February 12, 1925

CON
LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

My hon. friend opposite

laughs. Well, I will examine the Speech in detail and discuss it with him as I proceed.

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

The door is open.

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

I repeat, the Speech from

the Throne shows great vision; it shows a great advancement over many that have been read in this House before. However, let us examine the document.

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CON
LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

My hon. friend will be

saying, "hear, hear" many times before I get through. This is the paragraph to which I have reference at the moment:

It is to be borne continually in mind that the existing burden of taxation is due mainly to uncontrollable

expenditure in the nature of payments and obligations arising out of the war, and to the encumbered position of the National Railways.

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CON
LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

Let me assure the hon.

gentleman that what is there said is absolutely true to the last word, and I will prove it figure by figure and dollar for dollar to the satisfaction of the House before I am through.

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CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Whoever challenged it?

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

I will take up with the exMinister of Finance (Sir Henry Drayton) various figures with a view to finding out what is controllable and what is uncontrollable, and also what this government is liable for as against what can be charged to the responsibility of the hon. gentleman's government. I should like, if I may have the permission of the House, to place on Hansard in full a statement, which I shall read briefly, so that hon. gentlemen may have the facts before them. This is a very simple statement, but I have prepared it with the object in view of taking it up item by item and discussing exactly what our expenses have been, so that we may decide for ourselves the accuracy or otherwise of what is therein set forth. Receipts for the fiscal year ending 31 March, 1924, were as follows:

Receipts for the fiscal year ending 31 March, 1924:

A. From ordinary sources not

war-consisting entirely of customs and excise-and a comparatively small sum from interest on investments-and excluding revenue from services in departments.. .. 165,3-15,546

B. From war taxes-such as income, business, profits, sales, cheques, receipts, transportation, trust and loan companies, banks and interest on advances to Imperial and

foreign governments 204,862,739

The Address-Mr. Marler

are taken from the public accounts. The controllable expenditure of 1914 amounted to $78,397,000, and in 1924 it was $103,000,000; an increase of $25,000,000.

Now, Sir, I do not say that our expenditure in 1924 was as low as it should have been.

I believe at that time that we had got into very extravagant ways. But that is not the point at all. The point is that the public became used to certain services in 1914, the war intervened, the value of the d'ollar depreciated very much indeed, and the real comparison of the public wants to-day is between the cost of the services they had before the war and the cost of the same services to-day. The figure which I have given of $25,000,000 is the increased cost of those services.

But I want to go a step further, with all due regard to my friends opposite. In that controllable expenditure are certain items for which this government was in no way responsible, and I am treating the fact with the utmost candour and the utmost sincerity, because I believe t)he public should foe put in possession of the facts irrespective of everything else. In that $25,000,000 there were items such as expenditure on our merchant marine, the Canada Highways Act and the Victoria shipowners, amounting to over $6,000,000, which leaves the difference between the controllable expenditure in 1914 and in 1924, for which this government is responsible, at the sum of $19,000,000. Now, if you realize the reduced value of the dollar, if you compute quickly in your mind the fact that the controllable expenditure for the selfsame service was $78,000,000 in 1914, you cannot say that an increase of $19,000,000 is out of all proportion for the year 1924.

Much has been said and much has been written on the question of departmental expenditure, the cost of the departments has been criticized to a very great extent in the public press and elsewhere, and it has been said that we have retained in the departments many officials whose services might well be dispensed with, that the cost has been built up to an extraordinary extent, and as a consequence the country was being deprived of revenue and paying taxation which should not have been imposed upon it. Well, the net cost of the departments-because it is only right to take off revenue derived from the services of some of them-in 1914 was $65,000,000, While in 1924 it was $86,000,000, or an increase of approximately $20,000,000, which does not seem to be excessive. I do not say that an attempt should not be made to bring the cost down, but owing to the vast increase in what has to be collected, when we

realize that the revenue from taxes in 1914 amounted to $128,000,000, as against $370,000,000 in 1924, when we realize that the disbursements in 1914 were $185,000,000, and in 1924 $334,000,000, we cannot say that the cost of government to-day is a great deal more than it should be or that the cost can be severely cut down.

There is another question that I desire to take up before leaving these figures, a question that I have looked into with some care, and one in which I think not only hon. members but the public generally have some concern. Indeed, my right hon. friend who leads the opposition (Mr. Meighen) brought this matter up in his address a few days ago. He was quoting, as he will remember, Speeches from the Throne of other years. He quoted from the Speech of 1923, and he used these terms:

Do you realize, Mr. Speaker, why none of these are mentioned this year ?

He was speaking about revenue and expenditure.

For the simple reason that the condition in every instance is distinctly the opposite: instead of a decline in the public expenditure and an increase in the public revenue there has been to date a decline of $50,000,000 odd in the public revenue and an increase of $2,300,000 in public expenditure.

Surely my right hon. friend is not going to take the figures with respect to the middle of the year and come to the conclusion that they are a criterion of what the expenditure will be for the whole year. Moreover, why should he glory in the suggestion that there has been a reduction in revenue? The only reason there has been a reduction in revenue, is simply because this government- has made an attempt, and an honest attempt, to reduce taxes. But further than that, if he will examine the figures with respect to the last year that his government was in power he will find that there was a reduction of $54000,000 in the revenue in that year. So I do not think his criticism in that regard is well founded. In order to make a fair comparison I submit that it would be proper to take two years of the administration of this government and two year3 of the administration. of the previous government, that is to say, the fiscal years ending March 31, 1921 and March 31, 1922, which were under the control of the previous government, and the fiscal years ending March 31, 1923 and March 31, 1924, which were under the control of this government. A comparison of those figures, would, it seems to me, be eminently fair in every way. I have made that comparison, and I would like also to have this table put upon Hansard:

The Address-Mr. Marler

1921-1922 1923-1924

Not controllable expenditure War services partly con- 306,036,227 385,443,814trollable

Services in departments in 66,228,857 31,261,033part controllable 182,008.085 168,792,462Merchant marine 24,273,856 7,479,856Canada highways

Capital, canals, buildings, 3,934,009 9,920,606harbours, docks 23,650,266 IS,958,515Miscellaneous capital charges 408,709 2,297,655Total all heads, except rail- ways 696,539,999 624,153,941Total expenditure not controllable

Total expenditure in part con- 396,036,227 385,443,814trollable 300,503,772 238,710,127Total expenditure as detailed above 696,539,999 624,153,941

For the years 1921 and 1922, therefore, the total expenditure, in part controllable, was $300,503,000, and in 1923 and 1924, under the same heads, it was $238,000,000, or a decrease in the two years of $62,000,000. In addition to that, if certain items such as those I have spoken of are taken off-the merchant marine and other expenditures of that description-the decrease, instead of being $62,000,000, will amount to about

$so,ooo,ooo.

Now, I want to return to the question that I started out first of all to speak about, and to which the Speech from the Throne also makes reference in very clear and distinct language. I am sorry, Mr. Speaker, that these figures are so terribly unpalatable, but they have to be given in order to make this point quite clear. The Speech from the Throne says:

It is apparent that even the most rigid economy in public expenditures will not suffice to solve this pressing problem and the problem of taxation incidental thereto.

_ That is another general statement, and it is correct. An examination of the public accounts for the year, item by item, will show that it is practically impossible to cut off expenditure under any of those items. Take our war taxes, which in 1924 amounted to $370,000,000: these taxes were in payment of our war debt and in payment also of our pensions and of administration as regards war services. It is true we had a surplus in that respect of $50,000,000. While on the question of war taxes may I suggest to the government that if at all possible these taxes in respect to war services be segregated from all others. The people have borne these taxes, have endured their stagnating influence for many years without a murmur, and they 4 p.m. have done that because they have felt that these were war taxes and 8i

for war purposes. I do not say it is possible to do it, but if it could be done it would be highly desirable to segregate them for that particular purpose. The war debt could then be gradually eliminated1 and the taxes correspondingly reduced.

Taking our ordinary taxes, of which I have spoken previously, these represented expenditures connected with the cost of the departments, the Canadian Government Merchant Marine, highways, and other items-for the present I leave out railway expenditure. The large increase in that class of taxation is without a doubt represented by the interest on the non-war debt. In 1914 the interest on the non-war debt amounted in round figures to $13,000,000; in 1924 it amounted to $29,000,000, an increase of $16,000,000.

I do not want to go back particularly to the past for the purpose of dealing with our past expenditures, but we are all well aware of what happened at the beginning of this century. We were all imbued with the idea that the twentieth century was to be "Canada's century." You heard that from the Atlantic to the Pacific; everybody had it, rich and poor, young and old. As a consequence we involved ourselves in vast expenditures. We increased our manufacturing plants. We trebled our railways. We urged our farmers in the west to hurry up, to take up more land, to extend their activities, and this of course, involved the requirement of greater credits. But the public have been inclined to say: "Oh, it is the politicians who have done all this. It is the politicians who have been responsible for all this expenditure, the politicians who have asked us to enter upon this extravagance." Well, Sir, all I can say in that regard is this: Remember what happened in connection with the building of the Grand Trunk Pacific and the National Transcontinental. Examine, ' if you will, the resolutions of boards of trade in all parts of this country, which begged and prayed the government of that day to proceed with the construction of the National Transcontinental and the Grand Trunk Pacific. Examine what railway men like Wainwright and Hays said. Examine the petition to the government signed by Wainwright, Hays and the late Senator Cox, who said that with all possible speed the new railway should be built from the Atlantic to the Pacific. More than that, you can examine the various proceedings of the Grand Trunk shareholders in England who, without a dissenting voice and with prolonged cheers, declared that the Grand Trunk Pacific project was not only necessary for Canada but necessary for the saving of the Grand Trunk itself. These were their words at the shareholders'

The Address-Mr. Marler

meetings. That being the ease, it seems foolish for the public not to realize that they have been just as much responsible as the government of that day and the governments that followed for the expenditures which did take place in this connection.

In discussing this particular paragraph in the Speech from the Throne, and the truth in substance of that statement, we must remember that this vast expenditure in the days gone by has had a very pronounced effect upon the taxation of the present. Our expenditure in those days was out of all reason; it was a mad, drunken orgy of expenditure, and we are paying for it now in taxation which we cannot escape. We entered upon all these enterprises with our eyes wide open and there is no reason why we should now go into mourning and say we did not realize what was going on.

Take, for example, the figures as regards capital expenditure, and I may say the comparisons I am about to give are of very considerable interest. In the five yearn from 1896 to 1900 we expended in railway subsidies and in building canals, harbours and docks some $34,000,000. In the period from 1901 to 1905 we increased that capital expenditure to $54,000,000. In the five years from 1906 to 1910 that expenditure increased from $54,000,000 to $134,000,000. From 1911 to 1915, entirely exclusive of war outlays, our capital expenditure increased to $197,000,000; and from 1916 to 1920 it rose to $251,000,000.

As I say we cannot get away from paying the interest on these various obligations which we have incurred. I do not think we can very seriously cut down departmental expenditure, as one can see from a careful analysis of that expenditure. There have been increases in the expenditure of the great departments, for example, of Customs and Excise, Post Office and Finance. There have been great increases in the revenue collected, and great increases in the services. In other departments, such as Agriculture, Interior, and Health, again there have been increases, but those increases, Mr. Speaker, are due, in so far as anyone can see to the demands from the public for the rendering of certain services, and expenditure cannot be cut down in these departments unless the public itself is willing to do without the services which it had before the year 1914. We can make up our minds to that situation very clearly and very distinctly. If we want those services we have to pay for them. That expenditure must be met by taxation, and that taxation must come out of the pockets of the people. tMr. Marler.]

There is one item which I hesitate I admit to speak about in this House but which it seems to me should be spoken about no matter how unpopular it may be. A very good plan, very earnest gesture on our part would be to cut down our own indemnities.

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?

Some hon. MEMBERS:

Hear, hear.

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

I do not hear any great

applause to that suggestion.

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PRO
PRO

John Pritchard

Progressive

Mr. PRITCHARD:

May I put a question

to the hon. gentleman whose speech I am enjoying very much?

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LIB
PRO

John Pritchard

Progressive

Mr. PRITCHARD:

He mentions this plan of retrenchment. I would ask is not the increase in uncontrollable expenditure largely due to the increase of salaries?

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LIB

Herbert Meredith Marler

Liberal

Mr. MARLER:

It has been increased to

some extent by salaries, to the cost of living bonus and the betterment of salaries, but the public services have grown to a very large extent. These services were asked for by the public and the public is now paying for them. However, I am quite serious in this respect: A very effective measure would be to cut down our own indemnities. If we want to cut down taxes why should we not give that gesture to the public and say we are willing to cut down our indemnity. Why should we go to our constituencies and say "You cannot have this and cannot have that," and yet keep for ourselves the increase that was made in our indemnities. There is no reason why we should not do as I suggest, no reason why we should not give an example to the rest of the country by doing it.

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PRO

Agnes Campbell Macphail

Progressive

Miss MACPHAIL:

By what amount would you suggest the indemnity should be reduced?

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LIB

Joseph-Charles-Théodore Gervais

Liberal

Mr. GERVAIS:

According to the number

of children.

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PRO

February 12, 1925