April 29, 1924

PRO

Thomas Alexander Crerar

Progressive

Mr. CRERAR:

Then I misunderstood my hon. friend.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

I was using it as an example. My hon. friend has brought the matter to my attention better than I could have done myself. As I say, I am not picking out any particular industry, but I claim-a claim which, I know, is diametrically opposed by my hon. friend-that we should be a self-contained nation, manufacturing what we want instead of being dependent on other countries for our needs. I say that if the agricultural implement industry is threatened, or does go out of existence, then we shall be dependent on the United States for our agricultural implements. I doubt if this industry can be built up in course of time in the manner my hon. friend has spoken about. I do not think it can be, but I may be wrong in that respect. But I am speaking generally of our manufacturers throughout the whole Dominion when I oppose tariff reductions, and of course I do not expect my hon. friend from Marquette to agree with me on the point.

If the government thinks that the tariff reductions now proposed are going to cheapen the production of goods generally in this country, I can only say that in my view this will not be borne out by results, for

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the reason that in every factory certain overhead costs have to be taken into consideration. Where the factory is producing to capacity the manufactured articles necessarily bear a very much lower proportion to these costs; conversely, if the factory is not working to its fullest capacity, then the overhead costs bear an inverse ratio on the manufactured product. Therefore if the agricultural implement maker, for example, can bring in various materials for use in his manufactured product, to that extent we diminish the output of the Canadian factory which supplies those materials; and so we make goods dearer rather than cheaper. It means that every binder or mower brought into this country simply increases the cost of every binder and mower made in our factories. In like manner, every ton of steel imported diminishes our own production of steel to that extent, and consequently the cost of production of every ton of steel in our Canadian plants is enhanced proportionately. But supposing the actual price of agricultural implements is reduced by reason of the proposed! tariff reductions, thus stimulating the importation of such implements, it means that all the materials entering into their manufacture which are produced in thousands of our factories will be increased in price owing to lessened production; consequently the cost of goods generally is bound to be increased by means of such a policy. As a matter of fact, it seems to me that such a policy is not only certain to take work away from our Canadian workmen, but it must inevitably increase the cost of our manufactured goods.

Now, Sir, I am perfectly well aware that in rural ridings of the province of Quebec, and in rural ridings perhaps of the province of Ontario, it will be said: Because we have no factories in certain ridings this policy does not affect them in the slightest degree.

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

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

Oh, no, Ontario does not

say that.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE:

The hon. member for

West Toronto (Mr. Hocken) does not say it.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Well, as a matter of fact, I say that this policy does affect the rural ridings just as much as it affects the urban sections of the country-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

Hear, hear.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Adversely-not favourably; and for this reason; it means that in the province of Quebec-and I am speaking of

this province particularly-at the present time the farmer's markets are not in the United States or other foreign countries, but in the large cities and nearby towns. In other words, the urban population are his best customer. By taking work away from the industrial population-and work is taken away by means of the entry of very many materials from the United States-you reduce that population, and in turn you deplete the farmer's market, with the result that he will not get as good a price for his products, and the small gain which he is expecting to derive from a cheaper harrow or a cheaper plow will quickly fade away. I think hon. members from the province of Quebec should take this into consideration and search their hearts well before they vote in favour of this policy, the adoption of which will certainly prevent any increase in our urban population. And they can also take into consideration the fact that if we have not any place for our rural people to go to work they will certainly go to the United States; they will certainly not stay in Canada.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

They will stay on the farm.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

The hon. member for

Kamouraska (Mr. Bouchard) says they will stay on the farm. Who, then, are the farmers going to sell to? To one another?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

In the foreign markets.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

How much foreign market has the province of Quebec, say?

Topic:   THE BUDGET
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

We use the British

market.

Topic:   THE BUDGET
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

And the urban market

too. Is the urban market nothing to the farmer of the province of Quebec?

Topic:   THE BUDGET
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

It is something of

course.

Topic:   THE BUDGET
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Only in some things-nothing of any consequence at all?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Joseph Georges Bouchard

Liberal

Mr. BOUCHARD:

Oh no, I do not say that.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Mr. Speaker, may I pass on to another part of my remarks? I cannot believe that these numerous and varied changes in the tariff are in accord with the Laurier-Fielding idea of tariff stability. I know perfectly well that hon. members on this side will immediately retort: "Look at the resolutions which Sir Wilfrid Laurier or Mr. Fielding moved and supported while in opposition; these particular policies are in accord with

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those resolutions." I do not think we are so much concerned' with what those great and distinguished statesmen did while in opposition; we are more concerned with what they did while in power. While in opposition the intent may possibly be shown, but when in power attention is given to the consequence of the misuse of responsibility. There are instances, in any event, in the Liberal party- and there is no reason why there should not be such instances-where matters have been changed. If I remember rightly, the hon. member for Brome one year moved a resolution as regards directorships in connection with the holding of cabinet positions, and that was approved by the Liberal party while in opposition, but when they came into power, why, they considered that that resolution should not be supported. There is no reason why these changes should not take place.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

I think that certain

events that have happened in the financial and other worlds recently have rather justified the position then taken by the member for Brome (Mr. McMaster).

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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LIB

Samuel William Jacobs

Liberal

Mr. JACOBS:

Does my hon. friend suggest that because members of parliament have been connected with banks, that is why they burst?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Let us look, Mr. Speaker, for our examples of guiding principles to what the Minister of Finance did as regards tariff matters while his party was in power. The guiding principle of the Fielding tariff during the whole course of its administration was stability in tariff, joined with an incidental measure of protection. Hon. members may look in vain through the seventeen budget speeches of the present Minister of Finance for any other basis than that; it is the only conclusion which can be drawn. These principles were affirmed time and time again by Mr. Fielding and were also approved by Sir Wilfrid Laurier whose Minister of Finance Mr. Fielding was for nearly fifteen years.

As regards tariff stability, between 1896 and 1907, a period of over ten years, Mr. Fielding made only sixty alterations in his tariff by act of parliament, and from 1907 to 1911 he made only sixteen alterations in like manner. Yes, Sir, you can read the budget speeches of Mr. Fielding: you will find that when he brought down his first proposals in 1897-that was not his great scientific tariff-certain duties were raised and others were lowered, but the general trend of thought throughout the whole of the tariffs brought down at that time was that every industry should be treated fairly and equitably.

I stated, Mr. Speaker, that the two guiding principles of the Fielding tariff were stability and a measure of incidental protection. In 1898 Mr. Fielding stated, as regards the question of stability:

But we think, Sir, on the whole, believing as we do that the changes in the tariff should not be numerous or frequent, believing that we should have a large measure of tariff stability, believing that the public understand the policy of the government in this respect and will be content to have us carry it out in that spirit of moderation and caution we have so far evinced, we wish to announce to the House that it is not our intention to make any numerous changes in the tariff at the present session.

And) in 1899 he was even more emphatic in regard to tariff stability. He said:

I wish however to point out several reasons why it is not expedient to change the tariff at present. Tariff stability is always important if we are to have that confidence in business without which we cannot hope to have prosperous times. Therefore even though in all respects the tariff may not be as we would like it, it is better to bear some imperfections than to enter upon revisions which might create disturbances in the business of the country.

In 1901 he brought out an important point, namely, that making changes in one item of the tariff means making changes in many others.

Now, I pass, Mr. Speaker, over certain intervening years as regards the administration of the Laurier-Fielding tariff and come down to 1906. That was the year before Mr. Fielding brought in his great scientific tariff, a tariff which has undoubtedly stood the test of time, a tariff under which industries prospered in every way. Before he brought down this important change in the tariff in 1906 he made a statement in the House which let every business know that although there was to be a revision of the tariff, industry and business need have no fear as to what would happen. This is what he said:

We hope during the recess, if this session does not extend to too great a length, to take up that work-

He was referring to tariff revision.

-and at the November session, unless there should be delays in the present session to cause a change in the programme, we hope to bring forward a revised tariff, not one which will make any great changes perhaps, but one which will meet such new conditions as have arisen and we hope we shall have the same measure of success that we have had in the past in devising a tariff which will meet the requirements of all interests in the country and that we shall have again a period of tariff stability under which the industries of Canada will go on and prosper as they have done in the past nine years.

That was the year 1906. Now as you are aware, in 1911 the Liberal party went out of power and did not come into power again until December, T921. As was to be expected, and as was hoped for by all the electorate

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of Canada, Mr. Fielding was again Minister of Finance. When he returned to office the tariff he found in effect was his own tariff, the tariff of 1907. As everybody knows, he was privileged to make two budget speeches only, in May 1922 and in May 1923. In those budgets he made certain small alterations in the tariff, changes made in his cautious way, mostly of 2J- per cent, and one or two of 5 per cent, but not very many. As a matter of fact, he was criticized by the opposition that year, I think by my hon. friend from West York (Sir Henry Drayton) who called these changes piffling and microscopic, and Mr. Fielding's reply to that criticism was in these words, and I commend them to hon. gentlemen in view of the changes that have been made in the tariff this year amounting to much more than 2i and 5 per cent:

When he goes to the manufacturing districts, he will not find that these are viewed as mild as piffling reductions. They are reductions which account for a great deal. Two and a half per cent of an item in a manufacturing industry is often regarded as a very serious injury, and I know to-day there are many interests in Canada which are alarmed at the reductions that are made.

After that came the last budget speech which this great statesman made in the House of Commons in 1923, and in that budget again there were comparatively few changes in the tariff. Indeed, hon. members will remember that in his speech of last year the question of tariff stability was particularly emphasized. Many members. I think I am right in saying, thought that that was a new idea to be put into Mr. Fielding's tariff speeches, but as a matter of fact, it was an old idea and a good idea that had occurred to him, not once, but time and time again in the seventeen budget speeches which lie had made. In that budget speech of May, 1923, he said:

There is a thought which does not receive as much consideration as I think sometimes should be given in the public discussions, and that is the desirability of something like tariff stability. Business men do not like to be always threatened with changes in the tariff.

Later on in the same speech he said:

The tariff as it will be, when the changes proposed to-day come into effect, will be a moderate tariff and probably as low as the country can afford to have under present conditions.

Further on he stresses the question of tariff stability:

Business men should be able to carry on their various enterprises without the fear of being soon disturbed by further changes.

Now Sir, as I said a moment ago there were two inherent principles in Mr. Fielding's tariff administration: The first

was the desirability of tariff stability, of

which I have spoken and in regard to which I have given certain instances, and the second was the measure of incidental protection which was always a part of that particular policy. Mr. Fielding in 1897, at the beginning of his career as Minister of Finance, said:

It is a tariff policy based on the necessities of our revenue, a revenue tariff which incidentally affords a very considerable degree of encouragement to those engaged in Canadian industries and having as its leading principle the principle of the British preferential tariff.

Later on he spoke at great length on the same subject as regards incidental protection. In the year 1904, if I remember rightly, a resolution was brought forward by the Conservatives stating that the country should have adequate protection. Mr. Fielding in reply to that stated he thought the Lau-rier-Fielding tariff did afford sufficient protection at the time and had incidental protection in it, and he went on to say:

I think, Sir, as to whether or not it is adequate protection we have some evidence of a gratifying character that when the tariff without being excessive is high enough to bring some American industries across the line, and a tariff which is able to bring these industries into Canada looks very much like a tariff that affords adequate protection.

Then he goes on to speak of the great industries in the city of Hamilton and the city of Toronto, and I think in that speech also he referred to the great industries in the city of Sydney. I have always held Mr. Speaker, that the Fielding tariff had incidental protection in it, sufficient protection to enable our industries to go on in a stable manner, sufficient protection to prevent those industries being swamped by American industries. Hon. members can well remember the antidumping provisions which Mr. Fielding himself put forward; they can also remember the duty which he imposed in 1903 on steel rails coming into the country, and the minimum tariff of 30 per cent which he placed on the woollen industry in 1904 when that industry was in a very depressed state. But in all this, and in all that I have said, Mr. Speaker, the two points which I desire to stress and emphasize in this House to-day are that the Laurier-Fielding tariff was a tariff of stability and of incidental protection. And Sir Wilfrid Laurier approved of that tariff time and1 time again. For example, in 1904 Sir Wilfrid Laurier said:

We have a tariff against the United States varying from 25 per cent to 35 per cent, an average of 28 per cent. Under that tariff manufacturers ought to thrive. I am told, however, that they do not thrive and that we ought to increase the tariff. For my part I am always prepared to consider the case of an industry which being in existence finds itself pressed by foreign competition.

The Budget-Mr. Marler

Later on in the same speech, regarding goods coming in from the United States, he said:

But there is one class of goods which come from the United States which have come in in a manner which we regard as undue and to which we want to put a stop. That is the class of goods that have come in by dumping and slaughtering and by making Canada a dumping ground and a slaughter market. We have taken means to prevent this.

Later on he spoke with reference to present methods of manufacturing, and he ended his speech with these words:

We have in this country as in other countries, and indeed in all countries, manufactures carried on under a customs tariff whereby a fictitious atmosphere has created artificial conditions under which manufacturers are carrying on their operations. They have a right to expect therefore that the condition of things under which they have built up their manufacturers shall be maintained. This policy which we have adopted we believe will commend itself to the fair judgment of Canadian people the more it is debated.

Now, Sir, I have emphasized' to some considerable extent what my conception was of the Laurier-Fielding tariff. I have no desire, Mr. Speaker, to disguise my feelings on the question of tariffs. I believe that a moderate tariff-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   MINISTER OF FINANCE
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April 29, 1924