House of Commons, 20 April 1948, Canadian Confederation with Newfoundland

APRIL 20, 1948 Dairy Industry Act 3157
[...] ernment report concludes with one paragraph which I think I should put on record. Speaking of margarine, it says:
Its manufacture has been and is still opposed by the dairy interests. These interests do not appear to realize that the national well-being of a people must come before sectional gains. At present there is not enough butter to meet the purchasing power of the nation, let alone its nutritional needs. Even if butter production is expanded to supply the needs of those who can afford it there will always be a very large group of people whose wages will be so low, in relation to the price of butter, that they could not aflord it at any price. The manufacture of margarine is intended to fill the present gap between the production of and the demand for butter, and to supply the nutritional needs of the poorly paid groups in order to improve their health and working capacity.
What a splendid stand for our sister dominion to have taken.
Within the last year another aspect has become apparent in the margarine situation, an international aspect brought about by two things, the Geneva trade agreements and the suggested entry of Newfoundland into confederation. The Geneva trade agreements have been rightly heralded, by the democratic world at least, as a tremendous advance in international understanding and a breaking down of the barriers between nations to encourage world commerce and so stimulate world recovery; and none of the nations has so great a stake in this program as Canada, which is so dependent upon world markets. This great agreement was only reached, of course, through important concessions being made by each of the participating nations. One of those conditions is contained in article XI of the general agreement, which provides that there shall be no ban on the importation of any product of any of the signatory nations.
The Canadian experts who were at Geneva appeared before the senate committee last year and said that Canada had fought very hard against this condition because of our margarine situation, but that in the end we had given up and so were pledged to abide by that clause. Further evidence along that line was given in a statement by the leader of the government in the senate last year, which is found at page 34 of senate Hansard, where he said in part:
Under article XI of the general agreement we are bound to remove our ban on the import of oleomargarine. The product is not specifically mentioned, but we have bound ourselves to abstain from prohibitions of that nature.
Almost immediately following this declaration we were informed by a government press release, and I quote
. . . there is nothing in the Geneva agreement. nor is there apt to be anything in the Havana modification, to prevent us putting duties and taxes on the margarine as high as may be felt proper to leave the dairy industry completely undisturbed.
If parliament should follow such a course; if we should agree in principle to the spirit of the agreements and then immediately turn around and by a cynical evasion impose tariffs which are in effect the ban which was just removed, then I say we as a nation are guilty of the most arrant hypocrisy. Further I say that if every other nation takes similar evasive methods to escape the concessions they made, then the Geneva trade agreements will not be worth the paper they are written on. They will be even more worthless, I would say, than our own signature if it is our intention to evade the spirit of the concessions by some technicality. If we intend to abide by these agreements, then I say the only sort of tariff we can in honour place on the importation of margarine is one no higher than that we imposed when margarine was last imported into this country.
The Newfoundland proposals have an equally shocking implication. This sister country, with climate and geography much like our own, had another problem in common with us. They found their butter production was insufficient to meet domestic needs; but they did not stick their heads in the sand like an ostrich. They embarked, after mature considerations, upon the manufacture of margarine, using mainly their own domestic oils; and margarine now sells for roughly half the price of butter there. When they inquired about the conditions under which they might enter confederation, naturally they were most anxious to preserve this right and insisted upon it. The Dominion of Canada, in- its turn, agreed; with this provision, however, that margarine manufactured in Newfoundland could not cross the provincial boundaries. This amazing condition strikes at the very economic heart of the pact of confederation. Paragraph 121 of the British North America Act reads:
All articles of the growth, produce or manufacture of any one of the provinces shall, from and after the union, be admitted free into each of the other provinces.
The fathers of confederation intended Canada to be one economic unit, not nine Balkan states with customs houses lining every provincial boundary. This provision, therefore, strikes at the very heart of the economic foundation of confederation. It can be achieved only by an amendment to section 121 of the British North America Act. This is an amazing thing. Apparently it is almost impossible to secure amendments to the British North 3158 Dairy Industry Act COMMONS America Act for which the great bulk of the Canadian people long, such as an amendment Which will permit contributory old age pensions, an amendment which will permit national health insurance, or an amendment which will permit national control of labour legislation; but apparently no difficulty is anticipated in securing an amendment to the British North America Act which, though shaking confederation, will please the dairy industry.
If such an amendment is obtained it will have to be one of two kinds. Either it will have specifically to mention margarine and the boundaries of Newfoundland, in which case we shall debase our national constitution by the mention of one trivial article of commerce which is singled out for discriminatory treatment, or it will have to be a general amendment permitting other provinces to impose bans. So shortly we may have Ontario banning British Columbia apples, British Columbia banning Alberta coal, Nova Scotia banning Prince Edward Island potatoes, thus breaking down the economic heart of confederation. Such however, is the power of the butter industry in this country.
Now getting away from the principles behind this ban, or rather the lack of principles behind it, let me turn now and look at the various groups involved. Who are against margarine? Just one group: the dairy interests of Canada; and for just one reason: they feel that the sale of margarine will affect their pocketbooks. One reason, a purely selfish one, is behind this ban. They, of course, expand this reason into a much bigger sphere. They say it is more than that. They say the sale of margarine would depress the sale and price of butter. They say butter is the cornerstone of our dairy industry, so that it will depress the dairy industry. Then they say the dairy industry is the cornerstone of our agriculture, so that it will depress agriculture; and agriculture is the cornerstone of Canadian industry, so the eventual result of the lifting of the ban on margarine will be a national depression.
Mr. CASE: That is right.
Mr. SINCLAIR: My hon. friend across the way is quite familiar with ballads and poetry. I say that is exactly the same type of logic which traced the loss of a great battle back to the loss of a horseshoe nail. The same argument, of course, was used by the proponents of the cotton law of the eighteenth century, except that then it was wool and linen which were the cornerstone of British industry. It was used again by the champions of the corn laws in the nineteenth century, though this time grain was the cornerstone. Both predicted national ruin unless those bans were maintained.
History shows how false were their assertions; and history today shows that the assertion of the butter industry that this must ruin Canada is equally false. The history of every other country in the world shows that the introduction of margarine has not debased the dairy industry or agriculture as a whole but has helped the dairy industry. Both countries with butter for export, like New Zealand, Holland or Denmark, and those which like Canada are in short supply, such as Newfoundland, the United Kingdom, the United States, Norway and South Africa, have found this to be so, for all today, with margarine, have healthy dairy industries.
The thing about this that interests me very much is the fact that for years we have witnessed crocodile tears on the part of the dairy industry about the money they lost on butter. They were always losing money on butter. If butter was such a money loser one would think the dairy industry would welcome a chance to get rid of this loss leader by the importation and manufacture of margarine, letting margarine take that loss and leaving the dairy industry free to go into the more lucrative field of the production of milk, icecream and cheese.
What is the truth of the matter? The truth is that the sale of oleomargarine in Canada would have very very little effect upon butter sales or butter prices. In the United States, for example, butter sells at about a dollar a pound and margarine at from thirty-five to forty—five cents a pound. The great sale of oleomargarine is to people who today are either not buying butter because they cannot afford it or not buying all the butter they would like.
More than that, the manufacture of oleomargarine is naturally complementary to butter making, since it uses the skim milk which is a by—product of butter. More than that, the dairy industry gains from the oleomargarine manufacture, because there is more oil cake which comes as a by—product of the increased production of vegetable oils which will be necessary. The records of Canada also show that, because between 1917 and 1923, when we had oleomargarine, butter production and consumption in Canada gained each year.
I turn then to their second defence, the argument of protection. I shall deal with that at the close of my speech.
The next argument which we hear so often repeated is that We could not have any oleo- [...]


Canada. House of Commons Debates, 1875-1949. Provided by the Library of Parliament.



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