Hon. R. J. MANION (Fort William and Rainy River):

Mr. Speaker, I have a telegram from Toronto on which I wish to base a question. I presume it is an item in the Mail and Empire of this morning. It says:

A Mail and Empire agency despatch from Geneva says: "Canadian government has rented pretentious offices in the Quai Woodrow Wilson, where Dr. W. A. Riddell, permanent envoy, expects to entertain Canadians all summer."

Is this entertaining part of the policy of economy, or is it a correspondent's picturesque touch?

I want to ask the Prime Minister (Mr. Mackenzie King) if there is any truth in the statement made in this despatch with regard to the rental by the government of offices in Geneva, and if the government will make a statement in that regard.

Right Hon. W. L. MACKENZIE KING (Prime Minister):

It sounds a good deal like some despatch the Mail and Empire might get. I do not know anything of the matter referred to. I will make inquiry.

The Budget-Mr. Carroll

Mr. W. F. CARROLL (Cape Breton South and Richmond):

Mr. Speaker, will you allow me to join with those who in this debate have expressed regret at the continued absence from the House of the Minister of Fir ante (Mr. Fielding). We all miss the gentleman whom the newspapers of this country in recent years have called the "little grey man from Nova Scotia", and who as a matter of fact is a great Canadian statesman, a man who has gi seed the political life and the legislative halls of this country for well nigh half a century; a man who has an international reputation and who is looked upon in all quarters as one of the empire's ablest and most astute statesmen. That being true, we are nevertheless deeply grateful that we have as Acting Minister of Finance the keen, alert, active and. businesslike member from the district of Huntingdon, (Mr. Rob'b), who in the two budget speeches he has delivered in this House ho? placed himself in the front rank of finance ministers in this country.

Coming to the subject matter of this debate, me budget, I wish to say at the outset that there is nothing startling or sensational in it. It is, however, a dear, brief, businesslike statement of the financial condition of Canada, delivered by a businesslike Acting Minister of Finance. It does contain some surprises. During the past year, especially in the last six months of it, we were told by the press of this country that a deficit would be shown in the budget statement. It is a matter of gratification, however, that notwithstanding the world-wide depression which Canada has unfortunately shared; notwithstanding a considerable decrease in revenue; notwithstanding the fact that we lifted from the shoulders of the Canadian people last year millions of dollars of the weight of taxation, the Acting Minister of Finance is able to come down to this House and announce-'and announce truthfully-that we have a surplus of almost $2,000,000 of revenue over actual expenditure. That, Mr. Speaker, is a statement which will appeal to the people of this country and will give them renewed hope and renewed inspiration as to what Canada may be for the future.

102i

Coming down more particularly to the items in the budget, representing as I do a maritime country where upon the success of our fishermen depends the success of the commercial and other interests of the province, it is a matter of gratification to me, as it must be to the fishermen of Nova Scotia, to know that the acting Finance minister has reduced from 27 1-2 per cent to 15 per cent the customs duties on engines to be used exclusively in the propulsion of boats bona fide owned by individual fishermen for their own use. This, Mr. Speaker, will be a benefit to the fishermen not only of Nova Scotia, New Brunswick and Prince Edward Island, but also of the province of Quebec along the Gaspe peninsula, as well as of the Pacific coast. In addition, it is in keeping with the policy of this government in reducing the taxation on the implements of production.

Another proposal in this budget is the organization and appointment of a board which will act as expert advisers to the Finance department in 'matters of trade, tariff and taxation. This, I think, has been a long-felt want in Canada, and the proposal made is a move in the right direction. As I understand it, it is the intention to organize this board of experts from within the government departments and outside, men who will have special knowledge of trade, tariff and taxation, and who will be able after investigation to give the Finance department the very 'best advice on tariff matters. I agree, however, entirely with the hon. member for Brandon (Mr. Forke) in what he said yesterday, that notwithstanding the government has decided to create and organize this board of experts, yet in the final analysis now and for all time to come the responsibility for 'tariff changes must rest upon the government and the Parliament of Canada, So far as I am concerned, and I presume so far as the people of this country are concerned, they will not lightly stand for any independent boari, however expert they may be, forming and putting into effect any tariff regulations until they have first been passed upon by the parliament of this country.

The next item in this budget, whSh to me and to the Maritime provinces, and. especially to the province of Nova Scotia, is of supreme importance, is the regulation Which will readjust the duties on bituminous coal. This government, Mr. Speaker, has done not a little toward1 giving this country a Canadian fuel policy. Let me point out a few of the problems which this government has tackled relating to our fuel resources and our coal development.

The Budget-Mr. Carroll

In the session of 1923 tlhe Finance minister of the day in 'his budget speech announced that he was going to allow lignite to come into this country free. That was done to benefit the western operators and the miners in the province of Alberta. It was done also with a view to taking 'advantage of the reciprocal arrangement which a few years previously had been made in the tariff schedules of the United States, whereby any class of coal which was allowed to enter the United States free would have free entry into Canada, -and vice versa. The ihon. member for Bow River (Mr. Garland), in the session of 1923, in the course of a debate in this House on a resolution introduced by one of the members for Toronto, read a resolution passed by the Red Deer Valley Coal Operators' Association. I have no doubt 'that the government of the day was also approached, and as a result, in that session the Minister of Finance acted as I have said, and I am given to understand by a very reliable authority that this action has materially assisted the lignite coal industry in the province of Alberta.

In the session of 1924, after the Mines branch of this government had investigated the possibilities of getting coal from the east and from the west- into our central provinces the Minister of Mines had an appropriation of $200,000, which in effect meant that a subvention of one-fifth of a cent per ton per mile was to be granted in the carriage of eastern coals west and western coals east. That had a, very beneficial effect so far as the coal trade of Nova Scotia is concerned; I am not in a position to say whether or not Alberta reaped any benefit from that arrangement. The item was passed very late in the session of 1924, and it did not become effective, I believe, until the middle of August that year, but notwithstanding that, the operators in the province of Nova Scotia were enabled to market one hundred thousand tons of coal in markets which up to that time they had not been able to reach.

This year the government has brought down another policy, if I may call it such, respecting cSal. They have levelled up the duties on slack coal and run of mine coal to 50 cents a ton. Previous to this, and for some years the duty on run of mine and screened bituminous coal was 53 cents a ton, and on slack bituminous coal 14 cents a ton. This had the effect of creating an anomalous condition in the coal trade. Bituminous coal run of mine is identically the same article as bituminous coal slack, though in a different condition. Yet there was this difference in the duties. It may

be interesting, Mr. Speaker, to ascertain why the duties have remained in this anomalous position for very many years past. Well, slack coal up to seven or eight years ago was of very little market value. In the early days under our tariff the duty on slack and run of mine bituminous coal was identical. For some years it was 50 cents per ton, and for a few years 60 cents per ton. In 1907, I think it was, the duty on slack bituminous coal was fixed at 14 cents a ton, and the duty on the other 53 cents a ton. In 1897 the duty on round coal or run of mine bituminous was placed at 53 cents a ton, and the duty on the slack was. put upon an ad valorem basis of 20 per cent. The value of this slack coal was so low and so variable, and the market for it so small, that the customs authorities decidted to fix 65 cents a ton as the import price for duty purposes. That was not done by order in council, nor was it a part of a budget brought down in this House; it was a custom which grew up in the Customs department. Twenty per cent of 65 cents would be 13 cents a ton. In that way this anomalous condition of affairs grew up, and when the tariff of 1907 was brought down and readjustment made in the duties on coal, instead of going back to the ad valorem rate, the duty on slack coal was placed at 14 cents, and the duty on the other was left as before.

Now, Mr. Speaker, the market for slack coal in this country has very materially increased in the last number of years. Our coal industry in the province of Nova Scotia has been in a very precarious condition since the war. In 1913 the sales of Nova Scotia coal amounted to 6,164.000 long tons; in 1914 the sales went up to 6,478,000 long tons. In 1918 t/he sales fell to 5,265,000 long tons; in 1923 they rose to 5,507,000 long tons, but in 1924 they declined again to 4,448,000 long tons. Was there any good reason why, during the period from 1914 to 1918 when the wheels of industry in this country were running faster than they ever did before, the sales of Nova Scotia coal should have decreased by 1,200,000 tons? The reason is not far to seek. In 1915 a line of steamships-a thoroughly up-to-date line with fine terminal facilities in Nova Scotia and at Montreal-was developed by the then Dominion Steel Corporation and placed

2,000,000 tons of coal in the Quebec market. During the war, between 1914 and 1916 those ships were commandeered. Thus we lost the Quebec market; it was captured by the United States: and up to this time we have not recovered it. There is another reason for the decline in the sale of Nova Scotia coal. The United States did not, enter the war until some

The Budget-Mr. Carroll

years after hostilities had been commenced. When they did go into the war they had their men so picked that their industries would1 not be in any way injured by their war activities. Not so in this country. When the war broke out the men who supplied the bone and sinew to Canadian industries enlisted by thousands and tens of thousands, making such a. drain upon those industries that the military authorities instructed their recruiting sergeants in the province of Nova Scotia in the year 1916 to keep away from the coal fields otherwise the coal mining industry would be ruined, and permanently ruined. It is true that many of our most expert miners who had enlisted returned from the front, but many never came back. I believe

that the coal industry of Canada, having special reference to the province of Nova Scotia, was hurt by the war to a greater degree than any other productive industry in the Dominion; as a matter of fact it was practically destroyed. In the meantime, while the industry in Canada was being contracted, the coal industry in the United States was -being developed to an enormous extent. That was the state of affairs we had to face in the province of Nova Scotia in 1918.

In 1923, or before, and for some time during that year, there was a great coal strike in the United States. In that year we shipped through the port of Louisburg almost 1,000000 tons of bituminous coal for the New England market. But on the termination of the strike we lost that market and to-day not one ton of coal is being -hipped to New England, a condition which has existed for some time. To illustrate further the actual situation, and to prove the contention which I have been making, let me point out that in 1914 the province of Quebec took 2,381,000 tons of bituminous Nova Scotia coal. In 1924 we had a market in the same province for 1,570,000 tons of coal, so that in that one market alone we lost practically the sale of a million tons of coal in that ten-year period In the last four or five years the price of slack coal has been increasing, and to-day it has practically the same market value in central Canada as run of mine coal. This improvement with respect to slack coal was brought about by innovations in our manufacturing industry in the way of installing new furnaces to use that kind of coal, and to-day practically every great manufacturing industry in Quebec and Ontario uses almost entirely slack bituminous coal in its operations. Last year there was an improved demand' for our coal in the markets of Montreal and Ottawa; in fact 40,000 tons of our coal

were sold to the E. B. Eddy Company just across the river here. That improvement was made possible by the eft irts of the Department of Mines and the small subvention which was given us through the instrumentality of the Minister of the Interior.

As I have said, the United States mines developed wonderfully during the war period. They opened new mines over there and the cost of production decreased, whereas the cost of production in Nova Scotia increased. May I point out that in the province of Nova Scotia twenty per cent of the cost of operations is taken up with the pumping of water out of our mines, a difficulty which it is almost impossible to overcome. On the other hand in the case of many mines in theUnited States all they have to do to get thecoal is to tunnel into the mountain; and as a matter of fact enormous quantities of coal are mined there without the help of man power at all, and consequently without the assistance of men who have become experienced miners. Again, we have an eight-hour day in the mines of Nova Scotia as a result of custom and1 of statutory enactment, but there is no such provision m the case ofmany mines in the United States. Tn the

case of the Nova Scotia mines there is also a compensation law in force the funds for which are provided entirely by the manufacturers, operators and lumbermen in that province. Not one dollar of that compensation cornea out of the pockets of the miners, operatives or workers in the lumber industry. Under the pension scheme in connection with the-coal industry a miner who has worked for1 a company and reaches the age of sixty-five years may be given a pension which, in the cases which have come under my observation amounts on the average to from $40 to $45 a month. Not one dollar of this pension comes out of the pockets of the employees themselves. These are some of the burdens imposed upon the coal operators in the province of Nova Scotia. On the other hand the operators in the United States are free of these restrictions. And there is the further fact that in the case of some fifty per cent of the mines the men work as long as ten, twelve and fifteen hours a day.

I have given the reasons why the Nova Scotia coal industry finds it impossible, at the end of the war, to compete with United States coal in the Montreal market. Our greatest market, of course, is the little province of Nova Scotia itself where last year we consumed 2,000,000 tons of our own production but mostly run of mine coal. Now, to show how the physical difficulties of mining have in-

The Budget-Mr. Carroll

creased in Nova Scotia as compared with the United States, let me quote a few more figures. In 1908 the annual production per man in the province of Nova Scotia in the mines wlas 545 tons; in 1924 the average production iper man in those mines per year was 369 tons. That is a falling off of .more than a hundred tons a year. In the United States in 1908 the production per man per year was 603 tons, and in 1924 the production per man per year was 756 tons, an increase in the production per man of 153 tons, compared with the decrease of almost a hundred tons in the province of Nova Scotia.

Mr. GARLAND (Bow River):

Would the hon. member have any objection to putting that on a day's basis-the production per eight-hour day, instead of per year?

Mr. CARROLL:

I have not worked that out. I am afraid I am not a very good mathematician and will have to leave that to somebody else.

Mr. GARLAND (Bow River):

Permit me to suggest that that would have a very important bearing on the conclusion my hon. friend is trying to reach.

Mr. CARROLL:

I am arguing that the

production of coal has become much more difficult in the province of Nova Scotia, while in the United States since the war, and since the opening up of the vast territories of coal in that country during the war, the production has become very much easier. That is the conclusion 1 am reaching, and it is a matter of fact. Anybody who knows anything about coal mining in either of these countries knows that as we produce coal year by year we are getting further and further into the bowels of the earth and further and further under the sea. The longer the haul the more the coal will cost, and the further we go under the sea the greater will be the cost. In the United States, they have not, up to the present, faced this serious handicap.

Mr. GARDINER:

Can the hon. gentleman tell us the number of day's work per annum in Nova Scotia and the number of days' work per annum in the United States in the coal mines?

Mr. CARROLL:

I have not the figures before me, Mr. Speaker, but I will admit that last year the days' work per annum per man in Nova Scotia were not up to the standard, especially in three or four mines, and I can say the same thing of the United States. Let me point out that to-day and for the past few months there have been in south-west Indiana alone 17,000 idle miners; so that they have

their troubles in that country, as we have our troubles in Canada.

Mr. GARDINER:

If there are 17,000 idle

in the United States is it not because of the closing down of the mines?

Mr. CARROLLj I do not know. I am placing the facts before the House, and hon. members can draw their own conclusions. It may be that they are closing down the mines. I have no doubt in the world:-and I want to be fair with the hon. member-that the vast coal production of the United States in the last number of years, especially during the last few years of the war and since then, cannot continue, because they were over-producing.

Mr. PRITCHARD:

Does the hon. mem-

' ber think the increase in the cost of that coal has been brought about by the fact that there was no duty on it, or at least a very small duty, and that they began to improve the quality and got the business in better shape?

Mr. CARROLL:

I am coming to that

phase of the question. I think it is simply the demand for the slack coal that enhanced the price, because ten years ago slack coal was very little used in the industrial centres of Canada. However, I am going to touch on the question my hon. friend brought to my attention. I have many figures regarding importations from the United States, but I do not think I shall bother the House by placing them on Hansard. What is the reason that this government has been asked by the people of Nova Scotia to have a levelling up of the duty on slack coal, the same as on run of mine and bituminous coal? First of all, I support that proposition Mr. Speaker, because we were in an anomalous position for many years in that regard. I support it secondly because in the last number of years smuggling has become an art in the country, and the United States operators were using this anomaly in our coal duty to smuggle in run of mine coal under the heading of slack coal. That is a matter of which I have personal knowledge. I have personal knowledge that large lake boats come down to the city of Montreal, with two compartments, one loaded with slack coal and the other loaded with run of mine or screen coal. They screen that coal at the mine. They separate the slack from the run of mine. They bring it in, and the slack pays fourteen cents duty and the run of mine pays fifty-three or fifty-four cents. After the duty is paid they mix that coal and it becomes good run of mine coal, and they sell it ^ in the city of Montreal as such. The imposition

The Budget-Mr. Carroll

of the duty on slack coal will prevent a fraud on the customs, because it will prevent smuggling of run of mine coal into this country in the way I have mentioned.

Mr. KELLNER:

How do they mix it?

It seems to me a hopeless proposition. I do not know how they can mix it.

Mr. CARROLL:

It is not a hopeless proposition. I have mixed it myself in my own cellar. I have bought slack coal down there for fifty cents a ton and gone into my cellar and mixed it with run of mine coal or screened bituminous coal, and it makes a splendid furnace coal. It is almost as easy to mix the coal as to mix a western cocktail.

Mr. KELLNER:

Would the hon. member

tell us what percentage of it continues slack? It is stated in the press that there has been only a small percentage of American coal coming in as slack.