April 29, 1924

LIB

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

Liberal

Mr. MACKENZIE KING:

May I interrupt my hon. friend a moment before he leaves his reference to Mr. Fielding? May I ask him if his remarks are intended to imply that the Minister of Finance (Mr. Fielding) is not heartily behind1 the Acting Minister of Finance (Mr. Robb) in the budget which he has brought down?

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:

It is utterly impossible to make any such implication in any way. I am simply stating that I do not think the changes in the tariff that have been introduced are in line with the past traditions of the Laurier-Fielding tariff.

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

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

Liberal

Mr. MACKENZIE KING:

It is only fair to the Minister of Finance, seeing that he is not here to speak for himself, to say to my hon. friend that he is as wholly and heartily in sympathy with the Acting Minister of Finance in the budget he has brought down, as is every one of his colleagues in the cabinet.

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

Herbert Meredith Marler

Liberal

Mr. MARLER:

I certainly accept the

assurance of the right hon. Prime Minister without the slightest hesitation. There was no implication on my part whatever of any kind or description in that respect. I was merely drawing my own conclusion, which I had a perfect right to draw, in regard to. the past administration of the Laurier-Fielding tariff as it appealed to me. The Prime Minister has made a declaration, and whether I am

gratified to hear him make it or not does not matter in the very least degree, but naturally I unreservedly accept it, coming as it does from the Prime Minister.

As regards the question of tariff, I have not any particular delusions. Perhaps if we were to have perpetual peace and no tariffs raised against us, we might then be able to have the ideal conditions which possibly the hon. member for Brome (Mr. Mc-Master) desires that some day we shall have. But we have not ideal conditions in this country, and we have to deal with conditions as we find them I am quite ready to admit, even under certain circumstances that we might be able to buy goods cheaper abroad, but notwithstanding that fact, it seems to me that that is only a temporary condition and is not necessarily a condition that will last. Both Sir Wilfrid Laurier and the Right Hon. W. S. Fielding saw the effect of the temporary advantages which might be gained in buying goods cheaper abroad. Sir Wilfrid Laurier in 1904 said:

But whilst it may be a benefit to the individual Canadian consumer it is to the detriment of our community as a whole, because it throws a number of our people out of employment and causes the destruction of large amounts of capital invested in these industries.

And as late as 1920 Mr. Fielding speaking on the same question said:

We came to the conclusion that if big manufacturing concerns, in the United States had come here and closed up Canadian manufacturing interests, it was right that there should be a special duty made to meet that condition. It was considered by some as a piece of freak legislation, but I am glad to know it has been copied in other countries, and that the present government have paid us the compliment of continuing it on the statute book.

Of course the theory will be presented that if we have lower tariff, or no tariff, the workman or artisan might be able to buy his clothing and food cheaper. That to some extent is true. But what use is it for the workman or the artisan to be able to buy his clothes cheaper, unless he has work to do and money wherewith to buy that particular clothing? As a matter of fact, is it not better for the workman or the artisan to have six days a week steady work with good pay, and pay a few cents more for his boots and shoes and clothing, than to have perhaps three days' work per week and receive poor wages? We are very apt, I think, in this country, Mr. Speaker, to look too much for our examples to England or to the United States. We say that England has been successful as a free trade country, and we say that the United States has been successful as a high protectionist country. What is successful in England or what

The Budget-Mr. Mdrier

is successful in the United States does not necessarily apply to us here in Canada. I would like to see in Canada a tariff that will bring forward our manufacturers, and one that will provide the workmen with work, and make us a country dependent on ourselves and not dependent on others.

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LIB

Lewis Herbert Martell

Liberal

Mr. MARTELL:

Does the hon. gentleman think it is in the interests of the labouring man, the consumer, and the farmer, say in Nova Scotia, to have boot and shoe factories built up many miles away, with heavy freight charges, in order to make this country progressive? Or is it not rather in their interests to have a lower tariff with the United States?

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

That is a different point

entirely. If the hon. member wants to throw the bars down to the United States, I disagree with him. However, others will expatiate upon the advantages derived from the British preferential tariff. That tariff was inaugurated at a time when conditions were different, but since that time conditions have completely and absolutely changed. At that time we had not the depreciated currency to deal with, or the great spread in price between Continental labour and Canadian labour, and in my opinion, with regard to the preferential tariff, it is about time we came to our cool senses, and understood all the injury that that tariff was doing to industries in this country. The sooner we come to that conclusion, the more respect traders from Great Britain will have for us. But I do not belong to the type of protectionist who desires to protect inefficiently. I do not want the type of protection which will mean undue profits to the manufacturer. I simply ask for the type of protection that will enable us to give work to the workmen. If it is necessary in order to protect our markets that we should have a tariff higher than that, then I say that any undue profits made by the manufacturer should be returned to the people. All that I ever have asked, and all that I ask now is that a fair and reasonable cost of living tariff be maintained.

Hon. members from the West, of course, will say that I am not sympathetic with thesr needs. I do not think that that accusation is fair or well-founded. I am not unsympathetic with regard to what the West needs. No one has a greater admiration for what the people of the West have done, and no one desires to see the West progress and surmount their difficulties more than I do, but I would like to see lasting benefits provided for the West. What advantage can it be for the West if our industries in the East are curtailed, or if our industries in the East 101

happen to go out of existence? I say, "happen" to go out of existence, and I think I say so advisedly, because I have heard time and again from that section of the House that the tariff should be consistently reduced. Hon. gentlemen from the West are frank on that subject, and I admire them for their frankness and I congratulate them on the success they have attained in this matter. But when we in the East are told that this is the death-knell of protection, and hon. members from the West tell us, through their leader, that protection is to be reduced until it reaches the vanishing point, what are we to expect? The hon. gentleman from Brandon (Mr. Forke) said in this House:

I do not think that members on this side of the House are so much excited over farm implements. What they are interested in is the duties on the necessities of life.

Meaning by that, as we all know, that the duties should be taken off a great many articles, practically prohibiting their production in Canada. In addition to that the hon. member stated as regards the Hudson Bay railway-I may be digressing a little, but it will come into my remarks later on:

I want the government and hon. members of this House to understand that not for one moment can this subject be downed, because the West is determined to have the Hudson Bay railway built and it will be built, I believe, in the not far distant future.

Then their chief whip, the hon. member for Last Mountain (Mr. Johnston) again stressed the fact:

Now that the government has taken this step let them not stand still but press forward until the protective element in our tariff is completely eliminated.

I respect hon. gentlemen for these opinions. There is no bitterness in my remarks because they have their opinions on these subjects; but when we in the East hear from all sides of the House that protection is to be eliminated, naturally we have considerable fears as to our industries surviving. And as regards the remission of $750,000 this year, as spoken of by the Minister of the Interior (Mr. Stewart), surely that amount and much more than that amount is not going to help the position in the West very materially. It has always seemed to me that the difficulties in the West are not entirely d*ue to questions of tariff. I frankly admit that I have always been anxiohs and ready, with any influence or courage I may have, with any ability I may have to work, to sit down with any body of men and find out what really are the difficulties of the West and try to surmount those difficulties. But surely the tariff is not the greatest difficulty. When

The Budget-Mr. Marler

the AVest was prosperous-and the West has had its prosperous times-we in the East heard very little about the question of the tariff. But with adversity, naturally these matters arose. With adversity, due practically to over-expansion owing to war conditions, due, perhaps, to world-embracing difficulties which it is impossible to overcome at the moment, did not the West, through their political leaders, set up on an altar the god of a low tariff, or no tariff, and did they not fall down and worship that idol? Are the greatest difficulties, after all, due to the tariff? Are there not other matters which we in the East can' assist the West in, as we are always anxious and willing to assist the West to fhe fullest extent of our ability? Are the questions of freight rates, rural credits, not questions of great necessity to the West?

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

William Duff

Liberal

Mr. DUFF:

Branch lines in the West.

Topic:   THE BUDGET
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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Yes.

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PRO

Oliver Robert Gould

Progressive

Mr. GOULD:

As regards the remission

of $750,000 'which the hon. gentleman refers to, I think he would grant that the Acting Minister of Finance has taken into consideration the fact that the purchasing power of the farm has gone and that, as a result of that, the amount this year will be low.

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

Herbert Meredith Marler

Liberal

Mr. MARLER:

I did not take that into

consideration, but I am quite ready to take into consideration everything as regards assisting the West. That is what I have been trying to say for the last few minutes. But as regards the question of freight rates alone, are conditions going to be more advantageous if our industries in the East are curtailed? Railways have to live; in this country they have to live very largely by east-bound and west-bound traffic. East-bound traffic alone will not suffice, there has to be west-bound traffic also. As regards taxes, will the taxes be more easy to collect? AArill they be more easy to levy? Will a larger amount be realized in taxes if our industries in the East are curtailed? As regards rural credits, will it be easier for us in the East, in the event of our businesses not prospering to subscribe money for rural credits, as no doubt we are very willing to do? No, I have said in this House time and ti&e again and I repeat it to-day, that we in the East are ready to co-operate with the West in every particular; but we ask, and I think we ask with reason and fairness, that our industries be allowed to live and that our workmen be given work to do.

'

I come to the part of these remarks which is, perhaps, the most difficult for me to carry out, and I would ask hon. members to bear with me a little while longer. I trust they will forgive me if I infuse into the remarks which I am about to make too personal a tone. I wish to tell hon. members under what conditions I came to this House and the direct reasons I have for taking the course of action which I propose to take to-day. When I was asked to be a candidate in the division of St. Lawrenee-St. George Montreal which I now represent in this House I do not think there were many in the Liberal party who did not look upon the winning of that division as a fairly difficult task. It was not the division, I am free to admit, that I would have chosen in a first attempt to enter parliament. As a matter of fact, as all knew, a fight of that description could not be taken up without great consideration. I came to the decision to make the fight. In that decision I was very largely influenced by this factor, that if I was to enter parliament at all, the best way was by having the confidence of people amongst whom I had lived and who had known me and my family for many years; indeed, as regards my family, for generations, and if I had not their confidence, the best thing to do was not to attempt to go into parliament at all. It was under those conditions that I agreed to allow my name to go before the convention for the choosing of a candidate. But- before entering into that situation I took the advice of certain leaders of the Liberal party and I placed before them the identical conditions on which I thought I would support and the conditions which I was prepared to uphold if elected a member of the House of

Commons, and if I obtained their approval to those particular conditions. Subsequently, at the convention which was called for the purpose of nominating a candidate, I read to that convention, word and letter, those particular, self-same promises to which I have alluded. Subsequently, during the course of the campaign, I again persisted in the same policies, and as all hon. gentlemen know, I was elected to this House by a substantial majority. That is the story of how I came to this House. Since then I have advocated persistently those particular policies. I believe those policies are still approved by my electors and I have seen no particular reason to change my views. As a matter of fact they are precisely the same policies as others advanced in the city of Montreal. As a consequence of what I have told you, Mr. Speaker, I intend

The Budget-Mr. Marler

to stand by the promises I made my electors and to accept the consequences of the action which I intend to take to-day. In my humble opinion, while it is quite right that members of parliament should be given the utmost latitude in their decisions, nevertheless I hold, and will always hold, that where definite promises are made by a man to his electors, and where he believes, and in fact knows, that the policies which he has advocated in the past are still approved, he has no right to go back on those promises. To do so is merely to deceive the people whom he represents; and to that deception I will not be a party.

But in addition to that, Sir, let me address one word to hon. members on this side of the House; and I can assure them that the task which I am discharging at the present time is no light or easy one. Let me tell my hon. friends that there is no bitterness in the attitude I take towards any member of the government or any other hon. gentleman on this side. I have always considered it a doctrine of the Liberal party, clearly one of its fundamental tenets, that those who call themselves Liberals shall be entitled to act and think as their consciences may dictate. Liberals have never been bound, anywhere in the wide world, by hard and fast or immutable rules. Individually they have always followed those policies which they considered best in the interests of the countries which they have respectively been privileged to serve. Because, therefore, I see fit on this occasion to disagree with certain tariff policies of the government, I do not think that any gentleman in this House should deny me the right to that freedom of action because that is precisely what Liberalism has taught me to expect.

I do not propose for a moment to take up the time of the House in dealing with all those policies which I brought forward at the time of my election. However, if I may detain the House a few minutes longer, I want to lay particular stress on the question of the tariff as I advocated it then. I stated that my views on the tariff were that the tariff should be framed with the idea of the maintenance of established, legitimate industries, the encouragement of new industries, and the promotion of trade with other countries, and that no measure should at any time be so arbitrarily adopted as to occasion uncertainty in business and effect radical changes without reasonable notice or discussion. I still hold that the declaration I made at that time I was warranted in making, and was in accordance with the Laurier-Fielding 101 Jr

tariff as I understood it then and as I still understand it. Besides, that declaration which I then made regarding the tariff, and which I have repeated to hon. members of the House, is a declaration which was approved by the leading Liberals in the province of Quebec in the election of 1921. Of course, I know perfectly well that I lay myself open to an accusation, and I seek that accusation so that there shall be no misunderstanding as to the attitude I am taking. Hon. members will ask, why did I not accept the 1919 platform? The accusation implied in that question is a fair one for any hon. gentleman to make in this House. Well, I did not run on the 1919 platform for the reason that I never have accepted that platform so far as it relates to the tariff; it does not accord with my views. I always considered that that platform had been prepared at a time before there was, more or less, a line drawn between what I understood to be the Liberal party-certainly the Liberal party in the province of Quebec-and what subsequently became the Progressive party. I am not questioning the wisdom of any hon. member in following the 1919 platform; all I can say is that I never accepted it and do not accept its tariff proposals to-day. There are in that platform certain clauses which I think it is not unfair for me to repeat to the House to-day. Two of these clauses are the following:

That, to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery; farm tractors, mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into the same.

That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.

That the British preference be increased to 50 per cent of the general tariff.

Another accusation might be brought against me in this House, namely, that the Prime Minister said he did accept that platform. He did say that he accepted it, but he very properly explained-and I am not throwing this back at the Prime Minister in any way- that he accepted it as a guide to follow. He very clearly gave me to understand that. I hasten to amend that language: he did not personally give me clearly to believe, but he gave us generally to believe, that that tariff declaration in that platform was a guide to follow. Now, sir, I have not the slightest intention of being impertinent; but this is >

The Budget-Mr. Marlcr

matter of vital importance to many industries in the East and I think we should know from the government whether or not it is their intention to fulfil these articles in the 1919 platform. Let the government not misunderstand my questioning in that respect; I ask in all respect for information; and I merely say that if these articles in that platform are to be fulfilled, then it will be exceedingly difficult for certain industries in the East to survive. I was fully justified in taking the position I took in the election of 1921 owing to the utterances of other Liberal leaders in the province of Quebec. Mr- Taschereau, the Premier of Quebec, speaking on October 22, 1921, used these words:

Is it a time, when our industries are going through a crisis such as this generation has never known before-when our neighbours and even the Mother Country are having recourse to protection against our products, when the mark is only worth a half penny here and the European exchange is exceptionally favourable to us, when we ought to throw down all barriers and invite all foreign competition?

My Liberalism calls for a tariff which protects the consumer indeed but also our industries. These results are by no means incompatible but may well be obtained by a tariff for revenue-such as was proposed by Sir Wilfrid Laurier.

And later on he said:

May I say further on this subject that we ought to act with extreme prudence. It may be that for many years to come the tariffs of foreign countries will close their markets to our products both manufactured and agricultural. We must then become in a far larger measure the consumers of our own goods. Now, the agricultural interests cannot prosper, cannot survive, without great centres to receive and distribute their products. Our towns on the other hand cannot increase and support their work people unless the rural folks buy their manufactured goods.

And on the 6th December last at Montreal Mr. Taschereau said:

First, we want a tariff permitting the East to live and the great manufacturing centre of Montreal to prosper and expand. It is true that Quebec is an agricultural province, but our agriculture and our colonization cannot progress unless we have centres like Montreal. We need such a tariff, it is absolutely essential.

Now, Sir, I claim that the attitude I took in the 1921 election was clearly and distinctly taken on a solid foundation. I had the consent of Liberal leaders of repute to take my position with regard to the tariff policy. That policy was what I conceived it to be then, and what I still conceive it to be-the Laurier-Fielding tariff policy. In addition, my action was confirmed by the utterances of my leaders in the province of Quebec. I am pretty well convinced that if the 1919 platform as regards its tariff clauses is to be carried out, the concessions granted this year are only a start in the direction of very considerably lower tariffs.

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

Lewis Herbert Martell

Liberal

Mr. MARTELL:

That is what we hope.

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

My hon. friend says, "That is what we hope." Later on there will be still further tariff concessions, perhaps the entire elimination of many duties. Ultimately will come a peremptory demand from the Progressive party for the completion of the Hudson Bay railway.

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?

Some hon. MEMBERS:

Hear, hear.

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Some hon. members say "hear, hear" to that statement. Now, Sir, I feel I must take my stand in this respect. If other members on this side of the House view the future with equanimity, I certainly do not. And if they are not prepared now to take a stand for what I firmly, honestly and sincerely believe to be the policies of the old Liberal party-not those of the Liberal-Progressive party-they are only putting off the stand which they will have to take in the very near future. I intend to take my stand now.

Consequently for the various reasons which I have given in the course of these remarks, Mr. Speaker, I regret to state that I shall vote against this resolution.

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

Andrew Ross McMaster

Liberal

Mr. ANDREW McMASTER (Brome):

Mr. Speaker, the observations which I have to address to the House to-day fall roughly under three heads: First, a consideration of

the financial condition of the country; secondly, a discussion of the complaints of our protectionists; and, thirdly, an indication, by way of respectful suggestion, of the road on which the government should continue to travel.

I would wish at the outset to associate myself most heartily with the very gracious compliments paid by the hon. member for St. Lawrence-St. George (Mr. Marler) to the Acting Minister of Finance (Mr. Robb). I think it is of the utmost importance that we should have a clear understanding of just how the country stands as regards its finances. The Acting Minister of Finance has done what, I think, almost anyone who assumed the functions of a finance minister would have had to do in the treatment of our national debt. The minister who had already upon him the heavy obligations and responsibilities of the Department of Immigration could hardly be expected to recast the method in which the country's books are kept. But I am of the opinion that that method is undesirable. I am of the opinion that it fails accurately to set forth in an easily understandable form the real situation. I am not hostilely critical to the Acting Minister of Finance. Indeed, I think

The Budget-Mr. McMaster

the observation made a few days ago by one of the members from Toronto, in which he accused the Acting Minister of Finance of misleading the people, was particularly ungenerous in view of the fact that the Acting Minister had followed the procedure in regard to loans of the Canadian National Railways which had been inaugurated by the former Minister of Finance, the member for West York (Sir Henry Drayton). But I do cherish the opinion that the obligations of the National Railways cannot be treated other than as the direct obligations of the Canadian people.

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Does the hon.

gentleman think that a refunding operation ought to be looked upon as an increase in capital?

Topic:   THE BUDGET
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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

No, certainly not.

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Then just another question. Does he also think that if in a given year refunding operations were far in advance of bond issues, the bond issues should be looked upon as an increase of the capital debt? That is all we ever did.

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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

I would say that if a

refunding operation is merely borrowing, say, $100,000 to pay off $100,000, of course there is no increase in the capital debt; but that if you borrow $150,000 to pay off $125,000 you increase the capital debt by $25,000.

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

If that was

the result of the year's operations.

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April 29, 1924