April 30, 1926




Richard Bedford Bennett

Conservative (1867-1942)

Hon. R. B. BENNETT (West Calgary):

Mr. Speaker, I desire to present the petition of James Arthur Collins, of Chisholm, in the province of Alberta, lumberman, praying that the House of Commons of Canada may determine and declare that Donald Macbeth Kennedy was not duly elected and returned at the election held on the 29th day of October,

The Budget-Mr. MacDonald (Cape Breton)

1925, and that the said return was and is void, and that it may be declared that the petitioner was duly elected at the said election and is entitled to be returned as the member elected to represent the electoral district of Peace River in the House of Commons of Canada.




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


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

I desire to lay on the table of the House copies of the correspondence between certain members of the Civil Service Commission and the government respecting the resignations of the former.




Bill No. 93, to incorporate The Canadian Dexter P. Cooper Company.-Mr. Hanson.


On the Orders of the Day:


Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)


Hon. CHARLES STEWART (Minister of the Interior):

A few days ago I was asked by the leader of the opposition (Mr. Meighen; whether any changes had been made in the regulations governing natural gas and petroleum leases. I am now informed by the officer of the department that no changes whatever have been made in those regulations.




The House resumed from Thursday, April 29, the debate on the Motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Hon. R. J. Manion.


Finlay MacDonald

Conservative (1867-1942)

Mr. FINLAY MacDONALD (South Cape Breton):

Before saying the few words I have to say on the budget, I would like to extend my congratulations to the hon. member who preceded me in this debate (Mr. Lapierre). I listened to his speech last night with a great deal of interest. I think it was an excellent speech, moderate in tone, and well sustained in argument. I agree with a great deal of what that hon. gentleman said, but I have to differ with him in some of the conclusions he has drawn. I had heard before of the great wealth of that rich northern country from which he comes, of the great mineral resources that are there waiting to be developed, and of the necessity for capital to develop those

resources, but I would remind him that capital is very timid; it will go no place to develop any industry unless it is assured of protection. It is said that the doe of the forest is not more timid than the wolf of Wall Street, and before the hon. gentleman can hope to have the capital necessary to develop that country invested in it, I venture to think he will have to have a government in power here that will assure that capital adequate protection for its investments.

With regard to the budget, I regret to say that when the hon. Minister of Finance (Mr. Robb) in presenting his annual financial statement a few days ago spoke of the prosperity that existed in Canada, he spoke in a tongue that was foreign indeed to the ears of the people of the part of the country from which I come. It is useless to tell people that they are prosperous. People know whether they are prosperous or not, and if they are prosperous they will find some evidence of it in their own pockets. So far as I have been able to observe, there have been no indications from any province in Canada of the existence of prosperity there at the present time. It is pleasant news indeed, Mr. Speaker, to hear of prosperity existing in any place, even if our own common sense tells us that such is not the case. But I am afraid that this alleged prosperity has no existence outside the imagination of some mathematician in the Finance department.

The Minister of Finance attributed this alleged prosperity to various causes, chief among which was prudent administration on the part of this government. Other causes may have contributed such, for instance, as good crops, increased production at home, and increased buying abroad, but when the Finance Minister couples with these things which we are all agreed have contributed to what little prosperity the country has enjoyed, the statement that some of the credit is due to the prudent management of this government, he goes far to destroy whatever confidence we may have had in his budget. Following the announcement of the Minister ot Finance came the usual chorus of applause from hon. members supporting the government. I do not begrudge those hon. gentlemen any satisfaction they can get out of the budget. The occasions have been few indeed during the present session on which hon. gentlemen opposite have had reason to applaud the acts of the government. Furthermore, the party press from one end of the country to the other took up the jubilant refrain, and we were informed that this budget was one of the greatest the country had ever


The Budget-Mr. MacDonald (Cape Breton)

known. It was, they said, a Liberal budget, a budget for the people, one that was going to reduce taxation and the burden of the people. Now that was pleasant news for us, and when the budget was being delivered I felt very much like joining the supporters of the government in applauding the statements of the Finance minister. However, a little further examination disclosed that possibly the budget was not all it was claimed to be. At the first glance it seemed to be an attractive budget, some have even gone so far as to say that it was an election budget, but like many attractive things it was more or less deceptive in its character; and as we come to examine its chief features we realize that iv is very far indeed from meriting all the encomiums that have been passed upon it in this House and in the party press.

I think the usual course in discussing the budget is to call attention first to what it contains, and in the second place to point out its omissions. There are some attractive features about the present budget. Some taxes have been eliminated, and to the extent that there has been lessening of the burden of taxation we must all feel duly grateful. The government is entitled to credit for the remission of the stamp tax and some of the sales taxes. But there are three main features in the budget for which particular credit is claimed and these are such as to invite special attention. The first of these is the reduction in the income tax, but I cannot help thinking that the Minister of Finance has been extravagant in his claims as to the extent to which the burden of taxation has been lessened. It is said that there are but two things in this world from which we cannot escape, death and taxes, but the physician who holds out a hope of a postponement of the one and the Minister of Finance who promises a remission of the other may very often raise expectations that may prove illusory. When subjected to the acid test of practicality highly extolled remedies are frequently found disappointing. In the case of this budget I think careful examination discloses that it falls very far short of the merits claimed for it. I cannot claim to be an authority on the subject of income tax. It seems that a certain number of people will be exempt from the payment of income tax. To the extent to which this is true, the budget will be popular. But there are a great number of people who are going to pay very much higher income tax than they did before. I refer to those people who hold stock in Canadian companies the dividends of which were formerly exempt but are

now subject to income tax. It would appear, therefore, that the income tax has been shifted from the shoulders of one class of the people only to be placed on the shoulders of another class. I do not believe that very much revenue is going to be lost by this adjustment, but that the taxes paid by the people of Canada under this shuffle will be just as large as they formerly were, and that there will be no remission of the burden in such cases.

The second feature of the budget to which most attention is directed is the reduction of the duty on automobiles. When I heard that reduction announced by the minister I felt very much like joining in the applause in which hon. gentlemen opposite indulged. We have no automobile manufacturers down in Nova Scotia, and I felt very satisfied indeed when I learned there was a possibility that we were going to get our cars at a very much cheaper rate. That is a local and a selfish view, but it was the view I held until my eyes were opened by the delegation that came to the capital recently from Oshawa and other towns in Ontario. That delegation did not consist of manufacturers. It was composed of workingmen, the class of men that I am used to and that I represent in this House. In addition the delegation comprised representatives of the municipalities of cities, towns and counties in the province of Ontario. I have been closely associated with municipal government for a quarter of a century. I know from my own experience in the city of Sydney just what the feeling is and the fear of anything that threatens danger to the industry upon which our livelihood depends. I have talked with these men and got their point of view, and I could almost imagine myself talking to-a lot of my old workmen in Sydney. I knew what their feelings were, when fear entered their homes, when it seemed inevitable that their little savings were to be dissipated,, that their jobs were to be lost and that they would have to seek elsewhere their means of livelihood. We have had that experience down in my own home town, and I know what it is. Then came the delegation which. waited on the Prime Minister (Mr. Mackenzie King). I attended that meeting and listened to their addresses and their pleadings to the Prime Minister. They appealed to him to faithfully carry out the solemn pledge he had made to them as Prime Minister of Canada... That is all, and there is nothing unreasonable in that request. One man reminded him of sitting on the same platform with him in the-city of Oshawa and told him of the solemn pledge he had given to the people of that city'

APRiIL 30, 1926 2969

The Budget-Mr. MacDonald (Cape Breton)

that their industries would not be interfered with pending full investigation. The Prime Minister was then pleading for his job. He was then speaking to them as Prime Minister of Canada, asking to be continued in that high position, and giving them that solemn pledge. They were here pleading for their jobs, and asking him to carry out the solemn pledge which he made. Their argument was reasonable and was unanswerable. Mr. Speaker, I looked then for the Prime Minister to rise and tell them that no matter what the influences were, no matter how secret or sinister, he was going to carry out his pledge to them, if the government had to be wiped out of office next day. Unfortunately, that was not the tone of the Prime Minister's reply, but in answering them he made a political speech in which he stated some very strange and curious things. He said the matter was in the hands of parliament, and that so far no person had ventured to move an amendment to the provision in the tariff regarding automobiles. Unless I have terribly misconceived the meaning and purport of the amendment which has been moved in this House by the hon. member for Fort William (Mr. Manion), that is exactly what it means. They were asking him not to touch that industry without due investigation, and that is exactly what the amendment asks. I want to make clear my own position on this matter. I am in favour of reducing the duty on automobiles, but I am also in favour of giving the automobile manufacturer a chance for his life. He has to convince me that he needs this protection in order to live. It is a difficult and complicated matter, but I am willing to take the judgment of the tariff board on it. I confess they would have difficulty in convincing me, but I am at least willing to allow the automobile manufacturers to have a day in court.

There is another feature of this matter that should receive a little attention. If the automobile manufacturer is stabbed in the back to-day, what is going to happen other manufacturers to-morrow? What is the use of a tariff commission, if we are not going to wait for their finding on any question, but are going to determine whether or not we will reduce or increase the tariff on account of some underhand or secret or sinister influence. Possibly, Mr. Speaker, this exemplifies the great distinction and difference that exists between the two parties in this House on the question of protection. The Conservative party stands for protection and has so stood since 1878. There has been no wavering or turning aside. We have spoken with one voice from the Atlantic to the

Pacific. Everywhere that our leader has gone the same declaration has been made regarding the adherence of this party to the great principle of protection. Without meaning to cast any reflection on the good faith of my hon. friends opposite, I venture to point out to them that their history and present attitude with regard to this great question of protection has been a varied and difficult one to understand. Up to 1896 they opposed protection, and they offered alternative policies of various kinds. From 1896 to 1911 there appeared to be some difference of opinion among our friends opposite as to what policy they were putting forth. The hon. member for South Huron (Mr. McMillan) yesterday stated, I think, that the Laurier-Fielding tariff was not a protective tariff. The hon. member for Vancouver North (Mr. Donaghy) previously had said it was. We know among a certain following of the present government free trade and lower rates of taxation appear to be favoured. On the other hand, we have seen in this House instances where member after member supporting the government has risen and declared that he won his election on the policy of protection and that he stood for it in this House. It is not therefore difficult to understand to which party great industries must look for protection if we are to ask capitalists to invest their money in industries in this country.

By this downward revision of the tariff the government has given a stab in the back to various industries, and this example, popular as it may be in some localities, is but another tolling of that knell that was to proclaim the death of protection in Canada. When we come to view the matter in that aspect we see that the very slight benefit that the country is going to derive from the lower purchase price of automobiles is more than offset by the great danger that will strike Canada even through the mere threat of the destruction of the principle of protection.

The third feature of the budget to which the Minister of Finance (Mr. Robb) directed attention and for which he took credit was the great progress that has been made by the Canadian National Railways. It is a matter of congratulation, I think, to us all that the Canadian National Railways has reached within seven million dollars of payment of interest due on its securities held by the public. So far, so good. But when you come to ask us of the Maritime provinces to throw our hats in the air cheering the present management of the Canadian National Railways, you are asking too much. We are not going to do that.


The Budget-Mr. MacDonald (Cape Breton)

There are two views held with regard to this great railway project in this country. One view which is held largely in Montreal and Toronto is that the Canadian National Railways is to be treated and operated as a private company with the object first, last and all the time of paying its way and, second, for the purpose of developing the resources of the country. I have seen lately two editorial utterances from leading papers in Montreal and Toronto on this question and I am going to read one from the Montreal Gazette, a very responsible paper. It says, dealing with the question of coal transportation from Alberta and Nova Scotia:

What has happened, however, exemplifies one of the greatest dangers to which the Canadian National Railways can be exposed, the danger of being forced by politicians to operate upon a political rate schedule.

Right there I take issue with the article. I say: You cannot take the Canadian National Railways out of politics if you regard politics as it should be regarded as the management and development of the country. The Canadian National Railways must be regarded as an integral part of the machinery of Canada, the main object being not to produce dividends but to develop that portion of the country through which the railway passes. Those two divergent views are clearly held. V7e hold one; the centres of Montreal and Toronto hold the other.


William Findlay Maclean

Independent Conservative

Mr. MACLEAN (York):

What would

happen to the Canadian Pacific if that were the case?


Finlay MacDonald

Conservative (1867-1942)

Mr. MacDONALD (Cape Breton):

I was

pointing out the difference between a privately-owned company and a publicly-owned company. I regard the Canadian National Railways as a part of the machinery of this country and the earning and paying of dividends as a secondary matter altogether to the development of that part of the country through which it passes. The article continues:

That this danger has been averted for the time being is due to the fact that Sir Henry Thornton, fully appreciating his responsibility as a public trustee, declined to play the part set for him by the governments of Ontario and Alberta. The Dominion government have boasted repeatedly of their determination to keep the Canadian National system out of politics. The public know, and Sir Henry Thornton certainly knows that, if the system is ever to succeed, its administration must be unhampered by political considerations. In yielding to the importunities of the Ontario and Alberta governments, Sir Henry would have committed himself to a hopelessly unsound princple and would have opened the door to a long series of political impositions. That he resolutely refused to take this dangerous step is a fact which is decidedly to Sir Henry's credit, and

the public of Canada will leam to thank him for the course that he pursued. It -is the president's natural anfbition to build up the earnings of the Canadian National Railways to a point at which the railway will be self-supporting, and he has been able already to show a very comfortable operating surplus. If, at the bidding of any politician or group of politicians, he is to accept traffic at losing rates, the aim to which he has devoted so much energy and ability will never be realized, and the railway, into which the taxpayers have poured so many millions of their money, will never pay its way. There are probably few people in Canada who would not prefer that the country's -fuel requirements should be met out of Canada's own resources, but that preference must always be subject to practical economic considerations, and the Canadian public will not improve t-heir position by aggravating one problem in the effort to solve another.

As regards the railway situation we want our own railway back. Take your Canadian National Railways and do what you please with them; but give us back our Intercolonial railway and we shall be satisfied to bear the deficits which that road may incur, because that road and the management of it will give us some consideration and hope that does not exist now for the development of our natural resources in the provinces. The Canadian National Railways are being managed entirely with a view to the west. They have an enormous system of hotels in the west and none in the Maritime provinces. They lost hundreds of thousands of dollars in their hotel system throughout the west where they have magnificent hotels and golf courses. We have nothing of the sort in the east and they pay no attention to any request we make in that direction. In the town of Pictou they started a little bungalow system of hotels but got no encouragement from the Canadian National management, although an expansion of the hotel system throughout the Maritime provinces would secure an immense tourist trade and pay dividends on the capital invested in the hotels themselves. The service we get in the Maritime provinces is poor in every respect; the train service, the motor service and the track service are all inferior. As a matter of fact the management is starving the track. They shortened up the track force with the result that we have had within the last two or three months three or four accidents which I am told have been due entirely to the diminished service on that portion of the railway. The difference between the treatment accorded the west and the treatment, or lack of treatment, rather, which the east has received was very well exemplified here last spring when we tried to get our coal moved from Nova Scotia at the same rate as Alberta coal was carried for. Did we get any concession in that respect? Alberta coal was moved at

The Budget-Mr. MacDonald (Cape Breton)

a lower rate than actual cost but this concession was refused Nova Scotia, and when the representatives of that province related the sufferings of the miners there they were met with goodnatured smiles and jocularity on the part of members of the government. The government appear to have one idea when dealing with the Maritime provinces, and that is to exact everything that the traffic will bear. I know of numerous instances which display very bad business judgment on the part of the management itself. For example, I know of a little industry in that section of the country which all along has been giving about $50,000 a year in freight to the Canadian National Railways. The company have been using, for the purpose of transporting the freight to the main line, about one mile of track which was laid down years ago by the railway. They have not been paying for the use of this track, but this year the management of the Canadian National Railways insisted that the company pay an interest charge upon it, although, as a matter of fact it was nothing but scrap when it was first laid down. The company refused to meet this demand with the result that the railway spiked the switch, declining to afford this service any longer. In consequence, the company are making an effort now to have their products transported by water, and the Canadian National Railways will in all probability-I hope they will-lose this revenue of $50,000 per annum from the company.

A few years ago we had in S'ydney a terminal wharf in connection with the Canadian National railway. It was partially destroyed by fire some years ago and has never been rebuilt, having been allowed to fall into disrepair. No attention has been paid to that wharf. In the estimates of this year I find an item of $75,000 for the purchase of the site and for the building of a wharf within 200 feet of that railway terminus. One-half of that amount would repair the old terminus and the other half of the money could give us a new wharf. Unfortunately, however, one structure is under the Public Works department while the other comes within the purview of the railway. Surely these two departments must be on speaking terms with each other. As the money which will be spent for wharf facilities there will come out of the common treasury of the country, I would urge the Minister of Public Works' (Mr. King, Kootenay) to look into this question carefully, for I am sure he can save the country many thousands of dollars.

Cape Breton is the natural gateway of Canada. The government may spend a lot of money, as in fact this Dominion has spent, in developing port facilities at Montreal, Quebec, Halifax and 'St. John. But notwithstanding all the millions which have been already expended and the millions which will be spent in the future, the fact remains that Cape Breton offers the natural advantage of being the front door of Canada. Some years ago a rather interesting experiment was made when a transatlantic steamer was stopped some miles off Sydney harbour, where some of the passengers and the mails were removed and sent by rail from Sydney to New York and Montreal. These passengers and mails arrived in New York twenty-four hours ahead of the steamer. The incident was never repeated, the matter having been hushed up. Nothing further was ever heard of it. What was the reason for this? The explanation is that it did not suit the financial interests that had all their money invested in the port facilities of these various ports to have it acknowledged that the natural trade route from Europe to the orient passed through the island of Cape Breton. No doubt the time will come when that island will come into its own, but this will never be while such a government as this remains in power or while the Canadian National Railways continues under its present executive. I do not like to make cheap criticisms of men occupying high executive offices, but I am bound to say with regard to the head of the Canadian National Railways that as a chief executive he is certainly a very good afterdinner speaker.

Now, in a budget debate it should, I think, be the object of every speaker to view things from the national standpoint; but we may be forgiven if in discussing questions of this kind we assert our own point of view and claim the rights that are due our oven industries in the Maritime provinces. And certainly none of those industries is afforded any encouragement by this budget. From the Maritime point of view the budget is indeed a very disappointing and discouraging document. We have in that part of the country three great industries in which I am particularly interested, the fisheries, coal and steel. Off the coast of Nova Scotia there lie the greatest fishing grounds of the world. From the shore to the banks, 400 miles away, nature has placed at the disposal of man' the most abundant school of fish that is to be found in the known world to-day, but we cannot take advantage of this wealth.

Our shore fishermen pursue a hazardous occupation, but they receive no benefit from


The Budget-Mr. MacDonald (Cape Breton)

any rural credit scheme; they are obliged to fit themselves out with their own little fishing plant, and on that plant they cannot secure a loan of any kind. Frequently their nets are brushed away by steamers and by floating ice, and in many cases the fishermen lose all their equipment, but no assistance has ever been given them by this or any other government.

Now, the development of our fisheries is a very important question, indeed, it is a national question and should be treated as part of a national policy. There should be a great national development of our fishing industry from the catch to the table. We want our fishermen in the first place to be educated in curing fish. I understand there is some movement on foot by the government to do this, and I commend its purpose. We want a system of transportation and cold storage, and most of all we want a system of education in cooking fish, especially throughout the province of Ontario. I do not believe that the people of this province know how to cook fish. Perhaps they do not get the right kind of fish to cook. Certainly they appear to give all their attention to fresh fish, and I hope some epicure will commend to the people of Ontario the good qualities of salt fish, which in may instances are preferable to the fresh article. Some years ago the United States government sent a lady through the states to teach the women how to cook fish. Possibly the Minister of Agriculture (Mr. Motherwell) might use his good offices to have her sent over here to instruct our people how to properly cook fish from the Maritimes so that the market for our fish may be developed in this province. It is said that meat comes from the Lord, but cooks come from some other place. After eating fish in this city I am inclined to agree with that dictum.

I am not going to take up the attention of the House by a lengthy discussion of the coal question. It has been stressed, perhaps beyond the point of patience of many hon. members, but I think we have made plain to them exactly what we want.

4 p.m. We want an increased duty on coal. We want freight rates that will enable us to get our coal into the central market. We also want introduced this session, if possible, the bill which I understand the government introduced last session, providing for assistance in the establishment of coking ovens.


Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)


Introduced the resolution, but dropped it after the election.


Finlay MacDonald

Conservative (1867-1942)

Mr. MacDONALD (Cape Breton):

Well, it will take some years to get coking ovens ready for operation. I am content that the government of the day should receive every credit that may be due to them for the introduction of such a bill. I put a question on the order paper the other day relating to this subject, but I received a somewhat evasive answer as to the intention of the government. There is one thing, however, they could do to help our coal industry-they could make the Canadian National Railways buy Nova Scotia coal and Alberta coal-Canadian coal-in accordance with the pledge given by the Prime Minister to the people of Nova Scotia at Amherst on October 4, 1921, when he said:

Free trade is not the policy of the Liberal party.

Might I call that to the attention of the hon. member for South Huron?

Free trade is not the policy of the Liberal party. If it were I would oppose it because I believe it would bring disaster to our industries and remove from the farmers the home market, which is practically the only market they have left.

I am a lirm believer in the establishment of a national coal policy for Canada. No country, especially a country with cold winters, which depends on a foreign nation for fuel, can claim to be independent of that nation.

These are the words of the man who was entrusted with power four years ago:

Every pound of coal purchased by the government should be mined by Canadian miners and transported over government railways to the points of consumption. Coal required by other consumers in Canada should be transported at cost.

We want nothing more than the fulfilment of the Prime Minister's promise. And far be it from me to entertain for a moment the thought that a person occupying such a proud position will not carry into effect the promise he made on the hustings.

With regard to the steel industry, we have in the city of Sydney a steel plant organized and put into operation some twenty-five years ago. It began under the most favourable auspices and continued until some four or five years ago, when unfortunately this government began to tinker with the tariff, with the result that that great institution in which millions and millions of dollars have been invested is to-day on the verge of bankruptcy, and the men employed in it meet me on the street with the same look on their faces that those men had who came here from Oshawa the other day. Possibly that is the reason why I felt sympathy for them and changed my mind so quickly with regard to the reduction of automobile duties. The following is a list of the various drawbacks and tariff tinkerings which this gov*

The Budget-Mr. MacDonald (Cape Breton)

eminent has put into force. It is rather long and I ask the permission of the House to put it on Hansard.

This is the statement referred to:

Drawback of Duty on Spring Steel, Steel Billets and Axle Bars

According to items 1007 and 1008 of the present tariff, a drawback of duty is provided on importations of the above articles. This drawback is absolutely unwarranted at the present time, since the Canadian steel industry is able and we are prepared to make the steel necessary for the purposes.

Steel Products free of Duty The following steel products are now allowed into Canada free of duty:

Barbed wire of 9, 12 and 13 gauge for fence-making; pig iron for most agricultural implements; used rails for re-rolling into reinforcing steel, bed slats, etc.; rolled steel for most agricultural implements; bright wire 10, 11, 12 and 13 gauge for springs and mattresses, and many other products.

Rebates of Duties on Steel Products The following items are subject to rebates of duties: Pig iron used in the manufacture of agricultural implements; billets, axles bars and flat spring steel when used in the manufacture of other than railway and tramway vehicles; steel for manufacture of spiral springs for railways; steel under 1J inch diameter or 1J inch square when used in the manufacture of locks and knobs; steel used in the manufacture of hardware as specified in item No. 1009 of the general tariff; bar steel for chainmaking; wire rods not over f inch diameter when used in the manufacture of 9, 12 and 13 gauge galvanized wire.


At the present time coke imported into Canada for metallurgical, foundry and domestic purposes comes in free of duty. This coke is being made in Canada, and if a duty were imposed greater sales would be possible, with the result that by-products in the form of gas, tar, sulphate of ammonia, and so forth are left in this country. What is needed to properly assist Canadian coke production is a duty of $1.00 per ton on coke imported for metallurgical purposes other than pig iron.

Rebate of Duty on Coal imported by Operators of By-product Coke Ovens

Under present tariff regulations bituminous coal imported for the manufacture of coke by operators of by-product coke ovens is subject to a rebate of 99 per cent. Suitable coals for the manufacture of metallurgical and domestic coke are available in Canada, and any coals imported for this purpose should be subject to the regular duty on bituminous coal. If it is considered necessary to pay steel plants using American coal 50 cents per ton as is being done at present, we believe operators using Canadian coal should receive the same treatment.

But another feature of the tariff tinkering is brought to my attention by a resolution which was passed by the Works Committee of the steel industry a short time ago. The resolution was introduced at the regular meeting of the committee on Tuesday, October 6, 1925. Mr. T. M. Keating, of the rolling mills, was the mover, and Mr. D. J. McDonald, of the mechanical department, the seconder, and the resolution met with the unanimous approval of the committee. These men are known to me, Mr. Speaker. They are men of more than ordinary intelligence, men who have been Liberals all their lives so far as I know, but who, in their own defence, were obliged to forsake their party at the last election and throw in their lot with the Conservatives. The resolution is as follows:

Whereas, the population of the city of Sydney and surrounding districts are depending' either directly or indirectly on the steel and cool industry;

Whereas, anything of an industrial or economic nature that effects adversely these industries must necessarily be reflected in loss of wages to the employees and lack of prosperity to the whole community;

Whereas, steel rods, billets, and other steel products, from European countries are being dumped into Canada in competition with the Canadian-made article;

Whereas, steel rods have been landed at Sydney at a much lower cost than they can be produced at our own steel plant;

Whereas, the underselling of the product of our own plant is made possible because, first on account of the depreciated currency of these European countries, second, because the present duty on steel products, billets, rods et cetera, is not sufficient and does not give the amount of protection that was afforded previous to the war, or when the cost of production was much less than obtains to-day;

Whereas, the workers in these countries with depreciated currency have a much lower standard of living than our Canadian workmen;

Whereas, on account of this unfair competition the steel trade is losing some of its best customers-fact we are prepared to prove;

Therefore, be it resolved, that the General Works Committee, representing -the men most seriously affected, in meeting assembled call upon the Sydney Board of Trade as being the representative body of the communities interests to demand of the federal government that provision for protection be made against the importation of iron and steel from countries with depreciated currency.

So much with regard to that.

Another statement that I wish to put on Hansard is one issued by the general manager of the Dominion Iron and Steel Company to the representatives of the General Works Committee reading as follows:

In keeping with the discussion we had with you at a joint committee meeting held on September 3, covering the subject of plant operations. The question of importation of foreign billets and rods was taken up with the idea of ascertaining why it was more advantageous to the company to purchase continental billets or rods than to manufacture same in our own plant.

We were asked for a price on 5,000 tons of billets for delivery to our very good customers in Montreal, the Peck Rolling Mills, and lost the business.

We understand the billets have been purchased from Europe at $22.75 per gross ton, c.i.f. Montreal. (This is within 50 cents of the price of pig iron at Montreal.) _

It would cost the British Empire Steel Corporation $5.20 per gross ton to take a similai quantity of billets from the billet mill, load them on a boat and deliver them in Peck's plant at Montreal.

Why is this?

1. The steel plants in France are mining ore, coal and limestone, and making steel with labour paid in


The Budget-Mr. MacDonald (Cape Breton)

francs, which are now wortih 4.7 cemts of Canadian money per franc, and were worth before the war 19.3 cents per franc.

2. If the workmen in Cape Breton and France have received the same rate of increase in wages upon those paid before the war, it simply means that the French workman is being paid 4.7 cents in worth of Canadian money instead of 19.3 cents formerly paid, or say 25 cents instead of a dollar.

What are the remedies?

file government should protect Canadian workmen against imports from countries where wages are paid in depreciated money.

Those customs duties which are fixed by the ton, and to-day give only half the protection they gave when first imposed, should be increased to cover the increase that has taken place in wages.

Coal should be available for steel-making purposes at a much lower cost.

Such, Mr. Speaker, are the views of the men who are engaged in this industry of making iron and steel in the island of Cape Breton. That concern to-day is on the verge of bankruptcy simply because this government has withdrawn little by little the protection which was absolutely necessary to enable it to conduct its business at a profit.

The commision which this government has appointed to look into Maritime matters will no doubt take up the question of coai and steel. With regard to the commission itself, we from the Maritime provinces were at first opposed to the idea. We did not want a commission to look into our affairs or to tell us what we required, but now that the commission has been appointed I, for one, intend to give them whatever assistance may be in my power, and to place before them all the evidence that is available touching on the interests of my constituency. I do hope, perhaps not as confidently as I might otherwise, that when their report comes in here, suggesting and recommending certain remedies for the ills from w'hich we are now suffering in the Maritime provinces, it may be received, adopted and acted upon by the government of the day, and that the disabilities under which we labour may disappear.


Walter Allan Hall


Mr. W. A. HALL (South Bruce):


Speaker, may I be permitted to congratulate the Minister of Finance (Mr. Robb), not so much on the splendid financial statement he has presented, but upon his courage and good sense in taking advantage of the circumstances that made it possible? Doubtless this is the best budget since the Fielding budget of 1897. Its good effects will be felt by people of all conditions, especially the working classes. The circumstances that made this budget possible constitute the greatest achievement of the King government. According to the press of both political parties the Robb budget is being well received by all the people in this country, except by two cities where motor

cars are assembled, or perhaps I should say where motor cars are manufactured in part. However, Henry Ford, of the Ford plant, has declared himself in favour of a reduction, not only of 15 per cent, but of 35 per cent in the duty on automobiles, in other words, in favour of free trade. This may be accounted for by the fact that the Ford plant has passed the-stage of infancy and does not require further nursing. Let me remark here that it would! be a Godsend if we had more Fords in Canada.

The Robb budget presents six things-three-reductions and three increases. Reductions, first in taxation, both direct and indirect; secondly, reductions in expenditure; thirdly, reductions in the national debt. It presents increases, first in trade and commerce; secondly, in reveune; and thirdly, an increase-in the surplus.

Direct taxation has been reduced in four different ways: First, by removing the sales

tax on many articles; second, by wiping out the receipt stamp; third, by adopting two-cent postage instead of three-cent, and fourth, by lowering the income tax. These adjustments in the income tax have been so welt -planned that the greatest relief will come to the most numerous class of our income tax payers. It will bring relief to the people of small incomes, and will doubtless produce widespread benefits. The reduction in the income tax will doubtless not affect national revenue very much, as there will be more money available for production. This has been the experience of the United States and also Great Britain.

Coming to the increases, first, the trade of Canada has been increasing during the last eight years by leaps and bounds. Canada ranks second among exporting nations of the world on a per capita basis, and stands fourth among the world traders in foreign markets. The total trade for the fiscal year ended' March 31, last including exports and imports was 82,258,534,453. The increase in exports from last year was $249,000,000, and the increase in imports $130,000,000. The favourable balance of exports over imports during the year amounted to $402,695,000, as compared with a favourable balance of trade of $29,000,000, during the last year of the Meighen government. Our import trade accounts for about ninety per cent of the increase in the balance of trade which shows the value of trade treaties within the empire.

Now let me deal wdth the question of expenditure. The expenditure has been reduced in five different w^ays: First, by practising rigid economy in the different departments of the government; second, by lessening the number

The Budqet-Mr. Hall

of civil servants; third, by lessening interest in the refunding of debts; fourth, by lessening the deficit of the Canadian National Railways; fifth, by lessening the deficit of the Canadian Government Merchant Marine. The total expenditure last year was 1342,890,000, or $120,000,000 less than the total expenditure for the last year of the Meighen government. The national debt was reduced from $2,417,437,685 to $2,395,084,685, by applying the surplus or excess of revenue over expenditure to reduce it. The revenue for the last fiscal year was $376,000,000 as compared with a revenue for the previous year of $346,000,000, showing an increase of $30,000,000. The surplus of revenue over expenditure was more than $22,000,000 or an increase in surplus over last year of almost $22,000,000. The deficit on the Canadian National Railways amounted this year to $38,800,000. This represents interest to the public amounting to S7,400,000 and interest to the country amounting to $31,400,000 on money loaned to the railways by the government. The deficit on the Canadian Government Merchant Marine last year was $668,000. This shows a great improvement as compared with the deficit in the last year of the Meighen government which was over $9,000,000.

The Liberal party stands for a downward revision of the tariff, while the Conservative party calls for an upward revision. But there are insuperable obstacles in the way of too great reductions, chief among which are financial obligations. The Conservative party argues for stability of the tariff, while at the same time it talks of building a tariff wall brick by brick equal to the United States tariff, necessitating change and thus instability. The United States during the last quarter of a century has had the Wilson tariff, the McKinley tariff, the Dingley tariff, the Underwood tariff, and the Fordney-MoCumber tariff. In Canada we have had the National Policy, the Fielding tariff, the White tariff, and the Robb tariff, the last the best of all. Thus we see that in neither Canada nor the United States has there been any great stability, but rather stability by change. A gradual reduction in the tariff should be our aim.

Let me remark here that a tariff for revenue and for protection is somewhat of a contradiction. This double function cannot operate at the same time. If our industries have to be protected the tariff must keep goods out of the country. If revenue is the aim of a tariff goods must be brought in. Goods cannot be brought in and kept out at the same time. Tariff revision downward is all important. The limit to this is adequate revenue. The future prosperity, solidarity and stability

of our country depends on increase of our exports and imports. The only way to carry on foreign commerce is to import and to sell exports in exchange for imports. We need to export $200,000,000 worth of produce yearly to pay our foreign liabilities, namely, the interest on borrowed money. This is the only way we can pay that interest. These exports are derived largely from agriculture and allied interests. The products of the farm, the products of the forest, the products of the mines, the fisheries and so forth must pay the greater part of our external liabilities. We must be able to meet our financial liabilities as a nation. Consequently we must not place any unnecessary obstacles in the way of trade -no high tax on instruments of production, no unjust tax on capital, and no high tariff wall to obstruct trade and international commerce.

Just as expenditure of the individual should be within the limits of his income, so should the expenditure of the government be within the limits of the revenue. But what is fat better is to have a large surplus, as the King government had for the fiscal year ended March 31, 1926. Doubtless this government has made long strides along the road of public economy. This, Cobden described as public virtue. While lavish expenditure is a terrible public evil carying in its train many others, the only solution is individual and national economy. The estimates presented for this year show a very great reduction in expenditure, $120,000,000, from that of the last year of the Meighen government, 1921-22.

Then to return to the tariff again, may I ask what is a sound and sane and sensible and safe tariff policy for Canada? To whom shall we go for such a policy? Not to the Conservative party. We all know that the historic policy of the Conservative party is a policy of protection-protection for protection's sake-to enrich the few who are protected, at the expense of the many who are not. But the right hon. leader of the opposition endeavours to meet this in a rather sly way by promising to place a high duty on the products of the latter class. Is this not another blind intended to deceive? Although many good citizens believe this to be a sound policy, yet many more, just as good citizens, pin their faith to a moderate tariff-a tariff only for adequate revenue. This is the policy of the present government. However, I am of the opinion, if we are to get a sound and sane tariff policy we shall have to turn back to the policy of the Liberal party in 1911. That is the tariff as it then was with the amendments that were contemi976

The Budget-Mr. Hall

plated by the government when it went out of power. In this there is the framework of a sound and sane tariff policy. However, with changing conditions, variations must be made to suit the changed conditions.

The hon. member for South Wellington (Mr. Guthrie) said that the policy of the Liberals from 1897 to 1911, was the national policy of the Conservatives from 1879 to 1896. This is not so. If the hon. member will read his own speech, as recorded at page 1705 of Hansard of 1901, I think he will be convinced that this is not the case. In that speech he charges the Conservatives with inconsistency. He reminds them that they said that the policy of the Liberals at the revision of the tariff in 1907, had torn down and destroyed the National Policy, and then afterwards, when things changed, he says they turned to a sane and sound policy. If you will turn to the records of that time you will find that the Tory leaders as well as the Tory press denounced the Liberal policy of 1897. They said that the Liberals had torn down and destroyed the National Policy. But as the years passed and the country prospered and developed the Tories swung around and claimed the policy to be theirs, namely: to be the National Policy. In the same manner the hon. member claims that the right hon. leader of the opposition is the father of the Canadian National Railways, having unified and consolidated the different railway systems. But what is the truth? The Meighen government passed the Railway Act to take over the different systems, but the unification consolidation and co-operation of the different systems was left to the King government to accomplish. This government placed the Canadian National Railways under one board of directors with one president and general manager, Sir Henry Thornton,, instead of under four or five boards with as many presidents and managers. We all know the results produced by this policy.

But to return to the Liberal policy of 1897; proof that it was not the National Policy of the Tories is afforded by taking the facts and figures of the period from 1897 to 1911. Take the actual savings in custom duties, and the savings that were made by the reduction in the prices of home manufacturers. You will find the changes made represented hundreds of millions of dollars in the pockets of the people of Canada. Then how could it be the old National Policy? It was the policy which made this country grow and prosper as it never had before. During this period, there was the greatest development, the greatest prosperity,

and the greatest increase of population- amounting to 34.17 per cent-that had ever taken place in Canadian history. There was added to the population almost two and a quarter millions. This was Liberal rule under Laurier, with a tariff for adequate revenue. But the period from 1879 to 1896 was characterized by depression, by lack of development, by lack of prosperity, by a very small increase of population, amounting to only 11.44 per cent, the smallest of any like period in the history of Canada. Mark you, this was Tory rule with a high protective fiscal policy. They called it the National Policy. Indeed, several of the then leading Conservatives confessed in the House of Commons that high protection had not accomplished what it was intended to do,-in other words, it had failed.

But in the early part of this period of Tory rule, their leaders as well as the Tory press claimed that the National Policy would cause industries to flourish, would give employment to everyone, would retain in Canada her own people and would increase her population greatly. What happened? From 1884 to 1891 there came to Canada 886,00(0 immigrants. Out of this number only 36,000 remained in Canada as shown by the census containing the number of foreigners born in Canada.

Now, Mr. Speaker, permit me to read some extracts from Hansard bearing on this matter. In 1892, Hon. T. M. Daly, Minister of the Interior, in the Tory government, said:

I do not believe that our fiscal policy has anything to do with our people going to the other side of the line. As the census showed that the National Policy had not accomplished its objects.

Mr. Daly declared that the National Policy had nothing to do with the emigration. In the same year, Mr. R. Armstrong, president of the Young Conservative Association of Toronto, said:

The question as to why thousands are leaving this country every year and going to the United States, should engage our serious attention, for it is quite evident that the older heads are not going to do so.

I am informed that no fewer than 6,000 persons have left this city during the past year-left all that is near and dear-and gone into foreign exile. In short, there is no concealing the fact that we are being annexed in job lots every week and there is not a voice raised against it.

In the same city, Mr. J. H. McGhie, afterwards one of the members for Toronto, said:

The men who were spangled with knighthood, sit talking of loyalty in the midst of ruin and desolation. It was from the young men, that they must expect a new order of things.

Now' judging from these statements and facts, a few out of many that might be cited, those were very dark days for Canada,-

The Budget-Mr. Hall

manufacturers making no headway, unemployment, emigration almost keeping pace with immigration, Canadian-born drifting by thousands across the line, farmers quitting the land, skilled workmen leaving for the country south of us and unsatisfactory conditions generally due to industrial depression. This is another case of promises made to the people of this country-promises that could not be fulfilled. The National Policy of the Tory party was to be a panacea for all ills. But it utterly failed. Consequently, the Tory party with its policy became discredited, was defeated at the polls in 1898 and was succeeded by the Liberal government which had a real fiscal policy.

One of the first things to engage the attention of this new government was tariff reform. In 1897 a thorough revision of the tariff took place when forty-seven different articles were added to the free list and duties reduced on 147 o|hers including farm implements. In addition a substantial preference over the rest of the world was given to the products and manufactures of Great Britain. Sir Charles Tupper, and his party due, I suppose to their super-loyalty, bitterly opposed the British preference as well as the whole revision of the tariff. Sir Charles surprised the House by his historic attacks found in Hansard, volume I, page 1291, year 1897. He said in part:

The result is that this tariff goes into operation and the hon. gentleman knows that the industries of this country are already paralyzed, while hon. members gloat over the destruction of Canadian industries. I was reading the wail, the sorrowful wail of these industries in the Montreal Gazette, where one manufacturer after another declared that these industries were ruined, that their mills must close, and that they saw staring them in the face, a return of the deplorable state of things that existed when the hon. gentleman who last addressed the House was in charge of the fiscal policy of this country. I say that a deeper wrong was never inflicted upon Canada.

I ask, where was his super-loyalty? The Tory cry was, as it is to-day, preference for preference, Canada first. This makes one think of the present leader of the Conservative party in his pre-election speeches last year when he repeated Sir Charles Tupper's words: "preference for preference, Canada first." Thinking like this, made it easier for him to make his famous Hamilton speech.

The concessions given to the farmers of free binder twine, barbed wire, other fencing wire, Indian corn, cream separators, and so on, were denounced by the Tories on the score that they would result in the wiping out of these industries in Canada. But what happened? These industries continued to flourish as never before. The Robb tariff will have a similar effect on the automobile 14011-189

industry. Although binder twine and the other products mentioned are on the free list still as far as I am aware, and although these gentlemen declare that the British preference and the tariff changes would seriously injure our manufacturers, the contrary has proved to be the case. Mr. Speaker, will you allow a few more extracts from Hansard? On different occasions the Tories moved in the House the following resolutions:

Moved, that the House, regarding the operation of the present tariff as unsatisfactory, is of opinion that this country requires a declared policy of such adequate protection to its labour, agricultural production, manufacturers and industries as will at all times secure the Canadian market for Canadians.

Speaking on this resolution, Mr. Rufus Pope, Conservative member, said:

The resolution that I would have preferred would be a resolution for a Chinese wall all round.

Mr. Blain, member for Peel, during the same session-1902-said as reported in Hansard of that year, page 1499:

I hold that the tariff should be so arranged that every institution in this country which is manufacturing goods to be consumed by the Canadian people, should have sufficient protection to keep out the same class of goods made in any foreign country; and I have no hesitation in saying that if that country should be England, the policy of Canada should be framed in the interests of the Canadian taxpayer as against the people who are producing the same class of goods even in the Old Country under the same flag.

Mr. Henderson, Conservative member for Halton said, during the same session:

It was said in the early days of the present tariff that the Liberals had stolen our clothes. I have never said so, and I do not consider that they have done anything of the kind. I am only sorry that they did not, for it would have been better for the country if they had. Their tariff is instead just the antithesis of ours.

That is what Mr. Henderson states in regard to the Liberal tariff as compared with the Tory tariff. He says that one is the antithesis of the other. These quotations amply show that the Tories regarded this as a new fiscal policy. Indeed, they claimed that the Liberal policy would paralyse the industries of the country. They hoped and prayed for this, but their expectations were doomed to disappointment. On the other hand the Liberals claimed that this new policy would benefit the industries instead of injuring them, just as they claim that the Robb tariff will help the automobile and allied industries on account of increased sales rather than hurt them. Indeed, I challenge anyone to point out a single industry ruined by similar changes in the tariff. On the contrary, all modifications of this kind have invariably produced beneficial results to the industries affected.

The Budget-Mr. Hall

In this instance, as in all others, time proved the Tories wrong and the Liberals right. There followed a great revival of business, trade and commerce improved and even manufacturers flourished as never before. After this the Tories swung around and said that the Liberals had made no material changes in the tariff; that their so-called National Policy was still in force, and that the Liberals were wearing their clothes. Is this not what the Conservative party now claims? But the people had not forgotten what the Tory leaders as well as the Tory press had said and done when the Fielding tariff was enacted.

Perhaps the most outstanding feature of the new tariff was the British preference. Its results have been highly beneficial alike to Canada, Great Britain and the empire. This preference at first was a reduction of one-eighth, later one-fourth and still later one-third of the general tariff. As I said before, the Conservatives strongly opposed this preference; they spoke of it as a myth, a sham, a fraud on the British people, a danger and menace to manufacturing industries, the thin end of the wedge to destroy protection in Canada.

The leader of the opposition (Mr. Meighen) referred to this preference in his speech at Kitchener last October in the following words: I would give a preference to the people of Great Britain, Australia, New Zealand, any people within our empire, but on this condition that they give us a preference in return, until then it is no duty of Canada to continue the preference.

Now, Mr. Speaker, what does the leader of the opposition mean by this statement? If he were leader of the government would he terminate this preference? That seems to be the logical conclusion. The Conservative party is certainly true to its name; the same yesterday, to-day and forever. The very language of Sir Charles Tupper is employed by the present leader of the opposition, namely: preference for preference. Let me say here, that the Hamilton incident is in keeping with this occasion at Kitchener. On both occasions, what a manifestation of superloyalty! By the way, further proof of Tory super-loyalty in Lord Elgin's time was shown by the burning of the parliament buildings in 1849, by pelting the Governor General with malodorous eggs, and by other manifestations of hostility.

We also heard during the campaign last autumn a great deal about the decrease of immigration and the increase of emigration. The opposition in the House as well as the Tory press still continue the mournful, doleful wail. May not this account for the great


increase in the favourable balance of trade- the large export of exaggeratedly pessimistic news? The leaders and press of the Tory party have indulged in this trade, apparently with a certain morbid satisfaction. This tendency has been altogether too general among responsible persons in the Tory party. Their dismal prophecies, loud wails, though not taken too seriously at home, cannot fail to be believed by the people of other countries, and thus produce incalculable injury to Canada. The Robb budget, however, should dispel any such lurid and unwarranted impressions in Canada.

We are ready to admit that since the Great war immigration has slackened and emigration has been more active. There are many reasons for both, which we all know. But I am glad to say that the grounds for these reasons are gradually passing away and conditions are already fast improving. But my Conservative friends claim to have one sure remedy: "protection for all industries"-their cure-all nostrum. Why, Mr. Speaker, it reminds one of a patent medicine advertisement. What are its claims? It would beckon the exiles back to their homes. It would call home the sons and daughters who have gone. It would give work to those who are here. It would bring immigrants from other lands and so forth. But will this remedy do all these things? No more than any patent medicine will cure all diseases. Why, Sir, this is an old remedy, tested and found worthless, tried by the Tory party for nearly twenty years. The experience they had with it was that the longer it was used the worse conditions became, especially during the five or six years from 1891 to 1896. These were the darkest days of Canada.

The population of Canada was practically at a standstill outside of Quebec. The population in the Maritime provinces actually diminished. Ontario's population increased in these five years only about one per cent. Most of the few immigrants that came to Ontario soon found their way into the United States. The results of the Conservatives' efforts during this time to populate the west was described by a western Tory paper in the following graphic language:

The trails from Manitoba to the states were worn, bare and brown by the wagon wheels of departing settlers.

During this period between 1891 and 1896, about 100,000 immigrants were brought into-Canada at a great cost, most of whom crossed the line later into the United States. Indeed, we could not keep our own people. The United States census of 1900 showed that over

The Budget-Mr. Ryerson

1,000,000 of the population of that country had been born in Canada. Is it any wonder then that the people of Canada discarded this once much lauded nostrum of "High Protection" and voted a change of government in 1896, thus securing for themselves a worthwhile remedy-Liberal rule?

Then followed the golden era of prosperity and contentment under Laurier, the brightest and most glorious period in Canadian history. In conclusion, let me say that the Robb budget augurs well for a repetition of similar conditions in Canada under the King government.


April 30, 1926