OFFICIAL REPORT


[Stage Direction]
House of Commons Debates
[Stage Direction]
Wednesday, May 27, 1936

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. PERLEY (Qu'Appelle):: 1.	Have W. R. Kinsman, senior official receiver, province of Saskatchewan; Walter Burns, official receiver, Regina district; and James Paul, registrar of the board of review, been dismissed?
2.	If so, were their services not satisfactory, and in what particular?
3.	Have these positions been filled?
4.	If so, by whom and on whose recommendation?


Mr. DUNNING:: 1.	Yes.
2.	A change was considered desirable in the public interest.
3.	Yes.
4.	Edwin Sneath, Edward Lovell and Charles W. Hoffman have been appointed pursuant to the Farmers' Creditors Arrangement Act on the authority of the governor in council.


GEOLOGICAL SURVEYS-EMPLOYMENT OF STUDENTS
Mr. FERLAND:: 1.	Did the dominion government organize in 1935 a number of geological surveys under the direction of the Department of Mines?
2.	How many students took part in these surveys last summer?
3.	How many of such students, so employed, were French Canadians?


Mr. CRERAR:: 1.	Yes.
2.	Five hundred and forty-six.
3.	Twenty-five. It might be added that in organizing geological field parties of the Department of Mines, it is the practice to employ students proceeding to a degree in geology or mining engineering and who have completed at least two years of their course. These appointments are made on merit and, on first employment, the recommendation of a member of the faculty of the university is a consideration when rating a candidate. In the French Canadian universities little emphasis is placed on geological or mining engineering courses, with the result that it is difficult to secure from them students qualified in these branches of learning.


ASSISTANT TO CHIEF ELECTORAL OFFICER
Mr. HYNDMAN:: 1.	Has the government appointed an assistant, to the chief electoral officer, and, if so, who was appointed, and at what salary?
2.	Is he related to Alfred D. Stewart, the president of the West Ottawa Liberal Association, and, if so, what is the relationship?
3.	How old is he?
4.	Is he a married man?
5.	Where does he live?
6.	When did the position become vacant?
7.	Is he a war veteran?


Mr. RINFRET:: 1.	(a) Yes. (b) Donald Stewart, (c) $3,120 per annum less five percent deduction under Salary Deduction Act.
2.	(a) Yes. (b) Son.
3.	Twenty-six years of age.
4.	No.
5.	251 Clemow avenue, Ottawa.
6.	July 1, 1927.
7.	No.


MANYBERRIES, ALTA., POSTMASTER
Mr. MITCHELL:: 1.	Who holds the position of postmaster at Manyberries, Alberta?
2.	On whose recommendation did he obtain the appointment?
3.	Is he a Canadian or imperial returned soldier?
4.	How is he remunerated?
5.	How much did his predecessor receive in the year 1934 ?
6.	Who has the contract to carry mail from the station to the post office at Manyberries Alberta ?
7.	How did he receive his appointment, by tender or otherwise ?
8.	Who recommended him?
9.	How much does he receive for his services ?


Mr. ELLIOTT (Middlesex):: 1.	R. M. Hedley.
2.	Dr. F. W. Gershaw.
3.	Imperial returned soldier.

Questions

4.	By percentage on post office revenue, based on scale governing all revenue post offices.
5.	$1,036.38, out of which $36.38 was deducted under the statutory deduction act, leaving a net amount paid, $1,000 for fiscal year commencing 1st April, 1934.
6.	Charles E. Burr.
7.	By tender.
8.	No recommendation.
9.	$281.47.


CANADIAN PACIFIC RAILWAY-$60,000,000 LOAN
Mr. POULIOT:: When was the "draft of the proposed order in council regarding a loan to the Canadian Pacific Railway Company," referred to in a letter dated August 31, 1933, of the acting Prime Minister to the general manager of the Bank of Montreal (a) recommended to council; (b) prepared; (c) submitted to the council?


Mr. RINFRET:: (a) 28th November, 1933; (b) 28th November, 1933; (c) 28th November, 1933.
Note:	The word "drafted" is interpreted
as referring to the recommendation to council signed by the Prime Minister, the Minister of Finance and the Minister of Labour.


Mr. POULIOT:: 1. Was the letter of guarantee of a $60,000,000 loan to the Canadian Pacific Railway by the dominion government, dated May 31, 1933. signed by the then Prime Minister and addressed to Sir Charles Gordon, president of the Bank of Montreal, initialed by his colleagues?
2.	If so, by whom, and when?


Louis Édouard Fernand Rinfret: Nothing on file at present time; correspondence was tabled on March 13, 1934.


ACTING MINISTERS, MAY 31, 1933
Mr. POULIOT:: 1.	Was the then Prime Minister, acting
Minister of Finance and Railways and Canals, on May 31, 1933?	.
2.	If not, who were the minister or ministers for those departments on that date


Mr. RINFRET:: 1.	No.
2.	Minister of Finance: Hon. E. N. Rhodes; Minister of Railways and Canals: Hon. R. J. Manion.


MOTIONS FOR PAPERS
Jean-François Pouliot: For a copy of first recommendation to council for order in council regarding a loan to the Canadian Pacific Railway Company, referred to in a letter dated August 31, 1933, of the acting Prime Minister to the general manager of the Bank of Montreal.


Jean-François Pouliot: For a copy of joint reports, dated November 28, 1933, and June 20, 1934, from the Right Honourable the Prime Minister, the Minister of Finance and the Minister of Labour to the council with regard to the guarantee of a $60,000,000 loan to the Canadian Pacific Railway.



NATIONAL HARBOURS


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On the orders of the day:
Hon. H. H. STEVENS (Kootenay East):: Mr. Speaker, I should like to ask a question of the minister who is about to become minister of transport, but possibly my question might be more properly directed to the ministry of marine. First, has -the minister's attention been drawn to the fact that since the opening of navigation five men have been killed in Montreal in connection with the longshoring and storing of cargoes on Ships? Inasmuch as the federal government has taken over the administration of harbours in Canada, have any steps been taken to investigate the causes of these accidents? Second, what conclusion has the Department of Marine arrived at with regard to the inspection of apparatus in harbours? This question has been before the department for some years, and the fact -that five men were killed in the present year at the port of Montreal would seem to warrant the closest and most searching investigation both as to conditions surrounding labour in -the harbour and as to adequate inspection of apparatus. Careful investigation should be made as to the various types of machinery used in this hazardous occupation. I am asking whether the minister's attention has been drawn to the matter.


Hon. C. D. HOWE (Minister of Marine):: Mr. Speaker, the longshoremen and the apparatus they use have nothing to do with the operation of the harbour. The longshoremen are employed by the ships; the apparatus they use is furnished either by the longshoremen or by the ships, and it is probably for that reason that the matter has not been brought to the attention of the department. I assume that in a matter of this kind the Minister of Labour would be the proper person to institute an investigation.


Henry Herbert Stevens: I wish to thank the minister for his reply, but perhaps he will kindly follow what I am now going to ask and give me an answer to-morrow or at some later time. I am referring to the question not as it applies to the ministry of labour but more

Railways-Branch Lines
particularly from the standpoint of the inspection of the apparatus used. With all due respect to the minister and the answer he has given I suggest he will find that the Department of Marine has been interested in this matter for a good many years, and I believe, although I am not quite certain, that an inspector was appointed in Vancouver. I would ask the minister to look at it from an angle which is altogether apart from the question of labour conditions, and if he is not prepared to answer to-day he might give the matter further investigation and answer at some future time.


Clarence Decatur Howe: I shall be very glad to consult the officers of the Department of Marine and try to have an answer to-morrow.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I had intended to ask a question along the same lines as that of the- member for Kootenay East (Mr. Stevens), but I was going to direct my question to the Minister of Labour. It is several days since I wrote calling his attention to the very unsatisfactory conditions that exist in the port of Vancouver, and I wonder if any action has been taken. May I suggest that if this does not come within the scope of the minister who is in charge of harbours it does come within the scope of the minister who has charge of shipping, because several years ago we had this matter up-
Some lion. MEMBERS: Order.


Mr. SPEAKER:: Order.


James Shaver Woodsworth: May I ask the Minister of Labour whether he can give us any information as to what can be done to safeguard these men's lives.
Hon. NORMAN McL. ROGERS (Minister of Labour): Mr. Speaker, I did receive a letter from my hon. friend referring to conditions in Montreal. I do not recall having received a letter from him referring to conditions among the longshoremen in Vancouver.


James Shaver Woodsworth: Did I say Vancouver? I meant Montreal. I once worked in the port of Vancouver, and possibly that is why I made the slip.


Mr. ROGERS:: I can only assure my hon. friend that I am looking into the matter and shall supply him with an answer as soon as possible.


Jean-François Pouliot: If the hon. member mistook Vancouver for Montreal he was a longshoreman.
12739-200J



CANADIAN NATIONAL RAILWAYS


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On the orders of the day:
Mr. RALPH MAYBANK (Winnipeg South Centre):: Mr. Speaker, I should like to direct a question to the Minister of Railways respecting the Canadian Pacific Railway line into Quebec territory around lake Chibouga-mau. In view of the fact that Consolidated Smelters Lmited is a subsidiary of the Canadian Pacific Railway Company, is there not, in the extension of a railway into lake Chibougamau region by the Canadian Pacific Railway, under subterfuge, as set forth recently in the proceedings of this house, a danger of making the whole of the mineral area served by such new railway, which in reality is a Canadian Pacific Railway line, dependent upon the wishes and plans of Consolidated Smelters Limited in that mining enterprise in the said area-


Walter Edward Foster: Order. The hon. member ought to understand that he cannot make a speech in asking a question.


Ralph Maybank: If you will permit me, Mr. Speaker, to put my question, I would ask whether such an extension would not be a danger to mining enterprise in that area and whether the government will take steps to try to prevent any such condition of vassalage of mining enterprises. The few words I spoke, sir, in leading up to my question were necessary by way of explaining the situation.
Hon. C. D. HOWE (Minister of Railways
and Canals): I may say that so far as the conduct of my department is concerned none of the fears expressed by the hon. gentleman in his question will be realized.



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Mr. E. E. PERLBY (Qu'Appelle):: I should like to direct a question to the Minister of Railways based on a letter I have received from the mayor of Wilkie, Saskatchewan, protesting against a proposed change in the railway service from Saskatoon to Unity. The letter is to the effect that the Canadian Pacific Railway is dispensing with this service, and the mayor and council of Wilkie wish to protest against its being discontinued. Can
Interim Supply Bills

the minister make a statement in the matter?
I understand that the town of Wilkie has *taken it up with the Minister of Railways and with the Minister of Agriculture. If the minister is not prepared to answer to-day, perhaps I may receive an answer to-morrow.


Clarence Decatur Howe: Mr. Speaker, I received notice
of this question only a few moments ago and have not had a chance to look into it, but to-morrow I will give the hon. member such information as is available.



INTERIM SUPPLY BILLS

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance):	Mr. Speaker, I desire to ask
for unanimous consent to go into committee of supply for the purpose of voting further interim supply. Just before the house met I had an opportunity of speaking to the acting leader of the opposition (Sir George Perley), and if it is agreeable to the membership of the house generally to extend unanimous consent for the purpose I have indicated I shall move:
That Mr. Speaker do now leave the chair for the house to resolve itself into committee of supply.
It is about the end of the month, and the former interim supply is in many items about exhausted.
Sir GEORGE PERLEY:: Mr. Speaker,
speaking for myself and my confreres we have no objection whatever to this being done, but we wish to reserve as usual the right to discuss any of these items as we could have done if the vote had not been taken.


Mr. DUNNING:: Certainly.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
1.	Resolved,	that	a	sum	not	exceeding
$16,931,242.58, being one-twelfth of the amount of each of the several items to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937.


[Stage Direction]
Resolution agreed to.
2.	Resolved,	that	a	sum	not	exceeding
$371,958.33 being one-twelfth of the amount of each of the several following items to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 81st March, 1937, namely:-
[Mr. E. E. Perley. 1
Vote No. 54, Soldier and general land settlement.
Vote No. 77, Hudson Bay railway.
Vote No. 98 (10th item), Dominion public buildings, Yukon.
Vote No. 103 (8th item), Harbours and rivers, Windsor.
Vote No. 125, Ocean and river service, radio service.	.
Vote No. 129, Lighthouse and coast service, agencies, et cetera.
Vote No. 140 (1st item), Topographical and air survey bureau.
Vote No. 141 (1st item), Geodetic Survey of Canada.	, _	,Vote No. 142, International Boundary Commission.	„	,
Vote No. 150, Fisheries, Pacific halibut.
Vote No. 151, Fisheries, marine biological board.	„	,	.	,
Vote No. 154, Mines, Geological survey.
Vote No.	172	(6th item),	Dominion	lands
and parks, national parks.
Vote No. 183, External Affairs, London.
Vote No. 185, External Affairs, Paris.
Vote No. 186, External Affairs, Tokyo.
Vote No. 187, External Affairs, Geneva.
Vote No. 262 (6th item), Public Works, telegraphs and telephone lines.
Vote No.	266,	Trade and	Commerce,	commercial intelligence service.
Henry Herbert Stevens: Is the last resolution applicable to	the	consolidated	fund or	is it
special?


Charles Avery Dunning: The last resolution is applicable to the consolidated fund, yes.
3.	Resolved, that a sum not exceeding
$75,866.66, being one-sixth of the amount of the following item to be voted, as set forth in the main estimates for	the fiscal	year
ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937,
''"'vote No. 210, Miscellaneous, unforeseen
expenses.	, _	,
Vote No. 267, Trade and Commerce, bureau
of statistics.


[Stage Direction]
Resolution agreed to.
4.	Resolved, that a sum not exceeding $265,605.75, being one-fourth of the amount of each of the several following items to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937, namely:-
Vote No. 34, Legislation, Senate.
Vote No. 35, Legislation, House of Commons.
Vote No. 91 (1st item), Pjiblic buildings, Belleville.
Vote No. 94 (4th item), Public buildings, Red Deer.
Vote No. 128, Public Works, Marine department.
Vote No. 144. Steamboat inspection.
Vote No. 229, Miscellaneous, battlefields memorials.
Resolution agreed to.

Customs Tariff
5.	Resolved, that a sum not exceeding $4,233.33, being one-third of the amount of the following item to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937, namely:-
Vote No. 90 (11th item), Public Works, Westmount Armoury.
Resolution agreed to.
6.	Resolved, that a sum not exceeding
$9,200, being one-half of the amount of each of the several following items to be voted, as set forth in the main estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937, namely:-	_ ,
Vote No. 91 (2nd and 12th items), Public Works, Belleville and London.
Vote No. 146, Fisheries, building fishways.
Resolution agreed to.
1. Resolved, that a sum not exceeding $10,930,095.28, being one-twelfth of the amount of each of the several items to be voted, as set forth in the special supplementary estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937.
George Halsey Perley: Does this include anything in connection with wheat payments?


Charles Avery Dunning: No.


[Stage Direction]
Resolution agreed to. '
2.	Resolved, that a sum not exceeding $33,333.33, being one-sixth of the amount of the following item to be voted, as set forth in the special supplementary estimates for the fiscal year ending 31st March, 1937, laid before the House of Commons at the present session of parliament, be granted to His Majesty, on account, for the fiscal year ending 31st March, 1937, namely:
[Stage Direction]
Vote No. 342, Mines, N.W.T. geological surveys.
Resolution agreed to.
Resolutions reported, read the second time and concurred in.


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Hon. CHARLES A. DUNNING (Minister of Finance) moved:
Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1937, the sum of $17,658,106.05 be granted out of the consolidated revenue fund of Canada.
Motion agreed to.
Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending March 31, 1937, the sum of $10,963,428.61 be granted out of the consolidated revenue fund of Canada.
Motion agreed to.
Resolutions reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 69, for granting to His Majesty certain sums of money for the public service for the financial year ending March 31, 1937.
Motion agreed to and bill read the first time.
Mr. DUNNING moved for leave to introduce Bill No. 70, for granting to His Majesty certain sums of money for the public service for the financial year ending March 31, 1937.
George Halsey Perley: As a matter of procedure I suggest that these are two separate bills and that we ought to go into committee separately on each bill. The first bill could be dealt with and then the minister could propose his second bill.


Charles Avery Dunning: As a matter of procedure I introduced one bill, and I thought it would be convenient and would save the time of the house if I introduced the second one so that we could go into committee on both at the same time.


George Halsey Perley: It is rather unusual to have two bills under consideration at the same time.


[Stage Direction]
Motion agreed to.
Mr. DUNNING moved the second reading of Bill No. 69.
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.
Mr. DUNNING moved the first reading of Bill No. 70, for granting to His Majesty certain sums of money for the public service for the financial year ending March 31, 1937.
Motion agreed to, bill read the first and second times, considered in committee, reported, read the third time and passed.


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Customs tariff-703. (a) Travellers' baggage, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(b) Goods valued at not more than $100 included in the baggage accompanying resi-
Customs Tariff
[Stage Direction]
dents of Canada returning from abroad after an absence from Canada of not less than forty-eight hours and acquired by them for personal or household use or as souvenirs or gifts, but not bought on commission or as an accommodation for other persons or for sale, under regulations prescribed by the minister: British preferential tariff, free; intermediate tariff, free; general tariff, free.
Provided that a resident of Canada shall not be entitled to the exemption herein granted within a period of four months from the date of the last exemption allowed, nor shall the exemption be allowed on alcoholic beverages in excess of one quart, or on tobacco in excess of fifty cigars, two hundred cigarettes and two pounds of manufactured tobacco.
George Halsey Perley: When the committee rose last evening there was under discussion the wording of this clause providing for exemption of $100 worth of goods entering this country under special circumstances. The committee had been considering the wording of the part referring to alcoholic beverages. I should like to ask the minister if further consideration has been given to the point which was raised in that regard.


Mr. ILSLEY:: This item was given very careful consideration before the present wording was agreed upon, and from the best consideration we can give it we think the language should remain as it is.


Mr. CAHAN:: Who agreed upon it? Will the minister explain?


James Lorimer Ilsley: Well, the officers of the department and ourselves. I do not know that I understand the hon. gentleman.


Charles Hazlitt Cahan: The minister said that the item had been agreed upon. I simply wished to know who were the parties to the agreement. Just what does he mean when he says it had been agreed upon?


James Lorimer Ilsley: I was not aware that I had said there was any agreement respecting it. I was answering a question asked by the hon. member for Argenteuil (Sir George Per-ley), whether as a result of further consideration it was thought that any change should be made in the wording of the item, and I said that from the best consideration we could give it, we thought not.


Charles Hazlitt Cahan: The minister used the words "agreed upon."


Charles Avery Dunning: He meant, in that sense.


Charles Hazlitt Cahan: The government has recently been holding conferences with representatives of the provinces. As this relates to a provincial matter, and as a provision of the item overrides and overrules the laws of

the provinces, I was wondering whether the words "agreed upon" meant that the minister or members of the government had agreed upon such action with the provinces-


James Lorimer Ilsley: No.


Charles Hazlitt Cahan: -which are particularly interested.


James Lorimer Ilsley: No. I cannot believe that it overrides or overrules the laws of the provinces. I do not think it is even an implied authorization of the importation of liquor. It is merely a limit upon the amount that can be imported, if any can be imported.


George Halsey Perley: But this purports to override the regulations of the provinces, does it not?


Charles Avery Dunning: No.


Charles Hazlitt Cahan: Oh, certainly. The way in which the item is framed permits and authorizes the importing under certain circumstances of a quart of liquor. Otherwise the suggestion is preposterous; and it should not be found in any statute of Canada. It is placed there, I assume, to carry out some understanding that was arrived at in the negotiation of the Canada-United States trade agreement, and it certainly authorizes, so far as the customs laws of this country are concerned. any individual Canadian returning from the United States to bring with him a quart of liquor. .The Minister of Finance shakes his head. What other interpretation is to be given to it? It certainly is not a specious fraud. It is not intended for the mere evasion of some obligation the government has entered into with the government of the United States.


Charles Avery Dunning: The government entered into no obligation with respect to this matter.


Charles Hazlitt Cahan: All it does is to permit, as far as the parliament of Canada can so authorize, the bringing in free of duty from the United States by Canadian tourists of one quart of liquor on certain occasions, although the possession of that liquor in every province of Canada is a criminal offence.


An hon. MEMBER:: At the present time.


Mr. WHITE:: I do not think we should quibble in a matter of this kind. There cannot be a shadow of doubt that under the dominion law, when the legislation now before the committee is on the statute book, a tourist can bring into Canada, so far as the legislation of this parliament is concerned, a quart of liquor from the United States. But the tourist having come into Canada, a pro-

Customs Tariff
vincial officer, finding in his possession this bottle of whisky, not purchased from a liquor commission store in the province in question, can proceed against that tourist, and certain dire consequences will follow. That statement is not open to contradiction, I submit, and that is the beginning and end of the matter as far as that phase of it is concerned.
Now there are two other points to which I would like to draw attention. Beyond question the trade agreement made by the government with the United States is going to become law. Whatever one on this side or that side of the house may think of its provisions, a majority of this house and I have no doubt a majority of the other house will pass that pact into law. Last night, as I understood him, the Minister of Finance stated that in the letters exchanged between Mr. Wrong, the charge d'affaires at Washington, and Mr. Hull, I assume, the Secretary of State of the United States, there was an undertaking on the part of the Canadian government to introduce into the Canadian tariff an item relating to the privileges of tourists similar to the provision in the United States tariff. I have before me, as I think we all have, a printed copy of the letter, and I should like to draw attention to these words:
I am further directed to state that the Canadian government propose to invite parliament to permit the entry free of duty and charges of incidental purchases by residents of Canada returning from the United States of America

and so on.
-for such time as treatment substantially equivalent to that now in effect is accorded by the government of the United States of America to incidental purchases by residents of that country returning from Canada.
In connection with the words "treatment substantially equivalent" my contention is that the elimination of the language "not exceeding one quart" in respect of alcoholic liquors does not weaken or detract from equivalent reciprocal treatment to Canadians visiting the United States as compared with the treatment accorded American tourists returning from Canada. The quantity of liquor that will be brought in by tourists is a mere bagatelle; it is negligible; it is not going to affect the liquor trade or the revenue of any province. I do not think that aspect of it is worth a moment's consideration. But in my judgment we should give a great deal of consideration before passing a law that will have this effect, that when a Canadian returns from the United States with a bottle of whisky or a flask in his pocket or his suitcase, metaphorically speaking he will step into gaol when he reaches this country. I do not think that is fair. I think it is shameful on the part of the parliament of Canada to pass a law worded as this is, in the circumstances of the case. For the life of me I cannot see that the elimination of those words will be treated by the United States as being in any sense a violation of either the spirit or the letter of the trade agreement. Already, on the initiative of the government at the instance of the Minister of Finance, we have departed from the spirit of that agreement, though I will not say from the letter, in respect of two or three tariff items relating to commodities of considerable importance in connection with the trade of the two countries. This is not going to affect the trade of the two countries at all. I do not raise any argument upon that point, Mr. Chairman; I raise it entirely on the indecency of our action in exposing a Canadian returning from the United States to the penalties of provincial legislation.
One other point and I shall have finished; for I seldom inflict myself upon the committee.
I do hope that when the Minister of National Revenue comes to frame his regulations relating to this matter he will take particular care to see that the returning tourist is required to produce receipted bills or proper invoices for such purchases as he may have made. Unless that is done there is a very considerable danger of smuggling being carried on by merchants in Canada. I would also direct the minister's attention to what he is already well aware of, that if the returning tourist makes a declaration that the goods he has purchased in the United States do not exceed $100 in value, and uipon examination by the customs officer-who is required to examine those goods even though they be free of customs duty-the fact is disclosed that they are worth substantially more than $100, the goods are liable to seizure and forfeiture. It is therefore a protection for the tourist that he should be armed with proper invoices or receipted bills for such articles, other than mere trifles, as he may bring back with him from the United States. It is most desirable that this should be done in the interests of the business of Canada as well as for the protection of the revenue.


James Lorimer Ilsley: Mr. Chairman, with regard
to the second point raised by the hon. gentleman I should like to say 'that the draft regulations do provide that invoices must be produced wherever possible.
With regard to the operation of this provision in reference to exemptions it may be of interest to the committee to know what the experience has been so far at an important frontier or border port. I have in mind the port of Fort Erie. The collector at Fort Erie has given me a brief statement outlining the
Customs Tariff

experience at that port to date. From May 1 to May 24 inclusive at Fort Erie there were 443 exemptions to the amount of $12,042.58. On May 25 there were 465 exemptions to the value of $9,566.38. It will be remembered that May 25 was a holiday, the Monday following Sunday, May 24, and I am informed that about 3200 Canadian cars entered through the port of Fort Erie on that day, but there were only 465 exemptions. I do not know how many persons there would be in a car, possibly three; so that the experience at Fort Erie would indicate that a very small proportion of those returning from the United States are claiming this exemption. If there were only one person in each oar the proportion would be less than fifteen per cent. If there were three persons to each car the proportion would be about five per cent, and that was after a long week-end which included a holiday. Our experience at Fort Erie in connection with the claiming of the exemption shows that advantage will not be .taken of it to any very great extent. The average of exemptions claimed to date at that port has been about $24, and I am informed that the experience there corresponds closely with that at other ports throughout Canada.
With regard to the provision respecting liquor may I point out that the United1 States has a similar one which, while not specifically mentioning liquor, permits the importation of Canadian liquor into that country to the extent of $100. The whole of the $100 worth of goods going into the United States may be liquor. But in the case of a prohibition state, state law would govern, and it would never be contended, as the hon. member has argued, that it would be an indecent thing for congress of the United States to enact a law limiting the exemption to $100. It would not be an indecent thing at all, but would be a provision stating simply that so far as the United States are concerned they do not propose to allow an exemption over $100 on liquor. If the law of a state prevented a person from having liquor in his possession in that state, then that would be the law to which the returning American tourist would have regard and which he would be obliged to respect.
For instance, we shall suppose that two of the provinces of Canada were next week to repeal their laws respecting the possession of small quantities of foreign intoxicating liquor. Would it still 'be indecent on our part to have this provision in the tariff, namely that an exemption of over one quart could not be claimed? When we provide for an exemption of $100 we say that such exemption shall not apply to liquor. We will not permit the Canadian tourist to bring in $100 worth of 
liquor, irrespective of provincial laws. We will permit him to bring in only one quart of liquor. This is not an authorization or invitation to any person to break a provincial law. If the provinces actually desire to maintain their present position-and I shall be very much surprised if they do, on account of the amount of liquor they sell to American tourists coming to Canada-then it will be illegal to bring liquor into Canada. But as I say, I shall be surprised if the provinces maintain that position.


Henry Herbert Stevens: Apart from the provision respecting exemptions for tourists, when an ordinary importer of liquor clears liquor at Montreal, Quebec or any other point, and provincial authorities have a law against the possession of such liquor, what does the importer have to do to bring himself within the ambit of provincial law? Would an individual tourist be called upon to take a course different from that followed by the ordinary importer?


James Lorimer Ilsley: There is no ordinary importer. The liquor commissions may import liquor, and there may be certain other classes of importers licensed to import liquor in bond; perhaps that would depend upon the law of the province. But there is no right on the part of the ordinary individual to import liquor, unless it is for sacramental or medicinal purposes.


Richard Smeaton White: Do the words "alcoholic liquors" appear in the United States tariff item relating to the free entry of goods brought back to that country by American tourists?


James Lorimer Ilsley: No.


Richard Smeaton White: Then why do we insert those words in this item?


James Lorimer Ilsley: To restrict the free entry to a quart, so that $100 worth may not be brought in.


Richard Smeaton White: If the provision were knocked out altogether the liquor could not come in.


James Lorimer Ilsley: Yes, but we do not want to do that, in case the provinces change their attitude.


Mr. WILTON:: According to the figures quoted by the Minister of National Revenue it would appear that only a few hundred cars crossed from Canada into the United States over the holiday.


Charles Avery Dunning: He did not say that.


Herbert Earl Wilton: He referred to a few hundred cars.


James Lorimer Ilsley: There were 3,200.

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Herbert Earl Wilton: Yes. I have a dispatch
from Fort Erie which states:
The 24th of May movement was the heaviest on record here, however, it being estimated about 10,000 purely Canadian cars were handled.
Discussing this matter yesterday I referred to the cooperation of Buffalo business men with the railways in putting on cheap railway excursions out of Canada. Buffalo business concerns have advertised in Canadian newspapers in which they show bargains over the week-end. They induce Canadian people to go over and take advantage of the $100 exemption. An article from the Hamilton Spectator is as follows:
New customs regulations cause exodus to Buffalo.
Hundreds and hundreds of Hamilton people spent the holiday week end in Buffalo, N.Y., and spent thousands and thousands of Hamilton dollars. Many of these holiday trippers-the larger percentage of them, according to reliable reports-were taking advantage of the government's $100 exemption for a 48-hour stay and buying various commodities selling at a reputedly lower figure than the prices in Canadian stores.
T. H. & B. railway officials to-day stated that approximately 1,400 passengers had used their facilities over the week-end. These were in addition to the regular travellers. No estimate of the number who motored to Buffalo could possibly be given, but the number would, no doubt, be larger, than that going by rail.
Discussing the holiday exodus, several people who spent Sunday and Monday in the border city, remarked that it looked as though Hamilton had been transplanted temporarily. They had never seen so many familiar faces in a strange city at the same time, they said, and they were constantly meeting acquaintances in stores, theatres and restaurants.


An hon. MEMBER:: They will come back.


Herbert Earl Wilton: Yes, with their pockets
empty, and the business men of Hamilton will lose that amount of business. That is the point I make. This is a dispatch from Fort Erie:
Canadian custom-excise officials at the frontier port of Fort Erie said to-day a large quantity of merchandise of a personal nature, such as boots, shoes, clothing etc., had been brought back by the thousands of Canadians who crossed the international border here during the week-end observing Victoria day across the line, and took advantage of the new law.
At the same time officials here further added an exact total of the amount so imported would not be available until late to-day when the large staff of men here had all turned in the official memoranda taken from tourists returning by boat, bridge and railway train.
The 24th of May movement was the heaviest on record here, however, it being estimated about ten thousand purely Canadian cars were handled.
According to those figures I would say that from the city of Hamilton alone not less than
$7,000 or $8,000 of Hamilton money was spent in the city of Buffalo over the week-end, to the detriment of Hamilton business men. On Monday of this week I interviewed some of the business men of that city upon which occasion they told me that their Saturday business last week was less than it had been on the corresponding day in a number of years, due to the exodus of Hamilton people to the city of Buffalo to take advantage of the $100 exemption.	.


Mr. MACDONALD (Brantford):: Do any of the Americans spend money in Hamilton?


Herbert Earl Wilton: Oh, yes.


Mr. ELLIOTT (Middlesex):: Has there been any objection?


Herbert Earl Wilton: I am pointing out that we are doing business with American merchants to the detriment of Canadian merchants.


An hon. MEMBER:: It works both ways.


Charles Avery Dunning: May I say to the hon.
member who has just taken his seat (Mr. Wilton) that no item in the budget has brought quite so much by way of commendation in correspondence as has this particular item. The great bulk of that commendation came from merchants stretching all the way from Halifax to Vancouver-I repeat, merchants. I shall go further and say that from the hon. member's own city of Hamilton we received commendation for this action on the part of the Canadian government. It is strange, if they thought they would lose money or be ruined, that they should write commending the instrument of their ruin. I am quite sure, if my hon. friend canvasses Hamilton, he will find that there are merchants in his own city-I can give him the names privately; I do not at the moment recall them, but I shall have them hunted up-who commend this provision.
With respect to the newspaper dispatches, which seem to be exaggerated a little in the light of the actual information for the very period concerned for which the Minister of National Revenue gave the figures a few moments ago, I would point out that only 465 of all that vast number of cars contained people who took advantage of the $100 exemption. The minister gave the figures and they showed that the average declaration was in the neighbourhood of $24 each. That was on an occasion when all the circumstances conspired to bring about the maximum use of the privilege, for the reason that May 25 was a holiday following a Sunday and a Saturday, which enabled people to take the maximum advantage of the forty-eight hour
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provision by travelling the short distance to Buffalo, and yet only 465 cars out of 3,200 contained people who took advantage of the $100 exemption on their return from Buffalo on May 25. These are the actual figures, and I submit that the circumstances then being such as to facilitate to the utmost the taking advantage of the privilege, we need not view the future with quite the alarm that my hon. friend from Hamilton West (Mr. Wilton) displays in connection with the matter.


Herbert Earl Wilton: I would say in reply to
the minister 'that it strikes me as very peculiar that a business man would commend something which directly tended to injure his business.


Charles Avery Dunning: My point is that the
merchants do not look at the matter in that light. They are wise enough.


Herbert Earl Wilton: The minister says that
letters have been received from Hamilton business men complimenting the government upon this $100 exemption. I realize that at least one Hamilton concern might possibly view it with favour by reason of being a branch of a Buffalo concern, and this privilege will simply be sending business into .their own store at Buffalo. But I cannot imagine an honest-to-goodness Canadian business man who thinks of his own interests congratulating the government upon making a move which is going to take business away from business men in Canada. I repeat that I can quite understand a compliment of that kind coming to the government from one particular Hamilton store which is a branch of a large Buffalo concern.


Mr. CHEVRIER (Stormont):: I do not
wish to take up much of the time of the committee, but in fairness to the Minister of Finance (Mr. Dunning) and following along the line of what has been said by the hon. member for Hamilton West (Mr. Wilton), I should like to quote from the Cornwall Standard-Freeholder. This is an independent paper, neither Liberal nor Conservative, and this is what it says about this very matter we are discussing:
Although traffic over the international bridge-
There is an international bridge over the St. Lawrence at Cornwall:
-here has been thirty per cent heavier in May to date than in the same period last year, only two Canadians out of hundreds crossing the border have claimed the new $100 exemption of duty on goods purchased in the
[Mr. Dunning.)
United States. While customs officials could give no details, they said that neither applicant had brought in goods valued at more than $35. Both had been in the United States for a considerable time.
Now just to show what the merchants in that locality think of this provision, I quote this from the same newspaper:
Local merchants are not particularly worried over the effect of the new regulation. They have enjoyed a considerable revenue in recent years from United States residents buying in Canada, and feel that continuance of this trade will offset any loss of business caused by the reciprocal exemption. The majority agree that the provisions of the Canadian law give adequate protection against "flying shopping trips" over the border, which would do them greatest harm.
While I was at home over the week-end I took the trouble to ask the customs examiner just what .the figures with reference to this privilege were since May 1, and I find that from the first to the twenty-ninth of May, 1,145 tourists crossed over the international bridge at Cornwall; seventeen of them took advantage of the exemption and brought with them $1,535 worth of goods, being $11.80 or practically $12 per head. So the harm as suggested by the hon. member for Hamilton West is actually not nearly as bad as one would think.


James Shaver Woodsworth: With regard to the point raised a few minutes ago regarding alcoholic beverages I heartily agree with the position taken by the hon. member for St. Antoine-Westmount (Mr. White). It may very well be that from the strictly legal standpoint the minister may be right, but I do think this privilege is liable to cause a great many complications.
I cannot be as optimistic as some with regard to this provision being likely to lessen smuggling; in fact, I am inclined to think it will work the other way. There are many people who will buy articles for cousins and aunts and neighbours, and it will be much more difficult to prevent that kind of thing now than formerly. I think, as one of the other speakers said a little while ago, it is highly desirable that some sort of indication should foe given in the way of receipts for the goods purchased, invoices and so on. But even that does not altogether meet the point, because a great many people will undoubtedly shop for their neighbours. I do not know how that can be easily overcome. People who will smuggle under present conditions will continue to smuggle, and perhaps be able to do it more extensively under this arrangement.

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Charles Avery Dunning: There is a $100 exemption.


James Shaver Woodsworth: Yes, of course. 1 think that there are some very admirable features about the proposed arrangement, and if the minister is correct in saying that this is necessary in order to retain the American agreement, it is all to the good.
Further than that, it seems to me that it will furnish a very valuable lesson in what protection so-called really involves. If the leader of the opposition (Mr. Bennett) is right, that bringing back $100 worth of goods may in a great many eases cost this country $30 in revenue, I think that is a splendid bit of education for the public generally. The Canadian people will soon begin to understand how much it costs to live in Canada. They will -begin to understand more clearly that, as its name indicates, -the tariff is really a tax and a very heavy one, and this tax has been taken -from us in the past without our being quite aware of it. Again, if, as the leader of the opposition suggests, half a million people by crossing the border and making their purchases in the United States can escape that tax on the purchase of $100 or $400 worth of goods they will soon begin to understand how heavy a tax the tariff has been on each individual -and upon each family.
There is another advantage which, it seems to me, may counteract some of the disadvantages. When people come back having saved $30, we shall say, on a $100 purchase of goods, they will invest that $30 in the stores of Hamilton and elsewhere, and our Conservative friends will then begin to realize that there are some advantages in savings to the consumer by getting something like free trade established in this country. I do not know whether my Liberal friends had any sinister motive of putting over an educational campaign of that sort. In any case, I am inclined to think this may be a very good way to teach the people along the border the advantages of freer trade. On the other hand, may I point out a very serious danger in this proposal. It involves discriminatory taxation, or perhaps it would be more correct to say that it involves the discriminatory remission of taxation. If a man has a car or can secure the price of a railroad ticket and has a day or two of leisure, he can cross the border and return with $100 worth of goods.


Charles Avery Dunning: He must have the $100.


James Shaver Woodsworth: Yes, if he has the $100. He can bring back $100 worth of goods if he has the leisure to take the trip. He can
do this four times a year. If he has four or five children he can load them into a car and bring back $400 or $500 worth of goods at a time.


Charles Avery Dunning: If he has that much money.


James Shaver Woodsworth: Quite so. I want to point out that a great many people have not the necessary $100 and have to stay at home; a great many people have not a car; a great many people, especially those living in districts remote from the boundary, cannot afford the price of a railroad ticket; then a great many people cannot possibly take advantage of this opportunity as they have not the leisure; they may have steady work and cannot spend several days in taking a trip to the United States. All these people will continue to be taxed and in the long run their taxes will probably be heavier because a few other people are exempted from taxation. It would seem to me that the suggestion thrown out by the hon. member for Rosetown-Biggar (Mr. Coldwell) contains something of merit. He suggested that every resident of Canada should be permitted to obtain $100 worth of goods free of duty. If a man with a car or the price of a railroad ticket and several days' leisure can do this, why should the same privilege not be given to other residents who have not these things? Why should these people not be permitted to send $100 orders to mail order houses in the United States? I can conceive that many people, in northern Alberta or Saskatchewan would be very glad to be able to send such an order to a Chicago mail order house.


Mr. COLDWELL:: Provided they have the


James Shaver Woodsworth: That may be true. Anything up to $100, if you will; say $10.


Charles Avery Dunning: Twenty-five dollars would do just as well.


James Shaver Woodsworth: I was using the maximum; I said up to $100.


Major James William Coldwell: Several families could pool together.


James Shaver Woodsworth: Yes, they could do that. I suggest that this privilege is discriminating against those people who most need to have things a little easier. I realize the difficulties, if not the impossibilities in carrying out this suggestion, but there is another way in which it could be done-this amount of taxation could be remitted. The leader of the opposition (Mr. Bennett) has suggested that the granting of this privilege might easily involve a loss of $50,000,000 to the
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dominion government. I do not know whether those figures are extravagant as his figures sometimes are, but he has made that computation. If half a million people might conceivably have taxes remitted to the extent of $50,000,000-


Charles Avery Dunning: No, he did not say that; he said that they might import that amount.


James Shaver Woodsworth: I stand corrected. If half a million people can secure goods to the extent of $50,000,000 which, as the leader of the opposition suggested, would involve a remission of taxation amounting to twenty or thirty per cent, I do not see why a similar remission should not be made to the ten millions of people who do not cross the border. Of course the minister will say that this suggestion is perfectly absurd, but I want to point out-


Charles Avery Dunning: I did not say that at all.


James Shaver Woodsworth: I am glad to hear the minister say that he has not said it. I hope he will give us some justification for putting on the statute books what I have termed discriminatory taxation, or more properly, discriminatory remission of taxation.


Mr. ROSS (Moose Jaw):: Remission of discriminatory taxation.


James Shaver Woodsworth: There is discrimination in favour of the man who owns a motor car or has the price of a railroad ticket and has the leisure. It means that people along the international boundary who have some wealth will be able to take advantage of this exemption, while people in the more remote districts who cannot afford to buy cars are to be penalized because of this exemption.


Charles Avery Dunning: When my hon. friend
refers to those who cannot afford cars surely he forgets that nearly everyone in Canada has a friend who owns a car. He rides in that friend's car and he goes on trips, sometimes across the border, in that friend's car. Surely it is an exaggeration, in the light of the experience of the population of Canada in travelling in each other's cars, to say that this exemption involves the buying of a car.


James Shaver Woodsworth: I think .the minister is pretty hard driven when he has to make a statement of that kind.


Charles Avery Dunning: Is it true?


James Shaver Woodsworth: No, it is not true.


Charles Avery Dunning: I should like to know
in what respect it is not true.
[Mr. Woodsworth.l


James Shaver Woodsworth: There is a large
number of people who do not own cars and who have no friends who own cars. I am afraid the minister has been living in certain circles during the last few years and has forgotten the actual conditions which prevail on the prairies and in many of the cities. There are large numbers of people in this country who have no cars and who have no friends who own cars; there are a great many people who cannot afford a railway trip and there are other classes of people who cannot afford the leisure to take a holiday across the border. Under these circumstances I should like the minister to justify discriminatory legislation of this kind.


Mr. WALSH:: I have listened with much
interest to the hon. member for Winnipeg North Centre (Mr. Woodswor.th) and I think his remarks bear out that oft-repeated text from scripture, "To him that hath shall be given." I do not agree at all with his remarks, but I do agree with the observations of .the Minister of Finance (Mr. Dunning). Naturally I do not care a great deal for this $100 exemption as it is going to do a great deal of harm to some of our merchants, but it is also going to do other people a great deal of good. We could sit here until midnight quoting from the various newspapers, giving our own side of the argument, and then we would all leave the chamber convinced that we were right and the other fellows were wrong; we would be nowhere.
There is one point I should like to emphasize in connection with this debate. I want to ask the minister to consider a suggestion in connection with alcoholic beverages. I am not one of the legal lights of the house, but I should like to ask the minister if there would be any objection to inserting in the item this phrase, "except in so far as it is in contravention of any provincial law governing the possession of alcoholic beverages." I think such a phrase would prevent people with lay minds from being misled. I believe that in this way we would overcome the difficulties which might face a person coming back with a quart of whisky who finds that he is contravening some provincial law. He would be duly warned and he would require no other warning than that given in the words I have suggested. I point that out to the minister because I feel that there is a danger as the item is worded at present, and it is a very real danger, probably more real than the Minister of National Revenue cares to believe. The Minister of National Revenue is legally trained and no doubt he can understand words of this kind better than the lay

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mind. If he would put in words such as I have suggested I am perfectly confident it would meet the wishes of a large number of members of this 'house who would not like to see a person misled by any statement that appears in our customs act.


John Gordon Ross: We have heard a good deal about this item from people speaking for merchants throughout Canada. With the people of Canada as a whole this item is,
I believe, probably the most popular part of the budget, and I think the Minister of Finance should be highly commended for having included it in the trade treaty and in the budget. After all, we are not legislating here as a parliament merely for a few' merchants in Canada; we are endeavouring to legislate for the people of Canada as a whole. If the people of Canada do not want to buy goods in the United States they will not buy them there, but if they go over and do want to buy goods there they should have the opportunity to do so.
In connection with the liquor question, the provision with respect to liquor going into the United States is this, I believe. Anyone entering the United States can take one quart of liquor free of duty and up to $100 worth provided he pays the excise duty on that quantity. As regards liquor brought into this country, we are limiting it to one quart. It is quite reasonable to suppose that any legislature sitting to-day might within the next week or two change its - law in regard to liquor and allow the entry of liquor from other countries into that province, and I do not see why we [DOT] should in our customs act prohibit people from bringing it in. They know the law in their own province and they must abide by it.
There is one other matter with regard to the $100 provision. Some have suggested that invoices should be provided for the customs department for everything that is brought back. That is not always convenient to tourists. They pick up little knicknacks, curios, here and there, and often the person who sells them has no form of invoice or bill; the goods are sold for cash to the tourist. When these people come back across the line our customs officials, I submit, should be as lenient as possible, provided the tourist is not trying to bring in more than $100 worth of goods. After all, the customs officials at the border are there to serve the people of the country. I must say that in any experience I have had going across the line I have found them very courteous as a general rule. But sometimes they are not so, and I suggest to the minister that it would be a good idea at this time to send out a circular letter to officials at all border points in Canada, urging
that tourists coming into this country from the United States or Canadian tourists returning be shown every courtesy. The officials should not be too officious but should try to help tourists in every way possible, either our own people coming back or visitors from the United States. There are a great many more tourists coming to Canada from the United States than there are Canadians visiting that country, and the American tourists spend more here than Canadians do over there.


Herbert Earl Wilton: With regard to this one quart of whisky, it seems to me that there is a lot of unnecessary worry. Canadians are generally supposed to be sensible people, and if any Canadian wants to buy a quart of Yankee whisky when he can get good Canadian whisky there is something wrong with him. As regards the statement of the hon. member for Winnipeg North Centre, that so many people would have no money to take advantage of the concession, that problem is up to the government. It is for them to provide work so that Canadians will have money.


Henry Herbert Stevens: I would make one suggestion to the minister-he is seemingly in good humour and I will stretch it and make it two. In this item we are allowing tourists to bring in goods valued at $100 "included in the baggage accompanying'' the tourist; and such goods, according to the language of the item, must have been acquired by the tourist either for personal or for household uses. Then in the proviso we refer particularly to liquor and tobacco, and these items are specifically limited. I suggest to the minister that a man might go over and buy fifty shirts, and I assume he could bring them in; they would be in his baggage. Under the tariff act, it is provided in section 16 that the minister may make regulations such as are deemed necessary for the carrying out of the provisions of that section and for the enforcement thereof. I suggest to the minister therefore that the latter part of the proviso might be dropped altogether and be dealt with in regulations that could be passed for the administration of this item. By regulation it is competent for the minister to say that a man shall not bring in fifty or one hundred or ninety shirts but only ten; it is proper for him to say that the returning tourist shall not bring in more than one quart of liquor or more than fifty cigars or more than one hundred cigarettes. I suggest that it would be far better to do this by regulation than to put it in the statute. The reason I asked the minister a question regarding other importers of liquor
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was this. It is clear that because of provincial laws no person or business concern can import liquor into Quebec or Ontario-possibly the same is true of other provinces-and there is something to be said for the argument that to incorporate in a statute of Canada a provision that a man may bring in up to a quart of whisky may be looked upon as action in direct contravention of provincial law. In my opinion it is not necessary to put it in the statute at all. The regulations could cover restrictions regarding liquor, tobacco, shirts, or any other article that might be brought in.
The other suggestion is this. I am subject to correction, but I understand that this exemption applies also to the sales tax.


Charles Avery Dunning: Yes.


Henry Herbert Stevens: Is it quite fair to the Canadian business concern near the boundary to impose upon it an 8 per cent sales tax and a 3 per cent excise tax-well, we will leave the excise tax out-a sales tax which is absolutely a revenue tax, and, under this exemption, allow persons returning from the United States to bring in goods on which no sales tax is imposed? The sales tax has nothing to do with customs; it is a revenue tax on goods made in the country as well as on goods imported. Would it not be reasonable and sound legislation to insist that those who bring in goods under this exemption should pay at least the sales tax? After all there is no sales tax on goods going into the United States. It will be recalled by hon. members that the United States congress has, over a number of years, considered the imposition of a sales tax. I think a group comprising some 150 members of congress came to Ottawa a few years ago to study the question, but so far as I know 'there is no federal sales tax in the United States.


Charles Avery Dunning: There are sales taxes in some of the states.


Henry Herbert Stevens: Well, we have similar taxes. Montreal collects two per cent, and there are other taxes that might be cited. But I am talking about the balance between the two federal authorities. While I recognize all the difficulties attendant upon this item, I think in return for the advantage granted to United States citizens coming into this country and purchasing Canadian goods, the concession here made is justified so far as tariff exemption is concerned; at any rate it is a part of the agreement, so that there is no use discussing that feature of it. But it does seem to me we are going too far when we exempt imported articles from the

eight per cent sales tax. I make two suggestions to the minister: first, that he delete the last five lines of the item and cover by regulation the provision regarding alcoholic beverages and tobacco; second, that goods given free entry under this item should not be exempt from sales tax.


James Lorimer Ilsley: I thank the hon. member for his suggestions. I have been thinking; them over as he has been speaking. I am afraid it would be impossible for us legally to make regulations limiting the amount of tobacco, cigars and cigarettes that should be brought in, in view of the wording of the first part of the item, because there would be nothing in the quantity or amount of the hundred dollars' worth of cigars, for example,, or tobacco or cigarettes, to indicate that they were not for personal or household use or for souvenirs or gifts; and unless we also changed the first paragraph of the item, a person returning with $100 worth of cigars, cigarettes or tobacco would be legally entitled to the exemption regardless of any regulations which the minister might make. Therefore it is necessary that the proviso be added in order effectively to eliminate the exemption in the cases referred to. The illustration cited as to cigarettes and tobacco is, I think, different from that of shirts, as put by the hon. member. It is quite possible that the minister might have power to make a regulation limiting the number of shirts which a man might bring back with him as if the number were too large it would be obvious that they were not for his personal use, or even brought in as gifts to friends and the importation would then assume the dimensions of a commercial transaction.


Henry Herbert Stevens: That is precisely my argument.


James Lorimer Ilsley: Of course it could be limited by regulation. In such a case a regulation may be made, though I am not saying that it will be made.


Henry Herbert Stevens: A quart of whisky is a fairly generous personal quantity.


James Lorimer Ilsley: A quart?


Henry Herbert Stevens: Well, my hon. friend comes from Nova Scotia, where, I admit, it may not be.


Richard Smeaton White: Did you ever give a party?


Henry Herbert Stevens: I appreciate my hon.
friend's astonishment.


James Lorimer Ilsley: With regard to the sales
tax, there seems to be what is in my opinion an unfounded assumption on the part of those

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who state that we are discriminating against our own manufacturers when we contemplate bringing in goods from the United States free of sales tax. Taxes are paid in other countries besides Canada. A short while ago I had occasion to look up the rate of taxation in the United States based upon the national income, and economists state that the rate of taxation, federal, state and municipal, on the national income of the United States, is, if I remember correctly, over nineteen per cent, according to the best estimates. The rate of taxation on the total national income in Canada is less than that; it is about eighteen per cent. These taxes of the United States find their way into and are reflected very largely in the prices of goods, and taxes are paid there just as they are paid here. It is not correct to say that these goods have not been subjected to any corresponding taxation in the United States and that therefore our producers are being discriminated against. There are certain commodities on which the tax is higher in Canada than it is in the United States, that is, in respect of a particular commodity; but that is not true in the aggregate. As the Minister of Finance has pointed out, on some commodities the rate of taxation in the United States is higher than it is in Canada. If we were to adopt the hon. member's suggestion we should be removing, say, fifteen per cent duty on certain articles and reimposing upon them an eight per cent tax.


Henry Herbert Stevens: Pardon me; all goods coming in now are subject to the eight per cent sales tax.


Charles Avery Dunning: No.


Henry Herbert Stevens: What goods are not?


James Lorimer Ilsley: There are many exemptions.


Henry Herbert Stevens: Oh, not very many.


Charles Avery Dunning: Yes, a very large list of exemptions.


James Lorimer Ilsley: There is a long schedule of exemptions relating to a very large number of tariff items. But apart from that I am afraid it would be regarded as an evasion of our responsibilities if we were to impose a sales tax upon goods brought in under this provision. From an administrative standpoint it would not only surprise and startle a great many people but annoy them beyond measure if, particularly now that the sales tax is eight per cent, we were to impose an eight per cent sales tax upon goods exempted from duties by this item, when no such tax is imposed on goods going into the United States.


Mr. NEILL:: I have received a number of letters, some of them from merchants, endorsing this item. Merchants at the coast appear somewhat to fear that if we refuse reciprocity with the United States in this matter at this time it may be used as a lever for Americans to remove the privilege they accord their citizens of bringing in from Canada one hundred dollars' worth of goods free of duty, a concession which has proved very profitable to our merchants at the coast. I notice that the minister has, very properly, put restrictions on the privilege-once in four months, in respect of a stay of forty-eight hours, and so on. Does he not think the item would be improved if he used the word "adult" residents? To allow children of tender years to bring in a hundred dollars' worth of goods is palpably open to an abuse of the spirit of the thing.


James Lorimer Ilsley: That matter is under consideration in the department and by myself at the present time. To a very large extent I agree with the hon. gentleman. It would perhaps be an abuse of language to say that a child of five years has personal baggage. That baggage is the baggage of the parents.


Richard Smeaton White: Or acquired by them.


James Lorimer Ilsley: Yes, or acquired by them. What I have in mind is that an age limit, perhaps sixteen years, should be fixed. Below that age limit the articles will be deemed to be the baggage of the parents or the persons accompanying the children; above that age it will be considered to be the baggage of the children if it belongs to them.


Charles Hazlitt Cahan: It is difficult to trust to one's memory with regard to legal matters when one has been away from the practice of law for a number of years. But I was under the impression that, in order to safeguard the interests of provincial treasuries and the revenues derived through liquor commissions, this parliament at some stage passed ancillary legislation which made it illegal, for instance, to convey or transport from one province to another intoxicating liquor with the intention of evading the strict provisions of the provincial laws.


Charles Avery Dunning: That is correct.


Charles Hazlitt Cahan: In the province of Quebec, for instance, if a citizen of Montreal desires to drink a certain kind of wine or a certain kind of whisky the only legal way in which he can do so is to purchase it from the liquor commission, if they have that class of goods on sale, or else request the liquor commission to import certain quantities of that class to
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be sold to the applicant upon arrival, for which the applicant will pay after it has been taken out of the customs. Is there not some such ancillary federal legislation at present in force?


James Lorimer Ilsley: Yes, there is.


Charles Hazlitt Cahan: Has the minister considered whether the permission or authorization, because that is what is provided here, to import free of customs duty certain quantities of liquor into provinces in which the possession and consumption of that liquor would be a violation of provincial laws, might not also be a contravention of this ancillary Dominion legislation, concerning which my memory is not very clear at the moment?


James Lorimer Ilsley: The hon. gentleman is quite correct; there is a federal statute. If it is a violation of provincial law for the liquor to be in the possession of a person in the province it is a violation of the Importation of Intoxicating Liquors Act for the person to import it into the province. But that does not change the problem a bit, as far as I can see. I have admitted throughout that it may be an illegal thing.


Charles Hazlitt Cahan: I have not that statute before me, and my mind is simply reverting to past years when I was consulted about that law which the minister says does exist. I ask the minister if there is an enactment which precludes importation by a private individual into a province where the sale of liquor is controlled by the provincial commission. If so, is it not a contravention of a federal statute as well as of a provincial statute which the minister proposes to assist, shall I say. by this permission contained in this* clause? My mind is not clear, but it seems to me there is some inconsistency there which should be carefully considered.


James Lorimer Ilsley: Mr. Chairman, that has been carefully considered, and generally speaking the hon. gentleman is right. In answer to the question put to me previously I explained that there is a federal statute called the Importation of Intoxicating Liquors Act, but the importation of liquor ceases to be illegal the moment possession of liquor in the province becomes legal under the provincial law.


Charles Hazlitt Cahan: Quite so.


James Lorimer Ilsley: And I am proceeding on the assumption, perhaps unfounded, that it will become legal in some of the provinces.


Charles Hazlitt Cahan: Then why not so frame your clause and in effect authorize free importation under these conditions through such ports of entry in such provinces as do authorize the' possession by private individuals of liquor

which has not been purchased from the provincial commission? I confess that in dealing with this matter from memory, concerning statutes which I have not been considering from day to day as a lawyer in practice does in his own law office, my mind is not clear in respect of it, but it does seem to me that this clause sanctions an inconsistent provision. Furthermore, and doubtless the hon. gentleman has dealt with the criminal law of the country since I have, is it not a violation of the criminal law of Canada to violate certain provincial statutes? I know the violation of a dominion statute constitutes an offence under the criminal code, and my impression is that the violation of certain provincial statutes is also an offence under the statute cited. In any event, if the federal statute to which the hon. gentleman has referred is to be violated 'by one who brings in a flask of liquor containing a quart, we will say, then he is permitting, authorizing, facilitating and inducing Canadians to violate a dominion statute the violation of which constitutes a criminal offence.
Sir GEORGE PERLEY; Mr. Chairman, I am not a lawyer, but as a practical man I have been listening to all this discussion and there seems to be no doubt that the wording with regard to alcoholic beverages is very misleading. The ordinary citizen would consider it an authorization to him to bring in a quart of whisky, and would consider that he could do so legally. The ordinary man does not	know	all	the laws	of thedifferent provinces; in fact I do not think the lawyers know them all, and certainly I feel that an ordinary person returning to Canada and reading this provision would consider that he had authority to. bring in a quart of whisky, without thinking anything at all about provincial statutes. Apparently the government have made up their minds to put through this provision	exactly	as	it reads;	that iswhat I gather	from	the	discussion	to-day,and if that is so, no one can stop them. I do think, however, that some action should be taken by the minister, in the public announcement he will make and also in the regulations, to	draw	the	attention	of the
citizens of this country to the fact that they cannot bring this liquor into a province that has a law against it, notwithstanding the fact that it is so stated in this provision. I appeal to everyone in this committee if they do not agree that ninety-nine people out of a hundred reading this item would consider that it gave them authority to bring a quart of whisky into this country. As I say, if the government have made up their minds to put this through in this form we

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cannot stop them, but I think the minister should find some way of warning the people. The hon. member for Mount Royal suggested that this might be done by inserting certain words in this item, but I fancy that might be difficult. I think however the government should take steps to make it clear to the people of Canada that this is not an authority to bring whisky into a province where there is a provincial law against that procedure.


Charles Avery Dunning: The right hon. gentleman has approached the matter from the practical standpoint. In endeavouring to do the same may I point out that the government is not simply being stubborn in the matter. This has been the subject of discussion and investigation since the note was first written to the United States, at the conclusion of the negotiation of the treaty. Also since the budget was brought down on May 1, now nearly a month ago, the actual wording has been in review, because it is generally known that the provision is of an experimental nature. As has been indicated, to a certain extent it will have to be dealt with by regulation, and we acknowledge there is a difficulty inherent in the feature mentioned by my right hon. friend and by the hon. member for St. Law-rence-St. George. The Minister of National Revenue is making arrangements to see to it that tourists are advised. Methods may vary from time to time, according to experience, but we do want to give this provision a trial under the present wording, because of the way in which that wording has been worked out and the consultations which have taken place in various quarters in regard to it. It is not, of course, like the laws of the Modes and Persians.


George Halsey Perley: Would the government be in a position to make a change next session, if it were thought wise to do so?


Charles Avery Dunning: Quite.


Charles Hazlitt Cahan: Would the minister give
me the citation from the Importation of Intoxicating Liquors Act?


James Lorimer Ilsley: I was going to give it to
the hon. member. I would refer him to chapter 31 of the statutes of 1928, and particularly to section 2(a), the interpretation clause.


Mr. BARBER:: I understand that a tourist arriving at a port of entry with $100 worth of goods is given exemption to the value of $100. He then cannot secure a further exemption for a period of four months. What about the tourist who arrives at a port with only $10 12739-201
worth of goods? Should he receive another exemption within a period of four months? Does the provision refer to an exemption of $100 within four months?


Charles Avery Dunning: There is no carry-over.


Harry James Barber: That encourages the tourist to come back with $100 worth of goods.


Charles Avery Dunning: I suppose you might put
it that way, yes.


[Stage Direction]
Item agreed to.
Customs tariff-802. Materials and parts as hereunder specified, when imported by manufacturers of umbrellas, parasols, sunshades, walking sticks or canes, under such regulations as the minister may prescribe, for use in the manufacture of such articles in their own factories:-
(a)	Mounts, sticks, rods, ribs, runners, rings, caps, notches, tips, ferrules and assembled frames: British preferential tariff, free; intermediate tariff, 10 per cent; general tariff, 20 per cent.
(b)	Umbrella-covering fabrics of a kind not made in Canada, whether or not specially treated but not further manufactured than with hemmed selvedges, when imported in lengths of not less than ten yards each, with or without natural selvedges: British preferential tariff, free; general tariff, 20 per cent.
Henry Herbert Stevens: I should like to direct a question to the minister.


Charles Avery Dunning: I have an amendment
to move which may clarify the discussion at least in some degree. It will be noticed that previously materials for the manufacture of umbrellas were scattered through three items bearing widely differing rates. In drafting the item an effort was made to arrive at a fair rate applicable to all, but representations have been made since that time indicating that formerly a much larger proportion of the (a) section in the item came in under a 5 per cent intermediate tariff than came in under other items carrying a higher rate. It has been contended that the concessions granted on cloths and on portions of the frame would be to a greater or lesser extent offset by the increase in the rate on the components of the frame. That was not intended, of course. The intention was to help with respect to materials entering into the manufacture of umbrellas. The amending resolution which I shall ask my colleague to move changes to 5 per cent the rate of 10 per cent under the intermediate rate in section (a).


James Lorimer Ilsley: I move:
That the rates of duties of customs set opposite tariff item 802(a) as introduced under resolution No. 5 on May 1, 1936, be amended to read as follows: British preferential tariff, free; intermediate tariff, 5 per cent; general tariff, 20 per cent.


[Stage Direction]
Amendment agreed to.
[Stage Direction]
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Henry Herbert Stevens: I should like to bring a matter to the attention of the minister. The item in question deals with mounts, sticks, rods, ribs and so on, used in the manufacture of umbrellas. While the matter to which I shall refer does not come directly under the item, it has reference to an old item which included these articles. I am referring to shafts used in the manufacture of golf clubs.


Charles Avery Dunning: This point arose the other evening in connection with the discussion of another matter; perhaps the hon. member was not in the house at the time. On that occasion I undertook to look into it, and if the facts were as stated I promised to bring in an item. We will deal with it immediately after finishing the regular schedule.


Henry Herbert Stevens: Very well; I shall wait until then.


George Halsey Perley: Is it correct to say that the purpose of the change is to facilitate the manufacture of umbrellas in Canada?


Charles Avery Dunning: Yes. The companies manufacturing umbrellas have to import these parts, none of which are made in Canada.
Item as amended agreed to.
Customs tariff-805. Materials to be used as adhesives in cementing together glass sheets, when imported by manufacturers of safety or non-shattered laminated glass, for use exclusively in the manufacture of such glass in their own factories: British preferential tariff, free; intermediate tariff, free; general tariff, 25 per cent.


[Stage Direction]
Item agreed to.
Charles Avery Dunning: Before we complete the schedule may I refer to the item I mentioned to the hon. member for Kootenay East. We will refer back to item 446c, which is not included in the items in the schedule before us. Hon. members will recall the discussion a few evenings ago when it was represented that the tariff on the completed golf stick was lower than the tariff on the shaft, a condition which was described as inequitable. I have looked into the matter and find that I cannot make it equitable because this is one of the items bound under the British trade agreement. However, it can be reduced under the intermediate to 25 per cent and still maintain the margin agreed upon at the empire conference. I shall ask my colleague to move the amendment.


James Lorimer Ilsley: I move:
That schedule "A" to the customs tariff, as amended by resolution No. 5 of May 1, 1936, be further amended by deleting therefrom tariff item 446c and substituting therefor in said schedule "A" the following item, enumeration and rates of duty:

446c. Golf shafts of seamless steel, coated or not, but not chromium plated: British preferential tariff, free; intermediate tariff, 25 per cent; general tariff, 35 per cent.


[Stage Direction]
Amendment agreed to.
Charles Avery Dunning: Mr. Chairman, before
leaving this schedule, I find, after checking up on Hansard and on the scroll, there is one item which Hansard records quite property as carried, but which is not indicated on the scroll as having been carried. It is item 442 and was discussed thoroughly. The leader of the opposition (Mr. Bennett) asked me to hold it until he had had1 time to read it. The discussion continued until the leader of the opposition had had time to read the item, and he indicated no objection to it. There has been an error as between Hansard, on the one hand, and the scroll on the other, and I ask the indulgence of the committee to correct the scroll in that regard.


George Halsey Perley: That is all right.


Mr. REID:: Might I appeal to the minister in connection with egg graders imported into this country? There is no classification for them, but fruit and vegetable graders come in free or at a duty of five per cent. Egg graders are an item affecting the poultry producers of British Columbia, and at present they carry a duty of thirty per cent, plus, of course, sales tax and excise .tax. I am sorry that I did not have an opportunity to mention this matter earlier in the discussion as I was in attendance at one of the committees of the house, but I think egg graders should be placed on the same footing as fruit and vegetable graders.


Charles Avery Dunning: They are, by item 409
(e).


Charles Hazlitt Cahan: Before passing to the next schedule I find that chapter 31 of the statutes of 1928, an act respecting interprovincial and international traffic in intoxicating liquors, makes it a criminal offence under the laws of Canada for any person entering Canada to bring in with him liquors in any quantity whatsoever except for the purposes set out in the act. Section 2 says:
2. In this act, unless the context otherwise requires,-
(a)	"intoxicating liquor" means any liquor which is; by the law of the province for the time being in force, deemed to be intoxicating liquor, and which it is unlawful to sell or have in possession without a permit or other authority of the government of the province or any board, commission, officer or other governmental agency authorized to issue such permit or grant such authority;

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(b) "province" means any province of Canada in which there is for the time being in force an act giving the government of the province, or any board, commission, officer or other governmental agency control over the sale of intoxicating liquor therein.
Section 3 says:
3. (1) Notwithstanding the provisions of any other act or law, no person shall import, send, take or transport, or cause to be imported, sent, taken or transported into any province from or out of any place within or without Canada, any intoxicating liquor except such as has been purchased by or on behalf of, and which is consigned to His Majesty or the executive government of the province into which it is being imported, sent, taken or transported, or any board, commission, officer or other governmental agency which, by the law of the province, is vested with the right of selling intoxicating liquor.
There are very heavy penalties upon one who brings in liquors under those circumstances. There is for the first offence a penalty of not more than $200, and in default of payment imprisonment for a term of three months; for a second offence a penalty of not less than $200 and not more than $1,000, and in default of payment imprisonment for not less than three months and not more than six months, and for each subsequent offence imprisonment for not less than six months or not more than twelve months. Apparently in the latter case there is no option of a fine. I suggest that, when the minister publishes notice of the exemption which has passed the house this afternoon, he should place in print on the notice that any person who at the present time exercises the right of bringing in this liquor is violating a statute of the parliament of Canada, and that in retaining the liquor in his possession after he crosses the border he is violating a provincial statute, and that for violation of the federal statute he is liable to fine and imprisonment as I have stated.


Henry Herbert Stevens: I would like to-


Charles Avery Dunning: There is nothing before the committee, Mr. Chairman.


Henry Herbert Stevens: Before the bill is introduced I would like to add one word of appeal to the minister, that he again consider the deletion of the words "on alcoholic beverages in excess of one quart," and deal with the matter by regulation. I believe that can be done, and it would cover the whole situation.


James Lorimer Ilsley: There is nothing before the committee at the moment, Mr. Chairman, but the suggestion of the hon. member for St. Lawrence-St. George (Mr. Cahan) will be considered. At present it seems to me there is a
12739-201J
great deal of reason in his contention. Regarding the suggestion of the hon. member for Kootenay East, I do not like to say that we shall reconsider it, because I do not think reconsideration would lead to any change in the item. It has already been examined very carefully from a great many angles; we do not regard the inclusion of these words as an invitation to break either a federal or a provincial statute, and it is not to be regarded as such. This is not a. repeal of the act respecting the importation of intoxicating liquors, and it is not and is not intended to be an overriding provision so far as provincial legislation is concerned, but it is a provision that in our opinion is desirable.


George Halsey Perley: I would ask the minister-


The CHAIRMAN:: Order. I want to allow as wide a latitude as possible, but the committee is discussing an item that was passed ten minutes ago.


George Halsey Perley: I quite agree that the item has been carried, Mr. Chairman, and I am not asking to have it changed. We can quite easily bring this matter up at some other stage of the bill. As I understand it, this item in the tariff act will not override that general law. Is that right?


James Lorimer Ilsley: That is correct.
6. Resolved, that schedule B to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, be amended by striking thereout tariff items 1030 and 1055, the enumerations of goods and the rates of drawback of customs duties set opposite to each of the said items, and by inserting the following items, enumerations and rates of drawback of customs duties in said schedule B:-
Customs tariff-1011. Rhinestones, settings for rhinestones, metal spots and beads: when imported by manufacturers of dress trimmings and used exclusively in their own factories in the manufacture of dresses and dress trimmings: drawback, 99 per cent.


[Stage Direction]
Item agreed to.
Charles Avery Dunning: Following that item, Mr. Chairman, I have an amendment to deal with two situations which arise in connection with tubing. The present drawback provisions on lap welded tubing of iron and steel, not less than four inches in diameter, threaded or coupled, includes no provision for the couplings which are a necessary part of the pipe. The drawback to which I refer is available when the material is used in casing water, oil or natural gas wells or for the transmission of natural gas. A difficulty in administration has arisen because the word "coupling" does
Customs Tariff

not appear in the item and it is intended to make it so apply. The same is true with respect to tubing over four inches in diameter. I will ask my colleague to move the amendment.


James Lorimer Ilsley: I move accordingly.


George Halsey Perley: Is this No. 1025?


Charles Avery Dunning: This item does not appear in the printed list. It is a very simple thing and one which should not arouse any controversy.


[Stage Direction]
Amendment agreed to.
Henry Herbert Stevens: Before we pass on to the next item, I should like to refer to the striking out of item 1030. This covers a drawback of fifty per cent on the goods enumerated in tariff item 236, which refers to surgical dressings and so forth. What is the reason for the withdrawal or abandonment of the drawback privilege in connection with that item?


Charles Avery Dunning: My hon. friend is one item ahead of me at the moment. I may tell him that it all comes back in the next item. If he will let us deal with item 1025, we shall then come to item 1030.
Customs tariff-1025. Hot rolled hexagon bars of Bessemer steel not being of greater value than four cents per pound: when used in the manufacture of cold drawn bars: drawback, 99 per cent.


George Halsey Perley: Is this a new item?


Charles Avery Dunning: This is an entirely new drawback item which was suggested by the tariff board in connection with its report on the automotive industry.


[Stage Direction]
Item agreed to.
Customs tariff-1030. (a) Materials, n.o.p.: when used exclusively in the manufacture of articles enumerated in tariff item 236: drawback, 50 per cent.
(b)	Woven fabrics, wholly of cotton, not bleached, mercerized nor coloured, weighing not more than seven and one-half pounds per one hundred square yards: when imported under the British preferential tariff and used exclusively in the manufacture of articles enumerated in tariff item 236: drawback, 99 per cent.
Charles Avery Dunning: The hon. member for Kootenay East (Mr. Stevens) was asking about the repeal of this item. The whole of item 1030 is reenacted and the new (b) section is included as a result of the tariff board inquiry into the textile industry. The new (b) section will apply only with respect to duties paid on imports under the British preferential tariff.


George Halsey Perley: This clause is drafted exactly as suggested by the tariff board?


Charles Avery Dunning: Yes.


[Stage Direction]
Item agreed to.
Customs tariff-1052. Machinery, new or used, of a class or kind not made in Canada: When imported by manufacturers of automobiles and motor vehicles or of automobile and motor vehicle parts to be used in the production of such automobiles and motor vehicles or automobile and motor vehicle parts drawback, 99 per cent.
Charles Avery Dunning: This is an entirely new item put in as a consequence of the inquiry into the automotive industry. It provides for a ninety-nine per cent drawback on duties paid on machinery, whether new or used, of a class or kind not made in Canada, when imported by manufacturers of automobiles or automobile parts for use in the production of automobiles or parts.


John Alexander (1874-1948) Macdonald: It seems to me that in connection with these drawbacks the whole principle of fixing the tariff is shown to be wrong. We make tariff regulations; then we come along and say they are not right and we shall allow a drawback. That is an admission that we have not done what is right; that by a drawback we are trying to rectify an error. I think we should always deal with the tariff scientifically. This is my objection to the reduction of duties on farm implements. We appointed a committee of this house to inquire into this matter and before that committee had brought down its report, we changed the tariff affecting these implements. I think this committee should inquire as to whether or not a change would affect employment and the rates of wages paid in this industry, I doubt if any hon. member knows whether these changes will have any effect upon those employed in the industry. I have sufficient confidence in the government and in the Minister of Finance (Mr. Dunning) to know that any wrong will be righted immediately.
Similarly with regard to the automotive industry, a reference was made to the tariff board. In Brantford is located a company known as the Canada Carriage and Body Company Limited, which makes bodies for motor buses. In this industry are employed the finest class of working men, both skilled and unskilled, to be found any place in the world. This company makes a motor bus body that compares favourably with any body made in any other part of the world. This company did not have an opportunity of appearing before the tariff board. When they found out that the tariff had been reduced they immedi-

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ately made representations to the board and they were told that an advertisement had been inserted in the press to the effect that this matter was being referred to the tariff board. The motor bus body builders did not think they came within that classification and the chairman or some official of the board stated that representations would be heard from the manufacturers of motor bus bodies. They appeared before the board and an informal discussion occurred.
I am sure hon. members will be surprised to know that among those who advocated a reduction in the tariff on motor bus bodies was none other than the Toronto transportation commission. I contend that such action is most unfair and is certainly short-sighted on the part of the Toronto transportation commission, located in the city which is the home of the high priests of high protection. I am sorry that more members of the opposition from the queen city are not present this afternoon, but no doubt they feel that the conference they are attending is more vital to them than anything which might take place in this committee. However I must say that I do not believe hon. members from the queen city advocated a reduction in the tariff; I believe that was done by the Toronto transportation commission. Toronto is known as "Toronto the good," but I sometimes wonder what it is good for. Apparently it is good only for those things that are good for the city of Toronto.


Mr. FACTOR:: Mr. Chairman, I rise to a point of order.


John Alexander (1874-1948) Macdonald: There are some good men who have come out of Toronto. I am very serious about this. To think that an organization in Toronto should ask for a low tariff on goods which are made in the city of Brantford! Do they not care anything about the working man in Brantford? Do they not care so long as they get foreign motor buses to carry Canadian workingmen- and no doubt they put a union jack on the bus-to and from their work? I say that Toronto should have demanded Canadian buses made in Canada by Canadian workingmen to carry Canadian workingmen to and from their work. Toronto and every other city, whether in the east or in the west, must have a broader outlook if we are to solve our problems. We cannot simply seek, as apparently Toronto in this instance does, a low tariff on the commodities we do not produce and a high tariff on the commodities we do produce. We must look at industry as a whole, and I submit that no change should be made in the tariff structure unless we are sure that no workingman in any part of this
dominion will be detrimentally affected thereby. We must not forget that the greatest problem in Canada to-day is still unemployment. There are three great problems we have to face-the railway problem, the debt problem, and unemployment. Suppose you solve the railway problem, and the only solutions I have heard are scrapping the railways or amalgamating them. Well, however you may solve that problem you still have unemployment on your hands, and probably on a greater scale than ever before. Then you have the debt problem.	Suppose you solve that
problem. Some suggest wiping out debts; others say that we should print money and pay our debts in that way. Do either one, and in the end you will still be faced with unemployment as great as ever. But if you solve the unemployment problem then the railway problem will largely take care of itself and so will the debt problem.
My admonition to all the members of the house is this: We must look at Canada as a whole. We must try to solve not only the problems of the west or of the east or of the city of Toronto but all the problems that call for solution throughout the country. We must try to do those things that are good for the workingmen of Brantford and for the farmers of Brantford, for the workingmen of Vancouver and for the farmers throughout the land. We must get away from provincialism, for if we do not we shall wreck the whole country. Some of us come here thinking our own little constituency is the greatest in the country. I still think my own is the greatest, but I do know this, that my constituency cannot live alone; and again I remind other hon. members that their constituencies cannot live to themselves if they destroy other parts of the country.


Alan Webster Neill: Perhaps I am reading the item wrong, but did we not some years ago pass a statute forbidding the importation of used cars?


Charles Avery Dunning: Yes.


Alan Webster Neill: Would not these used cars come under the definition of machinery to be used in the production of cars or of parts?


Charles Avery Dunning: This is with respect to machinery of manufacture, not to the car itself.


Alan Webster Neill: Could it not be interpreted to include a carburetor?


Charles Avery Dunning: No; the prohibition will rule in any case.


Alan Webster Neill: If the prohibition rules, then we are in a position that is worse than the situation we have discussed all afternoon in
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connection with the conflict between a dominion and a provincial statute, because here we have two dominion provisions. I do not know how you will indicate the one that is to dominate, because they are both dominion.


Charles Avery Dunning: I was stating a general
principle when I said that the prohibition would rule, but I cannot admit that the prohibition against the importation of secondhand motor cars enters into any part of this item. This item deals with machinery for the manufacture of cars and not at all with the cars themselves or with parts of cars. And it is all of a class or kind not made in Canada.


Alan Webster Neill: It is not very clear.


Mr. STIRLING:: Is there any relation
between this item and 1055, which has been deleted? That is a very large item.


Charles Avery Dunning: Item 1055 was the old
drawback item on automobile parts and it is taken care of now in the general tariff revision which has taken place consequent upon the tariff board's report. It is unnecessary now and has no relation to this item.


Henry Herbert Stevens: Has 1055 been deleted in consequence of the report of the tariff board?


Charles Avery Dunning: Yes.


George Halsey Perley: Under this item as it reads could one not import a used engine, put it into a car in Canada and get the rebate?


Charles Avery Dunning: No.


George Halsey Perley: It says, "to be
used in the production of such automobiles." Would not the term "machinery" be broad enough to cover an engine?


Charles Avery Dunning: No; and in any case an engine would be barred because engines are made in Canada.


Alan Webster Neill: Would the minister consider
using the word "manufacture" instead of the word "production"? I can produce a car by buying a carburetor here and something else there, but I could not manufacture one.


Charles Avery Dunning: That is rather splitting
hairs, and I am afraid the same difficulty would be present in my hon. friend's mind if we used the word "manufacture." He could also manufacture a car by getting a carburetor here and something else elsewhere. This is exactly the wording the tariff board suggested for the item, which is distinctly
[Mr. Neill.1
a machinery item. And the words, "of a class or kind not made in Canada," would prevent my hon. friend from collecting parts of a car and putting them together.


[Stage Direction]
Item agreed to.
Customs tariff-1060. Paper of all kinds: when used by the publisher or printer in Canada in the production of periodical publications enjoying second-class mailing privileges: drawback, 50 per cent.
Charles Avery Dunning: I have an amendment
to bring this into conformity with the corresponding tariff item as amended. The amendment is to add the following words:
The pages of which are regularly bound, wire-stitclied or otherwise fastened together.
That will make the drawback item apply in conformity with the tariff item.


George Halsey Perley: What is thi
object of this item?


Charles Avery Dunning: It is to give the same
relief to the publisher of magazines in Canada with respect to Canadian taxation, having regard to the competition to which he is now subject from American publications.


George Halsey Perley: I am not going to traverse the ground we went over the other night when my right hon. leader discussed this particular question, but I must put myself on record as not- being in favour of doing this if it is going to reduce employment in Canada or take away work which we ought to do here in the manufacturing of our own paper. I realize that perhaps some of this paper cannot be made here, but we have now companies in Canada which manufacture very high grade qualities, and I think those companies should be encouraged. I do not want to do anything to hurt the publication of magazines. I was very sorry indeed that the regulations made by the former government imposing taxes on foreign magazines were removed by the present government. In my opinion we ought to be able to manufacture in this country papers of all kinds, and it is f great pity that steps are not taken to en courage such manufactures by our own people


Charles Avery Dunning: After considering the
matter very fully, I believe this degree of drawback represents a fair concession to the publishers without the danger to other Canadian industries which my hon. friend, like myself, would fear if it went too far. There has been a great deal of discussion about it ever since the Canada-United States treaty was made, and needless to say, various interests have various views. Each of them is actuated, of course, by regard for the

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thing he understands the best, which is the business in which he himself is engaged. I have endeavoured to give the matter every consideration. The government has discussed it on many occasions; representations from all quarters have been heard, and this represents what we regard as a fair adjustment under the situation now prevailing.


Frederick George Sanderson: It is moved by Mr. Ilsley:
That item 1060, as contained in resolution No. 6 of May 1, 1936, be amended by adding to the words "when used by the publisher or printer in Canada in the production of periodical publications enjoying second-class mailing privileges" the following phrase:-
"the pages of which are regularly bound, wire stitched, or otherwise fastened together."


[Stage Direction]
Amendment agreed to.
Mr. DEACHMAN:: I venture to make the suggestion that the government in this matter has not been over generous. I am not worried particularly about the point 'brought up by the right hon. member for Argenteuil (Sir George Perley), who suggests that the paper companies are in danger from the extension of this small drawback. I have before me the record of the two largest companies in Canada making this class of paper, the Howard Smith Paper Company and Provincial Paper Mills Limited. Both these companies went through a process of expansion of their fixed charges by means of reorganization, in different years. On June 1, 1928, the Howard Smith Company went into its mill with total securities of $10,664,300, and, without increasing its actual assets, emerged a few days later with a capital of $14,400,621, an increase, which may be represented as not much more than pure water, of $3,736,321. By that process they increased the fixed charges of the company in the sum of $140,000 a year. The Provincial Paper Mills was not quite so strenuous, though it was bad enough in all conscience. It went into this process of expansion on May 1, 1927, with a capital of $6,550,000, and without increasing its assets emerged with $8,900,000, a total increase of $2,350,000. The combined increase amounted to $6,086,321 of capital, and the increased fixed charges by way of interest on bonds amounted to $377,000 per year.


Charles Avery Dunning: What company was that?


Robert John Deachman: I am talking about
the two companies. I venture to suggest that two corporations which can afford to add to their fixed charges $377,000 in a single year without adding to their real assets will be able to withstand the measure of competition
to which they will be subjected by this change in the budget.
In 1928 the drawback was extended to eighty per cent. At that particular period Canadian companies publishing magazines were able to use better .paper. They increased their use of paper. The increase in the use of this classification went up more during the next three years than in any similar period of Canadian history. Nor were these paper companies at all seriously affected so far as their profits were concerned. The profit upon the individual ton they sold may have been less, but the increased tonnage enabled them to pay a larger dividend in 1930 than they did in 1928 or 1929, which were prosperous years, and they seemed to get along very well. But with the change when the drawback was withdrawn their profits and dividends fell, and they were no longer prosperous. The reason they were no longer prosperous, I shall be told, was that those were hard times. Quite true they were hard times, but they were hard times for the publishers in this country because they had to pay to the Howard Smith Paper Company and to the Provincial Paper Mills a price which was fixed by the tariff. There was published a few days ago in the newspapers of this city an open letter from the MacLean Publishing Company in which they stated that their paper cost them $312,600 a year. Then they said, "We were required to pay $66,162 more for our paper than our United States competitors." If you figure that out you will find that it amounts to approximately 21 per cent. These two corporations by this legislation, by the duty which they then enjoyed, were enabled to charge users of paper between 21 and 22 per cent more than they could have charged had they been on a free trade basis.
I ask you to consider this question. It is not only magazines, ordinarily so called, that are published in Canada. We have our farm press. The farm press has gone through very difficult times during the last few years. Farm purchasing power was gone. It has been a struggle to make a living. Not long ago two of the largest farm papers in western Canada amalgamated because they could not successfully maintain a separate existence. That amalgamation of these two separate papers was brought about by hard conditions induced by the high costs of raw material required in the manufacture of their products. The result of this amalgamation has been a big loss to the paper mills of Canada, a loss which they might have avoided under conditions of greater freedom. The
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farm press has been a powerful factor in maintaining the morale of the farmers of this country during a period of stress and strain. When you give relief as is being done here you are enabling the farm papers to exercise a tremendous national influence in the dominion. I suggest therefore that further relief should be given. There is no evidence in all the statements I have before me that any of these companies were suffering under the old drawback of eighty per cent.
I suggest there is something more that might very well be done. I suggest that the whole matter of the publishers and producers of paper might go before the tariff board during the coming year for further consideration in the hope that a larger measure of freedom might be extended to the publishers of this dominion and that we might get back near the basis we were on in 1928 and 1929 as far as the publishing business and the production of this class of paper are concerned. What do these people need? They are producing a relatively small quantity. They have difficulty in competing because they do not produce a sufficient quantity. Give the publishers a chance to develop; expand the market, and when that is done you will have a basis on which such companies can live and prosper. They will prosper not on a basis of inflation and the increase of stock values and bonded indebtedness, but rather as a result of a wider market for the product they have to sell.


George Halsey Perley: My hon. friend stresses the increase in capital of these companies, and I am with him in that regard. No one in this house dislikes more than I do the fianancing that went on in this country in connection with increases in capital and bonded indebtedness. I am entirely in accord with my hon. friend on that point, but I am thinking about the workmen; I am not considering the companies at all. They can look out for themselves, but the more paper we import into Canada, where we have the raw material, the less work there will be for our own people. That is the only thing in which I am interested.


John Gordon Ross: I understand that in the publishing business for every dollar's worth of paper used there is five dollars spent in labour in other ways. Therefore the more paper we import at lower prices the more labour there will be used in the publishing business in Canada.
Item as amended agreed to.
Resolution as amended agreed to.

7. Resolved, that schedule C to the customs tariff, being chapter forty-four of the revised statutes of Canada, 1927, be amended by adding thereto the following items:
Customs tariff-1218. Used or second-hand periodical publications:
Provided, that this item does not affect in any manner periodical publications:-
(a)	Sent, gratis, to Canada for charitable purposes;
(b)	Sent to persons in Canada as casual donations by friends abroad;
(c)	Imported for personal or for institutional use, and not for resale;
(d)	Imported by or for paper mills for use as stock in the manufacture of paper.


[Stage Direction]
Item agreed to.
Customs tariff-1219. Used or second-hand mattresses or materials therefrom:
Provided, that this item does not affect in any manner:
(a)	Mattresses imported under tariff items 704, 705, 706, 707, 708, or under tourists' or travellers' vehicle permits;
(b)	Materials from used or second-hand mattresses, when imported after having been cleaned and fumigated, under such regulations as the minister may prescribe, accompanied by such certificates as he may designate.
Henry Herbert Stevens: I should like to suggest to the minister that the proviso in paragraph (b) be dropped. This privoso limits the application of the prohibition applying to mattresses; it permits materials from used or second hand mattresses to be imported after having been cleaned and fumigated, under such regulations as the minister may prescribe, accompanied by such certificates as he may designate. I suggest that this should not be allowed. If there is any type of material that is filthy, disgusting and unsanitary it is this class of material coming from used mattresses. I think many hon. members who are interested in the question of health will support me when I say that it is a disgusting practice to allow this type of material to come in, though unfortunately we have done so for some time past. I suggest to the minister that this proviso be struck out entirely, so as to provide a complete prohibition on the importation of used mattresses. I earnestly and strongly plead for that.


Charles Avery Dunning: I wanted to do that,
until I was shown how very easy it would be to evade the prohibition by shredding the dirty material and getting it in under various other items of the tariff, such as the rag and waste items. This morning, curiously enough, I received a protest against this prohibition from a firm who claim to be very reputable people and who clean up this material and use it in some way. I am not complying with

Questions
that request, however. The point is that we felt it would be safer to deal with this material in this manner, by permitting it to come in if it has been cleaned and fumigated in such a way as to satisfy our health inspectors, than to put on a fonm of prohibition which I was told would not prohibit because of the ease with which the material could be brought in under some other item, though I agree entirely with what my hon. friend has said.


George Halsey Perley: Under present
regulations has not the Department of Agriculture some authority with regard to importations of this kind?


Charles Avery Dunning: No, not in connection
with industrial materials such as these.


George Halsey Perley: In connection
with the possibility of disease?


Charles Avery Dunning: That is so in connection with hay and straw and that sort of thing, but not in relation to human disease.


Henry Herbert Stevens: Animal health is adequately protected, but human health is not.


[Stage Direction]
Item agreed to.
Resolution agreed to.
8. Resolved, that any enactment founded upon the foregoing resolutions to amend the customs tariff or schedules thereto shall be deemed to have come into force on the 2nd day of May, one thousand nine hundred and thirty-six, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Resolution agreed to.
Resolutions reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 71, to amend the customs tariff.
Motion agreed to and bill read the first time.
At six o'clock ,the house adjourned without question put, pursuant to standing order.
Thursday, May 28, 1936