Mr. MANION:

Would my hon. friend

permit me just a remark? I would like him, if he would, to ask the hon. member for Brantford (Mr. Raymond) at the first opportunity what the conditions are now in that city. I am told they are worse in Brantford than in any other city in Canada.

Mr. HUGHES:

That was not the condition last year.

Mr. M ANION:

But there has been another year of this government since.

Mr. HUGHES:

Mr. GOOD:

Is secession the remedy?

Mr. HUGHES:

I think I will pass that

over. I want to call your attention, Mr. Speaker, to the fact that this statement of Mayor Murphy was tumultuously applauded by the whole delegation, and it means that if protection is to be the policy of Canada, the Maritime provinces will insist on being allowed to buy where they are obliged to sell without being penalized by 'high customs duties when they do>

so. Another delegate mentioned the word secession, and the Prime Minister sternly rebuked the idea. Perhaps it was his duty to do so, but the Prime Minister is too intelligent a man, and too good a sociologist, not to know that rebuking an effect will not 'likely either remove or cure the cause; as a matter of fact, perhaps open discussion would be a good safety valve; the remoyal- of the cause would, of course, be better.

I will give you, Mr. Speaker, and the House my opinion of the situation, and it is this: If the Conservative party should be victorious in the next general election, which is not likely, but if the selfish interests and trade restrictionists of central Canada should organize and use the devices that are sometimes employed in elections, and if the major portion of the press should be so shortsighted or so selfish, or so approachable, as to lend its aid, and if when elected the party

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should carry out its promises and give the tariff screw a few turns upwards, in my opinion the end of confederation would be in sight. The prairie provinces would not, in my opinion, stand for it, and the Mari-times could not.

The emigration that is now taking place from the provinces fronting on the Atlantic, which is all too large, would then become an exodus. The stream that is now a rivulet would then become a river, because all hope would be abandoned. I will therefore appeal to my fellow-countrymen in this part of Canada to consider the situation carefully before deciding to make permanent a policy of injustice upon other parts of Canada.

The men who introduced the so-called National Policy may have been sincere and honest in their day, but we know now that they were mistaken, and if confederation ever comes to an end the introduction of the National Policy was the first step in that direction. The second step, and a very long step, was the rejection of the reciprocity agreement in 1911. That was a crime against the people of the North American continent; it was a greater crime against the people of Canada, and a still greater crime against the people of the Maritime provinces. It was an utter denial and repudiation of all the Tory promises, pledges and professions of the previous thirty odd years, and the means employed to win that election were as vicious as the end was bad, and should therefore never be forgiven by the people of Canada.

To be condemned to wander in the wilderness for forty times forty years would not be sufficient punishment for the great betrayal of 1911.

Mr. ROBERT FORKE (Brandon):

Mr

Speaker, in commencing the few remarks that I propose to make, I would like first of all to express my regret at the absence of the right hon. Minister of Finance (Mr Fielding). I am sure we are all sorry that he is not able to be back with us and take his accustomed place beside the Prime Minister on the other side of the House.

I have listened with a great deal of attention and pleasure to the speech that has been made by the hon. member who has just taken his seat (Mr. Hughes), and I think perhaps he has relieved me of some of the remarks I would have made along the lines of protection and low tariffs or free trade.

I also want to call attention to some remarks that were made this afternoon by the exMinister of Finance (Sir Henry Drayton), who I am sorry is not in his place, in con-

nection with France and the condition that country finds herself in to-day. It struck me while he was speaking that if he thought seriously and just realized what the world conditions have been during the last few years he might perhaps see some relation between those conditions and the policy which he advocates-the policy of high protection, of one country building up high barriers against trade with another country. Everyone, I think, who has studied the causes of war and what leads to war, will1 acknowledge that it has a great deal to do with what may be called trade influences; and just as long as we have economic warfare between the nations of the world just so long will there be danger of actual warfare. But once people begin to trade with each other, once there is an exchange of commerce between one nation and another, an atmosphere of good will is created and the chances of war are very much diminished. That is about all I have to say in connection with the remarks that were made by the ex-Minister of Finance. Those remarks were a repetition of the arguments that we listen to here, day by day, month by month, as to what we should do to remedy existing conditions-just a little more protection, we are told, and everything will be lovely-everything will be all right. I am surprised at the barrenness of the suggestions that are being made from that part of the House.

Now, I want to say a few words in regard to the budget that was brought down by the hon Acting Minister of Finance (Mr. Robb) the other day. I think, perhaps, that budget reflected to some extent' the conditions that exist in the country at the present time. Things are not very satisfactory. We have not progressed just as rapidly as we would have liked during the past year. The budget, upon the face of it, bears the impress that things are hod very satisfactory; and I think in commencing that I might characterize the budget as I have seen it characterized in the press-as a stand-pat budget, adopting the position "just as you were" and really leaving us in exactly the same position in which we found ourselves at the commencement of the year-no progress, nothing changed, we are e t in the exact position we have been in during the last twelve months. I am sure that the position of the country has been emphasized quite sufficiently by hon. members to my right. Sometimes I am surprised that they have so little faith in the capabilities of the people of Canada and in the country itself. I for one am not prepared to say that things are satisfactory-far from it-but I

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do not for a moment suppose that they are quite as bad as we are continually hearing; unemployment everywhere and nothing but destitution and want in this great Dominion of Canada. I am quite prepared to admit that things might be better, but conditions are certainly not as bad as they are depicted by some of the members sitting to my right who have spoken this session. I agree with the hon. member for Kings (Mr. Hughes) that even in Brantford to-day conditions are not so deplorable as they are represented to be. I think the Prime Minister in his speech on the Address, at the beginning of the session, made the statement that things were better in Brantford than they had been for a number ,of years, and he also pointed out that the duties upon farm implements had been reduced. When we take that into consideration, and when we find that industries have been benefited by a reduction in the duties upon the implements which they produce, I am sure there should be no hesitation in travelling further along that line.

I also want to say, Mr. Speaker, that the financial statement given to the House does not reflect exactly and faithfully the conditions of the country at the present time, nor our financial standing either. First, I wish to say a few words in regard to the different methods of book-keeping that are practised by successive governments. Let me explain that in discussing this matter I speak as a plain man who has no knowledge of accounting; but it does seem to me that there should be no difficulty in the government making up the accounts in such a way that at the end of the year, the ordinary man, the man in the street, who after all represents the great majority of the people of this country, should be able to form some idea, a correct idea, as to the national finances. We had the spectacle here the other day of the Acting Minister of Finance presenting a statement purporting to show what the finances of the country actually were, and almost immediately afterward the ex-Minister of Finance getting up in his place and stating conclusions directly the' opposite. If we have that conflict in the House of Commons what will the situation be out in the country? How are the ordinary people of Canada going to know whether we have a surplus or a deficit as a result of last year's administration of the country? I think, Mr. Speaker, that these positions are intentionally assumed. It is done for a purpose; one side wants to make things look just a little better than they are, and the other side wishes to represent them as just a little worse than they appear to be.

Mr. ROBB:

My hon. friend will at least

give us credit for having taken less money from the people, fifty-two millions less money.

Mr. FORKE:

I am not going to do any

injustice to the Acting Minister of Finance, or even to his critic, in saying that the statements they made were not true.

9 p.m. I have no doubt that what both gentlemen said was true; but they have such a way of manipulating figures and presenting them, putting them in different places and under different headings, that the result is to confuse the ordinary man; and when these gentlemen make their statements the ordinary man on the street, as I have already said, is no wiser than he was before.

Mr. JACOBS:

Will the hon. gentleman

tell us what the right figures are?

Mr. FORKE:

Well, I am going to try and give you a few of the conclusions I have come to. I have already said that I have not much knowledge of accounting, but I have endeavoured to draw what inferences I could from the statements that were made in the House the other day.

Before going any further let me say that I noticed that the only thing which had brought an increase to the revenue of the country was the income tax, and we are told there has been an increase in the revenue from that source of $2,350,000. I wonder what that means; I am rather surprised at it. We are told that the country has not been prosperous, that we have not been travelling along the lines of progress just as rapidly as we would have liked to go, and on the other hand we are informed that the revenue from income tax is increasing.

Hear, hear.

Mr. FORKE:

Hon. members may applaud but I should like to know the reason for this. We had no explanation from the Acting Minister of Finance when he brought the budget down; perhaps we will get it at some time in the future.

Mr. CARROLL:

The country is more prosperous.

Mr. FORKE:

Is it more prosperous?

I hope it is true but I "hae ma doote" as they say in Scotland. There are several possible explanations. It may be that the wealth of the country is getting into fewer hands, that there is more wealth and also more poverty in Canada-that may be the explanation of the increased revenue from income tax. If that is true the fact is to be deplored; we do not want that condition

15S0

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in Canada. I have often made the statement in this House that I believe the policy that we have adopted is leading towards that condition-that we will have wealthy people and that we will also have poverty. What we want in Canada is moderate wealth widely distributed and a large population fairly well-to-do; that is the condition that I would like to see prevail in this country. However, I should like at some time to get an explanation from the Acting Minister of Finance as to what he thinks is the reason that more income tax is being paid in Canada under present conditions than was paid in previous years. It is undoubtedly true that the people of Canada to-day are very much concerned about the magnitude of our national indebtedness. There is no denying that fact. On the street, on railway trains, everywhere you go, you will find people expressing anxiety about our indebtedness and inquiring where this is going to lead us. There must be a stop put to excessive public expenditure some da}-; we cannot go on year by year adding to our national debt. There must be a turning around, or it does not require a prophet to see that some day in the future this will be disastrous. We are continually hearing about economy. I am almost afraid to mention the word in this House 'because it is so often mentioned, but I sometimes think that governments, very much like individuals, acquire the spending habit and they cannot get out of it. Consequently we go on year after year very much as we have been doing in the past.

As regards the financial statement, the minister claims a surplus of $5,823,162 for the year ending March 31 next. Included in this is $4,000,162 of accrued interest on Greek and Roumanian loans that have now been transferred from an unsecured to a secured footing. Does the minister claim that we have any more money now than we had before, that anything has come into the treasury7 by transferring this amount from one account to another? That is all it amounts to. The security may, perhaps, be a little better, but it is a stretch of the imagination to put down $4,000,162 as an increase in the revenues of the cpuntry during the ye

fMr. Forke.]

was going to be a deficit. Everyone was looking for a deficit. I heard it on the street; I saw it in the newspapers, and now the Acting Minister of Finance comes down with a statement that we have a surplus7 of $1.820,000. That was, indeed, a very pleasing surprise, and I was delighted to hear members on the other side applaud when that statement was made. I wonder if this is true, and this is where I get into trouble again in trying to understand something of the finances of the country. I noticed, after the Acting Minister of Finance had spoken for some time and read a few more items, it came out something like this that we almost had a deficit of $13,000,000. I am unable just to understand this. The ex-Minister of Finance, after making a careful survey, had it this way, that our expenditure was $360,000,000 and the receipts for the year were $344,000,000, and he figured out a deficit of $16,204,000 on the year's proceedings. How is an ordinary man to understand exactly where we stand when we find the two financial authorities in this House so completely disagreeing in regard to conditions as they are?

There is another item to which I would like to call the attention of the House. The estimates for the year 1924-25 were given as $329,086,305.97. The minister states that the expenditures, when the year closes on March 31, will amount to $319,000,000. There is a difference of $10,000,000 between what the expenditures will 'be and what the estimated expenditure was at the beginning of the year. This is very interesting-a saving of $10,000,000. The government estimated that our expenditure in round figures would be $329,000,000, and now we find they are going to get through with $319,000,000. I hope the minister will give us some explanation how this $10,000,000 has been saved because, if he does, we shall get some lessons in economy. The government must have been practising economy when they got through with so much less than they expected to spend after a careful estimate of expenditures at the beginning of the year. If it should turn out that our expenditure at the end of the year was anything like as large as the estimated expenditure at the beginning of the year, we would have a deficit of about $7,000,000 instead of a surplus of $5,000,000. These are some of the difficulties that I have met in trying to understand the budget statement that was brought down the other day.

There were expenditures in connection with the Canadian National Railways. During the year the government guaranteed bonds of the Canadian National to the amount of $81,-

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000,000 and the total obligations for the year amounted to apparently something like 8118,000,000. These may be called contingent liabilities-that is the term used by the minister-not a direct liability of the country. But who owns the Canadian National Railways? The people own them and the debt of the Canadian National Railways is a debt that the people of Canada must pay some day. That is a fact that I feel no great pleasure in stating, but I do not see any use in trying to blind ourselves as to the facts. We may as well face them and see what our present financial condition is and try to remedy this state of affairs. That is about all I have to say at the present time in connection with the finances of the country. In commencing, I said that I was a plain man, not very well posted in regard to finances or accounting, but these are some of the deductions that I have drawn from the statement made by the Acting Minister of Finance. I hope they may be more favourable but these are what I believe to be the facts of the case.

In connection with the Canadian National Railways, there is a suggestion which I would like to make at this time. It is not original; it has been stated in this House before. I believe it would be in the interest of all concerned if the capitalization of these rail-waj^s were written down to their actual physical value. I see no good purpose being served by carrying them on at a fictitious capitalization. It is discouraging to the management; it gives a false impression, and if the capitalization were written down, we would be in a position to know exactly the capabilities of our National railways. If the amount was reduced, it is quite possible that in a few years the fixed charges of $40000,000 may be met by these railways. We all look with hope to the future, and expect the day will not be far distant when these railways, instead of being a liability, will be an asset to the Dominion of Canada. We have in this country two railways that, I think, we may be proud of in some respects. We have a good system in the Canadian National Railways. I hope all of us are proud of the Canadian Pacific. I would not for one moment have the idea go out that any of the members of this House had any hostility to the Canadian Pacific. Its progress, its prosperity, its welfare is as essential to the country as that of the Canadian National. It would be a catastrophe, a calamity, should anything happen to the Canadian Pacific Railway, but there are some suggestions that might be handed out to the managements of both these

railways. This also is not original, but it would be a good idea if someone could get the ear of President Beatty of the Canadian Pacific and the ear of Sir Henry Thornton of the Canadian National Railways and intimate to them that it is time they were getting together and cutting down some of the extra expenses that are incurred through duplication of services on these two railways. This idea that these two railways have to continue cutting each other's throats, tiying the one to beat the other in getting traffic and all that sort of thing, will not get us out of the dilemma in which we are to-day. I am certain that a great deal of saving, of economy, could be effected were the managements of these two railways to work together harmoniously to this end.

. I think the Canadian Pacific Railway would be quite agreeable. I am sure they are anxious to make as profitable a showing as possible and I think that both railways as well as the country would be benefited by some arrangement of this kind. If this could not be done then I should be inclined to pay some attention to the suggestion offered by the hon. member for South York (Mr. Maclean) that there should be an amalgamation of the two railways. This may look like a dream to-day but I want to tell the House that there have been suggestions made by the hon. member for South York in days gone by which, however visionary they appeared then, later became realities. It is therefore not without the bounds of possibility that the suggestion he makes ia this regard may be an accomplished fact some day. One thing is certain, and that is that we cmnot go on as we are doing at present. It has been suggested sometimes that the remedy lies in an increased population which would provide greater traffic for the railways. That is one solution. But it seems to me that the railways could be more economically operated than they are at the present time. At any rate the condition is serious and drastic remedies are needed; and the opponents of government ownership can get no satisfaction out of things as they stand now. Even if we sold the Canadian National railways, does anyone think for a moment that anybody would buy them at their present capitalization? They would be sold at their physical value and the country would still have to bear the burden in connection with that overcapitalization; it would have to pay the interest that accrues on the bonds that were sold to build them. So that private ownership will not relieve us from any of our difficulties in that respect.

The Budget-Mr. Forke

I want to say a few words now in regard to the tariff. I think that the hon. member for Kings (Mr. Hughes) has possibly voiced a great many of the sentiments that I might express myself, and I question whether any of us could say very much on the matter that is new. This question has been debated so often from every angle that perhaps my own views have already been well expressed. However,

I shall offer a few remarks in this regard. I have in my hand some correspondence between the Minister of Trade and Commerce (Mr. Low) and Mr. H. G. Nickerson, of Prince Rupert, British Columbia. This correspondence relates to the purchasing of cement. There is apparently a regulation in the Department of Trade and Commerce which provides that where a firm tenders to sell cement and an opposing company outside . Canada also tenders, even under more favourable conditions, the final decision of the matter shall rest in the hands of the Minister of Trade and Commerce. He has the last say as to what the specification shall be and what kind of cement shall be used in the erection of any buildings or dry docks, as I suppose it was in this case. I do not intend to read the correspondence, which possibly will be referred to during the debate, but it goes to show that a very large saving could have been effected in the purchase of this cement had it been obtained from either England or Belgium, and it would have been of the very same quality as the Canada Cement Company was supplying. But these other tenders were not allowed; they were ruled out of the specifications. This kind of thing cannot continue. When a cement company in this country gets a duty of 8 cents per sack on its product it should at least be content with that degree of protection and should then be prepared to take its chance without other interference from the department or from any other source. I have mentioned this matter only in passing; the facts of the case are before us and I have all the correspondence between the minister and the company who seem to think they have some reason for complaint.

It was hoped, at least in this quarter of the House, that the present budget would show reductions on the necessities of life for the masses of the people. That I think was emphasized several times in this House last year. It was pointed out that while we were thankful for a reduction on implements of production we were even more anxious to see some reduction on the necessities of life for the great masses of the people, and we had expected that something

TMr. Forke.]

would be done along that line during the present session. With the permission of the House I am going to quote a few extracts from some of the speeches made by the Prime Minister (Mr. Mackenzie King) in 1921. Some of -these extracts I have taken from Hansard. For example, the Prime Minister declared that the guiding principle of his party would be to increase production and thus decrease the cost of living, keeping in view not only producers but consumers. On October 7, speaking at Halifax, as reported in the Halifax Chronicle, he said:

On the implements of production, and on the necessaries of life the tariff should bear lightly. The home and its needs will be our first consideration in revising the tariff.

On March 13 at Moncton, as reported in the Daily Times, he said:

Reduction of the duty on implements of production was vitally important, as was also reduction as far as possible of the taxes on necessities of life and the needs of the home.

At St. John as reported in the St, John Times he said:

The tax on necessities of life should be light. Along those lines the Liberals proposed to revise the tariff.

I come now to Ontario. Speaking at Sarnia he said, according to the Times of November 2:

The implements of production should be taxed as lightly as possible. The same applies to certain classes of necessities of life, food, clothing, etcetera, and the masses of the people should not be overtaxed on cost of food, clothing and other necessities.

At Sudbury he spoke along the same line. He advocated the removal of taxation as far as possible from implements of production, and he said that the necessaries of life must also be freed of taxation to the greatest possible extent. At Port Arthur he declared that the Liberal party stood for downward revision of the tariff, to bear lightly on necessities of life and implements of production.

At Pembroke, Gananoque, Calgary, Edmonton and numerous other places the Prime Minister stressed the fact that it was necessary to reduce taxation on the necessities of life. Now the cost of living has not been reduced. Will any hon. member say to-day that the cost of living in Canada is lower than it has been all along? It is not. And as I have frequently stated, Canada is one of the dearest countries in the world to live in. That is one of the sources of our trouble; it is the cause of depression in trade and business so prevalent now. I have declared time and time again that the cost of living is so high that the high wages that must be paid are reflected in an increased cost of production, so that the products of the factories cannot be sold

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in competition with those of other countries where the cost of living is cheaper. Hon. members to my right talk about low standards of living in the Old Country. I would not put it that way; I should say that what is low in the Old Country is the cost of living. I question very much if the working people of the Old Land live at a very much lower standard than the working people of Canada to-day. It is a glib phrase to use "The low standard of living over in England," and I think we are inclined to exaggerate conditions there. Personally I challenge the statement, and I question very much if our operatives in Brantford, Toronto, Hamilton or any other manufacturing, centre of Canada are living any better than the great mass of the working people in great Britain.

Mr. CARROLL:

Will the hon. gentleman say that the cost of living to-day is as high as it was in 1921 when the right hon. Prime Minister was making those statements?

Mr. FORKE:

Mr. Speaker, I think there is very little difference. Some things have come down in price, but the great mass of commodities used in the home are not very much cheaper at the present time.

Now, I want to allude to some of our western conditions, because I believe that prosperity in the west is reflected all over this Dominion. The products of that part of Canada must find a market outside. The arguments we heard in connection with the Maritime provinces apply directly to the provinces of the west. No system of protection under the sun can help the prairie provinces, and I would be inclined to say that a good many of the farmers in the central provinces are not very much benefited by protection. There are two factors to be considered in the prosperity of the western provinces-the tariff and transportation. I admit that perhaps at this moment the most important question we have before the House is transportation. Our transportation difficulties must be settled at this session of parliament. The government cannot evade the problem, and consequently its right settlement is one of prime importance. As regards the tariff, we are anxious for proper conditions. But the tariff will probably be up next year,-I think it will from what I can understand of the opinion of the House at present. One section is not content with the tariff in one direction, another section is just as much discontented in another direction. We have to fight the issue elsewhere and come back to this House and settle it perhaps in a more conclusive manner than it has been settled for a great many years past.

It has been mentioned already this evening that our factories cannot compete owing to the underpaid labour in Europe and the high paid labour in the United States-two entirely different points of view. The fact is that until we get rid of the idea that our factories cannot compete I do not think they are ever likely to attain any degree of prosperity. I think they might succeed if they got a proper understanding of their position. They have repeated it so often that our industrialists have almost convinced themselves that they cannot compete with their rivals in other countries. But the battle is already half lost when you make up your mind that you cannot compete with the other fellow. Just as long as we find the manufacturers coming to Ottawa seeking for more protection for their industries, just so long will we find their factories not so well equipped as they might be, and not conducted as efficiently as they ought to be; in a word, they are looking for help in the wrong direction.

The burden of taxation to-day is pressing heavily on the shoulders of the people. Dominion, provincial and municipal taxation together make a very heavy load. That I think has probably held us back more than any other factor. Of course the tariff, as the Prime Minister has told us time and again is part of our taxation, and a big part. If we are going to succeed in this Dominion we must engage in industries where we can successfully compete, where our energies will give us the greatest economic returns. We might commence growing oranges if we had adequate protection and proper conditions. But would not that be the height of foolishness? We might apply that thought to some lines of manufacture in which we find other countries can produce so much more cheaply than we can. Why do we not devote our energies to those lines of industry in which we can compete with other countries and which will give us the greatest economic returns? Interchange of goods can be beneficial to both parties. Too often it seems to be the idea that in trade one must get the better of the other. That is not necessarily so in business or in commerce. The interchange of goods-and sometimes the interchange of ideas, Mr. Speaker,-is all right and can be of benefit to both parties. I am quite ready to admit that it is just as foolish to import goods that we can produce as satisfactorily as any other country as it is to continue making goods that it is not economically sound for us to manufacture.

The Budget-Mr. Forke

Mr. MACLEAN (York):

Will the hon. leader of the Progressive party allow me a question? He says that if we can produce anything as well as other countries we will succeed. I want to direct his attention to an industry in my constituency and to base a question upon it. I refer to market gardening. Those engaged in it can grow their products as cheaply as they can be grown in the United States, but by reason of the earlier season south of the border their home market goes to their competitors in the States, and consequently our market gardeners are large losers every year through this discrimination. I think they are entitled to some protection, and they think so too. What accounts for their disadvantage is the difference in climate, not what my hon. friend says.

Mr. FORKE:

My hon. friend has referred

to the climate. I think perhaps there he has struck the nail on the head. If our climate is not so well suited to the production of early vegetables as is the United States Climate, then perhaps we had better let the people there produce them.

Mr. MACLEAN (York):

No. It is the question of season rather than climate and the hon. gentleman would put a burden on those who have this disadvantage.