March 17, 1924

LAB

William Irvine

Labour

Mr. WILLIAM IRVINE (East Calgary):

In view of the report in the daily press that the bonus to the Civil Service will be discontinued, and inasmuch as this has caused a great deal of disturbance among the postal workers, I would ask the government if they have so decided; and, in that case, if we may expect an immediate revision of salaries in which the bonus will be taken into account?

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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):

The government's intentions with respect to the bonus will be made quite clear as soon as the estimates are presented to parliament. The estimates have been ready for the past week or so and will be placed on the Table just as soon as the debate on the Address is concluded.

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CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

I was going to ask a

question on the same subject.

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THE GOVERNOR GENERAL'S SPEECH ADDRESS IN REPLY


Consideration of the motion of Mr. Kelly for an Address to His Excellency the Governor General in reply to his Speech at the opening of the session, and the proposed amendment thereto of Mr. Sutherland, resumed from Friday, March 14.


CON

Hugh Guthrie

Conservative (1867-1942)

Hon. HUGH GUTHRIE (South Wellington) :

Mr. Speaker, may I be permitted m the first place to associate myself with those congratulations which have proceeded from this side of the House to my right hon. friend the Prime Minister upon his return to this chamber in renewed health, strength and vigour, if we may judge from his appearance to-day? Let me assure him that during his

absence, under the genial leadership of the Acting Prime Minister (Mr. Graham), we have conducted ourselves, I think, with due diligence and with due dignity. I doubt if a better choice could have been made for Acting Prime Minister than the Minister of . Railways and Canals. His genial disposition, his uniform good nature, coupled with his long parliamentary experience, made him an ideal Acting Prime Minister, and if we have conducted our proceedings aright, great credit is no doubt due to him for it.

I regret very much the absence from the chamber this afternoon of my hon. friend the Minister of Justice (Mr. Lapointe). I believe he is unavoidably away from the city.

I heard him in the address which he delivered in this House on Friday afternoon with the greatest of interest, and I had intended today to enter upon a reply to some of the questions which he brought to our attention on that occasion. However, I shall have to proceed in his absence, as I am sure he, of all men, will not charge me with any lack of courtesy in so doing.

What was most noticeable in the speech of my hon. friend the Minister of Justice was not what he said, but rather what he omitted to say. We all enjoy his good humour, his jocular manner, his clever epigrams, but after all I do not think anyone would say that his speech could be called a serious pronouncement by a serious minister upon a serious subject. It was extremely witty, in parts it was brilliant, but the most outstanding feature was its careful avoidance of any discussion of the question which has occupied the attention of the House during the last two weeks and of the business interests of the whole Dominion. A most courteous invitation was certainly extended to him by my hon. friend from Vancouver Centre (Mr. Stevens) a few days ago-if not to him, to some minister of the Crown-to state for the benefit of the House and for the information of the country what was the government's intention, what was its real meaning in portions of the language which it adopted in the Speech delivered from the Throne at the opening of this session. It has been said from this side of the House that the Speech from the Throne, on the whole, might be described as an election manifesto, and I do not think this criticism is altogether unreasonable. I do not propose for one moment to discuss the fulsome flattery of itself which the government has seen fit to include in the Speech from the Throne; if it pleases them, let them have the benefit. But the outstanding paragraph in the Speech from the Throne is one which, I

The Address-Mr. Guthrie

-flink, might be fairly described as ambiguous had the Prime Minister himself not under-*aken to remove the ambiguity and to elucidate the paragraph in question. It was assumed from the outset by the official opposi-* tion, and I think, likewise in the Progressive ranks, that the language employed in a certain paragraph in the Speech from the Throne was a direct reference to the government's intention with regard to the customs tariff. I am going to quote the exact language, though it has been quoted on several occasions in the House:

In the opinion of the government, such reduction of taxation as it may be possible to effect should aim primarily at reducing the cost of the instruments of production in the industries based on the natural resources of the Dominion, thereby aiding materially in the development of our natural resources, and through cheapened production, effecting a diminution also in the cost .of living.

Now, that clause as it stands, unexplained, might well refer to a reduction of some direct taxation other than the tax imposed indirectly by the customs tariff. But it has been assumed from the beginning of this debate by this side of the House that the reference in question was to a removal of customs taxation, and my right hon. friend the Prime Minister (Mr. Mackenzie King) who spoke in reply to my right hon. leader (Mr. Meighen) on the opening day of this debate, made it abundantly clear, lay the justification which he offered for the presence of that clause in the Speech from the Throne, that the intention of the government was to make a reduction of taxation under the customs tariff in regard to the instruments of production.

This is how the matter came up: My right hon. friend the Prime Minister, speaking of the Speech of my right hon. leader, said,- page 31 of Hansard:

The impression he tried to convey to the House was that the Speech from the Throne was not the place to mention the tariff.

And then the Prime Minister proceeds to justify the mention of tariff action in the Speech from the Throne, and cites an instance which occurred in 1921, and another in 1897, where an intimation was given in the Speech from the Throne that tariff revision would take place during the ensuing session. There is no doubt, therefore, as to what was in the Prime Minister's mind; there is no doubt what was in the government's mind when this paragraph was inserted in the Speech from the Throne. The Prime Minister goes on and makes it doubly clear when he says again at page 31, in regard to the Speech from the Throne presented to this House in 1897;

That is the wording of the Speech from the Throne by a Liberal administration in 1897. That promise in the Speech from the Throne was implemented. . . and

the promise made to-day by His Excellency will be implemented.

I think the Prime Minister has made it abundantly clear that the disputed paragraph in the Speech from the Throne is a direct intimation of a reduction in customs taxation, and also that the intimation there given is going to be implemented by legislation during the present session.

I agree with those who take the view that it is not proper to mention any question of tariff reduction or tariff" increase in the Speech from the Throne. I have been a member of the House for a good many years and I cannot recall a single instance in which this has been done. I can see very very grave reasons indeed why it should not be done; I can see no reason why it should be done. During the first session in which I had the honour to sit in this House, a constituent of mine requested me to ascertain if the government contemplated any change in the duty on books, as he expected an importation from the United States. In my innocence I approached the veteran Finance Minister of the Liberal party (Mr. Fielding), who was Finance Minister also at that time, and made the inquiry of him. Why, his very look was most staggering, and I remember well his language; he said: "Guthrie, I would consider myself everlastingly disgraced if I gave anyone any intimation as to the government's action in regard to the tariff before the budget was brought down." That was the principle he maintained throughout his long career, and I am inclined to believe that had he been able to occupy his place in the House at the opening of the present session, had he been able to deliberate with his colleagues in the preparation of the Speech from the Throne, no mention of contemplated reduction in the tariff would have been made. What is the effect of this announcement by the government? Merely to cause hesitation and uncertainty in all business operations which may possibly be affected by tariff changes; merely to cause a halt, lo cause delay; to stop contracts; to create uncertainty in the business world. What would be the effect in a moment if the government stated in the Speech from the Throne that; during the present session they would increase the tax on sugar? What would happen? Think of the speculation which 'would take place immediately in sugar. So it is with agricultural implements: the announcement that a reduction is going to be made has caused great business disarrangement in this country. Farmers will not order, jobbers will not order, manufacturers are fearful of going ahead;

The Address-Mr. Guthrie

they want to know what is going to happen before they enter upon any new engagements.

To my mind, the statement contained in the Speech from the Throne in this regard is a very grave impropriety. I do not believe that under normal circumstances the Prime Minister would have committed the error or have it allowed to be committed. But I believe there was a direct and positive reason why the statement was made at this particular time in the Speech from the Throne. This government is known as a minority government; it has not a majority of the members of the House m support of it-not openly, at all events. The government had to give some positive assurance. which would enable them to secure support from the Progressives in the House from the opening day of parliament; the government could not wait for the budget. Many important questions usually arise in this House ear.y in the session which are voted upon before the budget is brought down, and in order to feel secure from the very opening day the government deliberately placed this improper statement of fiscal policy in the Speech from the Throne-in other words, in order to secure for themselves a certain measure of Progressive support. I will say this on behalf of the government, that while its action looks to me like a very grave impropriety, it is fairly good political engineering. The government was out on a fishing expedition; it was out fishing for Progressive votes, and it determined to bait its hook with Progressive bait, and it thought the most alluring bait would be an announcement of a reduction of the customs tariff on the instruments of production. The government was wise in its preparation and in its arrangements. It had merely to cast its bait upon the water and it immediately landed the leader of the Progressive party.

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PRO
CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

And now I think the Prime Minister can congratulate himself that he has at the present time almost the whole Progressive party in his basket. That was the purpose of putting this tariff statement in the Speech from the Throne. I do not know that my illustration of fishing for Progressive votes is perhaps as apt as the illustration given by my right hon. leader in his opening speech of this session, where he referred to the philosophy of Samuel Butler as expressed in that simple couplet which he placed on Hansard, that-

Round white stones will serve, they say,

As well as eggs to make hens lay.

Such was the homely philosophy of a very ancient rhym,er and philosopher who lived in the days of the Stuart Kings in England. The philosophy is pretty sound to-day. Carrying the inquiry just a little further I wonder which particular member of the government devised this wonderful scheme of the nest egg. Thinking it over last night coming down on the train I thought that probably this scheme had its origin in the fertile mind of our good friend the Minister of Agriculture (Mr. Motherwell). He is such a joker and he knows something about egg-laying and egg-laying contests. Whoever devised the scheme should be rewarded; it was a good scheme for the purpose. The government took a round white stone as a nest egg, and artfully placed it in the Speech from the Throne with a deliberate purpose, and hardly had the nest egg sentence fallen from the lips of His Excellency the Governor General than the leader of the Progressive party at once began to lay and to cackle. I reside in what may be called one of the more or less rural districts of the province of Ontario, and I know that at this particular season of the year many of the newspaper editors in my part of the country, particularly the weekly newspaper editors, are deluged with callers who produce a big egg. There will be John Smith who brings to the newspaper office a large egg from his Plymouth Rock stock; John Jones brings an egg from his Brahmas, and John Brown brings an egg that one of his Minoreas has laid, and so on. But the country editors in my part of the country and in the province of Ontario generally this spring have all become back numbers. The Winnipeg Free Press has them all "licked a mile" because the leader of the Progressive party on the first day of the session brought into the Free Pre*s office a great white round, meaty egg saying, "Look at the egg that the Progressives have laid for the government on this occasion." I think the government may congratulate itself upon the result of the little device which it adopted to catch the unwary.

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PRO

Robert Forke

Progressive

Mr. FORKE:

I would like to suggest to the hon. member that a round white stone is better than a rotten egg anyway.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

I am in perfect agreement with my hon. friend that a round white stone is better than a rotten egg, and I do not know anyone in the House who would think otherwise. However, this I am going to say to my hon. friend the leader of the Progressive party: Now that he and his

party have started to lay and to cackle at the bidding of the present government, why

The Address-Mr. Guthrie

COMMON*

not go a step further? I have been told, and I am sure it is true, that the Progressive group in this House is made up of members of what we call the two traditional political parties in the Dominion of Canada. Formerly they were all either Liberals or Conservatives. They were elected to this House under the name of Progressives, but I have been informed that as we sit here to-day, of the Progressive group probably ninety per cent would have formerly lined up as Grits thoroughly dyed in the wool One man remarked that you had only to scratch the skin of a Progressive and out would come the virus of the Grit. Well, why do they not come out in the open? Why do they not do as two of their number did last session, cross the floor of the House and openly support the government? Why not go across the floor and lay and cackle and roost in the old Grit henhouse instead of trying to keep up the illusion any longer? What interests me is to know what that large body of Conservative voters who voted for these hon. gentlemen at the last flection will think of it. I know how it was in my own riding. In several townships "practically every Conservative and every Grit voted for the Progressive candidate. Tiiey thought that they were voting for a man who had grown sick and tired of the two old political parties, and that the Progressives were launching out on a new movement for themselves. They desired to elect a man who had some class consciousness as a farmer, and they voted almost solidly for the Progressive candidate. They came so near to defeating me that I did not know the actual result for a while, but I managed to get in by a somewhat narrow majority. I wonder what the tens of thousands of Conservative farmers throughout the Dominion of Canada think, who voted at the last election for the Progressive party when they see them practically pledging their support to their old Grit friends-and before veiy long I predict that you will see them going over bodily to their old party allegiance.

Passing for a moment from that branch of the subject, I would like to touch upon one or two of the more outstanding remarks of my friend the Minister of Justice (Mr. Lapointe). His first criticism was directed against my right hon. friend and leader for what he called his pessimistic view of the country's situation and his lack of anything in the nature of a constructive suggestion or of constructive leadership. It is not the part of the leader of the opposition to for-

mulate the policies of the country. Such is the work of the government. A great leader in this House, the late Sir Wilfrid Laurier, said upon one occasion in this House that

the first duty of an opposition was to oppose, to scan narrowly and to criticize. It is the prime duty of the government to bring forward to the House constructive legislation. Does the criticism come well from the lips of my hon. friend the Minister of Justice when he says that the leader of the opposition has failed to propose constructive legislation? Has he to do more than glance over the record of his own party during the last two and a half years to realize the utter lack of anything in the nature of constructive legislation which has been brought to the attention of parliament by this government? Do you think, Mr. Speaker, that the wheat board fiasco, that legislation of two years a'go could be considered as a piece of real constructive legislation? Would the Minister of Justice, the first law officer of the Crown in this country, commend that legislation as a fair sample of the constructive work of this government? Would he be inclined to boast of the legislation of last session in regard to the regulation of lake freights? Is he proud of the grotesque situation which arose last autumn when the people of this country were actually humiliated by this government telling foreign ship owners that they could violate the laws of Canada? Is that constructive legislation of which the Minister of Justice would be inclined to boast? Has there been any constructive legislation, think you, in connection with the Labour department of this government? It is a strange commentary to make on the administration of that department, that upon three separate occasions in two short years this government has had to call out the military forces of this country to overawe labour men down in the Maritime provinces. Does that constitute constructive legislation, I would, Mr. Speaker, like to ask the Minister of Justice?

What constructiveness has the government displayed in regard to the movement of population from this country to the United States? Has it suggested anything, has it devised any means to stop it? Has it originated any scheme which it is submitting to parliament to try to remedy that evil? It is an evil, and more than an evil, and it is a most melancholy thing to contemplate, but perhaps the most melancholy thing presented to us is to be found in the trade reports furnished by this government when, in order to magnify the figures of the total

The Address-Mr. Guthrie

export trade of this country, it includes in its statement of exports $9,699,000 worth of settlers effects, the goods and chattels of people who are actually leaving the country. Does not that statement in the export returns of the country tell its own story? "Oh," but you say "there are the imports of effects of settlers who have come in." Yes, but for just one-half the amount, $4,640,000. I am taking these figures from the January statement published on the authority of the Minister of Trade and Commerce. Exports of the effects of settlers going to the United States in the same period, $9,699,000. These figures furnish a sorry tale. What constructive legislation does the government propose in regard to that matter? Is the exodus from this country one of the monuments to its skill, is it one of the monuments to its constructive activity, is it something to boast of? No, Mr. Speaker, rather to be ashamed of, I would say.

I only mention these matters as a few instances of. the government's misdirected activities. But the one, I think, of which the Minister of Justice was most proud, the one he was inclined the most stoutly to defend, was what we knew, or what we once knew, in this chamber, as the Halibut treaty. Now, no one knows so well as does the Minister of Justice that to-day there is no Halibut treaty in existence. There was a proposal for a treaty at one time. A proposal is one thing, and a treaty is another thing. That proposal has not been ratified by the Senate of the United States, and until it is ratified by that body it does not become a treaty. It is true that the Minister of Justice, speaking on Friday afternoon, said he had reason to believe that at some time in the near future the Senate of the United States would ratify the treaty; but how my hon. friend can view it as a government achievement, can refer to it as a piece of constructive legislation, can boast of it, passes my comprehension or the compehension of anyone who understands the real situation in regards to the Halibut proposal. There is no such thing as a Halibut treaty in existence to-day. There is merely a proposal now before the Senate of the United States in that respect.

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LIB
CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

When you bring back

a treaty on this question from Washington, then perhaps, I may ask to have my special pleading removed from the record.

There is another statement I wish to allude to. It is a statement contained in the speech of the Prime Minister, to be found on page

35 of Hansard. The Prime Minister was criticizing the speech of the leader of the opposition and he used this language:

In the course of his speech he touched on some matters that appear in the Speech from the Throne, but he ignored other very important matters. He said nothing of what this government has done to reduce the public debt, to lessen taxation, and to effect economies in the public service-of these things my right hon. friend never said a word.

I was a good deal put about when I heard that language used in this chamber, and I did not know whether to feel guilty myself or not. I had during the parliamentary recess on one or two occasions made speeches, and in those speeches I had deliberately stated that this government had increased the net debt of Canada, and also had increased the direct taxation. Consequently I was considerably nonplussed when I heard this statement of the Prime Minister on the opening day of the debate, and the following day I went down to the Finance department to find out just where the mistake arose. I got the figures from the Deputy Minister of Finance, and I found that I was not very much astray in my statement, but that the suggestion of the Prime Minister-because that is all I can call it, it was not a positive statement-was entirely wrong, and that my figures were absolutely right. The figures which were given to me by the Deputy Minister of Finance were as follows: On the 29th February, 1924, -that is a few days ago-the total net debt of Canada was $2,419,162,174.71. I then turned to the public accounts of this country to know what the net debt of Canada was when the late government gave up office in December, 1921, and at page 48 I found the net debt at the end of the fiscal year 1921 was $2,340,878,983.69. Thus, by a simple process of subtraction one finds whether or not this government has increased the net debt. If reliance can be placed upon the official figures which I have obtained from the department the difference is $69,000,000 of a net increase in round numbers.

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LIB

Henri Sévérin Béland (Minister of Soldiers' Civil Re-establishment; Minister presiding over the Department of Health)

Liberal

Mr. BELAND:

Did my hon. friend

give the figures for the net debt at the end of the fiscal year 1921-22 as over two billions?

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

The figures are $2,340,-

878,983.

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LIB

Henri Sévérin Béland (Minister of Soldiers' Civil Re-establishment; Minister presiding over the Department of Health)

Liberal

Mr. BELAND:

Are you quite sure of your figures?

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

I am only taking them

from page 48 of the Public Accounts laid on the Table by the Minister of Finance (Hon. Mr. Fielding) in the year 1922.

The Address-Mr. Guthrie

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LIB

Henri Sévérin Béland (Minister of Soldiers' Civil Re-establishment; Minister presiding over the Department of Health)

Liberal

Mr. BELAND:

I have secured some figures from the Finance department which show the net debt on March 31, 1922, was $2,422,000,000. [DOT]

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

I am giving it at the end of the fiscal year: At the end of the fiscal year, 1922, the amount was $2,422,135,801.

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LIB

Henri Sévérin Béland (Minister of Soldiers' Civil Re-establishment; Minister presiding over the Department of Health)

Liberal

Mr. BELAND:

That is the debt for which the previous government is responsible.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

For nine months of that year I think we were responsible, and for three months we were not responsible, and this computation does not take into account at all a sum, which I believe is $8,000,000, which has recently come to this country, and which really should have gone to the credit of the former government. It has been paid recently, but paid by the British government as a settlement of a disputed item of exchange. It should have gone to the credit of the former government, though the payment was delayed, and this government is now taking credit for that amount.

Then, turning to the question of the taxation of the country, my hon. friend the Minister of Justice (Mr. Lapointe) dealt with that question rather fully the other night, and he laboured to show that, in regard to taxation, Canada was really the most leniently taxed country in the whole British Empire. I think, however, that my hon. friend's figures in regard to taxation were somewhat misleading. In giving the figures for Great Britain and New Zealand, I think he gave the figures which represent the total per capita taxation of these countries. Then when he came to Australia and Canada he gave only the per capita taxation based upon Dominion taxes. In other words, so far as the Dominion of Canada was concerned the figures given by the hon. Minister of Justice on Friday night represented Dominion taxes only.

But we all know that in this coun-

4 p.m. try we have, in addition to Dominion taxes, provincial taxes, in some instances very heavy, and likewise municipal taxes, in many instances very heavy. I do not know that anyone can supply the exact figures pertaining to Canada at the present time,, but it must be pretty generally understood that taxation per capita of a citizen of this Dominion who resides in the province of Ontario is well over the hundred-dollar mark, whereas in the figures given by my hon. friend the Minister of Justice on Friday night he stated that taxation for the Dominion of Canada to be $36.67. I am sure, from the figure given that he has included Dominion taxation only. But what

[ Mr. Guthrie]

is the point in his remarks? He was criticizing my hon. friend the leader of the opposition (Mr. Meighen) because he had stated that the taxation in the Dominion of Canada under the late government was low. What has this government done to change it? Have there been any decreases in taxation during the last three years that anyone can point out? I am referring to direct taxation. We know of several increases in direct taxation, such as the increase in the sales tax, the increase in the cheque tax, and the adoption of a receipt tax. These are all increases. What can the government point to, or what could the Minister of Justice point to if he were here, in the way of decreases? And the good showing he was able to make in the figures he submitted to the House on Friday afternoon last was entirely to the credit of the preceding government. Any action in the matter by the present government has been to increase, and in no case has it been to decrease, the amqunt of direct taxation per capita upon the citizens of the Dominion.

There is another point which I would like to take up with the Minister of Justice, if he were here, upon which we cannot agree. I have tried to verify my figures-and I hope his figures will stand a similar examination-but there is a great discrepancy between us. I refer to his statement in regard to commercial failures in Canada. The Minister of Justice said that mercantile failures in Canada had decreased fifty per cent last year. He did not give any figures. I had before me statistical returns as sent out by Dun and Company, a recognized commercial agency in this country, whose reports are generally accepted as reliable. What do they show? I will take the whole period during which the late administration held power, the years 1918, 1919, 1920 and 1921. In that period Dun and Company report a total of 5,157 mercantile failures, for liabilities involving $110,000,000. Then I take the two years during which this government has held office, 1922 and 1923, and I find the total failures 6,942 and the total liabilities $129-000,000. Still, my hon. friend the Minister of Justice stated that this year showed a decrease of fifty per cent over last year. It may be that he was misled by Dun and Company's report. If he takes eleven months of last year-in the latest chart the month December 1923, is not included-he would find the total liabilities were fifty per cent less than the total liabilities of 1922, but he will not find it if he takes the whole year and if he takes the total number of failures from Dun and Company he will find the figures which I have just now included in my remarks.

The Address-Mr. Guthrie

Another matter I wish to refer to is the question of the building of ships at Victoria during the year 1919. A rather severe attack was launched by the Minister of Justice in his speech on Friday against his predecessors in power in regard to the expenditure of money on the Pacific coast in the year 1919 or the year 1920. By his remarks he left a very clear inference on the minds of hon. members in this House that this expenditure was authorized and proceeded with for the purpose of assisting in a by-election then pending in that province. Now, the by-election was that of our good friend the hon. member for Victoria City (Mr. Tolmie), who joined the government of Sir Robert Borden in September 1919. The by-election took place in that month. But the shipbuilding contract was not launched until December, 1919. It could have no reference to the by-election. It had no reference to the by-election. Why was it done? The year 1919 was a very difficult year in this country for any government. The armistice took place in November, 1918, and within twelve months of the armistice we had brought back to this country probably

400,000 soldiers who had been performing their duties as soldiers of the Empire for one, two, three, or in some cases, four years. The question of unemployment was a very serious one; it was one with which the government had to grapple, and the government deliberately set about grappling with that question. In some cases, we paid out money by way of doles. In some cases, we provided work. Great expenditures were undertaken solely for the purpose of giving employment, particularly to returned soldiers. A great many soldiers, on their return to Canada, went straight to British Columbia. British Columbia, after the war, received more soldiers than she had contributed to the war, and labour conditions in the city of Victoria in December, 1919, were rather serious. The question was: Should the government pay out doles to the unemployed, particularly to the soldiers, or should it furnish them with work? The question at once arose: What work could be given them? It was decided that it would be better to build ships to provide necessary labour than to take any other course. The soldiers themselves approved that course; they wanted work, not doles. It was decided, therefore, to build at Victoria four wooden ships. Wooden ships were decided upon after some disagreement, and after much consultation. The Minister of Justice, (Mr. Lapointe) on Friday afternoon read a letter from the Hon. C. C. Ballantyne, at that time Minister of Marine

and Fisheries in the former government. In that letter, Mr. Ballantyne stated very plainly that he was opposed to the construction of wooden ships; that he had opposed this method of construction from the beginning. That is true. That letter was written in March or April, 1920, following the order given in the preceding December; but I am not transgressing any rule nor making public any secret when I say that Mr. Ballantyne was always opposed to a programme of building wooden ships; he advocated steel ships. The difficulty was this as regards building steel ships at Victoria, that a very large part of the work would have to be performed either in Nova Scotia or in the United States. The unemployment was at Victoria. Wooden ships would require labour right from the forest where the trees stood until the ships were finally completed. I know it was said by some that the days of wooden ships were over; I know it was argued that wooden ships would never again pay; but we had a very strong opinion from the veteran Finance Minister of the Liberal party (Mr. Fielding) upon that question, which is to be found at pages 350-351 of Hansard of 1918, when a discussion took place in regard to steel and wooden ships. In that speech the Minister of Finance said:

There has been in the past, and I believe there will be in the future, quite a demand for wooden ships of the smaller class. I believe the conditions that will exist at the close of the war, and for some years after the war, will be such that there will be large opportunity for the wooden shipbuilders of the country to engage in their enterprise. So that I feel that, in giving the preference to steel ship building as the hon. minister is doing, there is no danger of any injustice being done to the wooden shipbuilding industry. I believe that industry will flourish for some years to come without any particular aid from the government.

That was an opinion expressed when the matter was under discussion in parliament, but that opinion was backed by assurances of various men both in and out of the cabinet which then existed. An agreement was finally come to with a shipbuilding company at Victoria for the construction of four wooden ships, in the construction of which certain classes of returned soldier labour were to be employed. Unfortunately the government made a contract with a company which subsequently got into financial difficulties. The government agreed to advance $175,000 per ship and the company was to finance the balance, the government taking a mortgage on the ships for the amount. The company went into liquidation; it was wound up in the courts of British Columbia. The government was left with its contract not a quarter completed, with material unpaid, unpaid labour

The Address-Mr. Guthrie

bills, and unpaid board bills for some of the soldiers who had not received their wages. The government was compelled to take over the plant and ships, and took also the loss which the minister stated to the House on Friday afternoon. Were we right or were we wrong? Was it better to employ that labour or to pay the money out in doles? One or other course had to be taken. We employed the labour; we made a loss; but saved the unemployment situation as it existed at the time at Victoria, and I doubt very much if we would have got out of it any more cheaply had we decided upon the payment of doles rather than the employment of men.

But just now, when I speak of returned soldiers, when the Minister of Soldier Civil Re-establisment (Mr. Beland) is in his place, there is one thing that appears to me to be so glaring and shocking in regard to the expenditures of this government which claims to be such an economical government, that I would like to bring it directly to the attention of the minister and the House. I have been handed a statement of the expenditures of the Department of Soldiers' Civil Re-establishment for the year ended March 31, 1923. It is compiled from the report of that year placed upon the Table by the minister a few days ago and from the Auditor General's report placed on the Table a few days ago. The minister will, I trust, give it his attention and further when the time comes, when his estimates are before the House, I hope he can show that in some respects this statement is inaccurate. I doubt, however, if he can, as I am assured that it has been very carefully prepared. What does it show? It shows that last year the department expended $13,375,134.89. No one would object to that expenditure for returned soldiers, for wounded soldiers, for crippled soldiers, or for their dependents; but when you find that of that total expenditure $6,000,649.30 went to pay official salaries and only $3,065,230.72 went for the maintenance of all the hospitals and $4,309,254.87 for all the pay and allowances to soldiers and their dependents, what do these figures mean when they are divided Up?

Topic:   THE GOVERNOR GENERAL'S SPEECH ADDRESS IN REPLY
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March 17, 1924