May 21, 1923

PRO

Oliver Robert Gould

Progressive

Mr. O. R. GOULD (Assiniboia):

Mr. Speaker, I wish with other members who have preceded me, to tender my hearty congratulations to the Minister of Finance (Mr. Fielding) who has brought his seventeenth budget into the House. I am minded to say that I believe just as great congratulation would be tendered to the hon. gentleman if he were now bringing in his fifteenth budget, for to me, and I believe to the majority of the members in this corner of the House, the last two budgets were a disappointment. I sincerely believe that, and I also sincerely believe that ninety per cent of the people in the country consider this budget and the last budget to have been disappointing, more particularly when they have in mind the great promises given to them in 1919 as laid down in the Liberal platform. I have been somewhat amused when my mind has gone back to the old House, that is, the House at the time of Union government, when our worthy friends who now occupy the treasury benches sat in opposition, and I have recollected the words of fire which emanated from them in denunciation of all and sundry things that the Union government did at that time, the promises, tentative and otherwise, that were held out and the -predictions as to the benefits that would come to the people of Canada if thev would only again repose power in the Liberal party.

We have now had for two years an opportunity of reviewing what these hon. gentlemen have done for the country since the people reposed confidence in them in 1921. Whether or not we are justified in looking back over history, back as far as 1896, perhaps, when my first recollection of political things in this country took form, I recollect very well the campaign that was carried on prior to 1896, the victory that was achieved by the Liberal party at that time, and the promises by which they achieved that victory. There is a great similarity between the tariff proposals then and the tariff proposals placed in the tariff platform of 1919. Very positive is it in the minds of the people who remember those incidents, that the tariff proposals of the Liberal party in 1896 were not carried into effect as was promised by the politicians of that date. According to the record of the last two budgets and according to the speeches that were delivered last year and those that have been delivered this year by hon. members opposite, which speeches, I must say, appear to me to be only apologies for their not putting into practice the policies which they presented to the country, we are right in assuming that it is their purpose to go back all the time on their pledges as regards the tariff planks in their platform.

I recall the elections of 1904 and 1908 when our western country was being opened up and the railway policies were dangled before the people of Canada, so that they in a measure might forget the action of the party after the election in 1896. Then we had the platform of 1911 containing what was known as the offer of reciprocity with the United States, and the Liberal party at that time had hopes that the people of Canada had forgotten. Evidently-and I point this out-although it has been said a thousand times in this House that the people of Canada repudiated reciprocity at that time, what happened is not, to my mind, any proof that reciprocity was the real cause of the defeat of the Liberal party in 1911; but most people who remembered that the Liberal party had gone back on their promises of 1896, took that opportunity of telling that party that they did not believe in the pledges they were making. The only recourse that the people of Canada had then was to place in power the Conservative party, which had been defeated in 1896 upon its tariff policy. In 1914. the war broke out, and for some years political conditions were disturbed. But again, in 1921, the people were appealed to upon practically the old platform of 1896, and by a very slender majority they said: "Yes, we will endorse

The Budget-Mr. Gould

the Liberal party in regard to that platform." In the meantime, however, a large faction had been created in Canada who really believed that the Liberal party was not constituted so that it could carry out the pledges of the platform laid down in 1919. Again I say that the last two budgets and the apologetic speeches made by the members of the government prove conclusively that those who believed the Liberal party would not carry the pledges of 1919 into execution, were justified, and I cite that as a reason why there are to be found at the present time sixty-four or sixty-five members in this part of the House.

Reciprocity is again held out in the budget speech of to-day as a reason why the .liberal party should be perpetuated in power. To me, reciprocity is a fetish. I supported reciprocity in 1911, and if the day ever should arrive when I have again an opportunity of supporting reciprocity, I promise now that I shall be quite prepared to do so. But in the meantime there is no excuse for the government to hide behind the fetish of reciprocity, and to let the things which pertain to-day go unchallenged and unwarranted. Every government speaker in this debate has been telling the people who live in the West and, indeed, people throughout Canada who have been proclaiming the truth with regard to agriculture, that we should hide the truth; that we are pessimists and so on. I maintain that if we are ever going to have a Canada worthy of the name, we must tell the truth, the whole truth and nothing but the truth, and let the people judge for themselves. WThen we tell the truth, we wish to be heard, and to have remedies applied to the evils of which we complain.

I have often thought, as I have sat in my place in this House and listened to the speeches made by hon. gentlemen opposite, whether any of those speeches were in evidence when their platform was made in August, 1919. That was the year after the close of the war, and surely at that time hon. gentlemen opposite must have been perfectly aware of the fact that we were overburdened with a debt. They knew very well that if they were returned to power they would have to find the ways and means of meeting that debt. And in the face of that certain knowledge, what did they do? They gave us to understand that they would eliminate the tariff upon the implements of production immediately. That was one of the first things that they promised to do; they preached it incessantly throughout the West, and during the campaign of

1921 they emphasized the pledge that by this means they were going to bring relief to those who were suffering from an unjust burden. All hon. gentlemen opposite who campaigned in the West were very positive in this regard, but we had particularly a strenuous champion in that part of the country. The people of the West desired the reduction on these implements, because it was their belief then, as it is now, that the tariff in this respect weighs heavily upon every individual who lives in that part of the Dominion. So that when the Minister of Agriculture (Mr. Motherwell) made great promises of what his party would do in this matter, the people naturally listened with great attention to what he had to say.

I have many extracts from the hon. gentleman's utterances in the West; we all listened to the speeches he made in western Canada, in which he told us of what would be done when he came to Ottawa. Why, Mr. Speaker, we were led to believe, from the hon. minister's statements, that the tariff would disappear practically overnight. Yes, Sir, the Hon. Frank Carvell's scalp was to be put into his belt in a very short time. But we have not seen any results since the hon. gentleman came here. The other night, however, speaking in this debate he took the opportunity to give the Progressives in this part of the House a severe lecture, the while admitting that in 1901 he was going up and down the province of Saskatchewan, protesting against the enormities that were being practised to the detriment of agriculture. The hon. gentleman would have the House and the country believe, I suppose, that all those evils of which he complained so strenuously in those days are now utterly eliminated. He deplored the fact also that while he had entered the field of politics the present member for Moose Jaw (Mr. Hopkins), whom he mentioned as one of his colleagues in the early days, had no right to do likewise nor refer to the difficulties under which the western agriculturist labours. I wish to tell the hon. gentleman that while I was not working exactly in his company at that time, I likewise was working in the interests of agriculture, while thousands of others were doing their utmost, in their own small way, to try to bring to the powers of the day the disadvantages against which we were protesting. Those disadvantages to-day are as acute as they were at that time and I think it would be very much better for the Minister of Agriculture to stand up in his place to-day and endeavour, with U3, to fight

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those evils against which he spoke in those days, and try to have adequate remedies provided, rather than get up* and give curtain lectures to the Progressives who are honestly trying to remove the evils that are complained of.

I would ask the Minister of Agriculture, in all seriousness, this question: Would the

farmers, in the province of Saskatchewan, say, complain of the conditions to which reference has so frequently been made if those conditions did not in fact exist? The Minister of Agriculture of Saskatchewan has stated that 261 municipalities, according to the returns for the year 1922, showed an average tax deficit of $33 per quarter section. I stated the other night that it was $37; it should be $33. The same gentleman in giving evidence before the Agricultural committee last year stated that $90 was the average tax on a half section of land, which would be $45 per quarter section. This year he states that the sum of $33 out of that $45 is in arrears. I ask all hon. members, therefore, would any agriculturists in Canada, either in the West or in the East, desire to have a tax record against them such as that if the conditions did not warrant it? In the past, when we had the means of preventing such a thing, it never occurred. But these conditions are forced upon us, and when hon. gentlemen get up in this House and presume to lecture the representatives in parliament of the people of the West on account of circumstances such as these, they are, to say the least, speaking without any knowledge of the facts.

We are told to work a little harder and to go more into the raising of stock; hon. gentlemen kindly advise us to take up mixed farming and to do various other things. Well, Mr. Speaker, this is very kind of them indeed; but really, a man does not need to be told this sort of thing. I listened the other day to a lecture of this kind from the ex-Minister of Agriculture (Mr. Tolmie) who comes from a province where the rainfall is 112 inches per annum. If he came to Saskatchewan and visited the district in which I live, I think he would have reason to modify his remarks somewhat, for in the past ten years we have not had much greater precipitation than 10 inches per annum. We have not had enough water to water our cattle, and I have been in such straits many a time; on two occa-9 p.m. sions I was obliged to sell the whole herd of cattle because I could not find water to water them; and I had to sell at a sacrifice at that. It is all very well for hon. gentlemen to tell us these things, but I

think that we know best, who live in that part of the country, just the conditions that prevail there. We do not need to be told, either, what it is best for us to do. Under the conditions that we have to cope with, wheat growing must be the bulwark of our activities until such time as we can find enough water to ensure the profitable raising of cattle.

I have figures compiled by a statistician which show that there is nothing the matter with the West so far as the producing of wealth is concerned. A comparison of the exports of the various countries of the world for the year 1922 will reveal the fact that Canada exceeded by a considerable sum any other exporting nation. The nearest to the Canadian exporters were those of the United States; the figures in relation to that country showed a per capita export of $65, while it was $98 in the case of Great Britain, and 1150 in the case of this country. Why do hon. gentlemen stand up and tell us to work harder and save more? What possible ground have they for abusing us and concluding offhand that we have been indulging in extravagant expenditures? Let me emphatically assure this House that this is absolutely not so. I may tell hon. gentlemen here that I know a man in my district who some years ago had thousands of dollars in the bank, but who last year was compelled to borrow money from the banks, although his land and everything was clear. These conditions have been getting worse and worse gradually, and if matters do not improve in the very near future I am not prepared to predict what the outcome will be. Certain it is that when hon. gentlemen stand up and undertake to lecture us, notwithstanding that we tell the positive, the plain and the simple truth, their attitude is not likely to appease our minds or to produce that manner in us which gentlemen would like to display.

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LIB
PRO

Oliver Robert Gould

Progressive

Mr. GOULD:

Yes. The Minister of Agriculture informed the House that he had kept certain notes of some of the remarks that he had made at Regina . I want to tell the hon. gentleman that some one else has been keeping track of his remarks as well, and I wish to give two citations to prove this. I regret that the minister is not in his place to-night, although I am quite sure that he knows that I would say the same things in his presence. I have done -so before and possibly may have occasion to do so again. In Prince Albert on November 2, 1921, the hon. gentleman stated:

The Budget-Mr. Gould

It is contended by the Farmers' party that the eastern Liberals will make it impossible to carry out their tariff platform.

Well, who was right? Why, the Fanners, absolutely. Has it not been proven by the past two budget speeches that the Fanners are absolutely right. But here is another extract from the hon. gentleman's remarks. The Regina Leader of December 2, 1921, quotes the minister as follows:

There is one outstanding question upon which I feel I should insist, and that is a substantial removal of the burdens and iniquities of the present protective fiscal policy that has been crushing the life out of western agriculture and conditions generally for so many years.

AH this is very nice, you know, and it goes well on the platform; but hon. gentlemen who heard the minister the other night, as he stood in his place and lectured the Progressives, noted very well that his remarks then did not accord with what he said out in the West in 1921, and there was absolutely no fight in him to uphold the convictions he then expressed. Oh no; instead of fighting for western agriculture he rather undertook to give us of the West a curtain lecture, notwithstanding that we are proclaiming in this House the very same things that the hon. gentleman so fervently put forward himself out in the West.

The hon. gentleman has achieved the position which he sought, that of Minister of Agriculture, and it is my opinion that since receiving his portfolio he has forgotten the people back home, he is not fighting their battles as we know he was capable of fighting them in the past tw'enty-five years in western Canada. I was going to make further references to the hon. minister about a certain byelection in 1919, of a personal acquaintance I had with him on that occasion, but I do not wish to go into it now.

But we know what is the matter with agriculture-there are too many combines, which are a law unto themselves in taking whatever toll they choose. A report was laid on the Table a few days ago as a result of the investigation of our charges that a huge combine existed to keep up lake freights. I do not wish to discuss that report, but I am sure hon. gentlemen who have read their newspapers lately will agree with me that we in this corner of the House were justified in making those charges. Those unduly high lake freights were taken out of the western farmers. And yet when we protest against this and similar injustice we are called alarmists and pessimists.

From 1912 to 1917 we had a somewhat similar condition in regard to our terminal [Mr. Gould.1

fjelevators. The matter was investigated by ;Price, Waterhouse & Company and reported upon. Why that report was not published I do not know. In this connection I was very pleased this afternoon that the hon. member for Last Mountain (Mr. Johnston) urged that the report laid on the table with respect to the lake shipping combine should be printed and published. The people who have been filched of their hard-earned coin by this and other heartless combines should be given an opportunity to study such reports. Then I am sure the efforts that have been made by us in this corner of the House to portray the actual conditions will be supplemented a hundredfold by the public. I have been studying the Price Waterhouse report and from the computations I have already made-and these are not final-I find twelve terminal companies showed a profit of 815,003,265. Remember, this was over and above the huge salaries paid their executives and over and above all expenses except the business profits tax which was then in force. At the present time we have twenty-five terminal companies, and so far as I have studied the figures they disclose a profit of 87,217,503.20. We have protested against these huge profits and have received a promise from the government to appoint a commission to look into this and cognate matters. It is the exactions of these combines which have caused the western members to stand in their places here and protest. As I have said before on many occasions, these combines are a law unto themselves to extract for their own benefit whatever proportion of the wealth of the country is created by the farmers and other producers, and yet our governments, both past and present, sit idly by and will not take these exorbitant profits from their hands.

There is another point which occurs to me in connection with the Price AVaterhouse report, but I want to refer particularly in passing to an address made the other night by the hon. member for Chambly and Vercheres (Mr. Ar-chambault), when he discussed very lucidly and effectively means of getting further revenue: that is, by taxing unearned income. I might say, Mr. Speaker, that in 1920, when I first had the honour of addressing this House,

I referred to this source of revenue. Again I say that from a study of the Price AVaterhouse report I have received a fresh stimulus along this line, and with your permission, Sir, I should like to supplement the remarks made by the hon. member for Chambly and Vercheres and demonstrate to the Minister of Finance and to the government the fact that there are further means of raising revenue

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apart from the tariff. When I am told that the tariff is the only means of raising revenue,

I reply that there is no justification for such a statement until all other possible fields of revenue have been explored.

I think in 1920 I tried to draw the attention of the House to our harbour facilities, and I cited more specifically those at Fort William. I find that the Price Waterhouse leport corroborates the statement I then made, namely, that certain companies had acquired sites along this waterfront free of cost. What is the result? Away back in the country the people-the state-creates wealth, and those companies, perhaps with more discernment than the people generally, or even the government, having possessed themselves of this waterfront are placed in a peculiarly advantageous position. The Price Waterhouse report distinctly states that many of _ these institutions in Fort William received their sites free of charge, and they include the capitalized value of these sites among their assets. And do not forget also that our government dredges the harbour, as occasion demands, and every time this is done an additional value is given to these sites. Therefore it amounts to this, these companies expect to earn dividends upon the capitalized value of something which cost them practically nothing. And this feature relates also to vast areas of land, particularly in western Canada, because there we find a large amount of real estate held out of use by speculators who oftentimes live in foreign countries. These land holdings the people residing in the locality make valuable by. their enterprise. Therefore after our people have created this wealth, that is, after they have settled the country and their labour and enterprise have caused land values to rise, the holders of these vacant lands are able to sell their property at greatly enhanced prices and take this unearned wealth out of the country. I maintain and insist that the government should take a substantial portion of such unearned wealth by way of taxation. That is something that I would recommend to the government and to the Minister of Finance as worthy of their attention, and after they have investigated this source I do not think they will continue to tell us that our only source of revenue is the tariff.

Speaking of the tariff reminds me of the speech of the hon. member for Fort William (Mr. Manion) a few days ago when he complimented the Minister of Finance upon having reduced the duty on stumping machines. Now, the hon. member being a Conservative is according to all precedent, a

strong protectionist, and yet we find him complimenting the Minister of Finance for this reduction of duty, and therefore we may con-clue that he realizes how necessary it is to have the cost of the implements of production brought down to a minimum. I for one, Mr. Speaker, would be too proud to stand in my place and thank the minister for something that would benefit my own district only while the rest of the Dominion continues to suffer under burdens similar to those of which we, as agriculturists, complain. I recommend that thought to the hon. member for Fort William in his solicitude for stumping machines. By a tariff tax the implements of production are made more expensive to the individual, and such a tax is a dead weight on production. All the people of Canada require woollen garments, shoes, in fact all the necessaries of life in common, and on these we are taxed in like proportion. As an agriculturist the first thing I must have is a capitalization of approximately $2,000 to work a half-section of land. What do I find? That the average tariff tax of 14 per cent on my agricultural implements, plus 6 per cent sales tax, represents a 20 per cent handicap on my capitalization, o>-$400 before I can start in to produce a commodity which I have to sell in competition in a free trade world. It is absolutely unfair. We are quite justified in my humble opinion in keeping up this fight for a square deal.

In the amendment that has been presented reference is made to a special committee of the House to look into tariff matters, It is my humble opinion that a special committee of this House is not sufficient. In reading over the evidence given before the special Agricultural committee it is very difficult for me to believe some of the evidence given. I do not wish to make reference to any specific case, but it does seem to me that a commission should be appointed with power to enter into these institutions, to ascertain the value of their plant and all the necessary facts. The government at the present time, if they question the veracity of any individual or corporation in making out an income tax return, despatch a man who goes into the office of that company or individual, makes an inquiry and tells the individual or corporation just how much his income tax amounts to. Then why not have a man or a commission armed with the same power and authority to go into the organized industries in this country and say: We want to see your books, we want to find out your overhead; we want to know how

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much watered stock you have, and exactly what it costs you to produce your product.

What has been the procedure in the past? Regardless of what government was in power we have simply had the say-so of the beneficiaries of the protective system. They come to this government or some other government and say: We must have a tariff; we cannot live without it; organized industry in the United States will put us out of business if we are not protected. And the government will say: Yes. We will give you protection. How much do you want? The answer may be 25, 30 or 35 per cent All right, says the government, we will give you that protection. But that is not the policy we want. When an institution will come to any government and give positive proof of just what amount of protection is required for any legitimate industry, I do not think the Progressive party would refuse to give it to them, but we are not prepared to accept their say-so. We have good reasons to doubt, we know the huge amount of watered capital on which we are being asked to pay dividends, and that is the ruination of Canada. I am shortening my remarks somewhat, but I might state that I have in my office upstairs one page of a newspaper which shows twenty-three companies, some paying quarterly dividends and some annual, and on the same page appears a letter from a certain farmer in the West who subscribed to this paper but was not able to continue his subscription, but the paper was going to continue him as a subscriber just the same-and on the same page, I say, there were twenty-three companies listed that were all paying dividends. That i3 what is the matter with Canada. These companies are a law unto themselves, and we cannot get away from that patent fact.

We also receive lectures on other things. Hon. gentlemen say: Why the per capita debt of Canada is not nearly as great as that of the United States or Great Britain. Or the Saskatchewan per capita debt is not as great as Ontario's. I ask you, Mr. Speaker, is there any reason why it should be? Saskatchewan was not formed a province until 1905, and we had not one solitary cent of debt at that time; we had money to the good. Yet to-day hon. members and ministers will come along and say that our per capita debt is 'less than Ontario's-Ontario, which is years and years, yea, almost a century older than Saskatchewan.

Take the Dominion itself. We are a comparatively young country. Yet hon. gentlemen will say: Our per capita debt is not as great as that of Great Britain. It has no [Mr. Gould4

reason to be. Accumulations of centuries of wars and everything else hang over the taxpayers of Great Britain. We have not that, thank God, and that is one reason why hon. gentlemen should not compare our per capita debt with that of Great Britain, although, Mr. Speaker, if we continue at the rate we are going, before we are one-tenth the age of Great Britain we are going to have four times as much debt, and it is time we called a halt right now. .

It seems to me that the present government and governments of the past have always been afraid to tread new paths in taxation. Yet when we look over the history of the past twelve or fifteen years we find that they have gone into new paths, but not until they have been forced to do so. It is the same thing with our railways. I can recollect fifteen years before the nationalization of railways became a fact in this country, we people in the West said we knew that it had to come the way things were going. We predicted it, and it came about. Again, when we called attention some years ago to the possibilities of direct taxation, we were called dreamers. Oh yes, but we have direct taxation to-day. We were told by the politicians of that day that it was an impossibility, yet to-day we are collecting the greater part of our revenue through direct taxation. We were told the same thing about government ownership. We were called socialists for advocating it. Hon. gentlemen will remember the day when we in the West advocated government ownership of interior terminal storage elevators, and the word hurled at us more often than anything else was socialists. But to-day we have government ownership of elevators all over the country; we have government ownership of railways; we have government ownership of steamships. I might mention, too, that the Conservative party were the ones who most loudly denounced the principle of public ownership in those days, yet to-day they stand as the champions of government ownership, showing that they are capable of learning something; and there, Mr. Speaker, the Progressive party stand side by side with them on the principle of government ownership.

It was also a very dangerous thing some years ago to advocate the taxation of unearned increment, yet the other night we had the hon. member for Chambly and Ver-cheres (Mr. Archambault) standing in his place in this House, four years after the member for Assiniboia had advocated the theory, and urging it upon this government.

The Budget-Mr. Senn

Bonuses-that is something that sounds very much like tariffs. If it be that the bonus to be granted to the flax industry in the West is intended as a sop to the Progressives, and hon. members have spoken of concessions given to the agriculturists of the West, they need not count on the member for Assiniboia, because in my opinion that is not any concession at all. I do not believe in any sops whatever, for capital will always be found for any legitimate industry.

I do not anticipate that the individuals who will grow the flax or hemp will receive any benefit from this bonus. No, the capitalists will absorb all that themselves; I question very much whether the grower of the hemp will benefit. I also question very much whether at the expiration of the supposed term of the bonus these same people will not be back again to the government asking that the subsidy be renewed. We have had that happen before. It reminds me of the Crows-nest pass agreement and the license to manufacture oleomargarine in this country. That was a privilege given during the war period because of the high price of dairy products, but what happened after the war? Selfish interests came along and said: We want the privilege continued, and it was continued.

I predict that the same thing will happen in the matter of these bonuses. These young industries will only treat this understanding as a scrap of paper, I am afraid.

The Minister of the Interior speaking in this debate made the statement that he did not know why protected industries in Canada required so much protection. That is the only note that has come from the Liberal party so far which has a ring at all similar to what we might anticipate took place when the Liberal platform was framed in 1919. This is the only note of the kind that has come from the whole of the Liberal party up to the present time, and yet the minister concluded with a remark that he wished the Progressives to have the opportunity of taking charge of the affairs of the nation. I want to tell the hon. gentleman that if we did not feel like taking that responsibility when the election occurred in 1921 we are quite prepared to assume it to-day. I feel sure also that the people of Canada will have more faith in a Progressive policy formulated by the men who come here and back up the things they have advocated outside of parliament, who are prepared to go ahead and take a chance at it. I question whether the Minister of the Interior was very sincere in that remark.

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LIB
PRO

Oliver Robert Gould

Progressive

Mr. GOULD:

That is mere conjecture on

my hon. friend's part; I venture to assert nobody will be prepared to bet any money on his statement. However I wish to state that if the people of Canada would only take a serious view of the offence-I was going to say -committed against them by this last budget speech they would rise in their might and turn the offenders out when the roll is called the next time.

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CON

Mark Cecil Senn

Conservative (1867-1942)

Mr. M. C. SENN (Haldimand):

I wish to speak very briefly to-night upon a few aspects of the budget as delivered by the Finance Minister (Mr. Fielding) and to discuss some phases of the announcements contained therein which are of direct interest to my own constituency.

I listened with a great deal of interest to the hon. gentleman (Mr. Gould) who just preceded me. In spite of his denunciation of the principle of protection I am not yet convinced that it is wrong. The party to which I have the honour to belong have always believed in adequate protection. They have always maintained that our industries should be protected from'undue competition with the highly organized industries of other countries, and that they should be protected against the product of the cheap labour of those countries. In so far as the budget affords this protection to our industries and to our business interests, whether they are commercial or agricultural, it is to be commended; but in my judgment there are many respects in which it does not go far enough, nor is it the revenue producing factor that it should be if foreign goods continue to come into our country at the rate they are doing.

The Progressive group who sit to my left were no doubt led to hope for a more material reduction in the tariff than has been granted, and I do not wonder that they cannot reconcile the present tariff with the platform of the Liberal party in 1919 and with the pre-election pledges of that party. It seems to me that one of the needs in all lines of production at the present time is a profitable market: Production in many lines is exceeding the demand and all countries are looking around for markets that will afford a constant and consistent demand for their products.

The British preferential tariff has been again increased, although many of our factories at the present time are not running to full capacity because of lack of orders. I believe, Mr. Speaker, that everyone in this House is in favour of British connection. We are proud of our place in the Empire, and we are fully aware of the benefits which we derive from our British connection. But even so, it is surely a mistaken policy to penalize

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any Canadian industry to satisfy our obligations in that respect. If we have a duty to perform for the Empire by all means let us discharge that duty; but each and every citizen of the country should bear a fair share of the burden without imposing too heavy a load upon a few. The increase in the preference will bear very heavily upon the woollen industry and unfortunately many of our factories engaged in that industry are not running to their full capacity owing to lack of orders. Their operators are not being employed, and they are leaving Canada to get employment in other countries where there is more work to be had. Orders for woollen goods are being taken by British and French manufacturers at prices which labour costs in this country make it impossible for us to compete with. The small margin of safety which these companies had under the old British preference has been removed by the present increase. This will create even keener competition, and may possibly force some factories to close entirely. I do not think that the Minister of Finance contemplated anything so disastrous to the welfare of such an important industry in this country.

Every time we purchase from outside we send our money to build up industries in other countries, and to encourage them to compete with our industries more keenly than ever. If we are to prosper as a nation we must stop this flow of wealth out of our country. I think we should, as far as possible, become self-sustaining. As it is, we are building up industries in other countries which are enticing our young men and women out of Canada by reason of the opportunities which they offer.

A duty of 15 per cent has been placed on artificial silk. The principle of protection is being applied in this instance with a vengeance. If I may use a contradictory expression protection is being afforded to an industry which does not exist. In the meantime the users of artificial silk in this country are being penalized to the extent of $15 on every $100 to encourage the establishment of this artificial silk industry. If I might I could give the House a concrete example of how our industries are suffering. I could tell of one order for ladies' knitted sweaters, principally of artificial silk, amounting to $40,000, which was placed in France just the other day, and owing to the depreciated currency of that country they are able to land these goods at Toronto cheaper than they can be produced in Canada. If our knitting factories in addition to this have to labour under an extra duty of 15 per cent for their materials (Mr. Senn.]

they can see nothing ahead but absolute ruin.

I have here, Mr. Speaker, 300 names which have been appended to a petition protesting against the increase in the British preference and the alteration in the sales tax. The prayer of that petition reads as follows:

We are your constitjitents and are engaged in working in the wooilen and knit goods mills. We have seen with great alarm that the British preference has been increased 10 per cent and that the sales tax has been altered. Some of us can remember, and those who do not have been told, of the hard times in our mills wh ch followed the increase of the British preference in 1900.

We know that the wages paid in British mills are about one-half that are paid in ours, and we fear that the present reduction in the duty will bring disaster to our industry in Canada.

Our wages go towards buying food from the farmers, to storekeepers who buy food from the farmers, and to trades which buy food from the farmer. We therefore submit that you thoroughly investigate conditions and use your best endeavours to have the 10 per cent increase removed from woollen and knit goods.

I wish to urge as strongly as possible upon the Minister of Finance that this extra duty of 15 per cent should not be applied until the Canadian product is on the market. The copper and hemp industries are being encouraged by a system of bounties, and it would seem to be the better way to adopt that system in this case.

The minister has renewed his offer of reciprocity with the country to the south of us. If I understand the term reciprocity as applied to trade, it means equality in trade relations. It means that if an article of Canadian origin is admitted free of duty into another country, we make similar concessions with regard to goods from that country. It is surely only reasonable that if duties are imposed on Canadian products that a corresponding duty should be placed on goods coming into the country. The Candian customs tariff in reality is much lower in many instances than the American tariff. This is particularly apparent when we consider farm produce. I have taken the trouble to compare the duties imposed upon a few of our farm products going into the United States with our own customs tariff, and I find the duties are as follows:

Canadian tariff-

American tariff.

Butter, 4c.

Cheese 3c.

Eggs 3c. per doz.

Hay, $2 per ton.

Clover seed 10 per cent.

(70c to $1.50 per bushel). Potatoes 20c. per bushel.

8c.

5c.

8c. per doz.

$4 per ton.

$2.40 per bushel.

30c. per bushel.

Imports for 1922, of these artitcles amounted to-

The Budget-Mr. Ward

Butter

6,078,882 lbs.Cheese

1,883.013 lbs.Eggs

9,377,769 dozensHay

29,008 tonsClover seed

3,547,080 lbs.Potatoes

429,543 bush.

The total imports of farm products amounted to $66,890,766 for the year 1922. In the case of potatoes the minister has seen fit to add to the duty. There has been an increase of 15 cents per bushel in the duty on potatoes. If the principle is sound for potatoes why not follow it in all other lines of farm produce? By the imposition of that extra duty the minister has admitted the principle as well as the necessity of protection for our farm produce. There is no reason why a country such as Canada, with a surplus of butter which must be sold in the markets of the world, should import a quantity equal to that surplus. We imported last year nearly $6,000,000 worth of fresh meat when we have a surplus which must be cured and sold abroad. We also imported nearly $4,000,000 of cured meats. Last year we exported $24,000,000 worth of cured meats to find a market abroad. The weakness of the present budget lies in the fact that no further attempt is being made to retain our home markets for our own produce, either manufactured or from the farm. I contend very strongly that if we are to provide adequate protection of our own products there can be no justification for any increase in the British preference. There can be no good reason why a duty should not be imposed high enough to ensure our markets to the Canadian producer.

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LIB
CON
LIB

Harold Putnam

Liberal

Mr. PUTNAM:

As the matter stands, are we to understand that the hon. member opposes the present increase in the British preference?

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CON

Mark Cecil Senn

Conservative (1867-1942)

Mr. SENN:

In certain lines, Mr. Speaker, the increase is not justifiable. I was looking at some of the items and giving my reasons for taking the stand I have taken.

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LIB

Harold Putnam

Liberal

Mr. PUTNAM:

I would take it from the hon. member's remarks that he considers that none of it is justified.

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CON

Mark Cecil Senn

Conservative (1867-1942)

Mr. SENN:

I would not like to go that

far, but I think that in the instances I have mentioned it is not justified.

The announcement of the Finance Minister that it is impossible to balance the present budget and that he did not hope to be able to do so for some time to come is cause for

alarm. The fact that Great Britain and the United States have both been able to do so should lead us to consider carefully if the attempt should not be made by the government at all costs. There is urgent need for economy not only by the government but in every walk of life. If we are to prosper we must ultimately get back to the old system of working and saving. We must keep our expenditure within our income. During the war our standards of living gradually became higher because money was plentiful. The great difficulty to-day is in the fact that these new standards and new conditions are making such demands upon our earning power that we find ourselves unable to meet them. It is peculiarly disturbing when the Finance Minister states frankly that he could not keep our expenditure within our income, and that the national debt must go on increasing. It is high time that our governments, our institutions, our business concerns and our private citizens realized the necessity of living within their income and acting accordingly, and only when that time comes will our national prosperity be assured.

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PRO

William John Ward

Progressive

Mr. W. J. WARD (Dauphin):

It is with a great deal of. shall I say reluctance, that I rise at this late period to take part in this annual family squabble, the budget debate. I feel that practically everything has been said that can be said, but as I have listened with a great deal of interest to the various arguments that have been put forward both for and against protection, which seems to be the hub of the debate, the argument has taken a somewhat zigzag course. My hon. friends to my right argue that the tariff is not high enough. We in this corner of the House argue that it is too high, and the Minister of Finance (Mr. Fielding) has told us that he has taken the middle course. I am not going to worry the House to-night with very much in the way of argument on the tariff. I think there are other matters of greater importance than the tariff, great and all as it may seem.

There is a matter that has been little referred to, yet possibly it took a greater toll from the western producers last year than any other single economic wrong that has been perpetrated on the farmers in the last few years. I refer to the high freight rates that were charged on the Great Lakes last year. I accepted the statement of the Minister of Trade and Commerce (Mr. Robb) in the early part of the session that it was not within the jurisdiction of the government or of his department to suspend the coasting laws last October when the congestion took place. In

The Budget-Mr. Ward

looking up the orders in council I find that in 1912 the Minister of Trade and Commerce of that day did suspend the coasting laws without calling the cabinet council together, and that action has never been questioned up to the present time. It seems to me, Mr. Speaker, that the Minister of Trade and Commerce simply remained inactive last October and quietly looked on while the shipping barons of the Great Lakes took from the western grain producers something in the neighbourhood of $20,000,000-at least that statement has been made. I doubt very much if even the excessive tariff rates that have been applied to food and clothing and implements of production in this country for the last 12 months took $20,000,000 of a direct toll from the pockets of the western grain producers.

The explanation given by the Minister of Trade and Commerce (Mr. Robb) is not a sufficient explanation why the coasting laws on the Great Lakes were not suspended last October. I have under my hand the figures of the normal rates, and the rates at which boats were carrying grain in the early part of last summer from Fort William and Port Arthur to the eastern ports. The rate was 2 cents per bushel; yet in the congested period, that is during October and November, a rate of 8 cents a bushel was charged between Fort William and Port Colbome. There was also colected an excess tariff of 15 cents between Port Colbome and Kingston so that it seems to me that there is still due to this House and to the people of Canada an explanation from the Minister of Trade and Commerce why he did not take some action at that time. It appears to me that the shipping barons of this country are running the government, because we find that the government did attempt to take some action in this matter, and immediately the shipping barons of the Great Lakes notified the government that they would contest the mling of the department. Evidently they frightened the Minister of Trade and Commerce; he conceded their demands, and the coasting laws were not suspended.

I should like to draw the attention of the House to a side of this question that I have not heard mentioned so far in this debate, and that is that Canadian boats were carrying wheat from Fort William to Buffalo for 2 cents a bushel-

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LIB

Jean George Robichaud

Liberal

Mr. ROBICHAUD:

Is my hon. friend not aware that a minister of the Crown cancelled the coastal regulations in 1912 without an order in council?

[Mi. Ward.]

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PRO

William John Ward

Progressive

Mr. WARD:

Any western member will remember that in the fall of 1912 we had a late harvest, very late threshing, and that very little grain came forward until late in the season, this necessitating a great deal of grain being stored at the head of the lakes. On application being made to the then Minister of Trade and Commerce, the coasting laws were suspended in October of 1912, and they remained suspended until the following June. If my hon. friend will look up the orders in council of that date, he will find that those statements are correct.

As I was saying, while our Canadian boats were carrying grain to Buffalo for 2 cents a bushel, they were charging 3J cents a bushel to Canadian ports. Last year 120,000,000 bushels of our Canadian wheat were milled in bond in the United States; going on through the United States; and were exported to the European markets, and there competed with our Canadian-milled flour, thereby placing our Canadian millers at a disadvantage of from li to 1J cents a bushel on the grain they milled as against their American competitors.

There is still another side of this question. It has been estimated that the advantage which the American railways received from transporting this flour from Buffalo to New York amounted to $12,700,000. That would have paid a great deal of wages to our Canadian railway men, and it would have considerably relieved the deficit on our Canadian National Railways. In adition to that, it is estimated that $20,000,000 was, may I say, bled from the western grain producers. The Canadian ship owners have stated that they paid the excess freight, which statement, of course, any sane man knows to be pure buncombe; they simply charged it back to the grain shipper, who was naturally the grain producer. Therefore, this $20,000,000 of excess freight that was paid to the shipping barons of the Great Lakes was a direct loss to the wholesalers, retailers and general manufacturing people throughout Canada. Had that amount been returned to the pockets of the producers, it would have been $20,000,000 more money to have been spent, which would have helped a great deal towards keeping our factories open and our workingmen on the job.

This is the point that my hon. friend (Mr. Robichaud) raised a minute ago. Expert legal opinion decided that the cabinet had not the power under the act to make this suspension. However, from reliable sources it is understood that the cabinet, in view of the emergency, determined to take the risk of suspending the coasting laws. This was last October.

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LIB

Jean George Robichaud

Liberal

Mr. ROBICHAUD:

Therefore those regulations were cancelled without an order in council, just by order of the minister himself.

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PRO

William John Ward

Progressive

Mr. WARD:

I am now referring to October, 1922. Let us see what happened. The shipping barons of Canada promptly notified the cabinet that if the coasting laws were suspended they would get out an injunction to prevent American vessels from trading from one Canadian port to another Canadian port. They, of course, graciously intimated that they would not, however, oppose American ships coming into Fort William and Port Arthur ports to load grain for storage last fall. That, however, had very little effect, because that order came through so late that only some four or five vessels were loaded. This, of course, was not permitted until some 75,000,000 bushels of our grain had been handled from Fort William to eastern ports at this excessive freight rate. In view of what has taken place during the past season, it is up to the Minister of Trade and Commerce or the government to see to it that, if the laws of Canada are not such as will permit this government to control shipping on the Great Lakes and if the shipping barons of Canada are running this government, laws are enacted that will permit the government and not the shipping barons to run the affairs of this country. I bring this matter to the attention of the government in the hope that they will see to it that this cannot occur again. We went home from here a year ago with high hopes that we had again restored the Crowsnest pass agreement as regards grain and grain products, and we had thought that this would go a long way towards saving the situation in western Canada. We see, however, that practically every dollar that was saved through the application of the Crowsnest pass rates, was taken from us through the excess freight rates charged on the Great Lakes.

Statements have been made in this House without very mature consideration by hon. gentlemen opposite and also by some hon. members to my right, that western agriculture has been most selfish in its demands, and so on. Perhaps we are, but I think it would be a good idea if hon. members would come West and study western conditions. Since I have come to Ottawa I have taken advantage of every opportunity to visit eastern Canada and I have gone to nearly every city in this part of the country in the last two years. I was born in Ontario and moved to the West when still a boy; 1 was one of those emigrants who went out to the West and hewed out a home in the bush. But I have tried to educate myself to eastern conditions, and I think that 188!

if hon. gentlemen living in eastern Canada would reciprocate and come West and study conditions out there it would tend to bring about a better mutual understanding. I have often asked myself whether it is going to be possible for this country to be governed by a spirit of compromise long enough to enable us to come to a realization of the situation and be able to keep Canada in one confederation.

I notice that hon. gentlemen, from both the East and the West, while conversing in privacy, speak a great deal about secession from the union. I do not know why they should refrain from mentioning these matters on the floor of this House, because this is the place where all such questions should be raised. I, for one, stand absolutely for one solid Canada, for I think that we have the prospects of making this the greatest country in the universe; and I should be very sorry indeed to see anything happen to disrupt the confederation of Canada. But we must take cognizance of the facts, and one of the facts is that there. are whole sections of western Canada made up absolutely of English-speaking people and British-born who are talking secession. Why is this? It is because we do not understand one another. It is because eastern Canada does not understand western Canada, nor does the West appreciate the conditions and the circumstances of the East.

It is high time that the governments of the country, and the responsible men in this Dominion, should study the situation as it really does exist with a view to offering some solution of the problem. I believe that the good people of this Dominion will unite and will surmount the difficulties that face them to-day, and that with the help of Providence this great Canada of ours will go forward and be the greatest country in the world. I do think that the people of Canada will yet unite into one great harmonious family so that this shall be the happiest country in the world to live in. When this is the fact then we shall not need any Minister of Immigration or any immigration agents; people will come in without any invitation. But, I repeat, we must take cognizance of the situation

I have here a paper-I did not send for it, it came to me the other day incidentally- from which it will be seen that over 200 quarter sections in one municipality in Manitoba are to be sold for taxes. It is not one of the best municipalities of the province, nor is it by any means one of the poorest, for they get a fair rainfall; and one would suppose that people ought to be able to make a fair living there. The fact remains, however, that over 200 quarter sections are to be

The Budget-Mr. Ward

sold in the month of June for taxes. I am sorry that the Minister of Agriculture is not in his place; I was going to say the misrepre-sentative of agriculture. I listened with some astonishment to that hon. gentleman's speech the other night as he referred to conditions in Saskatchewan, and I challenge him to prove many of the assertions he made then. Conditions in Manitoba are no worse than then they are in Saskatchewan. I am not very familiar with conditions in Saskatchewan but I do know that the freight rate on wheat is 4 cents less in Manitoba than it is in Saskatchewan while the freight rate on cattle is very much less, as well as on other natural products from Manitoba. So that in turn they must pay higher freight on manufactured goods shipped into Saskatchewan. I am quite sure, Sir, that conditions are very similar in Saskatchewan to what they are in Manitoba. We have the greatest country in the world in western Canada; no part of the universe produces so much wealth per capita as that portion of the Dominion. But what is the matter? I was speaking a few months ago to a business man and I asked him whether he was aware that 85 per cent of all the farms of western Canada were operated under mortgage, and he replied that he knew that 90 per cent of them were mortgaged. Now, if 90 per cent of all the farms in the West are being worked under this handicap, and we are paying 10 per cent interest on our money, can any hon. gentleman not appreciate the position that we are in? Sir Henry Thornton on his first visit to western Canada, speaking in the city of Brandon, said: "In spite of my very short visit and my limited opportunity of studying conditions, I appreciate this fact, that the people of western Canada will never successfully compete with the more fortunately situated peoples of the world so long as they are hemmed in 1,500 miles from tidewater." That is only one of our problems. The problem of carrying on agriculture and paying 10 per cent interest is the greatest one that we have facing us to-day; and while the institutions of the country, the manufacturers, the banks, the mortgage companies, the insurance companies, in fact all big corporations, all tell us that they cannot operate and pay more than 6 per cent on working capital, although they are highly profitable, how in the world is agriculture, which is much less profitable, going to survive and pay 10 per cent interest on the money it owes or on its working capital.

If we make agriculture prosperous, it will follow that the other industries will take their

places; make agriculture prosperous and you cannot keep prosperity away from the doors of the other industries of Canada. Personally I would be loath to say anything that was not respectful and that did not 10 p.m. show a regard for our Canadian industries. But I do think that agriculture and the other industries must go hand in hand. They are like a four or six horse team in front of a plough. If one of the horses is unable to keep up his end, the whole works go wrong, and that is what is wrong with agriculture in Canada to-day. Agriculture is one of the team that must take the country forward to prosperity. I think that all we need is equity and concerted action and prosperity is assured.

There is another matter I want to refer to of which I have heard very little. Possibly I was responsible for bringing it to the attention of parliament in the first place. I refer to the gratuities that were paid to the officials of the Grand Trunk Pacific and the Canadian Northern directors and officials. I did not think that the explanation given by the hon. gentleman who was then acting Minister of Railways (Mr. Graham) was all that parliament had a right to expect. He made the statement, in reply to a question by one of the Progressive members, that the information had been forced upon parliament. The facts were they were forced to give the statement to parliament. Five months had elapsed between the time the gratuities were paid and the time the information was submitted to parliament and no action had been taken; and I have no hesitation in saying that no action would have been taken had the matter not been brought to the attention of parliament. I noticed that while the Minister of Railways took to himself, or rather to the government, the credit for bringing the information before the House, a little pamphlet which I read with a great deal of interest, entitled "The Mirror", also claimed the credit for having brought the matter to the attention of the country. It might be of interest to the minister to know that I could have given to the House all the information that we did get long before I asked the question. I think that a government which was elected pledged to economy should have shown a greater interest in the affairs of the country than to allow nearly $400,000 to be paid out to men who may have thought that they had earned it, but who certainly were not entitled to it. However, I see the government has decided to appoint a commission, and I hope its personnel will be such as to ensure a real investigation and bring the guilty to task.

The Budget-Mr. Ward

A week ago I visited Montreal and had the pleasure of seeing a ship loaded with cattle. In fact I saw the super-structure built on the ship for the accommodation of these cattle. It will be recollected that immediately cattle were offered for shipment to the British Isles the freight rate went up $7.50 per head. On my return from Montreal I went to the trouble of figuring out the cost of building the super-structure and in conversation with the agent I ascertained the operating costs I shall not weary the House with detailed figures, but in my judgment cattle could be transported from Montreal to Liverpool at a profit at $12 per head; and yet we are paying $22.50. I was informed that this particular boat was expected to make six trips during the season. Of course, the Minist'-r of Agriculture (Mr. Motherwell) told us that he did not carry shipping space in his ves: pocket, and perhaps that is all the interest he has in the matter, but I think this is something that might well be looked into. Of course, if $22.50 a head is the lowest possible rate we should not kick very much, but, in my judgment we are paying $10.50 too much.

Turning to another subject, it seems to me that we have a right to expect something more from the Minister of Finance (Mr. Fielding) than that he should throw up his hands and say that he is hopelessly stucu., that nothing more can be done. For that i? precisely the attitude he has taken in saying that Canada must expect to go on for a number of years getting deeper and deeper into debt. I think the government -should accept full responsibility for bringing about drastic economies. It is not possible for the average member to intelligently criticize the estimates. The government brings them down and mast be responsible for their reduction to the lowest possible point. I think that we had every right to expect the government to bring down a balanced budget this session in view of the enormous taxation we are burdened with today. The total debt upon which we are paying interest is something over ten billion dollars. It is a tremendous sum. The interest charge alone last year amounted to something over $s00,000,000. In addition to this heavy burden, the taxes of all kinds paid by this little handful of people in 1922 amounted 11 practically one billion dollars. I ask the serious thinking business men of this country, do they think it possible for us to continue doing business on this basis? At the present rate of increasing, our national debt in twenty-five years will have reached the staggering total of twenty-five billion dollars. I am sura that few of us can really comprehend such

enormous sums, we speak in terms of billions without really understanding their serious import; but at the same time I do think the Minister of Finance should change his attitude of despair, take the bull by the horns and bring about such economies in administration as will at least balance the budget.

I would like to refer to the loan floated in New York last April. My suggestion may seem somewhat radical, but I make it for what it is worth. Many schemes have been put before the Banking and Commerce committee, most of which have been scouted as ridiculous and impracticable. But all the same, certain facts are basic, and I should like the Minister of Finance and the business men of this country to give me their opinion on this suggestion: What would have been the effect if instead of floating that loan a year ago and pledging the real credit of Canada-that is, the ability of the people to produce-to foreign moneylenders in order to get a United States certificate with ten figures on it, and upon which at the expiration of the term of the loan we will have paid $157,500,000 in interest,-I ask, instead of doing that what would have happened had we issued a Canadian certificate to ourselves and saved that interest charge? I direct that question more particularly to the Minister of Finance, and I hope at some later date he will give the House his explanation, because to me there is only one hope for the country, and that is to utilize our own wealth for our own development. We must stop borrowing money by the hundreds of millions of dollars or we can never expect to get out of our present financial difficulties. Failure to produce the bare necessities of life for the last two or three years is not the problem that is facing Canada to-day. The spectre that haunts us by day and disturbs us by night i* Debt. We have all acquired the pernicious1 habit of doing business with borrowed money -governments, municipalities and individuals-are alike guilty; they have all gone astray in: that regard. Not long ago I read an article written by Douglas Terstoile in which the writer pictured the effect of debt upon individuals, "How it carves the open countenance into a wrinkled face, what meanness what deception, and how like a knife it stabs the dishonest heart!" I know many men who two or three years ago you could not have persuaded to lie or be guilty of double dealing or any other meanness, but who to-day will lie to their bankers and their merchants and be guilty of double dealing with their neighbours. If that is the deplorable situation that is developing in this country, again I ask

The Budget-Mr. White

every thinking man and woman: Do you not think it requires the most serious consideration on the part of our business men and especially of the governement? In the face of this deplorable condition of affairs I should like to see a more serious attitude taken towards the solution of these grave problems, I should like to see the government attack them with vigour instead of throwing up their hands and saying, "We are hopelessly stuck in the mud."

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CON

John Franklin White

Conservative (1867-1942)

Mr. J. F. WHITE (London):

In continuing the debate I do not wish to cover all the points in connection with the budget. I shall touch on only a few which I consider of particular interest.

I think the budget is a source of disappointment to the country in general in that it does not come more nearly to being a balanced estimate. Last year the Minister of Finance in his budget speech referred to the situation as a very serious one indeed, and said he would soon have to make plans for the reduction of our debt. Now the taxation which we are bearing at the present time is as much as our people can stand, as much as they are willing to stand. It is as high as international competition will allow it to go. There therefore remains the alternative of reducing expenses.

At this date, four and a half years after the armistice, we are not reducing our debt. We are feeling the disappointment of adding this year from fifty to sixty million dollars to our debt, while other countries are improving their condition. The United States is reducing its debt somewhat, and Great Britain in spite of all her woes has reduced her debt considerably. A year ago the estimated expenditure out of consolidated revenue was decreased in round figures by about $128,000,000, while this year the decrease is not quite '$47,000,000. It is some reduction, I admit, but not much considering the circumstances. I would also point out that last year there was an estimated increase in civil government of $51,000, and this year it is further increased by $266,000. There is also the item of superannuation, which increased last year by $68,000 and this year by the further sum of $225,000. I am not objecting to the principle of superannuation, but I fear that many public servants are being superannuated while they are still capable of rendering many years of good and faithful public service. These conditions do not indicate the drastic retrenchment which the times demand. The items quoted, of course, may be small, but the trend is in the wrong direction, and the organization of all government departments might

well be scrutinized so that further retrenchment could be made in our expenses.

I notice that the minister proposes an increase in the duty on raisins and dried currants. That increased duty on the basis of our importations for the year ending March 31, 1922, will mean an additional cost to the Canadian consumer of $813,000 per year, while the change will probably mean quite a decrease in the customs revenue. I understand that this change in duty is proposed on account of Australia making efforts to establish a market for her goods within the Empire. I believe we should make every effort to foster trade within the Empire, not only with the Mother Country but with the other dominions comprising the Empire; but it will take considerable trade development with Australia to offset this addition to the Canadian cost of living occasioned by this duty, and we look to the government to secure conditions, either after the session or during the Economic Conference in October, which will be of benefit to Canadian trade with Australia. No doubt, if these conditions are secured, it will be along the line of an extension of the sale of our manufactured goods. May I express the hope that the arrangement with Australia will be of greater advantage to Canada than the French treaty is likely to be.

It is interesting to note that despite the famous Liberal platform, the minister is proposing to encourage the establishment of industries by means of imposing a tariff. It is also interesting to note that the minister, in his endeavour to establish the artificial silk industry, levies a customs duty, while to encourage the hemp industry a bouncy is the means adopted. He has not explained why a bounty will not serve the silk industry development as well as that of hemp; neither has he explained to the House to whom this bounty on hemp is to be paid, whether to the farmer who grows the hemp or to the manufacturing firm which makes the yarn or twine. I would judge, from reading clause 3 of the resolution, that the cordage firm is to receive the bounty.

The minister has expressed the opinion that binder twine and other products will be ready for the market by July, 1925. It would seem that he is desirous of retracing the steps taken by the Liberal government in abolishing the duties levied on binder twine. If the manufacturer of hemp or binder twine is to receive a bounty, in what position will the present manufacturer of twine be placed? Given an equal output of hemp per year for the five years in which the bounty is to be paid, the manufacturer will receive an aver-

The Budget-Mr. White

age of one cent per pound for his output. This will put the present manufacturer, who has neither bounty nor customs protection, at a disadvantage of about 10 per cent.

I have been wondering if the member for Brantford (Mr. Raymond) will rise in his place in committee and protest against this unjust, discrimination against a manufacturing firm in his own constituency. It is to be noted that the limit suggested by the minister to be paid in any one year on account of this bounty is $200,000, which on an average will provide for a bounty on 20,000,000 pounds of twine.

Last year Canada imported 50,000,000 pounds of binder twine. Why is it limited? Is this provision for the benefit of one firm only, or otherwise? What guarantee has the minister that this industry will be self-supporting in five years, or is it the hope of those who are interested in its establishment that the bounty will be extended?

The manufacture of binder twine in Canada has a tragic history. This article prior to 1S97 bore a duty of 12J per cent; that duty was reduced in 1898 to 10 per cent and in 1899 wiped out altogether by the Liberal party then in power. At that time Canada had twenty-four or twenty-five factories making twine but as a result of the free entry all went out of business but three. Two of these are branches of American industries, I understand, and have other lines and the binder twine business is a very small part of their turnover. Those factories which disappeared did not sell out to a larger company or a trust; eleven went into liquidation; eight dismantled their plants and went out of business, and two or three were destroyed by fire. In spite of the abolition of the duty, prices did not decline, but advanced instead.

I have figures furnished me by a hardware merchant in central Ontario, who deals in twine in a large way, which show that the average retail price of binder twine for the seven years prior to the removal of the duty, that is from 1892 to 1898 inclusive, was $4 cents per pound, while for the next sixteen years, between the abolition of the duty and the war, the average price was 121 cents per pound.

It may be argued that all commodities increased in value to the same extent, but that is not the case. Take for example, iron and steel, which being one of the basic materials is generally recognized as a pretty safe trade barometer to follow. Bar iron and steel was quoted in Ontario in the seven year period, previously referred to, at an average *of $1.71 per 100 pounds, while in the sixteen

year period referred to the average price was $1.93 per 100 pounds. These prices show an increased price on iron and steel of 11-4 per cent, while binder twine, when competition was largely eliminated, rose 45 per cent in price. I believe similar destruction of competition in any line of manufacture will produce price inflation.

In conversation with a friend who came from the Philippine Islands last summer, he told me that the raw material for twine was last year a drug on the market, and the price paid for it was extremely low, yet the price of twine is still high. Now it may be asked by some how it is that the one concern which makes most of the twine manufactured in Canada is able to continue in business. In almost every line of business there is some one firm which is more efficient, perhaps, as to buying and selling, and in the management of its plant, than any other, and is thus able to produce at lower costs than its competitors. This may be the case in connection with the firm in question. The only other reason I know of is that there may be some understanding between the manufacturers in the United States and the Canadian manufacturers as to division of the market and the price charged for twine, which enables the Canadian firm to continue business and, at the same time, by that very action to allay any criticism or fear on the part of the consumer that he is not getting the lowest price at which the commodity can be sold. If that is the case evidently the scheme has been very successful, because I have not noticed any mention made of binder twine at any of the deliberations of the special committee appointed to inquire into agricultural conditions.

On inquiring into this matter of binder twine, I secured some figures from the Bureau of Statistics which may be interesting. In the year ending March 31, 1923, Canada manufactured 31,864,000 pounds of twine, valued at $3,483,000, or 10.9 cents per pound. We imported from the United States 46,927,000 pounds to a value of $4,820,000, or 10.3 cents per pound; from the United Kingdom, chiefly from Ireland, over 3,000,000 pounds, valued at $379,000, or 12.4 cents per pound. We exported 7,520,000 pounds which figures, when worked out, show that Canada produced 43 per cent only of the binder twine used during the year. In previous years the percentage has gone as low as 26 or 27.

I have heard hon. members of this House grow eloquent on more than one occasion when discussing our export business, particularly with reference to agricultural implements,

The Budget-Mr. White

claiming that the Canadian manufacturers sold their goods for export much cheaper than they did for home consumption, the argument being that the tariff protection under which they operated was excessive and enabled them to overcharge the Canadian consumer. I have figures from the Bureau of Statistics which show that the same price conditions existed in the case of binder twine on which there is no duty whatever. The Canadian production of binder twine in 1922-23 was valued at 10.9 cents per pound. The United States imports were valued at 10.3 cents per pound, and imports from the United Kingdom at 12.4 cents per pound. Canadian exports of twine to Argentine in the same time were one million pounds sold at S90,000, which is 9 cents per pound. Canadian exports to Denmark amounted to 251,000 pounds, also valued at 9 cents per pound. There were some exports to the United Kingdom at less than 9 cents per pound. Evidently the critics of the customs tariff will have to look elsewhere for the cause of this difference between the price for home consumption and the export price as far as binder twine is concerned, and, I think, other commodities as well.

Now, the Minister of Finance in the budget speech has declared for tariff stability. He says that "broadly speaking it is possible to have reasonable assurance of stability of tariff. That this assurance is desirable as business men do not care to embark on enterprises which may be imperilled by frequent changes of tariff." This statement is a correct one, but as I listened to the speeches of the Minister of Agriculture and the Minister of the Interior, I came to the conclusion that there were various grades of stability. These two gentlemen seem to think that stability for this year only was all that was desired, and I suppose that if we were to hear a number of speeches from the government side of the House on this question there would be as many definitions of stability as there were interpretations of the Liberal code of ethics in the campaign of 1921. In this connection I would like to quote from a speech delivered by Sir Wilfrid Laurier at a meeting in Toronto in 1906. That statesman said:

It is absolutely essential to the capitalist, to the working man, to the business man, and the industrialist that he should know exactly the conditions under which he invests his capital, that he should know that it will be invested under a condition that will not likely be overturned, but I am able to say that in our regime the manufacturers all sleep soundly, and never fear interference with the tariff. We have made very few changes tin the duties.

Now, Mr. Speaker, I can hardly believe that the manufacturers of this country will

be lulled to very sound sleep by the assurance of the Finance Minister that the tariff is now stable, particularly when so many members of the present government are not of his opinion. The Minister of Finance proposes to insert two clauses in the tariff resolutions dealing with the prospect of reciprocal trade with the United States. Ever since the United States abrogated the original Reciprocity treaty in 1866-although after eleven years of the treaty Canada had an adverse trade balance of over nine millions-it has been impossible, for one reason or another to make such an arrangement with the United States. Time after time Canadian ministers went to Washington with this end in view, but returned empty handed, till on one occasion Sir Wilfred Laurier stated there would be no more pilgrimages to Washington. He did sanction one more pilgrimage, and out of that came the proposed reciprocity agreement of 1911. That agreement, however, did not receive the en-dorsation of the Canadian people. Even last year, I believe in February 1922, the Minister of Finance himself visited Washington and made another attempt at an inter-trade agreement with the United States, but he did not receive any encouragement. The Fordney-McCumber tariff was passed by the United States government last year without any consideration whatever for the interests of Can-* ada. It was passed largely at the behest of the American agricultural interests, and this measure practically ended the possibility of any large amounts of Canadian produce going to the American market. The United States government, of course, had the right to establish their tariff at any elevation they saw fit. If the Minister of Finance would word his resolution to the effect "that if the United States will reduce the tariff against Canada, particularly on food stuffs, to something approximating the Canadian tariff, we will take it as an indication that the United States are willing to do business with us on a fairly equitable basis," then the resolution would be much more deserving of support. It is time the Canadian should give up passing pious wishes, give up the idea of dependence on the United States, and act as though he could take care of his own affairs. That course of action, will, in my judgment, have the desired result-the securing of better trade relations -and get it by the shortest route.

As to the amendment moved by the member for Brandon (Mr. Forke) I cannot support it as I consider the principle involved is detrimental to Canada's interests. I fear, too, that the one who draughted the clauses with refer-

The Budget-Mr. MacLean (Prince)

ence to providing the revenue that would be lost in the event of the policy embodied in the amendment coming into force, did not give very serious consideration to the situation in regard to the income tax. Canada's present tax on incomes is about the same on the smaller incomes as the United States tax. It is much higher on the larger incomes, however, and there is no surer way to drive capital to the United States than to tax the Canadian income at a higher rate than obtains in the country to the south.

As to "unearned incomes," that is a new phrase to me. I have heard of "unearned increment," but I will have to get a better definition of "unearned incomes" than I have at present before I shall be able to understand it, unless it means the indemnity paid to members of parliament. It would appear that there are at least two members of the Progressive party who are quite willing to have their indemnity reduced, but only to the extent of 12i per cent.

The House has been treated from time to time to certain Socialistic utterances which I consider do not make for solidity and progress of business enterprises or business conditions in this country, and to those who have made these speeches, and particularly to the member for Centre Winnipeg, I would commend the words of Abraham Lincoln on questions of this kind:

Capital has its rights which arc as worthy of protection as any other rights. Nor is it denied that there is and probably will be a relation between labor and capital producing mutual benefits.

"The strongest bond of human sympathy outside of the family relation should be the one uniting all working people of all nations, and tongues and kindreds. Nor should this lead to a war upon property or the owners of property. Property is the fruit of labor, property is desirable, property is a positive good in the world. That some should be rich shows that others may become rich, and hence is just encouragement to industry and enterprise.

"Let not him who is houseless pull down the house of another, but let him work diligently and build one for himself, thus by example assuring that his own sholl he safe from violence when built.

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Alfred Edgar MacLean

Liberal

Mr. A. E. MacLEAN (Prince, P.E.I.):

In common with other hon. members who have spoken on this subject, I wish to convey to the Minister of Finance (Mr. Fielding) my congratulations on the presentation of his seventeenth budget. We may differ in regard to some features of the budget presented by the hon. minister, but I think we will all give him credit for sincerity of purpose in his long political career and on this as on former occasions all will concede that he has done his very best, or what he believes to be his best, in the interests of Canada as a whole. We have heard considerable criticism of the

budget along different lines. To my mind a great deal of this criticism has been more for political purposes than with the idea of presenting something really constructive. We have heard the financial aspect of the budget attacked, and we have been told on different occasions by members on the other side of the House that we have no war burdens at the present time, and that the statement of the Finance Minister that the deficit of this country had been reduced from some $674,000,000 in 1920 to $47,000,000 at the present time did not indicate a good showing. We were told that the budget should balance and the great argument was that we had no war burden.

I want to take exception to that statement, and to place on Hansard figures which I think will convince the House and the country at large that the greatest burden we are carrying to-day is the result of the war debt. In the matter of interest charges alone, we find that '.n 1914 our total interest charges were

$12,893,000. At the present time we find our total interest charges are $138,000,000. I got the information direct from the Finance department to-day that over $100,000,000 of that interest is due directly to our war debt. How hon. members on the other side can say we have no war burden at the present time is more than I can imagine. Our total war indebtedness is the staggering sum of $1,688,000,000 due directly to the war, and there are interest charges going on yearly, and will go on till this generation passes away, no doubt, and still we are asked to-day by an amendment to wipe out a source of revenue which is yielding us now the round sum of $135,000,000 or practically enough money to take care of these interest charges on the war debt. The situation is a very serious one and, I think before we cast our votes on this budget we should give it very careful consideration.

Apart from the large amount of interest that we are called upon to pay on that tremendous debt we have the soldiers' civil reestablishment to take care of and we find that, including the care of patients, treatment, pay and allowances, vocational pay and allowances, salaries, unemployment relief and cost of living bonuses, we have a yearly expenditure of $12,463,081. We find that we pay out in pensions $32,612,243, or a total of $45,168,029, which is paid yearly directly in pensions to our soldiers and in the running expenses of the offices, and so forth. This $45,168,000 added to the $100,000,000 of interest makes a total war expenditure from these items alone of $145,168,000 yearly. Those are staggering figures, and it is a debt that it is impos-

2968 COMMONS

The Budget-Mr. MacLean (Prince)

sible for us to get away from. Nobody is complaining, Mr. Speaker, of the pensions to the soldiers or the soldiers' re-establishment, in taking care of our men who served overseas. We are only too glad to pay to those heroes this amount of money and I am sure we would be willing to increase it if we possibly could.

When, Mr. Speaker, hon. members on the other side of the House tell us that to-day we have no war burden, I wish to contradict the statement, and I think I have successfully refuted it in the figures I have placed before the House. In view of those facts, and under present conditions, I consider the budget in its financial aspect makes a mighty good showing, and I believe, as I said at the outset, that the Finance Minister, in presenting the budget, has done the very best he can, taking into consideration the diversified interests of our country and the obligations we are called upon to meet. The budget may not meet the views of a lot of Liberal members on this side, and, speaking personally, there is possibly no one in this chamber who would wish to see a greater reduction in the tariff, if it were possible, or to see a greater measure of reciprocal trade with the United States, than myself. But those things, to my mind, are not possible under present conditions. Still we must admit that since the present Finance Minister assumed his responsible position the tendency has been for a continuous lowering of the tariff, with a strong desire for reciprocal trade arrangements with the United States. Now, while some hon. members may make light of this move, it is a move in the right direction, and we do not know what good may come of it. It is a standing offer, made in good faith, and the New York Times speaks of it as follows:

New York, May 15.-The Times, in an editorial on the reciprocity proposal made by Hon. W. S. Fielding, Canadian Minister of Finance, endorses reciprocity between Canada and the United States and says there is every reason why it would be absurd for Canada and the United States to embark upon a tariff war."

"There is no geographical barrier between the United States and Canada," the paper continues, "and the facility of intercommunication is such that the free and uninterrupted interchange of products between these two nations is to the advantage of both. America needs Canada and Canada needs the United States. During the year 1922 nearly 40 per cent of Canada's exports went to the United States and more than 65 per cent of her imports came from this country. Canada can well absorb more American goods and the United States can oSer Canada a much greater market for certain of her products.

This coming from such an important newspaper as the New York Times must not be passed over lightly, and no doubt it conveys the impression which is prevalent to a large extent in the United States. As I said at the outset, we do not know what good

may come from this standing offer which has been put into the budget, and which we are to vote on in the course of a day or two. What more could a Liberal or a Progressive ask than the offer that has been made to the United States in the hope they will before long see as we do, that it would be to the benefit of both countries for us to have reciprocal trade? We might go on and discuss the question at some length, and some might contend that immediately upon the opening of the doors, our country would be flooded with the farm products of the Uinted States. I could never see the matter in that light. We cannot ship products into a country where there is no demand for them, and the very fact that we grow largely our own foodstuffs, I think answers that question, and proves that there would be really no market in Canada for American farm products. Another feature that has possibly been overlooked is that a large amount of the profits of the Canadian farmers is used up in the long haul over our railroads, whereas with reciprocal trade arrangements north and south, both eastern and western Canada could have an interchange of trade with a very low cost of transportation charges. Therefore, from every angle, I think this standing offer that has been made is to our advantage, and why our friends have moved an amendment along the same lines when this offer is made in the budget, is really more than I can understand.

Some splendid points have been brought out by different speakers. One thing in the budget that has been emphasized by members from the Maritime provinces is the benefit that will accrue to maritime ports through the ten per cent increase in the British preference on goods coming into Canadian ports, when the duty is over fifteen per cent. This should mean greatly increased business for our maritime ports, and it should greatly enhance our railway earnings in transporting these goods to the different centres throughout the Dominion.

The reduction in the tariff on sugar has been reflected very quickly in the sugar market, and we find to-day that sugar is being sold at from 40 to 50 cents a hundred pounds less than it was before the budget speech was brought down the other day As was pointed out by the Minister of Finance (Mr. Fielding), this will mean a saving of over $2,500,000 to the consumers of this country.

A great deal has been said with regard to the expenditure of our country, and very little has been said regarding economy, although some speakers have referred to it. There is room for economy all along the line in the

The Budget-Mr. MacLean (Prince)

different departments of our civil government.

I am not criticizing this government; every government is guilty of the same mistake; but we are trying to develop too many activities that, in my humble opinion, are not needed, and we are doing work years before it is needed and possibly work that will not be needed in our generation. Let the departments get down to actual needs and not do work in useless experiments. In this way we shall save the country millions of dollars. No man would think of running his business in the way in which every government runs the business of the country, and we as elected representatives of the people should be just as careful as if it was our own business, and even more so, when we have to tax the other fellow to pay the bill. We should have a regular stocktaking in all the departments, and see if a tremendous saving could not be effected for our country. At the time when these activities were started, the revenues of our country were, perhaps, able to stand the expenditure; but now that we are in a different position and until our finances are greatly improved, every effort should be made to curb expenditures on every side.

I trust I may be pardoned if I refer to a few expenditures on which I believe a saving could be made. My viewpoint may not be correct; but in the Maritime provinces we look with some suspicion at the large expenditures that are made in the different departments in connection with some provinces of western Canada. In passing the estimates, we were asked to pass an item of $261,475 for irrigation purposes. This is a very large sum of money. In the eastern provinces we wonder why the government is called upon to expend such a large sum of money. Why should the provincial governments not do this work themselves? I am not in a position to say whether, under some prior arrangement with the western provinces, this government is bound to carry out schemes of irrigation for the different provinces; but I just wish to point out that apart from the small subsidy that we received for Prince Edward Island, we get very little assistance along any of the lines that are indicated in the Auditor General's report. Take, for instance, the surveys for water powers alone. On measuring streams and rivers in this country, streams and rivers which, I venture to say, will never be developed, we spent last year $319,885. If the streams and water powers of this country are to be developed, why not let the organizations or business concerns that are going to use this power make these investigations themselves? I do not believe any good business man would

think of promoting any large business without making a thorough investigation of the waterpower himself. He would not take any government report. Those are items which, to my mind, might be pared down, especially during those years when we are called upon to pay the huge expenditures which I have just mentioned in connection with our war burdens.

I am also informed that on those large water-powers that have been developed to some extent by this government, not one dollar has yet been collected by way of revenue. There is under way, I believe, a proposition whereby some fifty cents per horsepower is to be charged, or some other similar small charge is to be made, but as yet no revenue has accrued to this government from the development of those water-powers.

As regards the question of immigration, I do not believe forced immigration is or ever will be of any value to any country, and still the Auditor General's report of last year shows an expenditure of $251,895 for immigration purposes. Are we justified under present conditions in spending such a large sum of money in that department?

The sum of $194,189 has been spent in connection with reclamation of land. I am not well enough posted to discuss this question of reclamation of land; but I understand that no practical results have accrued from it. A number of the men employed in these departments, the moment they are appointed by the Civil Service Commission, immediately surround themselves with a staff of officers and engage a large number of officials to do woik whether it is necessary or not. In my opinion the time is coming when a real stocktaking of these departments will have to be made in order to see that not one dollar is spent that is not absolutely needed.

With regard to the question of immigration, I have already stated that I do not believe in the principle of forced immigration; I do not think that such immigration is of any use to a country. Do you know, Mr. Speaker, we spent last year $932,000 to take care of the unemployed in this country, and in the face of that expenditure we are asked to vote large sums for immigration purposes. I venture to say that nearly every dollar of that $932,000 has beeo spent west of this city; I am sure that not 5 cents of it was spent in Prince Edward Island. Yet, in view of these facts, we are asked again to go into a large immigration scheme.

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LIB

May 21, 1923