?


Robert Weir: No.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Bill No. 96, respecting the Samia-Port Huron Vehicular Tunnel Company-Mr. Gray.
Bill No. 97, respecting the Portage la Prairie Mutual Insurance Company-Mr. Willis.

[Stage Direction]
The house in committe of supply, Mr. Morand in the chair.
Natural Products Marketing Act, 1934, $545,500.
William Richard Motherwell: I made a few remarks on this item three or four days ago so I do not intend to devote any more attention to the actual vote and the purposes for which it is to be used, but inasmuch as the discussion widened out a good deal, particularly on the part of the hon. member for Dufierin-Simcoe (Mr. Rowe), may we be permitted to follow that hon. gentleman in some of the extraordinary allegations he made not only yesterday but on the 4th of this month. On page 3298 speaking of markets and replying to the hon. member for West Edmonton (Mr. Stewart) he is reported as saying:
Mr. Rowe: He is the man who said he would sound the death knell of protection when the Liberals got into power, and no man knows better than he does that practically every agricultural market in the world was closed to our products before this party came into power.
Now that was an extraordinary statement. It was so wild that I let it go by at the time.

But on the same page I find he repeated it in even worse form. He said first that "practically" every market was lost to Canada. Now "practically" is a very flexible and saving term. Sometimes it lets one out from deliberate misstatement. But what shall we think of this, found on the same page?
I have never blamed them, and that is why I resent hon. gentlemen opposite blaming the present Prime Minister and this government for closing, as they say, markets that as a matter of fact were absolutely closed to us before 1930.
This time he used the word "absolutely," not "practically." Then if you look at yesterday's Hansard the hon. member for Dufferin-Simcoe repeated the same statement, saying he was not making a random statement the other day when he said we had lost all our markets for agricultural products. What are you going to do with a gentleman like that? Where have our export commodities been going? If they have been shut out of all the world', then we must have eaten them all ourselves. But everyone knows that there has been a great volume of these agricultural commodities going abroad. Just to refresh our memory I have to-day received from the bureau of statistics figures as to exports of grain-I am speaking more particularly of wheat and of flour converted into the equivalent bushels of wheat. Here are the authentic figures, we shall see how far we lost the markets:
Crop years	Quantity
1924-	25	
192,721,7721925-	26	
324,592,0241926-	27	
292,880,9961927-	28	
332,963.2841928-	29	
407,564.1861929-	30	
186,267,212
A big .drop occurred there. It will be remembered that the 1929 crop was very small, and that was the beginning of the holding policy by practically every seller of Canadian wheat. I am not going to criticize the policy, it was thought to be a right one, nearly every seller of Canadian wheat did it, not meaning it to be permanent, but such hoarding policy has continued more or less until the present day, getting worse all the time. But notwithstanding that, in the last year of the Liberal administration we exported 186,000,000 bushels of wheat to various countries of the world, numbering about forty. Yet the hon. member for Dufferin-Simcoe says that absolutely all these markets were closed to us. How then did it get in? If all the doors of this chamber were closed, the inference would be that we could not get in unless we climbed through the roof or somewhere else. World markets cannot be

Supply-Agriculture-Marketing Act
open and closed at the same time. Inasmuch as all this grain went out of Canada for export and large amounts of other farm products, it shows that the hon. gentleman's statement was just a fairy tale, no sense to it, no fact to it. There has been no time in the history of Canada when we shipped out as much wheat as we did in the second to last year of the last administration, 407.000,000 bushels. Then as I say it suddenly dropped because of the holding policy of all sellers of Canadian wheat, thinking the market would revive.
Now we will proceed, after that occurred. In 1930-31 we exported 258,693,887 bushels; in
1931-	32 we exported 207,029,559 bushels; in
1932-	33 we exported 264,304,328 bushels, and in 1933-34 we exported 194,779,876 bushels. This year, as far as the figures go, we have exported 132,672,697 bushels. If you take the value, which is the basis upon which exports are compared, the showing is much more favourable for the years of the Liberal administration, but I will not make an extreme comparison of that kind because in a sense I suppose it should be on the basis of quantity rather than of value, though nearly all statistics are based upon value.
Yesterday the hon. member for Dufferin-Simcoe repeated the statement, and I am sorry to report to the house and to remind the minister that he made the same statement himself four or five nights ago, I think on May 31. The minister stated that practically all our markets for agricultural products had been closed, and he cited the United States as one example. That was correct; that market was almost closed to cattle but the minister did not mention the corresponding British market that had been opened up, to which I referred already to-day. So I am convinced that these are going to be the campaign tactics of this government during the coming election. It will be recalled how lamentably they have fallen short of carrying out their 1930 promises. Not satisfied with that a further barrage of promises by the Prime Minister was hurled across Canada over the ether waves shortly after the new year, another plethora of promises which have flattened out like the proverbial pancake or a busted tire. Now something else has to be framed up to stave off the approaching defeat. I happen to have in my. hands some campaign literature sent out by our Conservative friends, and this reveals the same tactics. Of course we are always prepared to make some allowance for the enthusiasm of the writers of campaign literature, but this stuff is just like the statements that have been made by the member
for Dufferin the very antithesis of the truth, and apparently that is the way the government and their followers are going to try to humbug the people once more, with the hope of again attaining power. Following the nonfulfilment of their 1930 promises and the Prime Minister's effervescent radio performances, now apparently the government are going to jam the people full of false statements by means of campaign literature.
That is one reason why I speak thus to-day.
I regret very much that the hon. member for Dufferin-Simcoe is not present; I presume he belongs to that class of people who hear someone make a misstatement, after they repeat it frequently enough they begin to believe themselves. I should like to be sufficiently charitable to think he was not deliberately deceiving the public, but the fact remains that he made those misstatements to which I have referred. He did qualify the first statement by saying that "practically" all the markets were closed to our farm products but in his last statement he said they were absolutely closed. Yet these official figures indicate that large volumes of farm products were going to the markets of the world, including Great Britain, between the crop years 1924-1925 and 1929-1930 far in excess of what has gone forward since this government have been in power.
I do not want to urge that point further except to say that the minister did qualify his remarks a little bit this afternoon. When he pointed out that our markets were lost he really did not quite mean it that way nor blame anyone for it. But why make the statement? I think when we come to the measure regarding the grain board we may be able to go into this matter further, in order to show that markets have been lost not so much during the Liberal administration but during the last two or three years. However, we will let that be for the moment. I would hope that the minister would not spoil some of the other qualifications he possesses for performing his work by making such loose and extraordinary statements as that we have lost all these markets for farm products. I think he did insert that saving word "practically" but his follower and supporter from Dufferin-Simcoe went him one better, or one worse, and said they were absolutely all lost. The very fact that all the members on this side of the house let the statement go indicated that they did not think it was worth replying to. It was like the statement of a madman, but at the same time it is this kind of madman that gets listened to during a campaign. Those tactics worked fine in 1930,
3418	COMMONS
Supply-Agriculture-Marketing Act
but it is our business to see that they do not work again. That is why I have made these remarks. If any one has any explanation or justification to. offer on behalf of the hon. member for Dufferin-Simcoe in connection with his extraordinary remarks I should be glad to hear it.


Edward James Young: When we were on this item last night I aksed the minister if there were any schemes in operation under which the actual marketing of the commodity was done by either the local board or the central marketing board, and the minister replied that there were none. I notice in the synopsis of the poultry marketing scheme which was submitted to the people of the west during the winter that the plan was to have the marketing done by a central sales agency set up and controlled by the producers. Are there any schemes in operation under which the marketing is done in that manner?


Robert Weir: The hon. member's question, I take it, is this: Is there any scheme in operation under which the local 'board has made use of that part of the marketing act that gives it authority to designate a specific agency?


Edward James Young: Not exactly. They might designate as a specific agency some agency already in existence, some private corporation. Under this plan, however, they proposed to set up a producer-controlled central selling agency that would handle the entire surplus product, working on a nonprofit basis. Is there any such scheme in operation?


Robert Weir: That is merely a designated agency, whether established or chosen from those already in existence. The potato people designated an agency; the jam people designated an agency and the bean scheme designated a specific agency, or so I am given to understand.


Edward James Young: Do these agencies actually market the crop?


Robert Weir: Yes, as distributors.


Edward James Young: Will the minister tell me how they finance it?


Robert Weir: I could not give the hon. member any information as to how they finance it. Certainly they do not finance it by any levy made on the producer.


Edward James Young: 
Robert Weir: My information is that they are using the established trade organizations.
Mr, YOUNG: Then they are not doing the marketing; the marketing is being done by other people, private agencies?


Robert Weir: Yes, they are
carrying on some of the functions. My interpretation is that they are really carrying on some of the functions of marketing in that to a certain extent they controlled the sale.


Edward James Young: Then they were not doing any selling, nor were they doing any buying?


Robert Weir: No buying.


Edward James Young: Neither buying nor selling. Then there is no scheme in operation under which the local board or any body set up by it is doing the actual marketing of a commodity?


Robert Weir: That is right.


Mr. RALSTON:: I want to ask the minister a question with regard to the working of the so -called potato marketing board, just following along the line of the questions asked by the hon. member who has just taken his seat. As I understand it the potato -marketing -board has power, under the order in council whereby it was established, to regulate the time and place at which and to designate the agencies through which the regulated product shall be marketed by dealers. That is one of the powers of the board. As I understand it the next thing that- happens is that an individual is named in, let us say Nova Scotia or New Brunswick, as the marketing agency designated by the board. Is that the practice?
-Mr. WEIR (Melfort): That an individual person is named as an agency?


James Layton Ralston: As a marketing agency.


Robert Weir: Yes, I understand that is correct.
Mr. RALSTO-N: Is that individual actually a dealer in potatoes; does he deal in potatoes?


Robert Weir: Except in so far as he controls the sale of potatoes.


James Layton Ralston: But does he deal in potatoes? Is he a marketing agency, at all? What does he do?
Mr. W-EIR (Melfort): To the extent, that he controls the sale of potatoes through any subagent he names.


James Layton Ralston: Through what?

Supply-Agriculture-Marketing Act


Robert Weir: Through any subagent he names.


James Layton Ralston: Where does he get power to name a subagent?


Robert Weir: He himself is named as agent and he can use whatever means he wishes to market the product.


James Layton Ralston: He is the agent of whom?
Mr. WEiIR (Melfort): I believe I did not understand the last part of the hon. member's question.


James Layton Ralston: He is the agent of whom? The minister said that this man was named as an agent,-the agent of whom?
Mr. WE'IR (Melfort): The first individual, do you mean?


James Layton Ralston: Yes.


Robert Weir: Of the producers.


James Layton Ralston: Of what? There is no provision for naming an agency of the producers. The board has power to designate agencies through which potatoes shall be marketed. I have under my hand-and there is no secret about it-a circular from New Brunswick signed by J. C. Cunningham, marketing agency designated by the eastern Canada potato marketing board. Is he the agent of the board?


Robert Weir: He is the designated agency through which the marketing takes place.


James Layton Ralston: The agency of whom?- of the board?


Robert Weir: Of the producers.


James Layton Ralston: Has the producer any part in naming him?


Robert Weir: The board names him, and the producer is represented on the board.


James Layton Ralston: Will the minister tell me how many producers are on the local potato marketing board of eastern Canada?


Robert Weir: We have not the names of the producers on the board, but I am informed quite a number of the members of the board are local producers.


James Layton Ralston: How many are there on the board altogether?


Robert Weir: Ten.


James Layton Ralston: I notice the minister is looking at the order in council. I find that a
Mr. Mulharin is a representative on the board of New Brunswick. Is he a producer?


Robert Weir: WTe have no information available as to who are or are not producers. I regret that that is the position.


James Layton Ralston: We ought to have that information because the minister has said that this marketing agency is the agency of the producers. He is not named by the producers; he is named by the board, and we ought to know whether it is a producers' board. My information is that it is not.


Robert Weir: I a'm informed that it is a composite board consisting of shippers and producers.


James Layton Ralston: And I understand that
there are more dealers than producers.


Robert Weir: I would not hazard a statement, because-


James Layton Ralston: I am talking about eastern Canada, the man who regulates the shipment of potatoes in New Brunswick. I notice that there are two men in New Brunswick, one being a Mr. Mulharin and the other a Mr. Cunningham. I wish to know if either or both are producers.


Robert Weir: I believe Mr. Cunningham is a producer.


James Layton Ralston: Would the minister verify his belief-not immediately but at some later time?


Robert Weir: Yes.


James Layton Ralston: I understand that Mr. Cunningham is named by this board to sit on the marketing agency designated by the eastern Canada potato marketing board. Does Mr. Cunningham handle any potatoes for the board?


Robert Weir: My information is
that all sales of potatoes in New Brunswick go through Mr. Cunningham.


James Layton Ralston: Will the minister please
answer the question: Does Mr. Cunningham handle any potatoes? Does he buy or sell potatoes?


Robert Weir: He does not buy or sell potatoes, but he negotiates sales of potatoes through subagents.


James Layton Ralston: The minister states that he negotiates sales of potatoes through subagents.


Robert Weir: Yes.


James Layton Ralston: Who are the subagents?

Supply-Agriculture-Marketing Act


Robert Weir: The different dealers named by him; we will have to get the names of the dealers.


James Layton Ralston: Where does he get the
power to name dealers as agents?


Robert Weir: In the same way
as any person who might be named as an agent would carry on that work with the assistance of subagents, commission men and so on.


James Layton Ralston: Are those subagents the
agents of the producers or of the board?


Robert Weir: They are the subagents of the agent named.


James Layton Ralston: And the agent is named-


Robert Weir: Named by the local board.


James Layton Ralston: The agent is the agent
of the local board?


Robert Weir: Of the producers
named by the local board.


James Layton Ralston: The agent is the agent of the producers named by the local board?


Robert Weir: Yes.


James Layton Ralston: Does the agent deal with the producers?


Robert Weir: The local board controls the movement of potatoes through that agency, and through his subagents the potatoes are directly purchased from the producer.


James Layton Ralston: Does Mr. Cunningham
of New Brunswick deal with the producer?


Robert Weir: Not directly, but
through subagents, I am informed.


James Layton Ralston: And the subagents are nothing more or less than every dealer in the province of New Brunswick. He names each dealer a subagent.


Robert Weir: Each dealer who conforms to the requirements set up by the scheme.


James Layton Ralston: I am not attempting to raise legal technicalities, but I am asking the minister, whose officers are before him, under what authority he finds powers to clothe Mr. Cunningham with authority to appoint subagents, or to appoint as subagents all the dealers in New Brunswick who conform with his requirements?


Robert Weir: That is a matter of commercial arrangement between the agent appointed and his subagents. If the regulation of the marketing was not conducted accord-

ing to the ideas of the local board, and in the best interests of the producers, then another agent might be named. That is the control that the local board has.


James Layton Ralston: I am asking the minister this question: Where does he find the authority to clothe this agent with the power to appoint subagents throughout the province, and to instruct them to sell through him?


Robert Weir: The authority is vested in the agent. A man, Mr. Cunningham in this instance, is appointed agent for the marketing of potatoes. He may either engage individuals and set up a marketing organization of his own, or he may make use of those already engaged. That is a private arrangement he may make.


James Layton Ralston: But Mr. Cunningham does not handle a solitary potato, does he? Mr. Cunningham is only a toll gate, is he not?


Robert Weir: The movement of potatoes is within the control of the marketing board, through Mr. Cunningham. He controls the movement of them.


James Layton Ralston: Does he keep any books of the number of carloads inward to him and outward from him.


Robert Weir: I could not give that information,


James Layton Ralston: I want to know whether he is an agency or not, or just a figurehead, a sort of mouthpiece of this local board. Is he anything more . than that? Does he handle a single potato or keep any 'books whatsoever with regard to purchases from producers and sales to the central markets?


Robert Weir: Whether he handles the potatoes himself or through the subagents I have no information, ibut I do not see how it makes any difference.


James Layton Ralston: As I understand it, he is the agency designated through which the regulated product shall be marketed by dealers. That is the difference, and I am asking if he is an agency in the business or just a figurehead who issues orders to somebody else.


Robert Weir: The interpretation is that he is the agent, and the work is done by subagents.


James Layton Ralston: Will the minister tell me where Mr. Cunningham gets authority to issue a circular fixing prices?
Mr. W'EIR (Melfort): As the agent of the producers. Any marketing agency could do

Supply-Agriculture-Marketing Act
that-a man by the name of Brown, for instance, if he was the agent of the producers, and they engaged him to market their product at a fixed price. I understand that is the way it is done.


James Layton Ralston: I am reading from circular No. 3, headed1 "New Brunswick Potato Marketing Agency" and addressed "To all representatives." I stop there to ask the minister if the "all representatives" referred to are all the dealers throughout the province of New Brunswick who, as he says, conform to the regulations laid down by this Mr. Cunningham? Is that who all1 the representatives are?


Robert Weir: Yes.


James Layton Ralston: Following that I quote further from circular No. 3:
The following are the minimum prices for Green Mountain potatoes (Cobblers 5 cents per bag less except at Halifax) effective February 25, 1935, at which you are to sell potatoes produced in New Brunswick, cash track on the following markets.
Representatives of this agency shall note that all quotations and sales to points east of Peterborough. Ontario, and to all points of northern Ontario shall not be confirmed at a lower proportional price rate than the minimum Montreal base rate.
Prices for Peterborough, Ontario, and west thereof and for points in southern Ontario (old Ontario) shall not be confirmed at a price rate proportionately lower than the minimum Toronto base rate.
Montreal	80-pound	bag	GO	centsToronto	90-pound	bag	75	centsHalifax	90-pound	bag	57	cents
Agency circular No. 2 is amended accordingly.
G. C. Cunningham, Marketing Agency designated by the Eastern Canada Potato Marketing Board. Fredericton, N.B.
February 21, 1935.
If one of the gentlemen who is named as a representative comes to Mr. Cunningham and says, " I am handing you my potatoes; I am going to sell them; I want them sold at 50 cents, not at 60 cents a bag," what are you going to do about it?


Robert Weir: The board controls
the movement of potatoes.


James Layton Ralston: Does the board control
the price?


Robert Weir: The agency controls the price.


James Layton Ralston: Is there anything in the
statute or is there anything in the order in couneil which mentions a solitary word about price, and was it not expressly intended when
the marketing act was brought down in this house that this was not to be a price fixing agency?


Robert Weir: The agency that is appointed controls the sale under the direction of the board, and the agent can sell at any price he wishes, but being the agent of the producers he would take instructions from the producers.


James Layton Ralston: Does my hon. friend suggest that when he finds in paragraph (a) of section 6 defining the powers of the local board:
(a) To regulate the time and place at which and. to designate the agencies through which the regulated product shall be marketed by dealers-
-and that includes the regulation and the fixing of a price?


Robert Weir: It states the time
and place at which the commodity is to be marketed.


James Layton Ralston: And the agency through
which.


Robert Weir: And the agency
through which it is to be marketed. Then it is within the power of the agency to market those potatoes according to the instructions of the board for regulating the marketing of potatoes. It is the function of the agent that is appointed to control the marketing of the product.
Mr. RALSTON; It is the function of the agency to regulate the marketing of potatoes as laid down in the powers of the local board, namely, to regulate the time and place and to determine the manner of distribution of the regulated product by dealers and to determine the quantity and quality, grade, variety or class, but it expressly omits to say anything about the fixing of the price.


Robert Weir: The marketing
agency has full power of the sale of the product when he is appointed agent of the board, both with reference to the price he wishes to get for the product and other matters.


James Layton Ralston: Has my hon. friend any
advice to that effect?


Robert Weir: That is the information I have just received.


James Layton Ralston: No. I mean has the
minister taken the advice of the Department of Justice or anybody on the power of an agent who is simply named as such to issue instructions to people throughout the province that they must sell at a certain price?

Supply-Agriculture-Marketing Act


Robert Weir: The approval of
this has been, given I understand by the Department of Justice.


James Layton Ralston: Will the minister bring
down that approval after recess?


Robert Weir: The approval is in the scheme, in the fact that the scheme has been accepted. The basis of acceptance of the scheme is that it has met the approval of the Department of Justice.


James Layton Ralston: The minister is not going to get away with that. I am not talking about the approval of the scheme, but approval of this method of regulating prices. I ask the minister has he any advice from the Department of Justice that a gentleman named Cunningham can be named by the board, a man who does not handle potatoes at all and is in no sense a marketing agency except nominally, and that he can issue instructions legally to all dealers in New Brunswick that they must sell at a certain price?


Robert Weir: I am not aware
whether or not that particular point was put before the Justice department. I thought the hon. member was asking with reference to the powers under the scheme. Before any scheme is approved by the board the powers are first submitted to a representative of the Justice department. With reference to the particular point my hon. friend mentions I do not know whether it was brought before the Department of Justice.


James Layton Ralston: But that is the whole
point, Mr. Chairman. That is why I understand the peg was pulled and the potato marketing board almost ceased to function.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 33 for the relief of Ray Leitman Aronoff-Mr. Garland (Carlton).
Bill No. 44 for the relief of Agnes Mabel Potter Brockwell-Mr. Garland (Carleton).
Bill No. 45 for the relief of John Henry Ley -Mr. Garland (Carleton).
Bill No. 56 for the relief of Emma Gelfman Goldman Stokolsky-Mr. Heaps.
Bill No. 57 for the relief of Albertine Roberte Montpellier de Beaujeu-Mr. Bell (St. Antoine) .
fMr. Ralston.]
Bill No. 65 for the relief of Isabelle Hume Sadlier Rice-Mr. Garland (Carleton).
Bill No. 66 for the relief of Mary Frances Isobel Brown Gauthier-Mr. Factor.
Bill No. 67 for the relief ,of Amy May Wells Gorman-Mr. Bell (St. Antoine).
Bill No. 68 for the relief of Charles Michael McGuire-Mr. White (Mount Royal).
Bill No. 76 for the relief of Nora Ellen Moore McCabe-Mr. Bell (St. Antoine).
Bill No. 77 for the relief of Hildur Emilia Hill Soucy-Mr. Bell (St. Antoine).
Bill No. 78 for the relief of Ethel Ellis Callow Randles-Mr. Bell (St. Antoine).
Motions for third reading agreed to on division.

[Stage Direction]
The house resumed from Friday, April 12, consideration in committee of Bill No. 13, to amend The Canadian and British Insurance Companies Act,	1932

Mr. Coote-Mr. Morand in the chair.
On section 1-Surrender of policy.
Richard Bedford Bennett: Now observe that of that total over $61,000,000 has been loaned by companies beyond the legislative jurisdiction of this parliament. While we have licensed them under circumstances which I shall not now discuss, it will be readily understood that when they are advised

as they promptly will be, as it is their business, and they have agents who watch that sort of thing-when they are advised that we have passed legislation by which we have modified to any extent at all the terms of the contract made between the policyholder and the company, the credit of Canada suffers a great injury.
I say that with very great deliberation because I know whereoif I speak. Only a few years ago we endeavoured by a special form of taxation to do what had been done in other countries, and we were advised at once, almost by cable shall I say, that certain conditions that attached to certain contracts clearly must not be covered by such legislation.
Let me go further. The premium loans, that is, loans standing to the credit of policies in this country, to carry the policies forward when the unfortunate policyholders can no longer pay the premiums, so far as the Canadian companies are concerned amount to $33,564,616; in the case of British companies, to the small sum of $466,377, and in the case of foreign companies to $3,439,173. making a total for automatic premium loans of $37,470,166. So, sir, the total sum of these two amounts, or should I say the total amount of these two sums, is $244,746,378.
When I first saw those figures, Mr. Chairman, I confess that I was astonished. Here we have nearly a quarter of a billion dollars advanced on the security of the reserves, on policies or under contracts between the policyholders and the companies themselves. What do you think the statutory reserves, set up under the provisions of the Insurance Act, amounted to? As of December 31 they amounted to the very large sum of $1,224,650,970. That was the sum total of the reserves, so you will observe that of those reserves there had been drawn out in cash or set aside to meet premiums when the policies, in the familiar language of the home, had lapsed, about twenty per cent of the whole. In other words, of the reserves set up for the purpose of taking care of the Obligations of the companies, under policies of insurance, to widows, orphans and beneficiaries in this country, twenty per cent had been advanced to the policyholders or set aside to automatically carry forward the policies.
That is within Canada. Now let us proceed outside of Canada. -Canadian companies outside of Canada had loaned their policyholders $90,248,660 as of the end1 of December last-, and .automatically there had been provided $15,238,728, making a total of $105,487,388 against total reserves on the same policies of $693,281,773. So the companies doing business in Canada, Canadian companies doing business within and without our own country, the total loans on policies amounted to $235,663250 and automatic loans to $48,803,344, or a grand total of $284,466,594 against a reserve of $1,505,856,108. I ask my hon. friend from Macleod and the members of this committee: At this moment, when the insurance companies are willing to enter into an agreement with the minister, and lodge it in has office, that they will reduce their rate on all outstanding loans to six per cent and make the same rate on all future loans as of January 1-and it will be the subject matter of further discussion as time proceeds-with further loans amounting to $105,000,000 outside of this country, where reserves have to be set up, do you think we should have it said that this dominion took this action to-night with respect to these contracts, without any consultation with the policyholders and against the legal position taken by the insurance companies who are willing, however, to notify their policyholders that they will make the agreement to which I have referred?
I have only one further observation to make upon another phase of the question. I did point out that it is inimical to the interests of those who are to be protected by insurance that loans should be made against the policies. I do not suppose it is necessary to argue in this committee, where there are a great many gentlemen who have outstanding policies payable to their wives and children, how undesirable it is that the protection thus afforded should be reduced by loans, for unfortunately there is a tendency on the part of those who secure loans not to repay them -but to let the interest accumulate until such time as the reserves are wiped out. Let me give an illustration of how marked has been the borrowing of money in days of great prosperity, not for the purpose of paying premiums but for the purpose of engaging in hazardous undertakings and speculative enterprises. In the year ending December 31, 1924, we had loans in Canada against policies
Insurance Companies Act

amounting to $90,298,571, and the total policy-reserves were $585,596,956, the ratio of loans to reserves being 15-4 per cent. During the ensuing five years of very great speculative activity the loans increased to $159,353,195, as of December 31, 1929, and the reserves to $975,113,290, increasing the ratio of loans to reserves to 16-3 per cent. During the years of great depression from 1929 to 1934 loans on policies increased to $244,746,378 and total reserves to $1,224,650,970, and the ratio of loans to reserves to approximately 20 per cent. This indicates, of course, that in times of depression this reserve is available for any purposes for which it may be required, and much money has been drawn for those purposes during that time.
Now may I say to this committee that we have passed through five pretty bad years, and during some of that time we have had considerably increased responsibilities because securities decreased greatly in value and the reserves of the companies could not be readily realized upon without taking great losses. The demand for loans was so great that the premium income could not be invested but had to be utilized for the payment of loans upon policies or for cash surrender value of policies, and the result was that there was a rather acute condition, not only in this country but in every country. Particularly was that so in the United States where, as I dare say you have observed from the newspapers, some of the great companies met with very great difficulties indeed. Under those circumstances I suggest to the hon. gentleman that we should avoid again thrusting the insurance question into litigation. We have done the best we could, believing that the action was. legal, but having regard to the terms of the judgment of the privy council I am not expressing the certain opinion that there might not be grave difficulties in supporting some of the clauses of our statute. I would avoid it if we could, because the companies in which you and I have our money invested are most anxious that they should have dominion registration, that dominion licences should be forthcoming, that dominion investigations should take place and that the restrictions upon investments for insurance companies, which we have in the insurance acts, should be observed. If that is to be continued we must support and protect this legislation. We believe it is legal, but we desire to avoid litigation, and I may say that the legislation as it stands has met with the approval of the insurance companies themselves who, for the reasons I have indicated, are anxious that they should have dominion licences. Then again, I ask, is it desirable 
with respect to these companies transacting business both abroad and at home, where provision has been made to meet the situation, that those companies by legislative act should be compelled to do something which at this moment they are not prepared to do to the extent the hon. gentleman wishes? In other words having regard to the contracted sphere of sound investments and to the low price of government securities they have done what they could by the rates I have indicated to create a habit of not borrowing on insurance policies so that those policies may be maintained for the purposes for which they were originally taken out, namely for the protection of the beneficiaries named.
One more point, and I shall have concluded. It is this, that if we are to pass this legislation, let us do it by amending the Interest Act and not the Insurance Act. If it is the view of the house or committee that this is the time at which to reduce the rates, then I suggest that it be done in the way	I have indicated.
I have nothing to say against rates being reduced, so far as that is concerned. I desire to say only this, that it is not desirable to do so without the consent at least of one of the parties to an insurance contract; for what assurance have you or I that we are representing John Smith regarding the terms of his contract instead of John Smith himself? John Smith has agreed that the insurance company which makes the advance to him shall be able to take from him a rate of interest which shall not be greater than a certain amount. The agreement provides exactly what it is to be. How am I to say, "I can do better for John Smith and know more about his business than he does himself?" I know what some hon. gentlemen will say to that argument, but we must remember that this is a matter of an exact contract for each specific case, each loan which I have mentioned. Do hon. members think this parliament, or does the hon, member for Macleod believe that this parliament, should take that contract, tear it to pieces, and say, "This is the contract by which you are governed, and not that one?" If we desire to do it, let us make it a general act for the future.
Every man who has a policy of insurance has two interests, one of which is its safety. If it is a profit bearing policy it is a better policy when he dies than it was when he took it out. This very provision for interest enures to the benefit of every policyholder throughout the country. That is an amazing feature of it because it strengthens the re-

Insurance Companies Act
serve on his policy. Let me ask this further question: Is it desirable to take the action suggested at this particular time? Is it not desirable that we should adopt the reasonable method and, if we are to take action at all, place it in the statute relating to interest so that it shall apply to all? Countries abroad, whether they be Mexico, China or South America, would not be able to say that with respect to loans what we had done was not proper, but rather that under the interest law of Canada owing to the cheapness of money and the lowering of interest rates the rate had been reduced for general application to all companies, whether they were provincial or federal, foreign or British. There is standing in committee a bill which would enable such amendment to be made, if it be thought desirable. I do suggest however that the desirable course at this time is for us to accept the undertaking of the insurance companies to make the agreement with the superintendent of insurance, so that every policyholder may be advised that the company is now prepared to reduce the interest rate on his past agreements-as they are prepared to do unless he desires to do otherwise-and on future loans. There is one phase of the matter that I mention with great hesitancy, and that is that the suggested legislation may place a very serious strain upon the companies themselves in providing cash to meet the requirements of the policyholders, either for cash surrender values on the one hand or loans on the other.
There are amplifications of the reasons which I could give, but I have endeavoured to outline to the hon. member and hon. members of the committee what is in my mind, not because I am against the reduction of interest rates but because I am deeply solicitous about the future of Canada, its position among the countries of the world in connection with the maintenance of what may be good or bad at the time it is made, and the maintenance of legislation under which companies have issued contracts to various people in different parts of the world.
In suggesting the action I have indicated I do so with the full realization that it may readily be misunderstood. I feel however I would be recreant to my duty if I did not rise in my place to-night and indicate to the committee how serious I believe the result would be if we were to say to each individual policyholder in the world that we know better than he does how he should conduct his business with respect to his home and family, and the protection he affords to those he desires to protect, and in connection with the 92582-218
making of loans, whether automatic or otherwise on the reserves which have accumulated on his policy. If the hon. member will accept that view, very well, but if he does not accept it I think he must in all fairness resort to the provisions of the Interest Act, and not the Insurance Act, to protect us against attacks which might properly be levelled against us. If he accepts my suggestion, we may hope that even further concessions may be obtained by action of policyholders themselves, and we know that at least we shall have secured a fixed rate, a rate not exceeding six per cent, covering all charges of every kind in connection with advances which may be made against your accumulation and mine on money which we have entrusted to various companies to invest, against the contingency provided, namely the payment to the beneficiary of a sum named either as an endowment or a claim maturing at death.


Jean-François Pouliot: Speaking on behalf of John Smith may I say that the member for Temis-oouata (Mr. Pouliot) has had experiences that quite probably the Prime Minister (Mr. Bennett) never had. I have often borrowed money from insurance companies, and I have found that the rate has been very high. When a man applies for a loan from an insurance company he does not discuss the rate of interest. He gets the money from the insurance company because he needs it badly, and the insurance company proceed to take advantage of that fact and charge the rate they wish. May I tell the Prime Minister, for his information, that when John Smith or John Doe goes to an insurance company to get money he has to comply with the conditions imposed by that company. Those conditions are not always pleasant, but when one needs money he must accept them as they are. That is a point which I suggest should not be overlooked.
Perhaps other hon. members have been in the same unfortunate circumstances and have had to borrow on their insurance policies. Undoubtedly they have found the rate very high. How is it that when rates of interest *have been reduced everywhere, insurance companies continue to impose their own high rates? How it it that when the government obtains the privilege of borrowing money at a low rate, individuals cannot do so? This is another point which cannot be understood by the common people. We know that in the first instance the rate of interest was reduced to the federal government; then it was reduced to the provincial government, and now the municipalities have obtained a lower rate of interest. But when it comes to an indiitEVISED EDITION
Insurance Companies Act

vidual, he must pay a high rate; the sky is the limit. Why do we have this discrimination? I find the condition I have described very hard to understand. I cannot understand the people who seek cheap money on the markets of the world and then tell the private individual that to save his country he must pay a high rate of interest. It is absurd, in my humble view, and I cannot understand it coming from a 'business man of the calibre of the Prime Minister. If the rate of interest is to be low for the federal government, if it is to be low for the provinces and the municipalities, it should be equally low for the private individual, and the reason why so miany individuals cannot pay their debts is because of the interest payments on their liabilities. It is a vast problem. I admit that the precise rate of interest fixed by the hon. member for MacLeod (Mr. Cootie) may be a matter for debate, but on the other hand something should be done t,o lower the rate of interest for the private individual. That is a matter of the utmost importance and it should be settled by this house because the usury act is an act of the parliament of Canada.
One reason why I do not object too strongly to this bill is that it is a public bill which affects all the insurance companies. I am strongly opposed to all private legislation to the granting of special privileges to this company and to that one. The business of parliament is to look after the general welfare of Canadian citizens as a whole, and we should not allow ourselves to be imposed upon by the private legislation which comes before us and which brings here swarms of lobbyists who are a pest to this house. Men who cannot earn anything before the courts come here and go from room to room canvassing in the interests of private legislation. It is shameful, because that legislation is to grant special privileges to the few. That is the sort of legislation I object to, but in a general way I do not object to public legislation by private members. That is our privilege. The members are here to enact legislation that affects every Canadian citizen. Therefore I think in principle the legislation which has been proposed by the hon. member for Macleod should receive the general approval of this house with the understanding that its particulars are a fair subject for debate.
The insurance companies always are complaining that their privileges are being curtailed. No one can expect that these companies, which have such enormous assets-and it is a good thing that they have-will be glad and that they will congratulate the House of Commons when by act of parlia-

ment their revenues are curtailed and the rate of interest is reduced on the loans which they make to their policyholders. On the other hand the public interest must be kept in view all the time, and it is on behalf of the man in the street who has to borrow on his insurance policy that I make these remarks to this committee.


James J. Donnelly: I should like to ask
one question of the Prime Minister. He referred to one Canadian company doing business outside Canada, and said that it had loaned money in outside countries and that a high rate of interest was received upon its loans in certain countries. Can he tell us what rate of interest this company receives from the loans it makes in England, for instance?


Richard Bedford Bennett: Presumably the rate on policy loans of any company doing business in England would fee the going rate in England. The rate as fixed in 1910 was based upon the rate fixed in the Bank Act on the assumption that money should be borrowed on an insurance policy at a slightly higher rate than from the bank. The policy of 1910, and it is still the policy, was to discourage these loans being made. In England the rate of interest is much less than it is here, although I have not the figures; so is the interest rate on reserves, and so are the promises with respect to profits. One of the reasons our companies do a large business abroad is that they are supposed to have a good field for investment in Canada where the yield would be larger than in older countries where the rate of interest from securities is smaller; but with a reduction of the rate of interest on securities the profits on insurance policies have been reduced. The rate of interest varies in other countries and it varies here from time to time. When we fixed the rate in 1910 we did it with the purpose of not facilitating policy loans, the purpose being, as I have said, to maintain a slightly higher rate on policy loans than money might be obtained for from a bank or other lending institution, in order to discourage the practice. I remember a friend of mine saying to me in this house that he wished that ten years ago there had been a law prohibiting loans on policies, for he had made a loan and had not been able to repay it-he wished he had never been able to get it.


George Gibson Coote: Mr. Chairman, I must say that the Prime Minister's statement to-night came as a complete surprise to me. I had no intimation, no knowledge of it at all; in fact I did not expect the insurance com-

Supply-Agriculture-Marketing Act
panies would make such a proposal to the government, and naturally I feel that I would like to have the opportunity of seeing in Hansard the statement made by the Prime Minister and possibly of seeing the suggestion which the insurance companies have made to the government.
As to the propriety of the house dealing with the .matter I may say that the insurance companies were very ably represented before the banking committee by Mr. Rowell, and speaking from memory I understood him to say that so far as this particular section of my bill is concerned, fixing the rate of interest on future contracts, we are certainly within our rights. That is, he did not raise any question of constitutionality at all in regard to that section. As the section was originally drawn I believe he did suggest that it might be regarded as perhaps outside the powers of parliament, but the redrafted bill as it was passed by the committee makes it clear that the rate of interest this bill seeks to impose would apply only to loans made after the first day of January, 1936. That will be clear, I think, upon a reading of the bill. It says:
No company shall charge, stipulate for, or recover as interest in respect of any loan made to any person on a policy of insurance issued or effected upon the life of any person-
I draw particular attention to the words that follow:
-resident in Canada at the time the policy was issued or effected, any amount in excess of five per centum per annum, compounded annually, on the balance of the loan from time to time unpaid by the borrower.
I just mention that to make it clear that this was not to apply to any policies or any loans made outside of Canada, and in that particular the committee was very careful [DOT] to see that the bill as passed by them did not infringe upon that right. I hope that before the bill is up again I may have the opportunity of studying the statement which the Prime Minister has placed upon Hansard.
Section stands.
Progress reported.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
The house in committee of supply, Mr. Morand in the chair.
Natural Products Marketing Act, 1934, $545,500.
James Layton Ralston: Mr. Chairman, when the committee rose at six o'clock the minister was dealing with the question of the fixing 92582-218J
of prices for potatoes under the potato marketing board, and I was asking him if he had had any opinion from the Department of Justice intimating that there was power for an agency of the kind which appears to have been appointed here to fix prices or to issue an order to the dealers that a certain price must be obtained. I understood the minister to say that that point had not come up I am wondering whether during the recess the minister has looked into the matter and found an answer, and whether he can give us now the benefit of any information he has gathered.


Robert Weir: My information is that the Justice department has not been asked for its opinion as to whether or not the central marketing agency had the power to fix a price. As regards the other question with respect to the personnel of the board, on the local potato board, which includes two from Quebec, six are growers: J'. J. Trainor, Prince Edward Island; R. K. Lougheed, Nova Scotia; F. I. Boates, Nova Scotia; G. C. Cunningham, New Brunswick; J. T. Cassin, Ontario; C. E. Broughton, Ontario. Two are shippers; M. G. McNealy, Prince Edward Island; H. L. Mulharin, New Brunswick. Three are connected with growers' organizations: W. J. Tawse, Quebec; J. H. Lavoie, Quebec; L. F. Burrows, chairman.


James Layton Ralston: The minister has said that the Department of Justice had not been asked whether or not the central marketing agency had authority to fix a price. By the central marketing agency, did he mean the agency appointed by the local board?


Robert Weir: Yes.


James Layton Ralston: The minister agrees, I presume, that the local board itself has no power to fix prices.


Robert Weir: Yes.


James Layton Ralston: Has he not taken an opinion or given consideration to the question whether or not the local board, not having the power to fix prices, may indirectly fix prices by appointing a marketing agency which does so? Does he think that the agency can do what the board itself cannot do?


Robert Weir: There is no doubt that the agency can do certain things which the board cannot do.


James Layton Ralston: For instance?


Robert Weir: For instance, the agency can market and the local board can-

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not. With reference to the hon. member's question regarding the fixing of prices, I think he will agree that the term "fixing of prices" is capable of different interpretations. The agency is appointed by the local marketing board in this particular instance for the purpose of marketing potatoes through that agency. The agency, in the ordinary course of selling, Would decide as to what was considered the best method, under conditions such as prevailed, of getting the largest returns to the producer, and in so doing he would doubtless offer at a certain price the product he had to sell. If that price were found to be such that the product would not move freely, or that its movement would be handicapped in merchandising, the agency would naturally change the price. As I say, "fixing of prices" is open to different interpretations. Personally I see nothing wrong with the action which was taken, especially under these conditions.


James Layton Ralston: I do not want to prolong the debate if it is going to get into a legal discussion, but the minister is speaking of a commercial transaction. The transaction which takes .place here is not in. any sense, as I understand it, a marketing transaction by the agency. Take Mr. Cunningham, for instance: all that he does is to issue an order to certain dealers throughout the province declaring, "You shall sell your goods for so much." But he does not take an order from the purchaser; he does not handle potatoes; he simply issues an order to A, B, or C all over the province of New Brunswick, "You have to sell your potatoes for so much," and all he asks of them is to file invoices with him. He does not say to whom they are to sell; he takes no responsibility in connection with marketing. He is simply a figure head, a dummy, a bureau, not a marketing agency in any sense of the word. Surely the minister does not suggest that a man who is appointed by the board can fix a price when the board itself cannot fix one. I do not understand the line of reasoning the minister takes. I am not talking about a commercial agency which has power to decide, "We have a certain number of potatoes on hand and we must determine whether to sell at such and such a price." I am speaking of a statutory creature, a man who does not handle potatoes at all and who does not attempt to negotiate with the purchaser. He sends letters to so and so, "You shall sell potatoes at such and such a price." Does the minister suggest that that can possibly be done? Has the .minister any authority for it? Has he consulted the Department of
IMr. R. Weird
Justice in regard to the soundness of such a scheme? Remember that what he is doing is this. He is endeavouring to found a basis for prosecution, for putting people in gaol, fining them from S25 to $500 and imprisoning them for three months. Does he suggest that any prosecution could be brought against a man who disobeyed an order made by someone in Fredericton and sold potatoes cheaper than specified in that order?


Robert Weir: Like my hon. friend, I do not wish to enter into a discussion of technicalities, especially legal, because I should be in no position to do so with one of his training. But it is a matter of interpretation of the term ''marketing." For example, I wish to buy a house; I can either go direct to the parties or name an agent to purchase it for me, though I have really paid for the house and purchased it. This selling agency-because he is appointed a central selling agency-


James Layton Ralston: Who appointed him?


Robert Weir: The local board. He has control of the products that come under the provisions of the scheme that has been approved.


James Layton Ralston: That is where the minister has gone wrong. If the local board appoints the central agency, the agency cannot do more than the board can do.


Robert Weir: The local board has no power actually to market, but it is set out specifically in the statute that the local board can name any agent or agencies to do the actual marketing. In this instance they specified a central selling agency and as such it has control of the product. If its operations are not satisfactory to the local board,
' the local board may either withdraw the authority which it has given or name some other agent or agency similar to any other marketing organization. He, I would say, would be privileged to ask a price for the product he has to sell, because his endeavour is to get the greatest possible remuneration for the producers for the goods sold.


James Layton Ralston: Let us leave that point for the moment. In the first place, I say that the marketing agency is the creation of the board and cannot do more than the board can do, and this house expressly indicated that the local board was not to have the power to set a price. What the statute contemplated I think was this: A toll gate or supervising bureau was to 'be established in the form of a- central agency, so that the local board might be assured the marketing

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was being done in accordance with the local board's regulations, and there would be a possibility of checking them as they went by that toll gate or turnstile. But the only thing the local board could do was to make regulations as to distribution, the quantity and quality of the things specifically set out in the order in council, but not as to price.
Let us go a step further. The marketing agency is not a marketing agency for the producer at all. To whom does it give an order as to price? It gives an order as to price to the dealer and says to the dealer: You must sell to another dealer at such and such a price. There is no order so far as I know-and the minister will correct me if I am wrong-from the marketing agency that the producer is to get a specific price. On the other hand there is no order from the marketing agency that the consumer is to pay a specific price. But there is an order that, for example, a dealer in New Brunswick and a dealer, it may be in Toronto or Montreal or somewhere else, will have between them a specific price, while the consumer is left out at one end and the producer left out at the other. Perhaps I am wrong, and if I am, the minister will correct me; but if that is the case, then it seems to me that what the minister says about the central marketing agency having the control of this product for the purpose of marketing it in the interest of the producer is not a correct statement of the case. The marketing agency simply regulates the price as between two middlemen.


Robert Weir: The marketing
agency in this case differs fundamentally from the local board in this respect: the local board has no power to buy and sell and therefore has no power to fix prices, but it has power or authority to name an agent or agency to market this product.


James Layton Ralston: No, it is the agency through which the dealer shall market the commodity, not the agency to market.


Robert Weir: To market.


James Layton Ralston: No, through which they shall be marketed.


Robert Weir: They are marketed through this marketing agency.


James Layton Ralston: May I just correct the minister? This is the distinction. The minister says that they have a right to appoint a central selling agency to market. That is not so. They have the right to appoint a central selling agency through which they shall market. The producer of potatoes, so
far as I know, has the right to fix his price. He says to the marketing agency: These are my potatoes; I want you to market them according to quantity and quality at a price which I specify. He is told: You will have to take such and such a price. He replies: No, I will take the price I stated, because you are my agent and I will not have you, my agent, tell me what price I am going to get. That seems to me to be the position.


Robert Weir: Does the hon. member in that statement refer to the action of a producer in selling his production?


James Layton Ralston: The minister said that the marketing agency was acting for the producer. My contention is that it was not. But assuming that the minister was right and that the producer did deal with the marketing agency, I said that if it was acting for the producer, the producer was the one to fix the price. If it is acting for the dealer, then the dealer was the one who had the right to fix the price, because he is the principal and the agency is only the agent. Or if the central agency is the agent of the local board, then it has no power to fix the price because the board has no power to fix the price. All through this legislation from beginning to end there has been the idea that price fixing is not going to be authorized. I will ask the minister one question: Have there been any prosecutions against anyone under the potato marketing board for selling at a price contrary to that which has been fixed by what he calls the central marketing agency or any of those agencies appointed by the board?


Robert Weir: My information is
that there have been no prosecutions, but I bag to differ from the hon. member in the statement that the producer may take his product to the marketing selling agency-


James Layton Ralston: He does not have to take it anywhere; he can sell it direct.


Robert Weir: But he can take it, if he wishes, to the central selling agency or to subagents, and he can offer his product for sale at any price he wishes. That product can be purchased or otherwise at the price that is set. But on the* understanding I have of the statute, the agent is named in this way, that the local board names the agent through which the marketing shall take place.


James Lorimer Ilsley: I think in view of the discussion that has been had here this afternoon and evening, a most extraordinary situation has developed under this marketing act, and I want to discuss it for a few minutes because it is a matter of great importance not

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only in the province from which I come but all over the dominion. The whole discussion of the marketing act last year was based upon the assumption that neither the dominion marketing board nor any of its agencies were to have power to set prices. The minister states that there is some ambiguity about the phrase "fixing prices". Let me make what I am speaking about very clear: I mean the setting by someone who purports to act as authority, of a minimum price below which the owner of the goods may not sell the product. I think that is clear.


Robert Weir: Has the hon. member reference to the producer?


James Lorimer Ilsley: The owner-producer, shipper or dealer.


Robert Weir: There is no price fixed for the producer.


James Lorimer Ilsley: Let us see about this. There are eleven schemes in operation under the approval of the dominion marketing board and the governor in council. Is that correct?


Robert Weir: There are more than that. Two or three more have been passed lately.


James Lorimer Ilsley: Then there are twelve or thirteen now. Is that correct?


Robert Weir: Yes.


James Lorimer Ilsley: Nearly all the schemes about which I have been able to get information are for the fixing of prices. There is one notable exception to that, and that, is the scheme under which the export fruit board of the Dominion of Canada is operating. That scheme does not involve the fixing of prices; it involves dealing merely with the regulation of quality of fruit shipments, and with the qualitative regulation of fruit shipments I have been in accord and other hon. members on this side were in accord last year.
In Nova Scotia the only formidable criticism of the apple export scheme is that there is an unnecessarily complicated amount of machinery used in putting it into operation. I can hear the comment on every side that this should and could be done by regulation of the minister under the Fruit Act or under the Fruit Act as amended, but with the principle of qualitative regulation I think we on this side are in accord. I certainly am personally in accord with the principle; I want to make that clear at the outset.
When you move into the other sphere, that of price fixing, very important considerations arise, and it is amazing that an act which was erected upon a basis which excluded price

fixing entirely should have been used in its operation as the ground for approval of a number of schemes the essential feature of which is price fixing. If the minister would kindly give me his attention, may I ask him whether the apple scheme in British Columbia -I am speaking about the Okanagan valley scheme-was not a price fixing one? Can he tell me whether that is so or not?


Robert Weir: My information is
that it is not.


James Lorimer Ilsley: I have here the issue of the Vernon News, as it states, "the leading journal of the famous Okanagan valley", of Thursday, March 21, 1935. In an article headed "Shippers advise lowering of prices so that 1934 . apples may not rot in valley storehouses", I find down in the middle of it this statement:
Prices were out of line.
To recite these facts is only to hint at the story that lies underneath. To understand, it is necessary to trace a portion of the history of the marketing of this crop. Last December the B.C. tree fruit board set prices which were changed on Saturday.
Did they set prices or not?


Robert Weir: My information is
that they did not set any definite price; that the shippers were not required to follow any price.


James Lorimer Ilsley: Did they fix a minimum below which shippers could not sell?


Robert Weir: My information is
that they did not.


James Lorimer Ilsley: I will continue reading:
Very shortly afterwards shippers found out that in order to sell the crop, lower prices were imperative. In January these prices were being cut to make sales, the condition of the fruit being an important consideration. With the passage of time price cutting became general until it is believed that for the past month the pool bases as set by the board have been almost entirely ignored.
What I want to know is, did the board' set prices? Did they set pool bases in the way of prices?


Robert Weir: My information is
that the board named what they thought should be the basic price at which the apples should be sold to cover the cost of production,
I take it; but the shippers were in no way bound, because the board had1 no authority to fix that price.


James Lorimer Ilsley: The minister's answer is that the board's action in setting prices was merely advisory?


Robert Weir: Yes.

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James Lorimer Ilsley: That is not consistent with
the tenor of this article. It goes on to say:
About six weeks ago the shippers met at Kelowna, discussed the situation and called in Messrs. Haskins and Barrat. These members of the board are reported to have referred to the movement as satisfactory and to have refused to move on prices.
I shall not go on reading the article, but I corn-mend1 it to the attention of the minister, beoause that seems to be a circumstantial account indicating that the board did set prices, prices which were not set by the shippers. They were set in December; in January the shippers began to break them; in February the break was almost general, and in March it was complete, and the board then met and fixed the price at which the shippers were selling anyhow. That, as I understand it, was the experience in the Okanagan valley of British Columbia. Now, did the tobacco sdheme involve the setting of prices?


Robert Weir: No.


James Lorimer Ilsley: We have the evidence of
Professor Leitch before the price spreads committee that an agreement was entered into between the big companies and1 the growers of tobacco in Ontario fixing prices which the buyers would pay during the next three years -they were fixed rather definitely for 1934, with provision for variations for 1935 and 1936 -and that the buyers were licensed and were threatened with suspension or cancellation of their licence, either tacitly or expressly, if they did not pay those prices. So that in effect prices were set in that scheme through the instrumentality of licensing. Is that substantially correct?


Robert Weir: I think that bears
out the contention I made some time ago as to the ambiguity of the use of the term "price fixing." The hon. member stated, if I heard him correctly, that the growers themselves in negotiation with the buyers agreed on a certain price for the sale of their product. If any product is to be bought or sold there must be some price fixed, but that I take it would not come under what is generally understood as price fixing. It was just a matter of selling a product. Under this scheme they have the control of the product and sat in and negotiated with the buyers as to the price. I would think that is a legitimate sale.


James Lorimer Ilsley: Perhaps it is perfectly
legitimate, but I am asking whether my statement of fact is correct.


Robert Weir: Yes, but I do not interpret it as price fixing.


James Lorimer Ilsley: But my statement is substantially correct, regardless of the interpretation. Then my submission would be that the board, through the instrumentality of licences, was in effect fixing the price.


Robert Weir: Was it not rather
taking power to make certain that the buyers would live up to the agreement that they had made to pay a certain price?


James Lorimer Ilsley: Yes, but through the instrumentality of licensing the board was practically keeping control over the price that was being paid for the tobacco.


Robert Weir: An agreed-upon
price. A contract was entered into to sell goods for a certain price


James Lorimer Ilsley: I am not arguing that point, but I say that is what happened.


Robert Weir: But following the
hon. gentleman's argument, in every case where an article is bought or sold, because the buyer and seller agree upon a certain price is it price fixing?


James Lorimer Ilsley: But not by the board.


Charles A. Stewart: But this
was done by the board.


James Lorimer Ilsley: I do not know about that.
Now let us come to the third scheme, the potato scheme. There is no doubt that in that case prices were absolutely fixed.


Robert Weir: I would not say
that. That is again a matter of interpretation. An agency is named to handle a product, and in handling it it feels that the product is worth a certain price, as any other merchandising agency might do. If by charging that price, from the experience of a week or two or a day or two it concludes that they are preventing the movement of the goods to the consumer, they may change the price. The flour milling companies do the same thing, as do thie motor car manufacturers; or any organization.


James Lorimer Ilsley: The minister should not
evade in that way.


Robert Weir: I object to that
statement. I am not evading; I am making a straight statement.


James Lorimer Ilsley: I would say that all over
eastern Canada where the eastern Canada potato marketing scheme was in effect, the board, whether through an agency or not, fixed prices and sent bulletins out to all dealers.

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Robert Weir: The board did not do it.


James Lorimer Ilsley: What did the board do?
That was the whole scheme.


Robert Weir: The board named
an agency to sell a product.


James Lorimer Ilsley: Who fixed the price?


Robert Weir: The agency. That is the job of an agent, to sell the product.


James Lorimer Ilsley: The minister says the agency fixed the price and the board did not, but certainly it was part of the scheme.


Robert Weir: No part of the
scheme whatever. An agent or agency may be named to sell a product. They might just as well name half a dozen different agencies, but in this case one was named, and the job of that agency was to take this product and dispose of it. In doing that they would do what they considered to be in the best interests of the producer and also themselves.


James Lorimer Ilsley: This agency was not the
agent of the dealers or the producers in the sense that they appointed it their agent. It was an agent imposed upon them by the board.


Robert Weir: What is the board?
The board is the representative of the producers, everyone concerned.


James Lorimer Ilsley: I am not arguing that; do
not draw me off to these side paths. The board selects an agent or agency which is not the agent of the producers except in a fictitious or legal sense-


Robert Weir: Not fictitious at
all. Someone has to speak for the producers, and the logical spokesman is their own chosen board. The producers are represented on that board. Otherwise there would be no means of naming the agent.


James Lorimer Ilsley: Now the Minister of Public Works and the Minister of Agriculture are both talking, but certainly neither one would say that apart from the act the agency or agent was the agent of any producer or dealer, because they did not appoint it their agent.


Robert Weir: Who is the board?


James Lorimer Ilsley: The board is a creature of
the statute, of course.


Robert Weir: Who names it?


James Layton Ralston: The minister approves it.


James Lorimer Ilsley: Yes, the minister approves
the board that is selected and named by the

producers, as representative of the producers' interests.


Mr. VENIOT:: How did the producers
select the agent?


Robert Weir: In this case the
board was named because of the emergency that existed. It was felt that to meet that emergency there was not time to go through the procedure of having an election to name this board. That organization that we considered most representative of the producers named this board. In that way they were, I take it, as far as could be, named by the producers, and therefore were their representatives.


James Lorimer Ilsley: Certainly the agency fixed
the price, and the farmers generally broke the price they fixed.


Robert Weir: Could the hon. member sell any article without a price being named before it was sold?


James Lorimer Ilsley: I am not objecting to the
farmers and dealers fixing the price at which they would sell, but I object that this legislation was erected on the basis that the boards were not to have the power to fix prices.


Robert Weir: The boards have
not fixed the price. Any product that is sold must have a set price either asked or bid for it.


Mr. CAMPBELL:: By whom?


Robert Weir: By the person who owns or is in charge of it to sell it, or his representative, and that is what took place in this case-not a particle of difference.


James Lorimer Ilsley: Now I want to come to
this: Is there a domestic apple marketing scheme pending for the province of Nova Scotia? Is it under consideration by the board at the present time?


Robert Weir: There is one under consideration.


James Lorimer Ilsley: I noticed something in the
press the other day to the effect that the board would receive representations for or against this scheme up to a certain date. What is that date?


Robert Weir: My information is
not certain, but it is suggested that it is June 15.


James Lorimer Ilsley: Has any poll been taken
of the persons interested in that scheme?


Robert Weir: That would not
be done until after these representations were received.

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James Lorimer Ilsley: Does the minister propose
to take a poll after these representations have been received?


Robert Weir: I could not tell
until the conditions were laid before me. I do not really know the particulars of the scheme.


James Lorimer Ilsley: It is a price fixing scheme,
is it not?


Robert Weir: I could not tell
that. Until all the information has been collected by the dominion marketing board and placed before me I could not hazard an opinion at all.


James Lorimer Ilsley: Just in conclusion I want
to say two or three words about these price fixing schemes. I am not going to take any very high ground or base my argument upon any broad or general principles at all, but I want to submit to the minister and to the board that they ought to be exceedingly careful about setting up price fixing schemes, because that is what they are doing now and what they have been doing ever since they started to put this act into operation, though they said they were not going to do it.


Robert Weir: I cannot let the
hon. member get away with that, because we have scheme after scheme in which there is no price fixing at all, any more than providing for an agency which may ask a price for a product. You cannot sell a product otherwise.


James Lorimer Ilsley: Yes, that is all there is to
it. Under these schemes, when a body, whether it be a board or an agency, fixes a price and imposes that price upon the producer, very often the price will be too high to move the goods. I do not think it can be denied that this has been the almost universal experience of boards which undertook to set prices at which the owners of goods could sell those goods. If that price is fixed too high the result very often is that the goods do not go into consumption as quickly as would be the case otherwise, and when that happens very often you have left a surplus which does not go into consumption at all but which is left on the hands of the seller to spoil. That has happened in connection with potatoes.


Robert Weir: Would the hon.
member suggest, then, that any fewer potatoes, to any considerable degree, would go into consumption because of a difference in price of four cents per bushel, especially if the lower price were eight cents and the higher price twelve cents?


James Lorimer Ilsley: I do not know about the
difference in prices, but I say that I do not think you can get away from this principle, that if you fix the price a little too high, or even a little higher than the market would fix it, a smaller quantity of the commodity will be purchased. It practically always works out in that way. I am submitting now that there is great danger in these price fixing schemes for that reason alone. If the price is fixed only a little bit too high it becomes exceedingly difficult, if not impossible, to enforce the scheme, because the seller or producer who has on his hands goods for which he finds there is not a demand, or for which the demand is not as brisk as he thinks it should be so that he finds it difficult to get rid of them, is confronted wTith the temptation to take what he can get for those goods. Take for example a person who has apples on his hands, and the price is fixed at S3 a barrel. He does not get the business at that price. He has a competitive, perishable product, which comes in competition with other fruits and which will not keep. What is he going to do? There are only three courses open to him. One is to bootleg the product, as they have been bootlegging potatoes, and from what I can gather from this British Columbia paper that is substantially what they did there in connection with apples and that is what a great many people will do. Another alternative open to him is to get the board together in some way or other and see if they will not lower the price a little to everyone so that he can sell his product. That is slow and cumbersome, and it is very doubtful if the board will act soon enough to enable this man to get rid of his product. The third course open to him is to keep his product and let it spoil.
Those are the alternatives open to the man who is the owner of a perishable product, under a price fixing scheme such as this. I think that is very clear, and I would suggest to the gentlemen who are administering this act that they should be exceedingly careful in connection with their price fixing schemes or they will drive the natural producers of this country into a wholesale bootlegging of natural products, as they have done up to the present time. They are doing it now. It is an amazing thing that there have been no prosecutions under this potato scheme.


Robert Weir: Does the hon. member suggest that under the potato marketing scheme at the present time the producers have been forced into bootlegging because of price fixing?


James Lorimer Ilsley: I do not think they are
bootlegging to-day but certainly they have
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been bootlegging during the winter months, and no one knows it better than the Minister of Agriculture. There have been no prosecutions, and apparently no prosecutions are possible because the price fixing provisions are illegal. It was a revelation to hon. members of this house, I think, to hear the cross examination to which the minister was subjected by the hon. member for Shelbume-Yarmouth (Mr. Ralston) during which he elicited the fact that the opinion of the Department of Justice had never been obtained in connection with these price fixing features. It is an amazing thing that the board should have been putting into effect what purported to be schemes that apparently have no legal authority behind them, and there is no reason to believe they have any legal authority. Are they going to continue to do that, or are they going to find out just what they can do? Are they going to make a farce of the whole thing? The person who suffers is the loyal, law-abiding man who tries to stick to the scheme; it is not his neighbour who bootlegs his products. All over the country a great many people think that if a scheme is put into effect it has the force of law; that is how they regard it. It has not the force of law; the neighbour of the law-abiding man can violate the scheme with impunity. That has been done in the past. Unless the whole operation of the marketing act is going to be child's play the minister will have to put it on a different basis.


Robert Weir: In reply to the hon. member for Hants-Kings (Mr. Usley) may I say that never have I felt so much regret because I have not the legal training to make such a lengthy statement based on something quite impractical. The hon. member has stated nothing that is not well known with reference to the sale of a commodity. He has said that if the price charged for a commodity is too high in comparison with the prices of other products that may replace it, or too high for the consumer who may wish to buy it, it will interfere with that commodity going on the market. I am sure the gentlemen who form these local boards are well aware of that fact. Every person* who has given any thought to the principles of marketing knows that, and that is the one thing these people have had in mind.
In connection with the potato scheme, due to a very abnormal crop throughout the whole of eastern* Canada, and due to the realization on the part of every person that this great surplus existed that could not be consumed, the price broke to a point at which the producer was not. receiving anything 
worth while for his product. But surely the hon. member would not put himself on record as saying that increasing the price of potatoes, especially potatoes of the higher qualities, from eight cents to twelve cents or thirteen cents would in any material way affect the supply of that product going on the market. That is a question of business judgment.


James Lorimer Ilsley: I do not know about that, but I know that the principle is of pretty general application that if you raise the price of apples from $2.50 to $3 a barrel* it affects the sale of the apples.


Robert Weir: This is a question of the collective business judgment of several men; it is not the judgment of an individual producer but of an organization which has been selected by the producers, men who have their confidence. It is not something imposed upon them. These men do this themselves; they name the agency which they think is best qualified to handle their products in the best possible way, and to put them on the market. And in order to put any product on the market some price must be asked for it. If we could imagine that these men, who are so closely in touch with these problems and the difficulties with which they have been confronted, would be so foolish as to raise the price from eight cents to seventy-five cents a bushel, I agree with the hon. member that it would be an . entirely different story, but we do not expect sane men to do things like that, and these are the men vitally interested in these matters.


James Layton Ralston: The minister seems to have missed the point made by the hon. member for Hants-Kings, which I think is most important. If he is going to have price fixing regulations surely those price fixing regulations must be such as are enforceable, and not such as can be evaded by the man who is either able to get legal advice or who has nerve, courage or boldness enough to tell the minister or tell the board that he does not care wrhat regulations are made. What has been happening. I am sure, is that the man who is honest and who wants to play the game is being penalized and has to hold his potatoes, while his neighbour is selling his at five cents or ten cents below the price and getting them off the market. The reason is that at the present time the minister has in force a scheme of very doubtful validity. Even without a legal training I hope the minister will understand that point. I am sure members of the government sitting near him, if he does not accept my statement, will tell him I am correct. I submit that

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in the interests of Canadian producers he could not do better than to follow the method adopted by the Minister of Justice, who did not feel ashamed or humiliated in connection with certain amendments to the criminal code in seeking the advice of Mr. Tilley and Mr. Geoffrion. In that way the minister could find out whether or not the scheme holds water.
I point out to the minister that his local board has no power to fix prices. That point has been admitted in a letter written by the secretary of the local board to the hon. member for Comox-Alberni (Mr. Neill) who drew my attention to it during the recess.


Robert Weir: We have agreed to that to-night.


James Layton Ralston: The minister agrees to that; very well. The local board has no power to fix prices. The local board has power to designate the agency through which dealers may market their product. Is that getting us any farther? Does that mean to say that the agency may designate a price when the local board may not? The very essence of the thing is that prices were not to be fixed. I submit that this is the most barefaced, transparent, unsound and unstable scheme one could possibly imagine. The point is this:	The local board have gone
through the form of what they describe as designating an agency through which potatoes are to be marketed. That is, there is nothing more than the writing of a man's name into an order and saying, "This is the agency through which potatoes shall be marketed." What action does that man take in connection with the marketing of potatoes? Does he sell potatoes on the Montreal market or does he go to the dealers and purchase potatoes? No, he does not do that; he sits in his office and issues an order in the following form;
To all representatives: The following are the minimum prices for Green Mountain potatoes (Cobblers 5 cents per bag less except at Halifax) effective February 25, 1935, at which you are to sell potatoes produced in New Brunswick, cash track on the following markets.
This is signed
G. C. Cunningham, marketing agency.
Designated by whom?
Designated by the eastern Canada potato marketing board-
-a body which cannot fix prices. Can anybody suggest that by this action the local board is not trying to fix prices?


Robert Weir: Is it the hon. member's interpretation that where a statement is made to the effect that the local board may name the agency through which the product may be marketed, the agency named by the board cannot buy, sell and actually market?


James Layton Ralston: I am talking about the scheme the minister has before him. Let us deal with a scheme in which the agency actually 'buys, sells and markets, when we come to it.


Robert Weir: But that is not the point.


James Layton Ralston: I am sticking to the particular potato marketing board, not some imaginary board the minister may have in mind.


Robert Weir: I have no imaginary board in mind.


James Layton Ralston: That is the only one I am talking about.


Robert Weir: Is it the hon. member's interpretation that they may name the agency through which the marketing may take place? Does the hon. member understand that the agency named may buy and sell the product?


James Layton Ralston: No.


Robert Weir: That was my understanding.


James Layton Ralston: No, I am saying that it is an agency through which the dealers may sell.


Robert Weir: But the agency itself might buy and sell.


James Layton Ralston: No. Potatoes are being bought and sold, and the dealer is doing the buying and selling. He is doing it through that agency. That is the turnstile through which they are to go. Even supposing the agency itself is doing the buying and selling and fixing the price, that is doubtful enough, but if all the agency does is to issue an order to people in the province stating, "You are to sell potatoes at such and such a price," I do not believe even the minister, with the lack of legal training he speaks of, would assert that that was sound.


Robert Weir: I appreciate my lack of legal training, especially in a matter like this. Because my understanding is very definitely that this agency named has the power to buy and sell.


James Layton Ralston: I understand the minister; but let us leave that to one side.

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Robert Weir: That is the point at issue.


James Layton Ralston: No, it is not. This agency is not buying and selling; it has never bought a solitary potato, nor has it sold one.


Robert Weir: That depends on the understanding of the hon. member as to the functions of marketing.


James Layton Ralston: No; if the minister will permit me to say so I am using the words "buy and sell." Those were the words used by the minister. I say this agency has neither bought nor sold. All it has done is to issue an order to a lot of dealers in New Brunswick telling them, "You are to sell at such and such a price." Then, when the dealers have themselves .made the sale, 'the board says "send to the agency the invoices under which you sold those potatoes." There is no suggestion that this agency itself has bought and sold; that is some imaginary board which the minister must have in mind.
I submit there is no foundation for a scheme wherein an agency is simply a dummy, a body issuing an order to people throughout the province. The sale is made between a dealer on the one hand in the province and a purchaser somewhere else on the other. The minister may evade-or if he likes the word better, he may avoid-the question put to him by the hon. member for Hants-Kings, but this is nothing less than a local board trying by subterfuge to fix prices, and under the act the fixing of prices was not authorized. It may be that if done properly the fixing of prices may be good policy. The hon. member for Hants-Kings has indicated principles which he thinks ought to be observed, i.f the fixing of prices is to 'be resorted to. If the board or the agency is to fix prices, this parliament ought to have an opportunity to say whether authority to do so is to be given. But if the minister receives advice that the marketing agency has power to fix prices I believe he will also be advised that this method of doing it, namely one whereby a piece of paper is issued to dealers, is quite illegal. The result is that the fellow who wishes to cut below the named price does eo and nothing can be done about it and the man who tries to observe what he thinks is the law is left with his potatoes on his hands. That is not a fair position; and it is one which the minister ought to correct immediately by seeking advice as to the legality of this whole procedure.


Alan Webster Neill: A week ago to-night when
this subject was under discussion the minister referred to some schemes which had been

rejected by the board, one of which was a scheme for the regulation of the marketing of butter for export. It struck me that that was a very desirable scheme and one which contained all the elements of success, particularly in view of the multiplicity of conditions which arise in the domestic market, especially bearing in mind the fact that the exportable surplus of butter is small. Yet that exportable surplus sold on a foreign market very often sets the price for the domestic market. A great many of the butter producers have looked towards a scheme which would regulate and feed the product on to the fore:gn market at the right time and place. Last night I asked the minister why it had been rejected and he told me he had not the information at hand, but that he would obtain it and give it to me later on. Is he now in a position to give me that information?


Robert Weir: The scheme I take it was to this effect, that responsibility should be taken for the disposal of certain amounts of butter in storage. Now in order to declare that that butter should be removed) from storage for export some provision would have to be made to make up the loss sustained by the selling of the butter on the world's market at a price less than the domestic price, and no adequate provision in that respect was set out in the scheme. That was one of the grounds upon which the board turned it down.


Alan Webster Neill: Who were the promoters of
the scheme, and whom did they represent?


Robert Weir: They represented
dealers, I believe, chiefly; the names were submitted through the National Dairy Council.


Alan Webster Neill: They are not dealers, are
they? Is the National Dairy Company a dealer?


Robert Weir: The National Dairy Council, I said.


Alan Webster Neill: I understood the minister to say that the scheme fell down because there was no provision made for taking care of the loss sustained by selling the butter. How was it determined that there was to be a loss?


Robert Weir: It was a long and
rather involved scheme, and my information is that there were a number of reasons why the board did not approve of it. I understand that this is more or less a confidential document we have in front of us, bu't so far as possible I shall be glad to set out in detail for the hon. member's information the scheme and the objections so far as they are set out here by the board. The board found the

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scheme lacking on a number of grounds. Another question was whether or not the scheme should be proceeded with before further opportunity was given to the combined dairy interests to submit a scheme that would take in the whole dairy industry. I shall be glad to give the hon. member more information but I regret I have not got it with me to-night.


Alan Webster Neill: There is just one other matter I wish to refer to. We were discussing it last night when the house adjourned. The discussion brought up a ruling given by the Saskatchewan court of appeal and the minister interjected into my remarks that "that case did not refer to the provisions of the marketing act; it had nothing to do with the marketing act," and I replied "I know that." But I spoke too soon. I did not mean to say that it had nothing to do with the marketing act, but that it had nothing to do with the marketing act directly. The minister must surely admit that the case was a very clear one, and that it did strike at the very root of the marketing act. The actual case was brought up under the Live Stock Act, but the point was that this appeal court decided that this system of trying to pass enabling legislation was ultra vires. I have the case in front of me here. It is reported in the Western Weekly Reports of May 4, at page 34. It is the case of Rex versus Zaslavsky. It appears that he is a dealer who bought some cases of eggs and did not comply with the regulations made under the Live Stock Act of this parliament. The case was appealed and a stated case was presented to the court, asking three specific questions: (1) Whether the Live Stock Act of Canada and the regulations thereunder were valid and binding on the accused; (2) if not, were they valid and binding on the accused by reason of the Live Stock Products Act passed by the Saskatchewan government; (3) was the governor in council empowered under the Live Stock Act of Canada to enact prohibition in regard to purchasing of eggs as contained in clause 9 (4) of the regulations. I have put the questions briefly in my own language. The answer in the case of the first two questions was no, that both the act and the regulations sought to be enacted by the Dominion of Canada were ultra vires, and so they were under the provincial act.
The minister I think said last night that I wmuld find if I looked at the case that the objection taken was to the manner in which the enabling legislation was passed, but I think
the language used was that customary in all these cases. The judgment said:
It was provided that any provision of the dominion act ... within the legislative authority of the province, and outside that of the Dominion of Canada, shall have the force of law in Saskatchewan, and. unless otherwise enacted by the legislature of Saskatchewan shall be and remain in full force and effect therein to all intents and purposes whatsoever, until the same is repealed by the dominion parliament.
Then in the article there is this remark:
This phraseology is used in nearly all provincial enabling statutes.
I believe that that is practically the language generally used. Well then, if it has been decided, although not of course finally because no doubt the case will go to the privy council, bv an appeal court in the province of Saskatchewan that this system of passing enabling legislation is all wrong and ultra vires, I ask the minister and his officials whether that does not strike at the very root of the marketing act when it. is admitted that we here have not sole jurisdiction nor has the province, and we try to get around it by passing enabling legislation. I think the province of British Columbia passed legislation along somewhat similar lines. If the only legal decision up to date of any value going beyond magistrate's court is the one I have just cited, and that cannot be denied, what is the advice of the minister as to the legal status of the marketing act?


Robert Weir: In the first place, Mr. Chairman, I have no advice to give in that connection. What I had reference to last night was that this was dealing specifically with the marketing act. The judgment given found the court divided.


Alan Webster Neill: With the chief justice siding with the majority.


Robert Weir: Yes. The case has been brought to the attention of the Department of Justice. I think everyone who has given any special attention to the question of a lot of this legislation, and the benefit of it while it has been in operation, realizes that it is a matter of the very first concern that all these acts do operate to a certain extent on the basis of enabling legislation. Under the marketing act there are certain things that can be done without enabling legislation of the province, but they may not be as complete and effective as if enabling legislation were passed. The matter is, as I stated before, under advisement by the Department of Justice. What, their opinion is I do not know. I do not think they have come to a decision yet.

Supply-Agriculture-Marketing Act


Alan Webster Neill: In view of that does not the minister think it would be wise to have a close season on starting any more of these schemes until we get the opinion of the Department of Justice? Is it not better to go slow in starting any more schemes? We have thirteen on our hands now of doubtful validity, and it might be a good thing to have a close season for a little while.
, Mr. BEAUBIEN: If the producers of a natural product have voted on a scheme, can another scheme in regard to that product be voted on within a certain period?


Robert Weir: Another scheme might be voted on at any time, depending on the scheme itself and all the circumstances.


Arthur-Lucien Beaubien: I had in mind Manitoba particularly. The people there voted against the scheme that was proposed to them by the egg and poultry pool. As the minister knows, they voted strongly against it because the producers of that product in Manitoba are against the compulsory features of the act and in the scheme as it was presented to them. Suppose another scheme is presented with compulsory features; I hope that the minister will be very reluctant about adopting a scheme which will inconvenience the people of Manitoba in connection with that same product, putting them to the trouble of voting again. I believe there are three members on the dominion marketing board. Am I right?


Robert Weir: Five.


Arthur-Lucien Beaubien: I understand that in voting on these schemes there are two official languages, and I wish the minister would instruct the board that when they are taking a vote on any scheme in my riding, where there are many producers who do not understand English very well, he will see that the two languages are used so that it will be satisfactory to the people. This was not done on the last occasion.


Robert Weir: Some schemes were printed in both languages and every care is taken to provide for those who spoke only French, or spoke French with greater facility than English. As regards the printing of the ballot in French, this was not done, but I agree with the hon. member that in cases such as this it might be made available in both languages when desired.


Peter John Veniot: The other evening I referred to the pegging of prices, and my information, according to what I saw in the press, was that it had been abolished, that there was no pegged price now for potatoes. Is that correct?


Robert Weir: That is correct.


Peter John Veniot: On whose recommendation
was the practice of pegging the price of potatoes abolished, and when was it abolished?


Robert Weir: On the advice of
the advisory body of producers, on the first of May.


Peter John Veniot: I understand that Mr. Cunningham of New Mills, New Brunswick, is the agent of the board. I see by the Royal Gazette that his address is given as New Hills; it is New Mills. What has he received in the way of compensation since he has been acting from, I believe, the first of January last, and from whom, and in what manner has he received it?


Robert Weir: That would be
decided by the local board. I have not the information here, but I shall be glad to get it and send it to the hon. member.


James J. Donnelly: Are any of these
schemes in operation at the present time in Saskatchewan?


Robert Weir: No.


James J. Donnelly: Will the minister tell
me whether he has had any applications from the wheat growers to bring wheat under the scheme?


Robert Weir: I am informed not.


James J. Donnelly: Last night, speaking on this bill, the hon. member for Dufferin-Simcoe (Mr. Rowe) went out of his way to deliver a campaign speech and he was allowed a great deal of latitude. I have no fault to find with that, but I expect to have the same privilege extended to me in discussing some of the subjects he dealt with. Some of the things the hon. gentleman said I heartily agree with. For example, he referred to the critical position of agriculture at the present time, and I absolutely agree with him. The agriculturist is indeed in a critical condition throughout the dominion wherever I have been, not only in the west but in eastern Canada as well. I agree with him also when he says that unless agriculture is made prosperous no industry can prosper. We gre not yet out of the depression, and until agriculture is. put on a sound and prosperous basis once more the country at large will not be prosperous. When the hon. gentleman says that Canadian agriculture must be made prosperous once more if Canadian industry generally is to return to prosperity, I heartily agree with him; but immediately after that, or at any rate during his speech, he began to advise the farmers of the west how to farm. I take

Supply-Agriculture-Marketing Act
issue with him there. Let me tell him first of all that the man who comes from the east, even though- he may be a good farmer, will find it necessary to live in the west for one or two years at least before he knows how to farm-yes, before he knows how to farm.


Some hon. MEMBERS:: Oh, oh.


James J. Donnelly: It is all very well for you to laugh, but I have seen better farmers than you come out west and they have discovered after two or three years that at first they had not known how to farm. I have farms in three or four different parts of western Canada and in no two sections do I farm land in the same way. In some places the land has to be farmed with a view to the consequences of drought; in other places the farmer has to take preventive measures against frost; in other sections again the land has to be farmed so as to keep down, weeds, and so on. And when you come from eastern Canada knowing nothing about the conditions in the west and presume to tell us how to farm, well you have another guess coming. There are no better farmers anywhere in this world to-day than the western farmer, nor more intelligent. He knows how to farm, and he has taken the best methods of farming his land. All he wants, and he is demanding it, is that eastern Canadian industry shall get off his back and give him a chance to live. Get off his back and gjive him a chance to get along, and he will! do so without subsidies or any help in the form of marketing schemes. He does not need these things. The hon. gentleman spoke about bonuses given to farmers, how they bonusedl them to the tune of 820,000,000 or $25,000,000 in connection with freight rates, or something of that sort. Let me remind him that we paid in Saskatchewan in the year 1931 the sum of $29,000,000 in order to keep up Canadian industry. That is to say, we paid $29,000,000 more than we should have paid for the goods we purchased in the west, all on account of tariffs and other restrictions put on against us which prevented us from importing the things we needed. Not that we paid that duty; I do not mean that. I mean that we paid that much more to industry in Canada for our goods because of the duties and the restrictions which were imposed upon us. We were unable to buy in the cheapest markets, world markets, but had to buy under the conditions laid down by these tariffs and restrictions. Again I say, get off our backs and let us have a chance;
let us buy these things in the open market. Some of you say that you have low tariffs, that the Liberals had much higher tariffs than the Conservatives.


An hon. MEMBER:: Sure.


James J. Donnelly: Sure they did; and I suppose you will tell them at the same time that you reduced -the tariff on liquor from S10 to $5 a gallon. And to make up the difference, what did you do? You put two-cents a pound on sugar, and then you reduced it to one cent-you were ashamed of yourselves. Now we need money in this country, and if people w^ant to drink liquor they have a Tight to pay a duty to the government. But when you put it on a necessity such as sugar and take it off liquor, a great deal of explanation to the people throughout the country is needed.
You did the same thing with cigarettes, and then you thought: Well, the fellow in the backwoods is so poor he has begun to roll his own, and so you went to work and put a tax on the paper, but you did not put it on the paper that the Imperial Tobacco Company is using; you let them go free. The poor fellow in the back concessions who buys his paper to roll his cigarettes has to pay the tax, while the poor Imperial Tobacco Company that is so hard up that it is paying $05,000, $35,000-, $40,000 a year to nincompoops and then on top of that paying bonuses of $25,000 or $30,000 a year, is let off easily because it is too bad to hurt such people! That is the policy of the government all the way through.
Somebody suggests: What about matches? When this government came into power the price of wheat stood at ninety-six cents to $1 a bushel and the index price on matches at that time stood at 72 and a fraction; but in 1983 the price of wheat had dropped to forty cents a bushel while the index price on matches had gone up to 76. Was that not too bad? I wonder who are interested in matches. This year the government were afraid that the people were not using enough matches, -so they put a tax on two-bit lighters. The man who buys a two-bit lighter has to pay the extra ten cents; they wanted to drive him to using matches instead of lighters. That is the situation which exists in Canada to-day, yet the government says: How solicitous we are for the poor man on the back concessions! They try to tell us how they are helping out the farmers the poor people. They come here with a claim


Mr. LUCHKOVICH:: May I ask a question? If our tariff were wiped out-


James J. Donnelly: You make your speech
later.


Michael Luchkovich: Even if our tariff were reduced to zero would that restore our markets?


James J. Donnelly: I do not know what the hon. member is talking about; I did not hear him so I cannot answer him. I say that the only open market we have, the market that has remained open for many years, is the English market, but day after day and week after week that market for our wheat has been lost. Why is it that Argentina has been able to increase her sales of wheat to England month by month during the past year and yet we are told that under our Ottawa agreements she must pay six cents a bushel duty before she can unload? Argentina has increased her exports to England while ours have gone down. Yet they tell us the Liberals lost it all. Let me tell you that the duty is of no account so far as France or Germany or certain European countries are concerned, because they are not allowed to import wheat except as they export some. For every bushel they export they are allowed to import a bushel, and they take Canadian wheat generally speaking because1 it is the strongest and' best. Look at our exports to France and Germany and those countries to-day.


Mr. MacMILLAN (Saskatoon):: Those
markets were all closed to us when we came into office.


James J. Donnelly: Yes, I am telling you that, and are still. But we are selling to them practically as much as we ever sold because they have to have our wheat, and when they export a bushel they are allowed1 to import one free of duty. That is the only wheat they are allowed to grind in those countries. So it is restrictions as well as duties that block us. In most of those countries the restrictions mean that they have to use one hundred per cent of the wheat they grow themselves in order to make the flour they use, but if they bring in wheat in exchange for their own they are allowed to grind that.
As far as exporting cattle is concerned, England is too far away from us in western Canada. As to the export and sale of butter, certainly we are selling more from western Canada than we ever sold, and we are making more. Back in 1920 to 1930 the people were so prosperous that they did not bother to sell butter; they used it for their cooking. To-day they iare selling the butter and using dripping; they have to because they are so hard up. They have to do almost anything to make a nickel. This is a nickel government, that is what it is. Talk about a five cent piece; this government looks like a nickel 1 Well, the people of Canada figure it is time they called it quits and gave the people a chance to operate, and when they do it will be just too bad. They will never get over the operation; they will die on the table.
In conclusion I will just say that when this government came into office there was a state of unemployment, and it was claimed that in the dominion there were about 117,000 people unemployed.


An hon. MEMBER:: What about the
marketing act?


James J. Donnelly: We are told continually by hon. members on the other side of the house that Canada has stood the depression as well as any other country. What about our unemployment? Surely that is the index. Weill, in 1929 we had 117,000 and now we have about a million on relief. Five countries in the world have reduced their unemployment until to-day it is less than twice what it was in 1929. Those five are England, Australia, Japan, Sweden and Belgium. What about ourselves? As I said, we had 117,000 unemployed when this government came into office and now we have over a million people on relief. I do not know whether that takes into consideration our farmers in western Canada; I do not think it does. In my district ninety-eight per cent of our farmers are on relief. I do not know that any govern-

3444	COMMONS
Supply-Agriculture-Marketing Act
ment could affect that; I do not think they could), because it is due to climatic conditions. We hope and trust that this year we shall have a crop, and the prospect seems good. But what are we going to do with it when we get it-a crop of perhaps four hundred to five hundred million bushels, when this government has not been able to market a crop of two hundred to three hundred million in the last five years? We have not had normal crops ever since they have been in office, but year after year our surplus has piled up. What can this marketing act do for us? We had a vote on it in western Canada, and the people in mj'- district almost to a man voted against it. They had a recollection of the operations of a poultry pool down there, and this pool had a monopoly. They came in there and gathered up the eggs and paid the farmers five cents a dozen. Suddenly some trucks came in and began to compete, and then what did we find? We found that the moment they began to compete the price of eggs shot up within one week to nine or ten cents. Those people said: We do not want any cooperative having a monopoly on eggs and poultry, because this is what will happen if they ever get this marketing act applied. They claim that the overhead is too great. If, for example, a man is getting S7.000 a year as the head of the pool and we are selling eggs at five cents a dozen, it will take several loads of eggs to pay his salary. It is going to be hard on the hens.


Mr. SMITH (Victoria-Carleton):: W'hat
about the turkeys?


James J. Donnelly: Yes, we have turkeys.


An hon. MEMBER:: What about the geese ?


James J. Donnelly: The turkeys are bought and crated and shipped under the pool. I was there and saw them myself being loaded in the car, the finest turkeys in the world; do not make any mistake about that. For the best turkeys, specials, we received nine cents a pound back there; for A grade we received seven cents; for B grade, six cents, and for C grades four cents. We boxed them and sent them to England. We sent our Prime Minister and another bird over there to look after the marketing. He came back and they told us in the House of Commons that we had received the best price ever for our turkeys, that they brought thirty cents a pound in England. The farmer received ten cents. Where did the rest of the money go? It all went in overhead. In these cases the overhead is absolutely out of reason, and that is why the people are

against these things. They do not want monopolies; they want competition of some kind, because they claim that competition will bring them a better price than any monopoly.


Michael Luchkovich: Just a short time ago I asked the last speaker a question in what I thought was a very gentlemanly manner, but he answered me in such an uncalled for way that it calls for a speech on my part, and I did not intend to make a speech. The hon. member introduced the tariff element into this discussion. Possibly that has not so much bearing on the Natural Products Marketing Act as we would like it to have, but it was mentioned by the hon. member for Dufferin-Simcoe (Mr. Rowe), the hon. member for Melville (Mr. Motherwell) and the hon. member for Willow Bunch (Mr. Donnelly). I asked the last speaker whether he thought that by lowering the tariff on all the items in the schedule we would restore our lost markets and find new markets for our wheat. When I asked that question the hon. member for Willow Bunch said I did not know what I was talking about.


James J. Donnelly: Pardon me; what I said was that I did not know what you were talking about. I could not hear you.


Michael Luchkovich: I spoke quite loudly. Possibly the hon. member for Willow Bunch wanted to be conveniently deaf at the time I asked that question, because it is indeed pertinent to the subject he discussed. Up in my district farmers are asking that question every day, as to whether a lowering of the tariff would restore the European market for our Alberta wheat. According to my recollection, in 1920 a binder cost just as much as a binder costs at the present time, so out there we do not feel that the tariff has done as much for the farmers as the hon. member for Willow Bunch and others who hold the same views would like us to believe.
There are gentlemen in my district who are telling the farmers that if they elect a Liberal government not only will the old markets be restored but new markets will be found. I wonder where they are going to find new markets at the present time. Are they going to send that colossal genius Bob Deachman, who I understand is a candidate in one of the Huron ridings, and the hon. member for Wey-burn down to the Fiji islands to teach the natives there how to bake bread? Are they going to send the histrionic member for Vancouver Centre to inveigle them out of their present food habits? Or are thej^ going to employ the editorial pen of the lugubrious

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gentleman from North Battleford to stop the Chinese raising rice and make shredded wheat and pancakes all the rage in that country? For the life of me I cannot understand where they are going to find these new markets. The hon. member for Melville well said that there is a glut on all the markets, that there is a surplus of wheat throughout the world at the present time which has prevented us from sending our Canadian wheat to the European market. If the other members of the party to which the hon. member for Melville belongs would only say that on the stump instead of promising that when they get into power mushrooms will grow under every blade of grass and this country will be with milk and honey blessed. I think we would be much further ahead than by listening to outworn arguments such as the free traders are preaching throughout the country at the present time
I believe there is an essential difference between Conservatism radicalism and Conservatism liberalism. I did not rise either to praise or to bury the government that introduced this marketing act. Personally I feel, like the hon. member for Melville', that this is a step in the right direction. Perhaps mistakes may have been made in certain particulars, but I certainly feel that it is a step in the right direction. It has been introduced from the point of view of what I have designated as conservative radicalism, and as between that and conservative liberalism I prefer the conservative radical application of the act as it is now presented to the House of Commons. After all, what is radicalism? It comes from the word "radix", which means the root. In other words radicalism means nothing more than going to the root of the problem, and I feel that this Natural Products Marketing Act goes to the root of the problem at the present time. I do not believe in the methods of those political dinosaurs and dodos who live in an age that is past, who still believe that by a policy of laissez-faire we can restore prosperity to this country. We are living in a changed world; there is no question about that, but they still chant the old slogans and apply them to new policies, and the thing is absolutely impossible. The farmers of my part of the country feel that we must approach this problem from a more radical point of view, whether that point of view be conservative radicalism or the point of view7 that we in this corner of the house have expressed. As a member of the United Farmers of Alberta I should like to go into the matter a little more radically than the government have done up to the present. Economics and 92582-219$
government must be brought into better coordination.
I cannot see, as some members of this house claim to see, that we are going to restore prosperity by some system of lowering tariffs. That is not enough. Certainly I will vote for any reduction in the tariff. When the hon. member for West Edmonton (Mr. Stewart) introduced a resolution calling on the government to lower or remove the duty on farm implements and machinery I was prepared to vote for that resolution. I was quite surprised, however, when in one breath the hon. member defended low tariffs and in the next breath said, "Well, this might not bring about any lower prices of machinery because of the system of combines that we have in this and other countries, which will prevent any decreases in the prices of machinery." Well, why not be practical about it; why not tackle the fundamental problems? Why not tackle the combines, the trusts and all those other ramifications that are doing so much to prevent the return of prosperity to this country?
I think the Natural Products Marketing Act ' is a step in the right direction; personally I support it, and I believe the great majority of the farmers in my district are advocating it also.


Mr. BRADETTE:: Mr. Chairman, I have
not taken up much time this session so I do not think I should be criticized for saying a few words now. On March 18 I requested certain information from the Minister of Agriculture, which he was kind enough to furnish. I made reference to the fact that last year in northern Ontario we had a bumper hay crop. Within the last three weeks I have visited nearly every section of that part of the country, and I must tell the committee that there are tens of thousands of tons of hay there unsold at the present time. The people in that part of the country, whether rightly or wrongly, blame the government for the present state of affairs so far as the hay market is concerned. I mentioned on a previous occasion that early last fall, after the farmers and settlers began to press their hay, we had in the Canadian market some American buyers. In those weeks our farmers were selling their hay on cars at an average price of S15 per ton. The minister was kind enough to tell us that the Americans took restrictions off the importation of hay to their own country, but that the federal government licensed the buyer. The reason indicated by the minister was that of maintaining a higher price. We know that last summer there was a drought in western Canada, and that to some extent the same con-

Supply-Agriculture-Marketing Act
dition existed in New Brunswick and Ontario. I do not believe the minister was explicit enough in the statement he made on March 18; his statement has not been clear enough to satisfy the people in my constituency. He stated that it would be impossible for us to ship our hay to the three western provinces affected by the drought. Due to the restriction imposed by the federal government, and the licensing of the American buyer, these agents in Canada immediately ceased to buy our hay. To-day it is a drug on the market; you cannot give it away.
I do not know whether or not the marketing act has affected the situation, but I must say that in the past twenty or twenty-five years we have paid very high prices for hay purchased in eastern Canada. In those days we did not obtain help from the federal government, nor was there any attempt made to help pay the price. At the present time the people in my constituency are paying more for Canadian wheat, Canadian flour and Canadian grain because of governmental activities. We do not begrudge the expenditure, because we want to see the western farmer prosper. But surely the federal government should not place a restriction against our agricultural production when practically the only natural market we have for our hay is in the United States. I know the minister wishes to be fair in his statement, but I must say to him sincerely that the statement he made was not satisfactory to my section of the country. If to-morrow we could sell the hay in northern Ontario at an average of $12.50 or $15 per ton, ninety per cent of our settlers would be taken off relief. They have to be maintained, however, because they cannot sell their hay crop.
I trust the minister will give a satisfactory answer to my question. I believe action has been taken which has had the effect of restricting hay export to the American market. I trust the minister will reply so that I shall be able to give a satisfactory answer to my constituents. I am not speaking politically, but am addressing the minister broadly and am taking the wider view. Undoubtedly the minister is well aware of my stand in the matter.
There is another point to which I should like to bring the minister's attention. When the people in my constituency buy fruit from the Niagara peninsula or from some other of the older sections of the province a flat express rate of 32 cents per basket is charged for transportation from those older sections to northern Ontario. Naturally we are satisfied with that charge, but when the people in northern Ontario wish to ship their natural
fMr. Bradette.]
fruits, such as blueberries, the gathering of which constitutes a local industry, and particularly at points such as Iroquois Falls and Porcupine, we find that we must pay a rate of more than 60 cents on baskets of the same size as those in which fruit is shipped from the older sections. The minister will readily appreciate that an injustice is done our shippers. The blueberry industry employs hundreds of people during the summer months when the fruit is ripening, and I believe the marketing board should take steps to adjust the rates on shipments from northern Ontario to the older sections of the province. The minister will readily realize what the rate means to the growers in the Porcupine district which at the present time has a population of nearly 50.000 people, and is increasing by leaps and bounds. I trust the minister will see that we receive reciprocal treatment in the shipment of our fruit. These are practical questions which should be answered in a manner satisfactory to the people of northern Ontario.


Robert Weir: I appreciate the opportunity now given me to correct what is no doubt a wrong impression concerning the restrictions placed upon the export of hay which, it is suggested, have interfered with the market in the hon. member's district. When I made my answer I had in mind the fact that due to the very high freight rates it would be impossible profitably to ship hay from his section of the country to western Canada. Last year there was a very definite scarcity of feed in certain districts of eastern and western Canada, and upon the representations of different organizations it was thought advisable to have some provisions whereby governments undertaking relief would not be left in such a position that there would not be sufficient fodder to feed live stock. The provision made to protect against this condition was a very generous one. Every possible effort was made to facilitate and expedite the issuing of a licence. Any man with a legitimate sale of hay could apply for a licence and in every case in eastern Canada I understand such licence was granted. No licences were refused, and I believe it was made clear that no licence would be refused to a man who had a legitimate sale of hay, unless conditions should arise where the scarcity of feed was such that there was not sufficient feed available to supply the live stock. Even then licences would not be refused but the province interested would be given permission to buy at the same price. I appreciate the oppor-

Bank oj Canada
tunity the hon. member has given me, and I have confidence in his fairness. Undoubtedly he will take the first opportunity to correct any wrong impression in his constituency. I have made a note of his observations regarding express rates, but I must say that such matters would not come within the administration of the marketing act. The situation he has described seems almost incredible, and I appreciate his having brought it to the attention of the committee.


Jean-François Pouliot: It is my understanding
of the act that a provincial board may prevent the products of one province from entering another.


Robert Weir: That is not my
understanding. I believe there is no provision through which that restriction coulld1 be imposed.


Jean-François Pouliot: There is no provision in
the act to that effect, but boards are given that jurisdiction. They may prevent the goods of one province from entering another.


Robert Weir: I am afraid the hon. member is in error. I should be pleased to have him submit a specific instance.


Jean-François Pouliot: Before the item is carried I have something further to say. This act is essentially parochial, and it is against the terms of the British North America Act. We have a Minister of Agriculture in Ottawa to facilitate trade between provinces and with other countries, and therefore the act in its present form is in my judgment against the spirit of the British North America Act. This is a very serious matter which I have brought to the attention of the committee. Soon we will have the opportunity to submit it to the people.


[Stage Direction]
Item agreed to.
Progress reported.
Hugh Guthrie: Mr. Speaker, may I have the consent of the house to revert to the order, Introduction of Bills, in order that a bill standing on the order paper may be advanced one stage by 'being given a first reading?


Pierre Édouard Blondin: With the consent of the
house.



ADMIRALTY ACT AMENDMENT

[Stage Direction]
Hon. HUGH GUTHRIE (Minister of Justice) moved the first reading of Bill No. 88, to amend the Admiralty Act, 1934.
He said:	May I explain, Mr. Speaker,
that in the Admiralty Act passed last session there is a provision that an appeal from the
local judge in admiralty shall be heard by two judges of the exchequer court. The president of the exchequer court has pointed out that it is very seldom there are two exchequer court judges in the city who could hear the appeal, and this amendment is merely to restore the old practice that such an appeal may be heard by one exchequer court judge.
Motion agreed to and bill read the first time.
On motion of Mr. Guthrie the house adjourned at 10.55 p.m.
Monday, June 10, 1935