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 <I\o. 10) ONTARIO GENERAL ELECTIONS, 18»4. 
 
 ExpOI{J Of Sj{WLoqS JO Jf/E U/llYED Q7'i|7'£S. 
 
 lO 
 
 THE EXPORT DUTY.-THE MANUFACTURING CONDITIONS. 
 
 This subject has only recently been projected into Ontario politics, to which 
 it does not properly belong, with the hope that it may aflect the Government 
 candidates in a few constituencies. 
 
 A short explanation will show that the question is one with which it is ad- 
 visable the Provincial Government should not interfere, and that it is one with 
 respect to which the Dominion Government has recognized its responsibility by 
 dealing with it frequently both by legislation and regulat;<m. The lumber trade 
 is of Dominion concern, and perhaps ranks second in importance in Canada. 
 All the Provinces are more or less affected by the prices obtained and the 
 markets available for sawn lumber, but to Ontario, Quebec, KTew Brunswick 
 and British Columbia — all large exporters of sawn lumber — the prosperity of the 
 trade is of vital importance. The United States is practically our only market 
 for sawn lumber and shingles, and its value may be judged from the fact that 
 Canada sent there last year 1,031 million feet of sawn lumber valued at 
 .^8,900,000, and 357 million shingles valued at $734,000, or a total value of 
 $9,6^^4,000. Is it advisable under these circumstances that any individual 
 province should undertake to interfere with a question which is purely one of 
 trade and commerce, and by its action affect seriously and adversely this great 
 trade with which the welfare and commercial interests of the whole Dominion 
 are interwoven and bound up ? It is reasonable that when any action affecting 
 this gigantic industry is being taken, the interests of the whole Dominion 
 should be considered, and for that reason the Federal Government has dealt 
 with it. Its powers and responsibilities in this matter have been abundantly 
 recognized by the Dominion Government both by legislation and regulation. By 
 legislation as follows : 
 
 CI) Act of Canadian Parliament, 1866, fixing the export duty on sawlogs at 
 $1 per thousand feet board measure ; 
 
 (2) Act of Dominion Parliament, 1886, increasing the export duty to $2 
 per thousand feet board measure, and authorizing the GovernoF in Council to 
 increase it to $3 per thoupand feet if deemed expedient. 
 
 (3) Act of the Dominion Parliament, 1888, aut^horizing the Government of 
 Canada, whenever it was satisfied it was desirable in the public interests so to 
 do, either to reduce or to remove the export duty on sawlogs. 
 
 By regulation it has dealt as follows : 
 
 (1) Order in Council of l8th November, 1888, increasing the export duty to 
 $3 per thousand feet board Pleasure ; , 
 
 (2) Order in Council of 5th July, 1889, reducing the duty to $2 per thousand 
 feet board measure ; 
 
 (3) Order in Council of 11th November, 1890, entirely removing the export 
 duty. 
 
 It will thus be seen that in the five years (1886 to 1890) the Dominion 
 Government has dealt with this question five different times, and that one Act 
 specially charges that Government with the care of the public interests in this, 
 question. 
 
:f f 
 
 ^KV 
 
 A moment's consideration will show the in;portance of the central authority 
 dealing with this matter. In 1890, when the McKinley Bill was before tlu) 
 United States Congress, the duty on Canadian lumber going into the Unittd 
 States market was a specific one of $2 per thousana feet board measure, without 
 respect to the quality of the lumber. This was a heavy charge even on good 
 lunber, but it completely shut out the lower grades, which caused large (quan- 
 tities of sawlogs to be left in the bush to waste, and quantities of the inferior 
 grades of lumber to lie rotting in the mill yards for want of a market. 
 
 While the McKinley Bill was under consideration, and the policy of the 
 Domniion Government was to prevent the export of logs, the Ontario Govern- 
 ment, in line with that policy, placed a condition in a small sale of timber 
 berths in the Rainy River District, requiring the logs to be sawn in Canada. 
 The United States Government having put a provision in the McKinley Bill to 
 reduce tiie import duty on sawn lumber to $1 a thousand feet provided the 
 Government of Canada would remove the export duty on logs ; the Dominion 
 Government, after careful enquiry, becoming ."mtisfied that such action would be 
 in the public interest, passed an Order in Council five days after the McKinley 
 Bill became law, removing the export duty, and the clause of the McKinley 
 Bill took effect. When, however, the United States lumbermen found that the 
 Ontario Government had placed this condition in a small timber sale, deputa- 
 tions immediately proceeded to Washington, magnified the action of the Ontario 
 Government, and made it the ground of urging upon Congress that the duty on 
 sawn lumber should be again increased, but Congress, relying that the policy of 
 the Dominion Government would be carried out in good faith, took no action in 
 the premises. 
 
 Under the operation of this system of reciprocity the money gain to Cana- 
 dian lumbermen on lumber sent to the United States in 1892, including shingles, 
 by reason of the reduction of the duty, would bo $1,000,000, but this is only a 
 small part of the gain. The rougher grades of lumber were now capable (^f being 
 marketed there at a profit, and it has been estimated by Col. O'Brien, M. P. for 
 Musk oka, and other competent authorities, and corroborated by the reports of 
 the Crown Timber Agents and rangers of the Government, that from 30 to 50 
 per cent, more pine timber is cut and marketed from the same area of licensed 
 territory than was formerly the case. This means a large increase in the reve- 
 nue of the Province for material which had formerly gone to waste. It also 
 means a large increase in the employment of labor and markets for produce. 
 
 Now it is contended by the Opposition that the Ontario Government should 
 have put a condition in its last timber sale (that of 1892) requiring the timber 
 on the territory sold to be sawn in Ontario, thus practically nullifying the action 
 of the Government of Canada. Such a course would have been imprudent and 
 disastrous — imprudent because there were only 427 miles of territory then sold 
 from which logs could be taken to the United States, while there were nearly 
 20,000 miles previously under license as to which no restriction could bo made. 
 It would have been disastrous because the United States would have regarded it 
 as sharp practice and would have resented it by the immediate re-imposition of 
 the old duty on sawn lumber or perhaps an increased one. As it turned out, 
 only 78 miles of the territory sold were purchased by Americans, so that the 
 action would have caused the loss of at least $1 a thousand on our exports of 
 lumber, which for the year 1893 alone would have aggregated over a million 
 dollars, and the market opened for our coarse lumber would have been 
 destroyed, for the bagatelle of keeping the sawing of 78 miles of timber in the 
 Province. If any loss should be calculated at all it should be only on the logs 
 cut on the .'imits sold in 1892 and exported in the log, not on the entire export 
 cut elsewhere, but as a matter of fact there were none cut on these limits for 
 exportation and not a log went out of the country. The re-imposition by the 
 United States of the old duty on sawn lumber or an increased one would have 
 paralyzed the lumber trade of the Dominion, have ruined many of our largest 
 employers of labor, and induced such a financial crisis as we have not yet seen 
 in this country. 
 
 iy 
 
3 
 
 The question of the wisdom or unwisdom of permitting the exportation of 
 logs as a quid pro quo for a reduction of the duty on sawn lumber need not bo 
 argued in Provincial politics. If there is blame anywhere it lies at the door of 
 the Ottawa Government for removing the duty and thus enabling the logs 
 to be taken out of the country. This was done, however, at the instance of the 
 lumbermen, who convinced the Government that there was more money to be 
 made for the country by obtaining a removal of the American duty on imported 
 sawn lumber than by retaining the export duty on Canadian logs. If the Prov- 
 ince had imposed the manufacturing condition and the United States had subse- 
 quently re-imposed the duty of $2 — or $'i — or indeed ^4 — per thousand feet on 
 sawn lumber, the immense loss to the Province and to operators would instantly 
 have been laid a' the door of the Provincial Government by the Opposition and 
 the Tory press, and the charge would have been difticult to answer. 
 
 Recently a Tory M. P. has made some calculations and founded arguments 
 thereon, with the object of inducing the Dominion Government tore-impose the 
 export duty on saw-logs, which, however, it has declined to do. As his argu- 
 ments and calculations are not addresscjd to and do not apply to the Ontario 
 Government, but were addressed to and do apply to the Dominion Government as 
 the proper authority to deal with the matter by putting on a prohibitory ex|M>rt 
 duty, they have no bearing on Provincial politics and might be ignored. But 
 they are so wild and grossly inaccurate that it would seem proper in the public 
 interest to dissect them. 
 
 His calculation is based upon an exp n't of 400 million feet of saw-loga, and 
 on this basis he figures as follows : 
 
 Towing 400 million to the Tlnited States at $1 per 
 
 thousand $ 400,000 
 
 Sawing 400 million in the United States at |2.5() 
 
 per thousand 1,000,000 
 
 Freight on 400 million at ^2 per thousand 800,000 
 
 Laths and cuttings at 50 cts. per thousand 200,000 
 
 Total $2,400,000 
 
 The actual figures of the export were 235 millions, 
 and from the average of five of the largest 
 mills on the Georgian Bay the cost of sawing, 
 piling and shipping is $1.50 per thousand, 
 
 which ecjuals $i352,0()0 
 
 Add freight on 236 million at $2 per thousand . . . 470,000 
 
 Add towing at $1 per thousand 235,0 
 
 Total $1,057,000 
 
 as against $2,400,000 ; so that it will be seen his calculation is an exaggeration 
 of $1,343,000. 
 
 The question of laths and cut-offs need hardly be considered because there 
 cannot be more than 400 million feet in 400 million feet, and that is the baais of 
 his calculation. Why he should add $200,000 extra is known only to hi)nself. 
 Again, as he is arguing for the entire abolition of towing to the United States, 
 it would be fair to deduct the cost of towing ($235,000) from his calculation, 
 because if there was no export there would be no tow bill, and Canadian labor 
 would not benefit by the towing in any event. This further deduction would 
 leave simply the sawing, piling, shipping and freight to be considered, which on 
 235 millions of feet would amount to $822,000, as against his calculation- of 
 $2,400,000. Besides, when he is obliged to come down to facts and state the 
 number of mills which are actually idle on account of the export of logs, although 
 it has been charged that fifty mills are idle, he is only able to cite two — one at 
 Midland and one at Parry Sound, and this statement is the only absolutely true 
 one in his whole speech. 
 
; 
 
 4 
 
 II 
 
 : 
 
 I : '■■• 
 
 .1 
 
 ii 
 
 But Mr. Bennett's figures arraign only his own friends, namely, the 
 Dominion Government, as his arguments and figures apply only to the abolition 
 of export duty, an act of the Dominion Government exclusively. They have no 
 foi'ce or application to the Provincial Government, for the reastm already f,'iven 
 that the logs were cut on old limits sold before the question of the " manufactur- 
 ing condition" ever arose, and it is not in the power of the Government or the 
 Legislature to impose such further condition upon limits which were slod free 
 from it, and none of the logs exported were cut from limits recently scjld. 
 
 It is said our forests are being depleted, but according to Col. O'Brien and 
 other good authorities, our timber resources have beeu added to by from 30 to 
 50 per cent, in the new market afforded for our coarser grades of lumber, which 
 were formerly wasted or burnt up. 
 
 It is said that Canadian labor is adversely affected, but it is well known that 
 employment at good wages was never more plentiful in the newer parts of the 
 Province, and that good markets have been afforded for all the settlers can rais?. 
 The American lumbermen employ almost wholly Canadian labor in taking out 
 the logs, indeed in many cases they contract with Canadians to take them out. 
 
 As stated above, the (quantities exported are also grossly exaggerated. Last 
 year's export has been put at from four to five hundred million feet board 
 measure, whereas as a matter ot fact only 235 million feet board measure were 
 exported from Ontario lands last year. (See Report of Commissioner of Crown 
 Lands.) There are about 20,000 square miles subject uo timber license in the 
 Province, of which only about 1 ,700 are owned by Americans who are not mill 
 owners in Canada. As regards the limits sold at the 1892 sale, (and this is the 
 only sale in which the absence of the condition of sawing in the country is or 
 can be attacked by the Opposition), of the 633 miles sold Canadians bought 555 
 and Americans 78 miles. 
 
 It is claimed that a large number of mills have been shut down which 
 formerly manufactured logs taken from limits the logs from which are now ex- 
 ported. Midland, Parry Sound and Byng Inlet are cited. The only large mill 
 at Midland shut down on this account is Mr. Miscampbell's, the Tory M. P. P. 
 for East Simcoe, who was paid a bonus to surrender his contract to saw the logs 
 of the Emery Lumber Company in Ontario. The only mill shut down at Parry 
 Sound, is the Midland and North Shore Lumber Company's mill, that Company 
 having sold its limits to Americans. At Byng Inlet there were formerly three 
 mills, two the Georgian Bay Lumber Company's and one Burton Bros. One of 
 the Georgian Bay Lumber Company's mills was burnt down a few years ago and 
 not rebuilt ; the Burton Bros, mill was burnt down last summer. Another 
 mill is being built there, perhaps on a smaller scale, as the limits are nearly cut 
 out. The third mill at Byng Inlet was operated last season and probably will 
 be this summer. The net result is that two mills have been closed down on 
 account of the export of logs. On the other hand, one large mill has been 
 erected by Moiles Bros, on Lake Huroi?. and another large mill is in process of 
 erection by the Cutler, Savidge Co., near Spanish River, and other large mills 
 are projected in view of the removal of th^ export duty on lum* er going intf) 
 the United States, If matters are allowed to rest until the United States tariff 
 is passed, ifc is confidently expected that sawn lumber will be free of any duty 
 going into the United States, in which case the incentive to take logs over there to 
 be manufactured will be removed and a numbe." of new mills will probably be put 
 up on the north shore of Lake Huron, and the quantity of coarse lumber market- 
 able still further largely increased. Should, however, any action be taken to 
 re-impose the export duty on sawlogs and the United States markets be closed 
 to us, as they will most certainly be, instead of one or two mills being shut 
 down, nearly all our large mills will be shut down and disorganization and chaos 
 brought about. 
 
 The question of the export duty on logs has within the past few days been 
 again under the consideration of the Dominion Parliament. All the lumbermen 
 in the House, of which there are a considerable number on both sides, spoke 
 strongly and unanimously against re-imposing an export duty on logs until it 
 was seen if the United States would admit Canadian lumber free, as is proposed 
 
in the tariff now before the Senate. No luniberiuan favored the re-iinpoaition 
 of the duty. It was loft for a doctor and a hiwyer to argue in its favor. The 
 Speaker of the House, a strong Tory and a lumberman, folt it incumbent upon 
 him to addresH the House upon this ({uestion, which he did as follows : 
 
 Mr. Speaker, said the evil effects were conlined mostly to local districts, 
 the north shore and the Georgian Bay. It would not bo proper to re-impose 
 the duty on logs until they found whether lumber would remain on the free list 
 of the United States. If it was on the free list there, then it would be a mistake 
 to re-impose the export duty. It would be in the interests of a large proportion 
 of the Dominion for the Government to stay their hand for the present. — 
 EiApire, May 18th, 1894. 
 
 Col. O'Brien, Member for Muskoka, Independent Conservative, said amongst 
 otaer things, that gentlemen were guilty of great exaggeration in their desire to 
 have the duty re-imposed. With regard to the Parry Sound District, there had 
 never been so many men employed or labor so steady and constant, neither had 
 wages ever been so good. So far from being an injury to the country, the extra 
 quantity of logs taken out since the export commenced had given a great 
 impetus to trade in the country. To re-impose the duty at the present time 
 would paralyze trade from one end of the country to the other. While there was 
 a chance of the import duty being taken off, the Canadian Government should 
 not re-impose an export duty. 
 
 Mr. Bryson, Pontiac, Tory, said the lumbermen should know what was their 
 own interest. The platform for the Government was that Americans should be 
 given free logs provided they admitted lumber free. His earnest desire was 
 that the Government should adhere to the ground it had taken. 
 
 Mr. Oalback, Tory, said if the United States would allow logs to go in free 
 from Canada, this country ought not to re-impose an export duty. 
 
 The Government has not re-imposed the export duty, because they believe 
 it to be in the interests of the country that the matter should stand as it is until 
 it is known if the United States will admit lumber free. 
 
 By the tariff bill now before the House it is provided that an export duty 
 may be imposed by the Canadian Government as against any country which 
 imposes a duty on imported lumber. 
 
 The policy of the Government as to the question of imposing * ' manufactur- 
 ing conditions " has been and is, that while the question of admitting Canadian 
 lumber to the American market free of duty is before the Congress of the United 
 States, it would be inadvisable, and possibly disastrous to impose " manufactur- 
 ing conditions " upon the sale of timber limits. In 1893, when this question was 
 first brought before the House, the American people had elected a Democratic 
 Congress and a Democratic President and there was every prospect that their 
 proposed new tariff bill would admit lumber free. In the tariff bill now before 
 the Senate a clause has been carried admitting lumber free of duty. Had the 
 Dominion imposed an export duty on logs, or had the Province attached a 
 manufacturing condition to their sale of timber limits, there can be but little 
 doubt that a heavy duty would have been imposed upon Canadian lumber 
 entering the United States. 
 
 It will be time enough to consider what the policy should be in the future 
 after we have seen what action the American Congress takes on this very vital 
 and important matter. The Government are open to deal with the question in 
 the manner best suited to the public wants. The reasons herein given are 
 those which heretofore have been presented in the Legislature against the 
 resolutions in favor of " manufacturing conditions " which have been proposed 
 by the Opposition. 
 
 2—10