Canadian Tariff Policy

Abstract

During the recent session of Parliament a Conservative member flourished a small garment before the House to dramatize the fact that a Canadian baby is surrounded by the influence of our tariff from the time he is first wrapped in a tariff-protected blanket until at length he is driven out to some cemetery in a tariff-protected hearse and interred in a tariff-protected coffin. And yet I suspect that most economists have been less surprised at the continued importance of our tariff than at the consistency with which Canada has moved in the direction of freer trade during the past decade or more. One admittedly defective measure of tariff levels, the ratio of the total amount of duty collected to the total value of dutiable imports, has fallen from 29.6 per cent in 1933 to 18.6 per cent in 1953 and during the past few years has been at its lowest level since Confederation. Moreover, despite the acute import competition in a number of industries during recent years, the Government has steadily refused any openly protective measures on their behalf. The sharp declines in employment in our woollen textile and deep-sea shipping industries suggest a willingness to tolerate substantial readjustments in employment arising at least in part out of the changing pattern of international competition. The active role our Government has taken in supporting the General Agreement on Tariffs and Trade, the International Monetary Fund and the International Bank and in pressing for a removal of quantitative restrictions and the restoration of a more multilateral pattern of trade is further evidence of tins freer-trade attitude. After a regrettable lapse in 1947, Canada has been one of the few countries that has managed to avoid the use of import quotas since the end of the war and is almost alone in her abandonment of exchange controls. Then too, in line with the provisions of GATT, our regulations with respect to the valuation of goods for duty purposes and the application of dumping duties have been revised and in some respects made even more liberal than a strict interpretation of GATT would require. Even the party of Sir John A. Macdonald no longer gives outright support to the cause of protection. One European economist has suggested that Canada now has the most open economy in the world. Nowhere else is the international movement of goods, people, and capital as free as it is across the Canadian border.