I admit it is too much, but under this resolution not one dollar would I be asked to pay to the Crown. If, however, I should have been unfortunate enough to join my hon. friend (Mr. Turriff) in an incorporated company and put that $30,000 into it, and carried on the same business and made, say, only 8 per cent, I would have to divide with the Crown, the one per cent over the seven. Therefore I cannot for
the life of me understand why the minister intends to discriminate against an incorporated company doing business in a town of five or ten or fifteen thousand people, or, if you like, in a city. I have in mind at the moment an incorporated company doing a boot and shoe business in one of the western cities, and having a capital of $7,500, and a surplus of $5,000. A neighbouring boot and shoe store might have the same capital in a partnership company, but whereas the incorporated company would have to pay taxes to the Crown, the partnership company would escape scot free.
The limitation of $50,000 of capital applies to firms, individuals and partnerships as well as to joint stock companies. If my hon. friend will look at section 4 of the resolution, he will find that it is perfectly plain.
The minister has answered that question. Will he tell me why he asks an incorporated company to pay on its earnings over 7 per cent while he does not ask a person to pay until he has earned over 10 per cent? I have endeavoured to think out what the reason can be, but 1 cannot understand it. I can understand that in large corporations 7 per cent may be considered a fair .earning for the money, but I cannot understand why J. R. Booth should be able to keep his money up to 10 per cent on his earnings, while the W. C. Edwards Company cannot keep theirs when they get beyond 7 per cent.
It is not fair that a limitation should be put upon capitalization, and I cannot understand why the minister should arbitrarily fix the capitalization at $50,000. Why should a man who has a capital of $50,000 have to pay taxes to the Crown, whereas another man doing business beside him with a capital of $49,000
is not called upon to pay one cent? I also cannot understand why one class of firms should have the benefit of 10 per cent interest and another the benefit of only 7 per cent. These are inequalities that ought to be cleared up before the resolution is passed.
The minister was not in the House when I referred to the valuation of intangible assets, and I think he should be able to overcome that difficulty by consulting experts and framing legislation in such a way that all classes of the community, all business interests, will be affected alike, so that one class will not have an advantage over another, because competition is very keen, and it is inequitable if one firm has to pay three or four hundred dollars into the treasury and another firm doing business beside it is exempt.
I hope the minister will try to make this a matter of equality; I hope he will see to it that all business interests contribute alike to this laudable work. As the Finance Minister suggested, we all wish to pay our share, but we on this side of the House ilaturally think that the Government should set the country a good example by cutting down their expenditure as much as possible. In England the public are asked to economize; surely we in Canada also ought to economize. When you ask the people to economize, you cut down the profits of the men who are doing a general store business throughout the country, in the large as well as in the small towns. It seems to me, therefore, that this is a matter which will require consideration before the resolutions proposed by the Finance Minister are adopted.
I should like to congratulate the Minister of Trade and Commerce and the Finance Minister upon the titles which have recently been bestowed upon them. Forty years ago I heard the hon. gentleman who is now Minister of Trade and Commerce deliver in Fredericton a lecture on temperance, with Sir Leonard Tilley as chairman. I have not forgotten that occasion. I have heard the hon. gentleman deliver many eloquent speeches since that time. I recollect an address that he delivered in 1907 or 1908, when he bewailed the taxation that the then Government were imposing upon the people of the country, asserting that they were taking out of the pockets of the people probably 100 per cent more than his party had taken from them when in power. If the hon. gentleman were on this side of the House now, how he would bewail the taxation that the Government is imposing
upon the people. On another occasion I heard the hon. gentleman deliver an address in this House on the navy question, when he said that we should give not money, but something tangible. I have not forgotten that address; it was grand. I heard him on another occasion, when, I think, he was not sane; at the time of the Drummond and Arthabaska election he gave insane advice. Now, however, I congratulate him for rising to the dignity of the occasion when he addressed the House a few days ago.
Mr. LOG'GIE: I join hands with the hon. minister in the stand that he takes with regard to the patronage system, which, as he says, has resulted in dry rot. I assure him that I should be glad to join with him in bringing about the good result that would accrue from doing away with this patronage sytem. Let us unitedly make new resolves in this day of our prolonged parliamentary life. Let us rise to the occasion and eliminate all that is wrong in connection with the patronage system; let us, when we go before the'people, do what we can to see that no undue influence is brought to bear upon the electors. All that demoralizes political life ought to be stamped out. It behooves the hon. Minister of Trade and Commerce, having in regard the high tone of his last address, to lead the way; if he does so, I am sure that he will have a great many faithful followers.
In closing, I think it falls on me to express my sympathy with those of my country who have lost sons in the cruel conflict that is now taking place in Europe. To those who have been maimed for life I extend my deepest sympathy, expressing the hope that the Government will give due regard to their requirements and to the requirements of all those who are entitled to the benefits of a pension fund. No doubt this matter will receive proper attention at the proper time; meanwhile, to the bereaved I extend my deepest sympathy on the occasion of their loss.
Mr. Speaker, the Budget that has been brought down by the Minister of Finance is a new departure in the history of Canada. The imposition of a direct tax on capital is, in my judgment, a step in the
5 p.m. right direction, and in that respect I offer the Minister of Finance my congratulations. In bringing down the proposal to tax industry, I think ,
that the hon. minister has not been desirous of making party capital; in that respect his Budget is free from partisanship. I should like very much if I were honestly able to congratulate the Minister of Finance that in that part of his Budget relating to changes in the customs tariff he had refrained from indulging in any partisanship. But, Mr. Speaker, knowing the circumstances as I do, it is impossible for me to absolve my hon. friend." I think that personally he would prefer not to introduce partisanship into the Budget in any shape or form, but, if that was his desire, certainly he allowed his colleagues to put one over on him.
Only two changes in the tariff are proposed. One is the raising of the duty on apples from 40 to 90 cents -a barrel; that is, an extra duty of 50 cents a barrel is imposed on apples coming into Canada. Why was this done? For whom was it done? The Minister of Finance stated that it was done for the apple growers of British Columbia in particular and of Canada in general. The hon. minister knows as well as I know, and as well as any hon. gentleman in this House knows, that the extra duty that he is putting on apples will not materially affect the conditions in the lower provinces; he knows that it is not going to affect the condition in Ontario to any extent. The only province to which it applies is British Columbia. Why has the minister done this? In order to protect and assist the apple growers in British Columbia. My hon. friend is ever ready to protect the farmers when they ask for duties, but he is not at all ready to listen to them when they ask to have duties taken off. For one farmer in British Columbia who grows apples, there are a hundred on the prairies who. grow wheat. These hundred men have for years come down here demanding the removal of duties, and the Minister of Finance has on every occasion turned a deaf ear to them; but as soon as one man, one per cent of their number, comes from British Columbia and asks that a duty be put on, my hon. friend comes to the rescue at once and puts a duty on apples. What is the result? Every man on the prairies must in future pay fifty cents a barrel extra for his apples, in some cases a great deal more. In my part of the country apples come in by the carload for the American towns just a mile or two south of the boundary line. They are shipped in bulk as we ship potatoes or wheat.
These are second-grade apples, windfalls, and they are sold from the car at from twenty-five to thirty cents a bushel, and shovelled into the farmers' wagons. Then, our farmers are accustomed to purchase ten or twenty bushels and team them home, paying the small duty that has hitherto been imposed on apples. But my hon. friend comes forward and says. " You must pay more than double what you paid in former years." That is the way it works out, and why? To protect a few apple-growers in British Columbia. I said a moment ago I was sorry I could not exonerate my hon. friend the Minister of Finance from being touched with partisanship in this matter, perhaps not intentionally. My hon. friend is the last man in the House to whom I would wish to do an injustice; but somebody has put one over, him, for I say that that duty was put on apples not so much to protect the farmer as to protect the discredited politicians in British Columbia. There are by-elections taking place there to-day, and the general elections for the local House are coming on within the next two or three months; and in order to try to save the practically defunct Government in British Columbia my hon. friend and his colleagues put a duty on apples, and every farmer on the prairies has to pay the piper. That is the state of things we are up against. My hon. friend refused the ten thousand farmers their demand for free wheat. He did it, he said, in the general interest of the country. The farmers could not be listened to. But in this case, in which the proposal is against the general interest of the country, when only a few are to benefit by it, the voice of the farmer is listened to. Nobody in Canada, so far as I have been able to learn, has during the past few months asked for this duty on apples; there has been nothing in the press about it, so that it is easy to see that it is a put-up political jo*b to help out the political friends of the Government; and the farmers of the Prairie Provinces are the people who have to bear the brunt. Not only are they not allowed to have duties taken off, but they are not permitted' to secure a market. It was bad enough to be refused that market, but now the Government come along and say: "Not only will we not take the duty off your wheat so that you can sell in the American market, but in addition we will put another load on your back and make you pay fifty cents more for every barrel of apples you buy for your family.
And this is done to protect the British Columbia apple growers, while a few years ago those very British Columbia apple-growers voted almost solidly to refuse the American market for their apples, a market that woul,d have been open to them had we obtained reciprocity, a market that is within easy reach, because, as every hon. member in this House understands, in British Columbia the rivers and mountains and valleys all run north and south, so that you can ship fruit into the United States from the applegrowing portions of British" Columbia at a very much lower rate than to Vancouver or Victoria, where the great bulk of the population of British Columbia is, or to the prairies of the West. In the past we on the prairies have been getting apples from British Columbia, and why is it necessary to put on the duties to keep American apples out? Simply because we could buy the same class of apples from the United States a great deal cheaper than we could get them from British Columbia, and the market that was most suitable for British Columbia was closed by the votes of my hon. friends opposite. Now they come complaining when they get exactly the result that they voted for in 1911, and want to tax practically everybody in the Dominion of Canada in order to keep up that industry, whereas the industry would flourish if it had the American market in which to sell its product; because if must be remembered that our apples ripen later than those of the United States and would command a better price. The same thing applies to all friuits.
My hon. friend has put an extra duty on
oil. I shall not discuss that at length because, unfortunately, I do not understand exactly what the tariff means. It seems to give a reduction in one case, but in the other it apparently means an increase of 7i per cent on the illuminating oil used by the people on the prairies and all over Canada. As I understand the proposition, it is that oil coming into Canada to be' refined shall be charged an extra 71 per
cent. Well, if you charge the refiner 7i per cent extra, you are going to charge the consumer probably 15 per cent extra. I may be wrong in my understanding of this proposition and perhaps the minister would explain it.
I am glad to hear from the minister that it does not apply to illuminating oil, because that is the chief article of light used generally throughout the country. I shall say no more about the oil duty, because I am not very well posted on it. I am glad to know that in some cases there have been reductions.
We have heard a good deal in this House since the debate started about this being a farmers' budget, and some speakers on the Government side have taken credit to themselves because the farmer is not taxed under it. .
My hon. friends opposite say, hear, hear. I have been now some thirty-five years in public life. I have represented my constituency for a good many terms, in both the local and the Dominion Houses, and I have never once, in the course of my life, heard a farmer complain at having to pay his fair and proper share of taxation. The farmers of the western prairies are readier than any people on the face of the earth to pay their fair share of taxation. They are not asking for exemptions. Why should a cattle rancher who has 5,000 or
10,000 head of cattle, and who makes a profit of $10,000 or $20,000; or a farmer who puts by $10,000 or $15,000 or even $5,000, after he has paid all the expenses of producing his crop, not pay his fair share of taxation as well as any other man? There is no farmer who would object to that proposition ; at all events, I have never met one. What the farmer objects to is being taxed up to the neck on everything he buys, on everything he uses to produce his crop, and not being allowed to sell his crop where he can get a market for it. He is hit at both ends; that is what the ordinary farmer objects to; it is not to paying his fair share of taxation.
The farmers of the West, and of the East as well, have responded readily to every call made upon them, whether it be in the way of contributing to the Red Cross fund or the Patriotic fund, or other funds. They [DOT] have done their share in that respect, and
it would not be to their credit if a law were passed exempting them from taxation. Last year the farmers. in three of the prairie provinces, in convention assembled, passed unanimous resolutions calling on the Government to impose a single tax, which meant taxing their farms. In that case every farmer would be obliged to pay a tax, whether he was making a profit or not. Do you think then that these men, who asked that the revenues of the country should be raised by a tax on their lands, would object to paying a fair share of taxation out of their profits? No, Mr. Speaker; any minister who would so judge the farmers is mistaken. Give the farmer fair play in the matter of duties, and give him a free market, and he will not complain about paying his share of taxation.
I am very glad, however, that my hon. friend the Minister of Finance has resorted on this occasion to a system of direct taxation. Why did my hon. friend take up that new position? It was simply because he was driven to it, simply because he was unable to raise any more revenue by increasing the customs duties. My hon. friend is fortunately in the position this session to say that the revenue for last year was greater than had been anticipated; but let me point out that it was not because of the 7j per cent extra tax that he put on last year. Let me remind my hon. friend, and this House and this country, that in spite of the extra 7J per cent tax, for several months after the new duties came into force last year, the revenues kept falling. For several months after the new duties came into force, the revenue was not increased; it was, in fact, less than for the corresponding months of the previous year. What was the cause of the extra revenue last year? There were two, and two only, and neither was the per cent extra duty that was imposed. The two causes that contributed to the increased revenue were: first, the goods imported, a great deal of which were for the manufacture of munitions of war, and second, the bountiful harvest all over the Dominion. On the western prairies during the first few months of the shipment of the last crop, over 200,000,000 bushels of wheat went east of Winnipeg. The price paid for that immense quantity of wheat and the cost of freight for carrying it down to Fort William, represented a large amount of money going into that country; and then you can add the money going in for cattle, for hogs, for oats, for flax, for barley, and for all the products of the farm that were going east
or south. It was that condition of affairs which increased the revenue that my hon. friend was so fortunate to get during the first few months of this year.
' I have several objections to the proposed taxation, but the main objection I have is this: the minister proposes to treat the honest business man exactly, as he would treat the dishonest munition manufacturer who makes a huge fortune by robbing this country and Britain. The minister puts that class on exactly the same footing as the conservative business man who has been in business all his life, and who carries on a straightforward, legitimate business. Will any one tell me that that is a fair proposition? Will any one say that it is fair to put the regular business man on the same footing as the members of the old Shell Committee who acted simply as a committee to hand out to themselves contracts by which they made millions and tens of millions of dollars, which they were not entitled to make, and which any decent Government would not have allowed them to make? If the Government did their duty they would take at least half of the profits of these munition manufacturers in taxation. But what have they done? As I said a moment ago, they put that class on exactly the same footing as my hon. friend here (Mr. Loggie), who has been in bus-ines all his life, and who carries it on in a legitimate manner. Is it fair? Is there any equity in that? Is it reasonable? I venture to assert that there is not a business man in Canada who would object to pay this war-tax if it were evenly levied. If business men were called upon to pay approximately the same, you would not have one word of complaint from one end of the country to the other. But are we called upon to pay the same? No, not in any degree. I venture the assertion that, if my hon. friend the Minister of Finance had properly taxed the munition manufacturers, he would have secured a large sum of money, and as for the balance of the $30,000,000 or $35,000,000, which he expects to get out of this tax, he could have saved every dollar by a little economy. Why should it cost $50,000,000 more to run this country to-day than it did four years ago, when the Liberals were in power? Have we any more population to-day than we had then? If we have, it is very little. Is the country any better able to pay taxes than it was then? I think every man will answer that it is not as well able. Still this Government, instead of cutting down
expenditures, prefer to tax the people. Suppose my hon. friend the Finance Minister went to each voter in the country and said to him: " Do you prefer that I should tax the munition manufacturer, who has made his ten of millions; do you prefer that I should take half of his profits, and that for the balance of the $35,000,000 which we require we should cut off $25,000,000 of expenditure? We are expending $50,000,000 more than our opponents did four years ago; do you want us to cut off $25,000,000 of that and get the balance that we need from the munition manufacturer, or do you prefer that we should tax your industry to get that money? What would the answer be? I can tell my hon. friend what the answer would be. There would not be one man in a hundred who would support his proposal if he had the option of supporting or rejecting it.
Let my hon. friend take warning by what happened yesterday in the county of Peel. The people of Canada are being roused up about the way the money has been handled in connection with this war-squandered by tens of millions of dollars. My hon. friends opposite seem to think it is all right. Mr. Fallis thought it was all right and the hon. member for Peel (Mr. Blain) thought it was all right. With the support and backing of the Ontario Government, and with the backing of this Government up to the hilt, their candidate was defeated, there being a change of something like a thousand votes. Let my hon. friends opposite take warning by that, let them realise that it, is the handwriting upon the wall, because, if they do not take warning they will get a rude awakening whenever they go to the country. Talking to-day to one of my Conservative friends, something was said about the election in Peel, and he remarked: Well, thank Gbd, we got an extension of Parliament for one year. Well is it for the Government that they have got an extension of Parliament for one year, but it would be well for my hon. friends not to rely too much upon that, because a year goes around very quickly, and if they do not mend their ways with regard to the expenditure of money in connection1 with this war they will find that a great many counties will follow the example of Peel when they next confront the electors.
Let me refer to another item in the Estimates. During the Liberal regime we had two-cent postage in Canada, and under the administration of Sir William Mulock and of my hon. friend from Rouville, the ex-
Postmaster General (Mr. Lemieux), we had, after the first year or two, a surplus every year running up, I think, to as high as $1,000,000. Our friends opposite came into power and the surpluses gradually melted away until they vanished altogether, and we had a series of deficits. The Government, in order to avoid a deficit last year, raised the postage to three cents on letters and two cents on post cards, .an increase of from 50 to 100 per cent. What was the result? This year, I am told, we may look for a $5,000,000 deficit. They have a deficit of $5,000,000, notwithstanding an increase of from 50 to 100 per cent in the postage rates. Why? Simply because they have departed from the ordinary business methods that had been adopted by my hon. friend from Rouville.-. Now contracts are given without competition, and money is squandered in every direction. I do not know that the present hon. Postmaster General (Mr. Casgrain) is entitled to very much of this blame, but his predecessor is. His predecessor, the Hon. Mr. Pelletier, now Judge Pelletier, of the Quebec bench, is the man who brought this about. He was one of that little coterie in the Government who believe that the way to keep a party in power is to be extravagant, to spend money, to get big election funds, and to spend them corruptly in order to corrupt the people. We have seen examples of that in Manitoba, and we have seen examples of it here. What has it done? Landed the Post Office Department, after a 50 to 100 per cent increase in the cost of postage, into a series of deficits that is culminating this year, I am informed, in a deficit of $5,000,000.
The Minister of Finance told us that the only way in which we can save this country, and put it into a position to handle our immense debt after the war is over is by the practice of economy. I quite agree with my hon. friend that that is the proper position to take; I quite agree that that is what we should do, and I agree, also, that people all over the country, rich and poor alike, have been practising economy all through this war-all except the gentlemen" on the Treasury benches and those behind them when it comes to spending public money. Where has any saving been attempted by this Government? Where have we had any evidence of economy on the part of the Prime Minister or the Minister of Finance? There is not. a single sign that they contemplate economy. The only evidence we have is the speech
made by the hon. Minister of Trade ana Commerce (Sir George Foster) the other night, and I venture to say that that speech will stand to his credit as one of the finest speeches he has ever made in his life. But it would stand a great deal more to his credit if he would live up to it. If the Minister of Trade and Commerce, instead of speaking to us across the table, would speak to his friend the Minister of Finance and his friend the Prime Minister, and ask them to carry out the proposal that he made the other night, we might expect something to result from it. Why, Mr. Speaker, if the Minister of- Trade and Commerce could have that proposal carried out there would not be the slightest neces sity of the Finance Minister asking for a dollar of taxes.