May 22, 1923

CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):

Is the government in a position to advise the House in regard to the reported appointment of a publicity representative in London?

The Budget-Mr. Meighen

Topic:   PUBLICITY REPRESENTATIVE IN LONDON
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

I have made inquiries of the different departments of the government end have been unable to find any one who knows anything of the matter. The government has no information as to any such appointment having been made.

Topic:   PUBLICITY REPRESENTATIVE IN LONDON
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PRIVATE BILL-FIRST READING


Bill No. 179 (from the Senate), for the relief of Grace Lees Smiley.-Mr. Boys.


THE BUDGET

CONTINUATION OF DEBATE ON THE ANNUAL


The House resumed from Monday, May 21, the debate on the motion of Hon. W. S. Fielding (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into Committee of Ways and Means, and the proposed amendment thereto of Mr. Robert Forke.


CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):

The Minister of Finance (Mr. Fielding) has been treated in this debate to general expressions of good will. To these his wealth of years and his long public service undoubtedly entitle him, and in them I am only too happy to join. My comment this afternoon on his course in recent times will, I hope, not lack in courtesy, but I am equally anxious that it do not lack in frankness. I was disappointed in his budget. I say so entirely irrespective of the policies he abandoned and of the policies he adopted. I do not think the budget presentation was a real budget presentation at all. I think the country is entitled to more in a statement on the occasion of a budget speech, than the Finance Minister saw fit to give us as the text of our discussion. What the budget speech contains is a skilful but elusive commentary on the history of tariff discussions, on the unpopularity of taxes, on the undesirability of debt and on various ideas, some accepted and some rejected, which passed through the minister's mind in preparation of his case. A budget presentation should be a great deal more than that, and in the history of this country it usually has contained a great deal more. A budget presentation, I think, should include a close examination of the whole financial position of our country with some retrospection into past years and as well some prospect into the future. By examination I do not merely mean a chronicle of the ascending steps of our debt. I mean an analysis of our financial position. I mean an investigation of the value of our assets, of their

revenue bearing properties and of the nature and maturity of our liabilities. It should contain as well a synopsis of our trade, of those vital factors of our commercial life that keep us living and moving, an examination into the sources, the basis and the currents of our trade, and into the policies that best can be applied for its pursuit. It should contain as well an analysis of our means of revenue and of the merits of each, and some comparison between our position in all these respects and the position of other countries comparable to our own. These things are given in the budget addresses of the statesmen of other lands. I commend the Finance Minister to read the speech on a similar occasion of the Chancellor of the Exchequer of England presented this year, or, better still, the speech presented last year, and, because a better example cannot be found, I commend all hon. members to read the budget presentation of the present Prime Minister of Australia when as treasurer of the Commonwealth a year ago he gave to its parliament an exhibition and an expose of the whole financial and industrial situation of his country. I venture to make this remark: that after reading both, -the Australian budget and our own-though unacquainted with Australia and its history to any degree and though having followed the finances, the trade, and all the affairs of this Dominion, and having witnessed its development for fifteen years, after reading both, I knew more of the position of Australia than I did of the position of Canada. This is the purpose of a budget address, and a mere homily on various popular subjects is not justice to the occasion and not justice to the House. We owe to our people a thorough examination of all these elements, and we did not get the text for this examination from the budget presentation of the Finance Minister.

He gave us the figures of our ascending debt since 1914, told us how much it had increased year by year, and seemed to take some credit, or at least some comfort in the fact that we were not increasing our debt so rapidly now in the days of peace as we did in the days of war. His idea was to show that under other regimes we went rapidly into debt, but that now, though we are going further into debt, we are not going at quite so accelerated a pace. This is very true. He was not altogether fair even in that statement. Starting with 1914, when we did add $21,000,000 to our debt, the whole addition and far more due to comm.i-ments for the Transcontinental and Grand Trunk Pacific, and the loans we had to make to have them completed, though we did that year add 821,000,000 to our debt for those

29S5

The Budget-Mr. Meighen

purposes, we remember as well that the year before, notwithstanding corresponding obligations, we reduced the debt by $25,600,000. We effected a greater reduction in one year than all the aggregate reductions the present Minister of Finance (Mr. Fielding) had been able to make in the fifteen years antecedent during which he reigned as Minister of Finance. Yes, our debt additions are, I suppose, diminishing. The debt addition in the fiscal year ending in 1920 was some $674,000. 000. That was the year when we paid for demobilization and took care of the cash responsibilities which we thought this country owed to the men who returned from the war. The elements that make up that sum are largely composed of cash gratuities to those men, and of outlay for other policies then laid down, which policies hon. gentlemen opposite have dutifully followed by way of helping to establish the returned soldiers. Though we went into debt huge millions for that purpose, we were met by castigation on the part of hon. gentlemen opposite, including the Minister of Finance, and by the declaration that, if returned to power, they would adopt a better method and distribute further cash grants to those men. This declaration they promptly repudiated on attaining power.

The next year, when we had passed from those days of great and uncommon responsibilities, the addition to the debt was some $92,000,000, and in 1922 for which the present government is partly responsible, $81,000,000. This year the addition to debt is $57,000,000, not a very great reduction from the year before. The minister gives it to us as $49,000,000; but he gets that figure by crediting $8,000,000, which was just as much our property five years ago as it is our property to-day, $8,000,000 of exchange which was owed to us by the British government then, but which now is credited merely for the reason that now it is ascertained. These are huge additions to our debt.

In case I might overlook this, let me say that the Minister of the Interior (Mr. Stewart), in attributing our obligations for revenue to the late administration and to the great war debt which was piled up during its tenure of office, reflected upon us because, he stated, we had not gathered from the pockets of our people during the war and applied on our war obligations, as large a proportion as we should have. He contrasted us unfavourably with Great Britain. This has been a practice of hon. gentlemen opposite and of some hon. gentlemen who are not wholly opposite. I have never heard figures given by any of our critics; but if members

of the House will look at the figures given in the budget presentation of 1919 when the war was over, there will be found a statement of the revenues collected during the war, of the war debt, of the whole war outlay, of the capital debt as well, If hon. gentlemen will look at a corresponding statement by the British Chancellor of the Exchequer, they will find the British Chancellor of the Exchequer claiming that they succeeded, during the currency of the year, in paying 28 per cent of the war debt, of the war obligations, and having to borrow only the balance, 72 per cent. I went into his figures to ascertain how they were arrived at, and the only method by which they could have been arrived at was this, by taking the total outlay for the war, including interest thereon and resultant pensions, then ascertaining how far their excess of revenue during the war exceeded their other expenses, and applying that excess upon war obligations. If we take the very same method in Canada, we find our war obligations as presented in that budget running to $1,327,000. Add to this, interest thereon and our pensions; then set off against it the excess revenue over the other obligations, revenue over expenditure, which excess was $425,000,000, and it will be found our application against the whole war responsibility was not 28 per cent, but 29 per cent. Nor do I not know that we could have been expected to have reached the percentage of Great Britain. Great Britain was an older and a wealthier country. She had greater resources upon which to draw. Of course her responsibilities were greater; but we were much more comparable with Australia. I have gone into the figures for Australia, and I find that Australia was able to apply, not 29 per cent on her war obligations, but less than 15 per cent throughout the entire war period. Such is the record of Canada.

We gathered those funds from war profits, from a higher scale of income tax; we gathered those funds as well from a well directed additional tariff taxation to the extent in one year alone of $44,000,000, during which period not only industry, but agriculture and every occupation of our people flourished as never before. We gathered them by a higher income taxation than Britain imposed, because Britain's minimum was actually higher than ours, and her maximum was not more. We carried our profits taxation in its full extent throughout the year 1919, after Great Britain had reduced hers by almost one-half. Our profits taxation throughout, higher on certain industries than on others, because certain industries profited more than others, was higher than that of our great com-

The Budget-Mr. Meighen

petitor the United States, indeed it was the highest tax of its kind in the world. Beyond that our income taxation, though fixed on a scale lower than that of Great Britain until something over $150,000 per annum of income was reached, was on a scale higher even than Great Britain's and higher than Australia's for incomes beyond that amount. It was higher than the level of the United States on all classes of incomes, large and small. We must measure our power to tax in a very great degree, by corresponding taxation across the line. The government then in office went to the full extent it could go in levying from the people during the war period a large share of their earnings to pay the cost of the war. Very well. We got to the end; and though no one claims perfection or anything approaching perfection, nor claims there was not waste, for no war can be fought without waste, I venture to assert this as one conclusion, that we got more war results for the money we spent on the war than did any other country, save possibly Australia or Great Britain. Undoubtedly we got the equal of any country for the money we were able to expend. Let us not, then, bewail the debt of Canada. We are in a better position to discharge it than is any other nation which went through the entire course of the war. It has been shown in previous budget addresses that our debt, though heavy, is less than a third of the per capita tax of New Zealand and little more than half the per capita debt of Australia; and; of course, our debt is very much less per capita than is the debt of Great Britain.

Years ago, even as early as 1919, but more strenuously in 1920, we were prayed by hon. gentlemen opposite, nay, we were demanded bv them, to balance the budgets of that time. We were told that the war was past and the period for balancing budgets had come, and hon. gentlemen in 1920 pointed to Great Britain, which that year had virtually balanced hers. In 1921 more vociferously than ever they compared us unfavourably with Great Britain because we had an addition to our debt of some $80,000,000, while Great Britain s had actually been reduced. Those charges were true. But Great Britain had added to her war debt all the cost of her war material and so she was able to reduce her war debt thus enhanced, by the sale of war material to the extent, not of millions or hundreds of millions, but actually of billions of dollars. We on the other hand, though we were possessed of a share of war material, had relatively almost a trifling share. We had equipped our men on a per capita basis from

the British government; therefore a large share of war material was not ours. Our debt was never enhanced by that increment, and consequently we could not sell war material to reduce. But with the passage of those years, conditions became comparable. Great Britain's war material has been sold, and for the past two years she has been virtually in the same position as we; but she continues to diminish her debt while we, with a new government in office, continue to increase ours. And this new government consists of the men who inveighed against us in earlier times because, under totally incomparable circumstances, we were not able to reduce. Now I think the time has come when a better showing should be made, and I certainly think the time has come when we ought not to be under the necessity, I had almost said the humiliation, of proclaiming to the world that we are budgeting for a deficit of some $70,000,000 for the year just ahead.

There are ways of balancing budgets. The Minister of Finance (Mr. Fielding), in his address, thought of only one; the only possibility that seemed to be before his eye was the raising of taxes, as he described it, from new fields. Well, there are other ways of increasing taxes besides entering new fields, namely, the multiplying of taxes in the old fields. But the minister, although he has done that, did not emphasize the fact; the fact he emphasized was that he did not like to venture into new fields in order to balance his budget. It is not very long since he saw another and far better way than either of those plans to balance a budget, and that way was by reducing the expenditure of this country as we receded from the years of the war. Hon. gentlemen will remember that in the Estimates of 1922 it was proclaimed to the people of Canada that a saving of, I think, $137,000,000 was being effected by this economical government for the year just now passed in the way of appropriations for our railways. One would have expected it is true, that concurrently with the completion of two events or tasks, namely, the receding of the war- and necessarily the reduction of after-war services-and secondly, the rehabilitation of our railway systems that we had to take over;-one would naturally have expected I say, that concurrently with these two circumstances, it would be quite easy to reduce our expenditure. So no one was surprised when the government was able to present appropriations to this House less, as to our railways, by $137,000,000. It simply meant that the Grand Trunk, having been

The Budget-Mr. Meighen

put into shape for service, the Canadian National having been built also into shape for service, those obligations being discharged did not have to be discharged again. But notwithstanding this fact, and notwithstanding the other faftts to which I have alluded, what do we actually find the result of last year? What do we actually find in the way of diminution of expenditure as between 1922, nine months of which were ours, and 1923, no months of which were ours? The reduction is not $137,000,000; it is not $37,000,000; the reduction is nine million and a few thousand dollars. The actual expenditure last year as given by the minister m his budget statement, though he did not tabulate and add the figures-why, I leave hon. gentlemen to conjecture-the actual total expenditure, taking into account that charged to the consolidated revenue, the capital charge, the special war and railways expenditures amounted in 1921-22 to $463,305,000. The actual expenditure for this year, an expenditure composed of the same elements, is $454,280,000, or a diminution of $9,000,000. Why has 137 contracted to nine? How is the nine arrived at? Our Soldiers' Civil Re-establishment department is nearly $4,000,000 less. I am not criticizing the reduction; the Minister of Soldiers' Civil Re-establishment has frankly and publicly stated that, having examined into the services we had established, he had made up his mind that he could not improve upon them and so simply carried them on. This reduction is due to the fact that the necessity for the money has contracted; we are getting further from the war. There is a reduction also of $3,000,000 or more in our pensions. I have the exact figures before me from the Department of Finance; the reduction in pensions is $3,300,000. There is a reduction as well in our Soldiers' Settlement appropriations. In those soldier services the government was able, quite properly, I presume, to save this country some $7,500,000. This makes up virtually all of the total sum of reductions from 1921 to 1922; there is only a million and a half to account for besides. But they had nothing at all this year in the way of loans to the provinces for housing; they had nothing at all for unemployment-they let the unemployed take care of themselves. This may be an evidence of selfishness, but it could scarcely be said to be an evidence of economy. Then they did not have the same appropriations for railways. But in all the services where it took real strength of character and will to make contractions, instead of contractions they have

made additions, and at the rate they are going they will very soon overtake all they are able to reduce because of diminishing soldier services. At the present rate of additions to civil government, at the rate of additions to many other of the services mentioned in the tabulated statements obtainable from the Department of Finance they will very soon overtake and pass the appropriations of the nearwar years.

Such is the financial record of the government. And yet although standing under a deficit for this past year of $57,000,000 the Minister of Finance gives us figures of contemplated expenditures for the current year aggregating $434,000,000, and budgets only for $372,000,000: What is going to be the effect of all this on the name of Canada throughout the world? What is going to be the effect on the operations of business and the securing of money everywhere for the purposes of our industrial expansion? What is to be the effect now on this Dominion which ended the war in strength and virility, which was admitted by this government to have been in the best position of any land when peace was declared, if we have to acknowledge financial defeat, haul down our flag and say "For the life of us though we don't expand we cannot pay our debts"?

The minister proposes some increases and some reductions of taxation. Everybody rejoices in reductions. But what does reduction of taxation mean when it is accomplished by an increase of our national debt? It is all right to talk about taking $2,500,000 off sugar -and, mark you, it is not off the sugar refiner; the protection stands as it was. I am not complaining of that-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

Some hon. MEMBERS:

Oh, oh.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

No, I am not complaining, and I did not complain three years ago. Hon. gentlemen will hear me on this subject, and one thing they will not be able to find fault with-they will not find me guilty of apostacy. There is a reduction of $2,500,000, the minister estimates, in sugar taxes-we had a duty of 2-39 cents a pound on refined sugar and 1-69 cents a pound on raw sugar; he takes 50 cents per hundred pounds off refined and a corresponding duty off the raw, thus1 leaving the refiner just where he was, a reduction on the whole to the consumer of half a cent a pound, and thereby he says he saves the country $2,500,000. Well, is

this more creditable than the course of Great Britain? Great Britain has a five cent per pound duty on sugar. She maintains this duty, but she is reducing her debt by one

The Budget-Mr. Meighen

hundred million pounds. We are cutting down a two cent duty and we are adding to our debt by $72,000,000. Let the government balance its budget and we will all welcome any reduction of taxation; but let no government boast of tax reductions when they are made at the expense of our credit and add to our national debt.

I have a word to say about last year's alterations in the budget. Hon. gentlemen will remember that though in the tariff there was rigid, definite adherence to the principle of protection-accompanied as usual by aspersions on its name-although there was almost an exact adherence to the very schedules of our tariff, the minister made certain proclamations of "reforms" which he said he was effecting. Every proclamation being a change from what had been our policy was received with acclaims of joy by hon. gentlemen of the House in two of its departments. The first I believe was an announcement of a great "reform" in the abandonment of what was called our depreciated currency clause. rHds clause it was said was merely disguised protection. It raised our protection 1,000 per cent, and if we wanted such protection the manly thing, the minister said, was to put 1,000 per cent protection on and call it 1,000 per cent; But he had looked into the subject of depreciated currency and had determined to sweep the whole mockery of protection away. Well, when the applause had died down there was a little consideration given to the question, there was some debate, and the minister later came down with a substitutive depreciated currency clause which did in another and less efficient way what the old depreciated currency clause which he had denounced had done. His new clause put the duty anywhere from 100 to

1,000 per cent at the will of the minister but disguised its operation. He has operated that depreciated currency clause ever since.

Then he announced that there was a marking clause which had been scorned by many as an abhorrence. As disguised protection it had been claimed we had provided that goods from foreign countries should be marked with the country of origin. He said this would not do, especially as we had not put it in into operation. Neither had we. There had been difficulty in putting it into operation. It was a matter which required regulations difficult to work out. He was going to wipe this plan away as well. But the minister took this precaution; while he wiped the general clause off the statute book he retained full power to his government to put the same clause back or any part of it, and all by that abhorrent in-

strument-order in council. I told him that he was simply taking to his government power to favour any industry which favoured him, and to penalize any industry which did not meet with the smile of his good will. Well, what has been the result? I asked some time ago, for a statement of the orders in council passed, and I found that two industries, and only two[ had got the favour of this law,-one of them was an industry which helped to elect the Prime Minister in his own county of York. Lead pencils now have to be marked with the country of origin; lithographic work has to be similarly marked. These are supposed to be in a class by themselves, these alone have received the favour of the government. It would be interesting to know upon what principle these favours have been bestowed.

Then there was another; the dumping clause, particularly as it was applicable to fruit, did not suit the government, and the minister came to parliament with a considerable flourish of trumpets and announced that this dumping clause had to go. But before the debate was through, the Minister of Customs rose-prompted no doubt by the Minister of Finance-and proposed a dumping clause which for autocratic audacity has never been equalled in this or any parliament. Hon. gentlemen have said that I supported it. I did support it; I had no alternative. We had either to support it or do without a dumping clause altogether. I wanted and want still the dumping clause that was there before. It was fair and right; let any hon. gentleman vote to restore it and I will vote with him and against the autocratic dumping clause which exists to-day. But I am not willing to imperil the industries of Canada, especially the primary industries, because of exception to the character of any dumping clause.

The minister had some other proposals last year which he seemed to think were great reforms-a change from the policy of his predecessors. He announced a new duty on tobacco, an increase of $3 per thousand on cigarettes, and an increase from 28 cents to 40 cents on raw leaf tobacco; and he believed that he would sceure thereby an additional revenue of $5,000,000. Well, again the force of argument was brought to bear; the minister was warned, and warned in all seriousness, that the limit of the cigarette excise had been reached and that if he went beyond he would do harm. He yielded to the extent of 50 per cent; he fixed the excise at $7.50 instead of $9, as he'had proposed. Now, what has been the result of this "reform," this variation from the tariff which he found in effect? In one year he has reduced the tobacco business of Canadian pro-

The Budget-Mr. Meighen

ducers by 22 per cent; in one year as well he has lost to the treasury of Canada 81,327,000. Well, have these twin misfortunes been obtained with an accompanying boon of reduced tobacco consumption?-if such is called a boon. Not at all. The minister admits the fact himself

just as much tobacco used, just as many cigarettes smoked as before, but the Canadian business is impaired, the Canadian treasury is depleted to the extent of $1,327,000-and the only people to benefit have been United States tobacco dealers and producers, and the bootlegger, who has thus been given a return cargo to this country. I venture to suggest that, laying aside the injury to Canadian business for the profit of the United States, the loss to the treasury of over a million dollars is something of a serious price to pay for the privilege of having the present government in power. Such is the penalty of another of the Liberal "reforms" which we were treated to last year.

Then there was one more. There was to be a duty on beet sugar production. It was fixed first of all at a very considerable figure, 48 cents per hundred. In the course of argument this figure was reduced and at the reduced figure, 24 cents per hundred, it went into effect. Did I say it went into effect? The Finance Minister tells us that they never collected anything under it. Do hon gentlemen know why they did not? For the simple reason that the government took it upon itself to postpone its application. They never let it go into effect, although it had been passed by this House; and now after a year goes by, during which the reduction was postponed by the government, they come to parliament and say "this was another blunder; the whole thing has to be repealed."

What is left, then, of the "reforms" of the 1922 budget? Do hon. gentlemen know? Economy is gone. The sugar duty reform is gone. The cigarette reform is gone. The depreciated currency reform is gone. The dumping reform is gone. The markmg reform is gone, or almost gone; the old system re-appears to help along the lead pencils of North York. All these things have gone. What is left-let me repeat-of the budget "reforms" of 1922? I venture to suggest that by the time a year goes by, even by the time three weeks go by, there will be just as little left of the alterations the minister brings down in the budget of 1923.

I come to a discussion of the new proposals of this year. The minister announces a scaling of one tenth of the British preferential duties. I do not know upon what principle the minister does so. It is not in order to

avoid protection; he tells us so himself. Perhaps it is in order to strike a blow at those horrid combines, monopolies and trusts which were the particular object of the diatribes of hon. gentlemen opposite two and three years ago. I wonder what are the "combines, monopolies and trusts," struck or staggered, by this peeling of the British preferential tariff to the extent on an average, of 1.9 per cent. What combine or monopoly is now the object of the vengeance of the government? Does anyone know? Hon. gentlemen who examine the industrial fabric of our country will find this out: that the one class of industry seriously affected is the woollen industry. The others upon whose goods the diminished duty operates are those whose main and determining competitors 4 p.m. are in the United States of America. In the woollen industry our great competitor is Great Britain. Is the woollen industry a combine, monopoly or trust? Now. let me inquire. There may be such monsters in Canada, but if they deserve anything in the way of penalty at the hands of this government, they certainly do not get it in this budget. But the woollen industry in this country is not a combine. It is composed of small mills separately owned, scattered over the length and breadth of eastern Canada, mainly in eastern Ontario. Not one of them is a mill of great proportions; nothing in the nature of a combine was ever alleged against any of them; all of them are struggling to keep their heads above -water, and have been so for years. Such is the industry against which this government has the courage to strike its blow. Tender and delicate the assault is, but they were just as careful in selecting the enemy as they were in tempering the force of the blow.

Then the budget goes on; the American tariff is to be left just where it is. Did I say, the American tariff? I should have said, the tariff against the world. Outside of this 1.9 per cent change in British preference there are more increases than decreases in the budget. There is a new duty on currants and raisins, four times beyond what it was before Why this increased duty upon currants and raisins? Here we have an echo of the French treaty debate. Do hon. gentlemen recall that we told the government in that debate that they had sacrificed this country, and had been utterly worsted in their negotiations with France; that they had put our own tariff out of line-put our luxuries away below our necessities, let off the rich and burdened the poor; that while they had reduced luxuries and thus made a big concession to France,

The Budget-Mr. Meighen

they had come back from Fiance with a far higher French tariff against our actual exports than we had before? We told them as well the reason. The reason they did so was this: They had not armed themselves with any weapon before they started to negotiate with France; that they should have raised our duties on luxuries before they went over to that country, and thereby have been in a position to offer something to France in return for concessions by France to us; that instead they went over there bound hand and foot by the state of our own tariff and by their own commitments -the sincerity of which hon. gentlemen can now judge-by their own commitments uttered over and over again in this country. There was the reason why this Dominion was penalized and worsted in the French treaty negotiations. Our ministers took thought; they saw the force of our argument, though they were not frank enough to admit it; and now, having to negotiate with Australia they are advised by the Minister of Trade and Commerce-who has been over there-that unless they put our duties up on goods which Australia wants to sell to us they will have no chance in the negotiations at all. They come to parliament and they say: Australia wants to sell us raisins and currants. If we are to make a deal with Australia, and not capitulate the way we did with F'rance, we will have to have a duty that is worth while on raisins and currants. So they lift the tax on these goods to three cents a pound in order that they may negotiate with Australia. Now, will anybody answer me this question: How is it this is a good plan to employ in the case of our sister dominion of Australia and a bad plan to employ in the case of France? I will be interested in the answer to that question. I hope the Prime Minister, if he speaks, will venture to essay the task.

There is also a new duty upon artificial silk. Artificial silk under this budget has a whole range of duties up to 374 per cent. The minister did not dilate very long on the reasons for that move. I am not complaining of the duty. I do not know any way to get industries in this country, any way to keep our country strong and prosperous, a real country where people can get work, except by having duties on articles that we can make in this Dominion. But here is a government, which has been denouncing protection through all its opposition life, which has members supporting it, some of them even within the fold and rapture of office, who still tell us that protection is all wiong, a

Government which to-day is trying to pretend to this country that the only reason it is maintaining a protective tariff is because it finds such tariff here and because it will disturb industries erected on that basis if it dares to shatter their foundation; here is a government, I say, giving such as the only reason for maintaining a protective tariff and then undertaking to establish a new industry on the same foundation. Thus they make it increasingly impossible for those wno may ever wish to do so to get any relief from protection. Well, if inconsistency was a charge to level against this government no more concrete, glaring, brazen instance could be found. This government has been open to charges of inconsistency ever since it got into power. Why I almost smile at the resolution of the hon. member for Brandon (Mr. Forke) m which he alleges inconsistency against the present Prime Minister of Canada. We take that indictment as proven in this Dominion now.

There are . other increases but in the main the tariff is left practically where it was. The whole principle of a protective tariff is there intact. Indeed, it is reinforced by this very legislation, the new legislation, which i3 brought down in this budget. In respect of the shaving in the duties on woollens affecting a lot of small mills through this country I call attention to a further fact: that a similar shaving last year was followed by an increase of British importations of almost 50 per cent, by a contraction of Canadian production of 33 per cent and necessarily by a contraction of Canadian labour and Canadian prosperity. Was it followed however by any contraction of the price? Does anybody know of woollens being cheaper this year than last? Are you buying them cheaper in your stores? Not at all. The consumers got nothing, but cur industries have been, in a measure, sacrificed to their larger competitors in the older land.

There was another effect of the tariff of last year. The government did venture then into the realm of reduction in the general tariff but only as to one class of goods-one that is worth mentioning. I refer to the reduction of the duty on farm implements. Here a 2J per cent lowering in the general tariff took place on the part of a government which had solemnly promised to sweep those duties all away. Now, I want to put this question in the hearing of the House: What has been the effect of this reduction? Has there been any increase of labour employed in the farm implement industry of Canada? Has there been any increase in. the consumption of Canadian goods? Has there been more work given to

The Budget

Mr. Meighen

one man in this Dominion? On the contrary, the reduction has operated exactly the other way. There has been less production, there has been a contraction of our towns, there has been an exodus of our mechanics, there has been a decline of our population, there has been a drying-up of sources of our revenue, there has been a lessening of our markets. Well, who has received the benefit? Are we told that the western Canadian farmer, or the farmer in any other part of Canada, has received the benefit? If so what has it been? Are farm implements cheaper to-day than they were a year ago? I have not heard of it. But I have read an advertisement which I think I brought with me, an advertisement published in a western paper which is interesting enough to give to the House. The advertisement in question is published in the Yorkton Enterprise and reads as follows:

We are still in business carrying a full line of International Harvester Agricultural Implements, but regret at this time to have to inform the public that prices on agricultural implements have been slightly advanced since last season, for which we are not responsible.

Advances on some of the more important lines are

as follows:

Binders % 8 00

Seeders

12 00Mower and Rake

3 50Gang Plow

6 00Cultivator

7 50

and other smaller lines about the same proportion.

Then follows this interesting paragraph which I hope the Prime Minister will remember and ponder the rest of his life:

This advance has been made notwithstanding the fact that we have a Liberal government at Ottawa, with sixty-five Progressives on the job and a Canadian Council of Agriculture in the background, all supposedly working overtime in the interests of agriculture.

I want to say a few words on the general question covered by this advertisement. I do not need to make any statement merely in order that members of the House may know where I stand. There has been misrepresentation of my attitude, there is contsant misrepresentation; it is all for a purpose. I have stood all my life for a policy of moderate protection for this country. Under the conditions of the last few years I have felt that the tariff in effect was on a general scale that could justly be described as moderate protection. In that stand I was attacked by hon. gentlemen across the way; attacked as following a false principle, as following a principle that bore down on producer and consumer and that favoured the monopoly and the trust; attacked as favouring a high protective tariff, by the very hon. gentlemen who come in this debate and declare that this same tariff-raised in some respects and slightly, almost microscopically diminished in others-is not now high protection but moderate protection and even a low tariff. I believe it is of no avail to argue the principle before many hon. members. But it is no longer a waste of time to argue it before hon. members opposite. It used to be. Those who fondly hoped in the years and the months that have gone by that the progress free trade principles were making was rapid, that the day of their triumph was dawning, have received a rude awakening since they have entered the parliament of Canada. Is it not plain, I ask of them, that your adherents in this House do not number more than half of what they did in the last parliament? Instead of getting converts you are only finding apostates. You cannot rally half the number to your flag that you could two years ago. Such "progress" is very slow. Why, the speeches hon. members made, particularly the speech of the hon. leader of the Progressive party (Mr. Forke), the speeches as well of other hon. members behind him- those speeches would have been received with paeans of joy and admiration by hon. members across the way if their authors had only made them two years ago. No, there does not seem to have been very rapid progress. And why? Do hon. members really think it is because the great part of the people of Canada elect representatives who are slaves to fetishes, who are instruments of great potentates or the victims of plutocratic corruption? I hope, hon. members do not believe such things-The hon. member for North Waterloo (Mr.. Euler) gave the lie to these assertions on behalf of the two older parties in very firm language Thursday night. I paid him the compliment of saying that I had never heard him hurl these aspersions upon others, but that I knew a party which had got into power by this very process. No; such absurd humbug is not the reason. The simple, reason is that lying along side of a great republic, living in a world every country but one, yes every country of which to-day is protected, we, particularly, a young undeveloped Dominion, beside a tremendous nation the biggest industrially the world has ever known, cannot lay our markets open freely to them. We cannot lay our manufacturers and producers under competition at the hands of those who have their own market guarded for their advantage and an equal show with us in the outside world, while the producer in this Dominion has not access to their markets,

The Budget-Mr. Meighen

has no preference in other countries and has not even a priority in his own. These things were known to hon. members opposite two years ago just as well as they are known to them to-day. But they had a purpose to serve. The glory of office was in front of them, and they sought to delude a great population of this country into their support by professing principles and policies in which they had no belief at all. No. Protection will be the law of Canada for many years. There will be a different world before protection can be abandoned. We cannot get on under any principle other than that of protection. I remember it is only two years, indeed, since the then leader of the Progressive party, (Mr. Crerar) seconded in most eloquent and wonderfully emphatic language by the then hon. member for Red Deer, Mr. Michael Clark, declared that a change was coming over the commercial world, tariffs were coming down, the day of protection was nearly over, and they pointed in particular to the United States of America. In the words of the then member for Red Deer, the United States of America was "comparatively a free trade country," and in his opinion was soon to open its doors and the light of free trade was to shine. Well, what has taken place? There is not an hon. member to-day, even to my left, who so far deludes himself as even to profess that the world is moving to free trade. And this

country of all countries, with its resources undeveloped, in whose neighbourhood we have the great developed, advanced, protected republic-this of all other countries would be playing the part of madness to march ahead of the others in the direction of free trade.

While on this point, I may deal with another phase of the budget presentation. I .refer to a reciprocity offer to the United States. As respects the subject of reciprocity, [DOT]do not let any hon. member think that there has been a change of opinion in this country. *Oh, we have heard a lot about these changes [DOT]of opinion. We heard about them away back rin the eighties and in 1891; we heard about them in 1911. But always when the challenge came and the issue was disclosed there was found to be no change of opinion in Canada. Why is it I am asked that though we like to have treaties of reciprocity, favourable trade arrangements if we can get them with other countries in the world, and particularly with those of our own empire, we do not think it the part of wisdom to enter into an extensive reciprocity convention with the United States? Why is it? The United States I am told lies beside us, a tremendous population, and there-

fore a potential market, with less transport costs than to other lands; why not make, I am asked an extensive trade arrangement with them? Well, the reason lies in the very geography of this continent. The reason lies still more in the very fact of our separate nationhood. Let me explain. With any other country we are on terms of parity. Other countries are natural consumers of our goods, and we consumers of the goods of other countries. With different geographical conditions, different industrial occupations, other countries would have just as much to lose by cancellation of such an agreement as we would. With the United States the position is different. [DOT] We are only 9,000,000 people and they are 112,000,000. They have a production twenty times our production. They have the biggest factories, the biggest industrial concerns and the biggest commercial organizations in the civilized world. They are as well our greatest competitors in all our lines of production. If we enter into a commercial arrangement with them there would be something at least, to say for it, if conditions were such that we knew there would be permanency to such arrangement. Now, mark you, I said there would be something to say for it. There would at the same time be much to say against it. In my judgment it would result in conditions in Canada very comparable with what to-day exist in the northeastern and the northwestern states. In these states their industries have been drawn by the magnetism of the great huge plants and populations of the central states, and the northwestern and northeastern districts are a little more than feeders for the great industrial centres of that nation. Tariffs the world over, though you can argue against them, have a tendency to distribute over the surface of the world varieties of occupations, instead of concentrating in particular localities all those engaged in single occupations. But I said before, there would be something to say for such a treaty if there was any guarantee or hope of permanency. In that case we would know what to do, investors would know what to do; agriculturists, would know what to do; ranchers, would know what to do; men thinking of going into any line of trade or production would know just what to expect. They would make their investments, and they would order their lives accordingly.

But is there any guarantee of permanency, or can there be any guarantee of permanency, under any conceivable circumstances in a reciprocity arrangement with the United States?

I ask that question and I ask it seriously, because in my judgment it is at the root and

The Budget-Mr. Meighen

the heart of the whole problem. There was no

permanency inherent in the 1911 treaty. Each country reserved the right to depart from it at its will. That the United States insisted on; that the United States will always insist on; and such insistence no government of the United States dare neglect at the price of its life as a government. No, the right to annul will always be theirs, and that right they have never failed, in the whole course of their existence, to exercise. They exercised it back in 1866, when our industries, having set themselves in those channels, our East trading with East, West with West, centre with centre, were rendered all but helpless by the annulment of the agreement and the consequent stoppage of trade. We do not need to go back to the 50's and the 60's; let us go back just two or three years. We entered into a reciprocity agreement, not an extensive one, a very simple one, a comparatively negligible one, as lately as four or five years ago. They proposed in their tariff that they would give this country free entry for our wheat, our flour and our other wheat products into the United States, conditional on our country doing the same for theirs- precisely the arrangement as respects wheat and wheat products that the reciprocity agreement of 1911 made as to a far wider range of articles. The government of the day accepted that proposal, and we placed wheat and wheat products on the free list. Their proposal extended to potatoes and we accepted that as well. For a few weeks this operated, and then came a period of suspension because of the two governments controlling theii crops. The suspension ended, and within four months of the close of the suspension, the United States put a high duty on wheat and potatoes, and ended our reciprocity agreement. I urge this fact only to show that the possibility of any permanency to such an arrangement is nil. Not only is there no likelihood, there is utterly no possibility,-the exigencies of American politics demand that there be no possibility,-of permanence. This country is one country; the United States is another. We have our government; they have theirs. We are a British country; they are an American country. Their parliament, their legislatures, have the right to act. The longer an extensive reciprocity agreement operates with the United States, the more this country depends upon the continuance of that reciprocity agreement. Does anyone dispute my assertion? Did we not depend upon it more in 1866 than we did in 1854? Were we not injured more by*its collapse in 1866 than we should have been had it collapsed in 1855? Did we ever get on in 190J

our lives as well as after we set our faces the other way, to develop east and west channels of trade which no other government could interfere with or destroy? The longer such a reciprocity arrangement operates, the more dependent we become. You say then that it must have proved to be good. For the sake of argument and only for the sake of argument, let me grant that. The fact is that the power to annul is a tremendous weapon in the hands of the United States. Annulment - would mean very little to that country. Their trade, their production, is twently times our own. Our trade with them is fractional as compared with their whole trade. Their trade with us would be tremendous compared with our whole trade. Our West would trade with their West, our East with their East, our centre with their centre. Those channels being established and other channels being tc the same extent abandoned, the power to annul the treaty means a vital power over the legislature of this country. Hon gentlemen say: "They are a friendly people." Yes, but they are the American republic. We have things we have to take care of in competition with the United States. I could name them one by one. As matters stand now, when we are in no alliance, we are on a parity. They have no such extraordinary power, I am not afraid as matters stand today of any reprisal in the power of the United States, to wield. There is no reprisal they can exercise over us to-day that need put fear into the heart of any citizen of this Dominion. Whatever we may desire to do, in the interest of our country, let us do. There is no reprisal they can exercise that will not do them as much injury as it will do ourselves. But put us ten years under a reciprocity agreement; give those channels ten years to become established and then tell me what chance we would have in any negotiation with the United States. I ask hon. gentlemen in all seriousness to put themselves in that position. Where would we be then if we sought to make terms-say as to the draining of our lakes and our St. Lawrence through the Chicago canal? Where would we be then if we sought to make terms on half a dozen things of vital consequence to this country, which lie between us and them at this hour as matters of contention? No nation that respects itself will get into such a position. We are so geographically situated that there is a peril which, if we have not the manliness to guard against, we will afterwards be the victims of. Whether those words sink in or not, I ask at least that they be remembered, I ask that they be reflected upon, and, if the time ever comes, as it may, when by the

The Budget-Mr. Meighen

turn of the political wheel the United States government may look to us again for a reciprocal agreement, I ask hon. gentlemen before they commit themselves-when this is a real question, for now it is only a gesture-to think those thoughts over and to determine whether they are content lightheartedly to travel along that road.

I pass from reciprocity and I come to a discussion of other proposals of this budget. I purpose to discuss them in the light of their wisdom and in the light as well of the political honour of this Dominion. Hon. gentlemen opposite are not very fond of such discussion. Indeed, there is a tendency in more quarters than among the government members, but animated, I think, solely from there, to say: "Oh, we will let the past bury the past; political platforms anyway are not very serious matters; we cannot erect a future by decrying the past; the Liberal convention is four years old now or nearly so, and there is nothing to be gained by bringing its unwelcome ghost before this House." Such is the constant importuning of hon. gentlemen of the government side. I venture to say this- and I do so without any assumption of superior virtue at all-that if political platforms are to mean nothing, if they are only constructed to be discarded, if the carrying of them into effect, when power is gained, is not a matter of honour and of right, then responsible government is a mockery, public life is a sham and representative institutions are no better than a fiasco. Hon. gentlemen do not like to be reminded of their commitments of years ago. I have not seen one of them produce that brown-covered edition of the chronicles of the Liberal party at convention in 1919. I have not heard one of them read from it in this House or seen them show it to his fellows. The hon. member for North Waterloo, bolder than the rest, comes forward and says: "I do not think a government should be bound by the ill-digested conclusions of a convention." And the Minister of the Interior (Mr. Stewart), while affecting a certain academic loyalty to the resolutions of that convention says to hon. members to my left: "Oh, it is all 'right for you to talk; you are in opposition; but it is altogether different when you get into power." I have listened during the debate to this sort of contention from the hon. member for North Waterloo in the clear language that he uses so well; I have listened to dozens more of apologetic imprecations from the perspiring periods of the Minister of the Interior, all the way through to the massive and majestic eloquence of the Minister of Agriculture. But let hon. gentle-

men reflect: What is to be the result on the young men, on all the people of our country, if honour and fidelity to political pledges are to be openly flouted in the parliament of Canada? Hon. gentlemen tried it in 1896. They made a show of allegiance then which at least had the merit of a certain plausibility. Now, not from one without authority, not through a mere backbencher, but through the mouth of the Minister of Finance, who is in charge of fiscal policy, they flout all allegiance to their commitments of only four years ago. The Minister of Finance openly tells this House that he is not bound by those covenants that his government is not bound by them, that his party is not bound by them. Why? Because at that convention he did not vote for them himself!

I said I would speak frankly in the presence of the Minister of Finance. He is not here, but I cannot be deterred on that account. The Minister of Finance has done no credit to the politics of Canada when he made that assertion; nor has he done any credit to his own record in our public life. The Minister of Finance was a party to, was present at, and took an active share in the framing of the very resolutions he now repudiates; and after they were adopted he contested on the basis of those pledges the leadership of the Liberal party which had adopted them and which had pledged itself to put them into effect. The hon. gentleman, for months after went through this country as a leading Liberal and as the prospective Minister of Finance and never for one moment gave in public a soul in Canada to believe that he himself differed in the least degree from the pledges and commitments of his party. Then he got into power and said, "I am bound no more." His Prime Minister, (Mr. Mackenzie King), too, stood up and declared last year that all he was bound by was a certain obligation to regard these specific, definite, concrete tariff covenants printed in his platform as a chart and compass to guide him in the sea of politics; and he the same Prime Minister listens now to his Minister of Finance declare openly to parliament that he has flung chart and compass away after the platform, and that all are gone and guide him and his party no more And this is called honourable politics! But more. The Prime Minister of this country declared in this House, only a little over a year before he came into power, that he intended to put into effect the very articles of the Liberal platform adopted at that convention. I read from Hansard of the year 1920, 1st June, at page 2993:

The Budget-Mr. Meighen

I would not be worthy of the trust reposed in me by members of the party with which it is my privilege to be associated in the position that at the moment I hold, were I to be one thing at one time and another thing at another time. Sir, I was chosen, for the responsible duties that I am seeking to discharge, at the Liberal Convention at which the platform of the Liberal party was laid down, and by that platform I intend to stand or fall. The resolution on the tariff was as follows:

Then he read the resolution verbatim-all about free farm implements, all about free cement, all about free foodstuffs, all about free fertilizers, all about free oils, and all these other long lists of classes of articles which his convention bound him to put on the free list "when returned to power." And he added.

Let me further point out that there is not a line in the resolution adopted by the Liberal convention which has not appeared in resolutions proposed in parliament from this side prior to the time that the convention was held.

The assertion he thus made was true; it was all true. The authority, the solemnity of the Liberal convention, all was added to by the resolutions of the whole Liberal party in this House time and again, year after year. Then the Prime Minister went on to attach another article of sanctity to the Liberal platform. He declared that "the last public address by Sir Wilfrid Laurier, only two or three weeks before his death, was, in the main, one approving of a resolution passed by the eastern Ontario Liberals, in words almost identical with the resolution which was adopted at the Liberal convention." Did he tell us then that this same resolution was not approved by the hon. member for Shelburne and Queens (Mr. Fielding) whom he intended to make Minister of Finance, and consequently that his party was not to be bound? Was there any language used in the whole speech of the Prime Minister which was not diametrically flagrantly, violently opposed to any suggestion of that sort? On the preceding page the Prime Minister made this statement, and I ask that it be brought to the ears of the Minister of Finance, for the Minister of Finance was present when the Prime Minister uttered these words, and he heard them without protest:

You had there exactly what you have here,-some taking extreme views in one direction, others taking extreme views in another direction. But, Sir, you had the splendid spectacle of that vast assemblage of men and women standing up as one and approving the platform of the Liberal party.

No absolution there, no exception of the Minister of Finance, no exception of the hon. member for North Waterloo (Mr. Euler), no exception of anyone; everything the Prime Minister said on that occasion was said in the hearing of these two hon. gentlemen. The Prime Minister emphatically stated then that

at the convention the whole "vast assemblage" stood up and voted for the Liberal platform as one.

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LIB

William Daum Euler

Liberal

Mr. EULER:

I beg my right hon. friend's pardon; I was not present when the resolution was carried.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

I did not say so; I said that the declaration of the Prime Minister in parliament, that all who were present at the convention had voted for the Liberal platform, was made in the hearing of the hon. gentleman and of the present Minister of Finance.

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LIB

William Daum Euler

Liberal

Mr. EULER:

I was wrong, evidently; I assumed that the hon. member was referring to the convention.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

No; I take the hon. member's word for it that he was not present at the vote; he was evidently conveniently absent. But this is not all. The very same year the Liberal party of the province of Alberta, headed then by the present Minister of the Interior (Mr. Stewart), met also in convention in the city of Calgary. This convention mark you was headed by the Minister who now tells us how different it is when you get into power. At this convention they adopted all the things adopted at the Liberal convention of 1919; but they did a lot more. Why, they said, there is no difference that anyone can see between the platform of the Liberal party, as professed and voted for in parliament, and the platform of the Farmers' party of Canada. And as it was necessary for them all to unite against the Tories, they voted for a resolution in which they quoted the whole Farmer platform and swallowed it line for line, declaring it to constitute the policy of the Liberal party of Alberta, headed by the present Minister of the Interior. But more. Their appetites were not satisfied even with the Farmers' platform. After quoting and adopting the whole Agrarian programme they added the following clause:

But this convention further asserts that free trade with Great Britain and the United States should be the ideal of the Liberal party, and that it is and shall oontinue to be the duty of Liberalism to earnestly strive to so regulate and direct the fiscal policy of Canada as to ultimately attain free trade with Great Britain and the United States.

Again I emphasize the abservation of the Minister of the Interior-it is very different when you get into power.

Yes, these western ministers say they struggle, they still believe, they still hope. Evidently there is to be the very same plan of campaign in the country in respect of this tariff and the new policy of the government, the same double dealing, the same two-

The Budget-Mr. Meighen

edged sword as there was when they were in opposition. In opposition the plan was to fly to the four winds of heaven the Farmer platform-the convention platform-to proclaim it in all the issues of their party literature, but at the same time through the mouth of the hon. member for St. Law-rence-St. George (Mr. Marler), through the mouth of the present Minister of Justice (Sir Lomer Gouin) and through the mouth of the hon. member for North Waterloo (Mr. Euler) to quietly assure all those interested the other way that they need not fear the Liberal party, that no matter what the platform said everything would be all right with them. Such was the method pursued, such seems to be the method still. The Minister of Finance stands up and says, "Here is the tariff of the Liberal party. Last year we shaved a little here and a little there, this year we shave a little here and we raise a little there, but now it is stable save only for exceptional cases." He told the whole business world of this Dominion that except in very exceptional cases, which he described, they could regard this as the permanent tariff of this country for some years to come. But the Minister of Agriculture says, "Oh, he did not mean that at all." He tells us that parliament can change the tariff next year. Well who does not know that? What we are discussing though, what the Finance Minister was pronouncing was the policy of this government. It has been proclaimed by the Minister of Finance.

The Minister of Agriculture will be encouraged to carry on his pillow fight and to dangle hopes before the western farmer, but from our experience of the past I do not think we will put the influence of the Minister of Agriculture against the influence of the Minister of Finance. In the cabinet combats last year and this the Minister of Agriculture had all the cards, and all the records, he had everything on his side. He could have said to the Minister of Finance and to every other member of this government who was in the House of Commons in 1919, "Why, gentlemen, you voted for these very things I am arguing for, you voted in 1919 for the resolution of the hon. member for Brome which called upon the late government to free the food of the people and to free as well all the instruments of production and all the spare parts entering into the same. You voted for this motion of the hon. member for Brome, you voted for free food when there was not one man hungry in this Dominion for five that are hungry now." He could have said as well, "Why, the Prime Min-

ister in 1920 quoted with approval and affirmed his fidelity to the statement of Sir Wilfrid Laurier at Hamilton in 1913 that the unalterable policy of the Liberal party was to have food free from customs duty for all the people." Yes, and he could have called forth the convention platform, that beautiful pamphlet, and said, "here is the book of the chronicles of the Liberal party, read it and behold our faith." All these arguments he had on his side. Then he could have come to the New Testament issued just before the election, with the photograph of the Prime Minister on the back and his signature inside, wherein it was declared that all those commitments of 1919 constituted the policy of the Liberal party still. All these weapons were in the grip of the Minister of Agriculture and in the grip of the Minister of the Interior. But how did they use them? What was the result of the contest? They lost all along the line. They did not win a single skirmish. So what is the hope for the future? Why, the Minister of Agriculture only makes a laughing stock of his friends. The Minister of Agriculture is an apostate to everything he has declared for in western Canada. The Minister of the Interior is the same.

Let me emphasize here that hon. members do not escape behind the "indigestibility," as described b}? the hon. member for Waterloo, of a convention platform. They voted for the same thing in this very parliament in 1919 -save the member for North Waterloo- he was honest enough to escape-and the hon. member for Sherbrooke (Mr. McCrea) ; they were the only two who had the courage of their convictions then; the rest, including the Minister of Finance including the Minister of Marine, including the Minister of Trade and Commerce, including the Secretary of State, including the Minister without portfolio (Mr. Sinclair) who sits in the seats of the mighty though I am afraid he does not exercise much of the power of the mighty-all these, indeed over half of the present government, voted in this House for the resolution in 1919 of the hon. member for Brome.

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?

Some hon. MEMBERS:

Order.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

What is wrong?

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LIB

William Duff

Liberal

Mr. DUFF:

That is not a fair reference to the hon. member for Queen's (Mr. Sinclair).

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

I would be willing to say the same of the hon. member for Lunenburg.

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LIB

William Duff

Liberal

Mr. DUFF:

You are fit to say anything, but the people do not listen to you.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

These hon. gentlemen

voted for that resolution, declared it to mark their course, declared for free food-let me repeat, at a time when there was more prosperity in this Dominion, less men out of work-indeed, scarcely any out of work at all-less need of it than there is to-day many times over. They declared for free instruments of production at a time when there was a prosperity throughout the farming community of Canada, which we know nothing of to-day, at a time when wheat was over $2.00 a bushel and oats over $1.00 a bushel, whereas to-day wheat is half of its former price and oats you can hardly sell at all. But this was the policy of the Liberal party then. If there was an arguable case for it at that time, the conditions demand it ten times as strongly now. I stood against it then I stand against it to-day. I did not believe the policy they then advocated would result in the conditions they professed to desire; I do not believe so now.

But I want to come to some other features of this budget. Increases in taxation constitute an addition to the burdens of the people. New taxation is all right if accompanied by economy; unaccompanied by economy new taxation is all wrong. This government has added again to the sales tax. If there is one tax that comes upon the back of everyone almost equally, the poor and the rich alike, it is the sales tax of this Dominion. We imposed the sales tax first. I am aware of this fact, because I remember the reprimands and the castigations we endured at the hands of hon. gentlemen opposite-and at the hands of none more determinedly than the Prime Minister of this country-when we put on li and 2i per cent as sales tax. He declared in the debate of 1921 that instead of getting more from income tax, instead of taxing luxuries, we were piling a "visible" tariff on top of the "invisible" tariff we had then by putting a sales tax on the backs of the common people. He denounced us for doing so, because he said, the reason we had not reduced the tariff and had not as he said taxed luxuries, the reason we had taxed the common people by a sales tax, was that we were the tools and minions of wealthy corporations; that we were the servants of organized interrelated business, or, as he was fond of describing it, of an industrial plutocracy. How would he like to hear with its application on himself that same argument to-day? To-day instead of taxing luxuries more he taxes them less; instead of

taking the sales tax off he adds to it until it is twice the burden it was at that time. How would he like it if I urged against him now the allegation which filled almost every line of his speech in 1921? How would he feel if I told him that the reason he is doing what he is doing is because he is the meek and humble instrument of wealthy corporations, because he has not the courage to do right by the common people? How would he like that class of demagogism in parliament to-day?

Perhaps I should read a few words from what the Prime Minister said two years ago. He was first of all denouncing us for not revising the tariff. He said:

To say that the changes being made in the American tariff are responsible for the abortive professions, the frustrated intention, of the government, is to assume an unlimited degree of gullibility on the part of the Canadian people.

The fact that an American tariff, temporary but about to be made permanent or probably to be made permanent, was in actual course of progress through the American congress-to urge that fact, he said, as a reason

5 p.m. for referring revision was to assume gullibility on the part of the Canadian people. Here was what he declared to have been the real reason:

The failure of the government, at this time of high-living costs, and much needed increase of production, to give any relief from burdensome taxation to either consumers or producers, is not due to any circumstances so much a matter of chance as the present emergency legislation of the United States; it is due to a deliberate and determined effort to thwart trade and to restrict competition in every direction, with the Mother Country and our sister dominions even more than with the United States, in order that a few wealthy men and their immediate friends and associates may reap still larger fortunes through obtaining, not a much-needed home market, as they would have us believe, but a monopoly of the Canadian market.

And a few pages later he used this language :

Do you see also, Mr. Speaker, why it is, in the budget which has just been presented by the Finance Minister (Sir Henry Drayton)-that this year, as in former years no account whatever has been taken of profiteering; why another year has been allowed to pass without any effort whatever having been made by the government to recover any of the war-time wealth; why, instead of the removal of any of the taxation that bears immediately upon the masses of the people, the duties upon the necessaries of life, it is the business profits taxes and the luxury taxes that have been abolished?

And he goes on to say:

The protection for which we stand is the protection of the consumer against the exactions of combines, monopolies, and the super-organization of associated, business.

Such was the whole tenor of his speech in 1921. Because we had abolished certain taxes

The Budget-Mr. Meighen

on expensive goods by which we had sought to get-with some success, though not with the success we expected-considerable addition to our revenue, and from which we did get quite a substantial sum; because we had abolished the business profits tax, these were the opprobrious epithets he applied to us; these he said were the motives which animated us. Is he restoring now the business profits tax? Is he restoring the luxury taxes? No, he is doing nothing of the kind. The business profits tax was abolished with the approval, expressed in this House, of the leader of the Progressive party; abolished, indeed, with the approval of many hon. gentlemen opposite, but abolished, the Prime Minister told us, because we were the tools and minions of the rich and powerful. The special luxury taxes were abolished, but hon. gentlemen know that they were abolished because of difficulty of operation. The only sales tax we put on was a small tax of lj and 2|- per cent, later increased by us to 3 and 4 per cent, applicable to home productions and to imports respectively. This was the sales tax that we imposed on the consumers of goods in this Dominion. At the same time we collected from our income tax some $93,000,000. We collected from

our income and business profits taxes in our last year $101,000,000. This year the Minister of Finance is collecting through the same taxes just $72,000,000. But he put in 1922 an added tax on the whole people-a new sales tax-to make up the difference; a tax that has brought him last year an increased revenue of over $31,000,000. In a word, the tax that we collected from income, the tax that we collected from profits, even in our last year, after the business profits tax had been abolished and only arrears thereon were taken in, amounted in the aggregate to about $30,000,000 more than hon. gentlemen opposite are collecting by those means to-day. But to make up the deficiency the Minister of Finance swooped down on everybody-on the common people of this country, and took $31,000,000 more in an increased sales tax. He collected last year 4i and 6 per cent and he is not satisfied with that; he comes along this year and lifts up the sales tax on Canadian goods, raising the rate upon them this time from to 6 per cent. This is an additional charge on all the goods covered by the sales tax, goods which comprise the clothing of the people, comprise what keeps the people warm-clothes, shelter, stoves and the like; which include hardware used by the people, and which include farm implements used on the land. All these things come under our sales tax, and the amount that has been added during these two years

is more in every case than any customs levy the minister has taken off. To the sales tax as he proposes to collect it now a profit will be added by the manufacturer; to that another profit will be superadded by the wholesaler, and still another by the retailer. These profits taken together will make an addition to the cost of living in this country of not less than 10 per cent. Hon. gentlemen to my left frequently complain of the higher cost of living in Canada, the higher cost of articles which they have to purchase compared with prices across the line. But do you expect anything else when you have a 6 per cent sales tax at the source, on which two or three profits are bound to be levied? You have right there a 10 per cent addition to the cost of necessaries. In this fact we see the main reason why this government has brought about an enhancement of the cost of living during every month that it has been in effective power.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 22, 1923