GENERAL ARTICLES

Backstage at Ottawa

Spotlighting the proposed Bennett-Roosevelt tariff reductions

A POLITICIAN WITH A NOTEBOOK April 1 1935
GENERAL ARTICLES

Backstage at Ottawa

Spotlighting the proposed Bennett-Roosevelt tariff reductions

A POLITICIAN WITH A NOTEBOOK April 1 1935

Backstage at Ottawa

Spotlighting the proposed Bennett-Roosevelt tariff reductions

A POLITICIAN WITH A NOTEBOOK

THE HARDEST thing to do in Ottawa these days is to keep on seeing the forest despite the trees.

It may be well, therefore, to begin this sketch by setting down the questions most people are asking; and then try, as best we may, to answer them. The things most people keep asking are:

1. What is the most likely date of the election?

2. How many more reform measures may be expected from Mr. Bennett?

3. What is likely to be done with, or because of. the Royal Commission on Mass Buying?

4. What are the chances, if any, of a trade treaty between the United States and Canada?

5. What concessions has Mr. Bennett asked of the United States, and what have been asked in return?

6. What is happening, or is likely to happen, to Mr. Stevens?

Trade Negotiations With U.S.

LET US begin with the most important of these questions, J namely, trade negotiations with the United States. What the position may be a month or three weeks hence, no one may tell. What the position is at this writing and it may be stated fairly authoritatively—can be set out clearly and definitely, thus:

The Canadian Government has not yet submitted to the United States Government any final, definite or detailed proposition; has reduced nothing to writing. It has, however, intimated to the United States Government that, in the event of the United States being prepared to consider certain concessions which have been indicated, it will be prepared to discuss, perhaps to offer, the following:

1. A substantial reduction of duties on all motor vehicles under $1,200.

2. Abolition of all duties on all farm tractors.

3. A substantial reduction of duties on farm implements.

4. Abolition of all duties on fishermen’s equipment.

5. Abolition of all duties on gasoline.

What effect these duty reductions would have upon certain groups of Canadian industry, or upon Canadian business generally, must be a matter of doubt. There can be little or no doubt of their effect politically. The tens of thousands of farmers and small business men and middleclass people who buy cheap motor cars would be all for cheaper cars; just as thousands of other farmers would hail the possibility of cheaper tractors and farm machinery, and thousands of fishermen and more than a million gasoline users would cheer for cheaper gasoline and fishing gear. From the standpoint of more ballots for Mr. Bennett the

thing would be a riot.

It would be that and more if, in addition, Mr.

Bennett could bargain Mr. Roosevelt into giving him what he wants. What he wants—at the present writing—is free entry into the United States for:

1. Livestock.

2. Lumber.

3. Fish.

4. Certain dairy products.

A treaty of this kind, should it

come, would have something for nearly everybody. The rancher in Alberta would have a new market for his steers: the timber operators of British Columbia and Ontario and the Maritimes a new market for their lumber; the dairy farmers of Ontario and Quebec a new market for their cream and butter; the fishermen of the Atlantic a new market for their fish. That, with cheaper automobiles and gasoline and farm machinery and other things to boot, might not be a godsend to Canada—ultimately. It would undoubtedly be a godsend for Mr. Bennett on polling day this summer.

That there would be political dynamite in such a treaty, as well as political advantages. Mr. Bennett doubtless knows. The automobile industry is not a negligible one; nor the agricultural implements industry. Representing a combined investment of more than $150.000.000. they employ between them some 25,000 workers, pay out in wages and salaries annually more than $30,000,000. And that isn’t all. There are as well the scores of plants turning out automo-

bile supplies; the scores of other plants that sell automobileand farm-implementplants iron and steel and tires and paint and many other things. These, by themselves, represent a lot of capital, employ thousands of workers, have a tremendous payroll.

Whether substantial reductions of duties, would cripple these industries, or affect them adversely, nobody knows. What everybody knows is that these industries would fear being hurt and, fearing it. would marshal all their resources to fight Mr. Bennett’s treaty. A memory of 191 l’s reciprocity battle tells all about that.”

Mr. Bennett no doubt has all this in mind; may have it even more in mind before committing himself on paper. Yet a trade treaty cannot be made without hitting somebody or without the taking of chances, any more than omelets can be made without breaking eggs.

What are the chances for such a treaty? The answer— and it is based on the best possible information—is that they are not too good. It is not a question of Mr. Roosevelt and Mr. Bennett disagreeing; they do agree. The real obstacle in the way, and it is more formidable than the public suspects, is the influence of powerful special interests in the United States. The lumber interests of the United States Pacific Coast don’t want competition. They are particularly and almost violently hostile to competition from Canada.

Their antagonism toward Canada, or toward Canadian lumber, hinges round the Ottawa agreements. The Ottawa agreements, they are telling Washington, drove them from the British market; therefore, why should they permit the interests which wTested from them the British market to wrest from them, as well, their own home market? It is an argument which, coming from a State which has had its apples barred from Canada through special dumping duties, is not without force.

And so with fish. The fishermen of Gloucester and of New England, not overly prosperous, cannot see why they should have the competition of fish from the Canadian Maritimes. These people, like the lumber interests, are not impressed by figures showing that Canada buys more from the United States than the United States buys from Canada. They are concerned solely with themselves. Their power rests in the fact that they can command a powerful lobby in Washington, that they can and have lined up with them other potent groups.

There is another factor; a considerable one. It is that the United States automobile firms may not regard concessions upon automobiles and gasoline as particularlv valuable. These firms—this is notably true in the case of two of them—have heavy investments in Canada; probably a fourth of the total Canadian automobile investment. They might well represent to Washington, and effectively, that a reduction in Canadian automobile duties would imperil their interests over here without helping them very greatly over there. In other words, they might argue that Mr. Bennett,

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offering lower automobile duties, was thinking more of Canadian automobile users than of American automobile producers. In which argument they might be right.

And so with gasoline. In certain of Canada’s oil refineries there is a considerable United States interest and investment. It may well be, therefore, that certain powerful interests across the line would look with anything but favor upon any policy holding danger for the refinery business in Canada.

The truth is that this whole question is shot through with difficulties. Indeed, it would not be surprising if, when the representatives of the two countries meet face to face to bargain, the United States were to ask for our intermediate tariff on a whole range of commodities. They might argue, and not without force, that the United States, asked to admit a number of Canadian commodities free of duty, was entitled to as good treatment at least as a number of other countries. Such an argument, once conceded—and the argument would almost certainly be considered— would mean the opening up of practically all the iron and steel schedules.

Nor does it mean much that Mr. Roosevelt, under his new tariff powers, may make a treaty with Canada without submitting it to Congress. Mr. Roosevelt’s bargain with Canada might escape the votes of hostile Congressmen, but Mr. Roosevelt’s other measures, some of them most vital for him, would not be so lucky. There would be ample opportunity for revenge.

Mr. Roosevelt, with storm signals flying for him everywhere, thinks of that. And the more he thinks of it, and the more the storm signals fly, the smaller become the chances of a trade treaty with Canada. Or of a good one.

This, with the further point that we shall know for a certainty by the end of June what is to come, is the long and short of our trade treaty position with the United States.

That Reform Programme

V\7TIAT OF Mr. Bennett’s reform proYV gramme? The existing position is that three measures—the Unemployment Insurance Act, the Eight Hour Day Act, and a bill providing increased loans for farmers—are already before Parliament, on their way to Royal Assent. Still in incubation, and to come, are:

1. A bill providing for an Economic Council.

2. The Communications Bill.

3. The Companies Act.

4. The Minimum Wage Law Act.

5. Whatever legislation may grow out of the report of the Royal Commission on Mass Buying.

6. Taxation changes, to be a part of the Budget.

Mr. Bennett’s Economic Council and his Communications Bill (they are probably before Parliament as this appears in print) are of no major consequence. The Economic Council, designed to create an Ottawa “brain trust,” will take time in organization, cannot make itself felt soon, may never be much felt by the ordinary public. The chief promise of the Communications Bill is that it will take radio from the Department of Marine and place it with the Department of Railways, with no immediate or drastic change in the existing Radio Commission. A stirring up of the Radio Commission, if there be stirring at all, will come later.

As for the Minimum Wage Law, that will be a part of whatever legislation comes from the report of the Commission on Mass Buying. Across this last there falls, and darkly, the shadow of Mr. Stevens. The Evil Conscience, or Accusing Angel, of the Conservative party is not disclosing his hand, and until he does disclose it, Mr. Bennett will not be in a position to make up his mind. What may be said now, and

about all that can be said, is that, short of his proposed corporation to undertake a huge construction programme, there is little Mr. Stevens can suggest that Mr. Bennett will not be prepared to adopt.

And for a good reason. For Mr. Bennett to face the country with a programme of reform falling short of Mr. Stevens’s programme, would be politically fatal. It would mean a loss of all the elements whose present prophet is Mr. Stevens—and those elements are considerable. Therefore, while there is no hope of a reconciliation between the two men—they meet in caucus without as much as speaking—there is yet little chance of their going to the country with different programmes. Mr. Bennett will see to that.

It may be just possible, of course, that up Mr. Bennett’s sleeve there are a few surprises, such as his surprise of a “Canadian Grain Board.” Unheralded by the Speech from the Throne and unexpected, the Grain Board startled Parliament; and Parliament, its speeches notwithstanding, is not sure what it should think about it. Its main purpose, of course, is a more orderly marketing of wheat, its main consequence to put the Government in the wheat business; but inasmuch as the Government has been in the wheat business, and pretty deeply, for some considerable time past, that would be no revolutionary departure. As for the rest —the effect of wheat marketing and prices— no one may say safely. The business of making predictions about wheat has been a pretty dangerous business; has injured a lot ! of prophets.

A Summer Election?

WHEN WILL the Government go to the country? The answer is that nobody in Ottawa knows, not even Mr. Bennett. The reason is that the thing depends upon circumstances over which nobody, including Mr. Bennett, has much control. The Prime Minister’s present idea —it may be only a hope—is that he may be able to leave the House and get over to the King’s Jubilee ceremonies in May, returning ; to Ottawa within three weeks. This would i enable reasonable consideration of measures that cannot be introduced into the House in I a hurry, and provide for prorogation before | the first of June. The election could come then in July, or, if deemed better, in September. All of these notions, however, or hopes are subject to revision. “The plans of mice and men ...”

Both parties, meanwhile, or all parties, sleep in their armor. Whether the armor is good, bad or indifferent, it is difficult to tell. Mr. Bennett, having neglected his field works and fortifications for four years, has his Mr. Earl Lawson moving hither and yon ; and in Ottawa, for the first time since 1920 a Conservative propaganda bureau has begun to function. According to Mr. Bennett’s more hardbitten captains, it should have been functioning long ago. In the philosophy of these gentlemen, elections are not won with reform programmes any more than with prayers; some of them are even wondering how capitalists, in the process of being “reformed,” will behave in the matter of campaign funds.

Mr. King, for his part, has had a peacetime chief of staff—Áír. Vincent Massey— also a corps of propagandists. But whether Mr. King’s campaign managers can find a Santa Claus such as they encountered in the last election, is another matter. Ottawa, genially cynical in such matters, rather reasons not.

Meanwhile come all the manoeuvring and tactics that precede an election: Propaganda in the House, speeches for the back concessions and Main Street, innuendoes and insinuations, charges and countercharges, the traditional imputation of motives—all a part of the old game of politics, careless of reform programmes, or of depressions either. One day the Opposition

discovers that the Government has a sinister and secret scheme to wreck the National Railways; the next day the Government i discovers that the Opposition is trying to I sabotage the reform programme, using the constitution. And so it goes. In the background. like a threatening cloud, is talk of a ! National Government. The thing simply will not down.

National Government

ACTUALLY, and for the present, there I is no chance for it. Mr. Bennett may send for people and say to them fervently I that now is the time for all good men to I | come to the aid of the country. What Mr.

¡ Bennett says is regarded as significant, ¡ especially when the person sent for returns ,

; home to adorn Mr. Bennett’s telling. What I the people spreading these tales do not : j know is that Mr. Bennett’s sole meaning was j j that now is the time for all good men to j i come to the aid of the count ry— under Mr. Bennett.

There is but one chance for a National | Government. That chance would be in the j event of a stalemate between Mr. Bennett and Mr. King after the election—with Mr. Woodsworth holding the balance of power. In that case, with neither Mr. Bennett nor : Mr. King able to govern, or to govern ¡ I without Mr. Woodsworth, the forces of ¡ j National Government could move upon Ottawa. It is not outside the impossible.

That goes as well for the railway question. For railway unification. Precisely what Mr. : Bennett thinks of the railway situation or what should be done regarding it, nobody knows. What is dear, however, is that Mr. Bennett has no intention of touching the railway question before the election. What is also clear is that Mr. King, were he returned to office, wouldn’t touch it after the election. The best bet for railway unification, therefore—if a best bet it may be called—is an after-election stalemate, followed by ' National Government.