Mr. C. E. BOTHWELL (Swift Current):

Just before the house closed yesterday evening, two or three questions were asked from the other side, particularly by the bon. member for Skeena (Mr. Brady) and the hon. member for Lincoln (Mr. Chaplin). In reply to the hon. member for Skeena, I wish to inform the house that the statistics I gave yesterday were from the summary of the trade of Canada for January 1929 and for the twelve months ended January, 1928 and January 1929. The question was as to what proportion of our Canadian export trade consisted of wheat. In reply to that question, I may inform the hon. member that the proportion amounts to about 32 per cent. The question was also asked as to whether fish and furs were included or should be included with animals and animal products, and in answer to the hon. member for Lincoln I said that I did not consider these articles as coming under that heading; but even excluding them, the figures I gave still hold good. I want now to inform the hon. member further that from the exports enumerated yesterday we can eliminate not onty fish and furs but also beverages, tobaccos, rubber and rubber goods, fruits and vegetables and still the proportion of the export trade of Canada, made hp of agricultural and vegetable products and animals and animal products, is over 50 per cent. With regard to those items that are excluded, I cannot possibly see how industry in Canada could be benefited by the placing of a duty on fish and furs, for instance, the two items referred to by the hon. member. In that connection it might also be of interest to the house to note, from the preliminary report of the trade of Canada for [DOT]1928, that our percentage of exports of raw material, excluding grains, fresh fruits and vegetables, seed and raw tobacco, has steadily declined. In 1900 the percentage was 28.8 per cent and in 1927 it was only 12.4. Our export of raw material has been steadily going down, whereas in the same report you will find that the American percentage has increased.

Mr. BENNETT:

Would the hon. gentleman think I was trespassing on his time if I asked a question? Does he realize that in that report we classify as raw material what in other quarters is classified as manufactured material? Take blister copper, for instance; we treat it as an export of manufactured or partly manufactured products, instead of its being classed as raw material.

Mr. BOTHWELL:

TheTe may be something in what the leader of the opposition says. However, on that particular page of the -report, which came to me only this morning-page 15-the export trade of Canada in raw materials is compared with that of the United States. Now, following what I said yesterday, I have lo-oked over th-e trade of Canada, with particular reference to the imports dealt with by the hon. member for Fort William (Mr. Manion), and I find that among the imports into Canada for consumption the largest single item, upon which the opposition apparently believe there should be an inorease in the tariff, is that of iron and its products, amounting to $330,953,152. I took occasion to ascertain what th-e production of Canada was of iron and its products, and I also looked up -the report to see what our exports were. As I say, we import $330,953,152 and export $73,070,054 of the same class of products, leaving a net import of $256,883,098. Our production in Canada, according to the report for -the year 1927, the latest report I -could obtain-and for 1928 I believe it will be considerably higher, judging from the newspaper reports-was $525,921,839, making a total consumption of $782,804,937. The proportion of imports amounts, therefore, to hardly 33 per -cent.

Mr. STEVENS:

Does not the hon. gentleman realize that a substantial portion of these imports, by -the re-manufacturing process, enters into the item given for production? He is counting them twice.

Mr. BOTHWELL:

That may be; no doubt a percentage of the -imports goes into that process. Nevertheless the percentage of imports to our total consumption- and we import manufactured goods as well as raw material in that total I gave-is as I have stated. Now that is a pretty fair record for an industry which does not appear to be native to Canada, because we import a considerable amount of raw material. It is true, as the hon. member for Fort William says,

The Budget-Mr. Bothwell

that we have in Canada raw material which might be made use of. At the hearing before the tariff board of the applications made by the manufacturing concerns in respect to iron and steel, a statement was made, as appears in the brief of the Algoma Steel Corporation Limited which was filed in connection with that application. They give a schedule at the back of their brief in regard to the use of Canadian ore, and I wish to read this particular clause from the first column:

There are in Canada reserves of iron ores of excellent metallurgical quality, and large tonnages of the these ores are available and contiguous to the Great Lakes water system, and therefore in a position to be cheaply conveyed to the consuming centres, which are also situated adjacent to the same water system, but all the known deposits of ores located in this district require beneficiation before they can be used in the blast furnace. The cost of beneficiation is in excess of the cost at whicli American lake Superior ores can be laid down at Canadian furnace docks at the present time, and therefore governmental assistance in the way of bounties would be required to firmly establish a Canadian iron ore industry.

Then I read from the evidence taken on that same reference to the Advisory Board on Tariff and Taxation; this is reference No. 2, the resumed hearing held on November 27, 28 and 29, 1928. At page 25 of the printed proceedings I find the following statement:

.... until increased mining costs in the American iron ore fields force the price of ore well beyond present levels, we will be unable to proceed with the development of this important future source of supply.

That was the statement made before the tariff board. If the situation in Canada is such that it is going to cost us considerably more to use our own ore and coal in order to manufacture iron and steel, surely at this time it is good business for us to get our iron and steel from some other place; otherwise we would take the money from the pockets of people who can ill afford to pay it and place it in the pockets of other people who possibly do not need it. If we in Canada are producing about 66 per cent of our own consumption of iron and steel products it does not appear to me that our importations will affect us seriously.

In connection with this same hearing, and after listening to the remarks made in this house from time to time in favour of increased protection, I was somewhat surprised in reading the record of this hearing to find that the representatives of the manufacturers were not agreed among themselves on this question of tariff. The hon. member for West Hamilton (Mr. Bell), who represented Dominion Foundries and Steel Limited said:

We are of the opinion that the removal of tariff from pig iron for steel making and the placing of compensating tariffs on more highly finished steel will increase the production of pig iron in Canada as a part of steel making operations, therefore, no harm results.

Mr. Moffat, of Moffats Limited, in answer to a question put to him by the chairman, said:

.... I do not understand what they mean by making pig iron free. I do not want to see pig iron from the United States free, but free from Great Britain.

Mr. Sherman, of Dominion Foundries and Steel Limited, said:

We also want it free from Great Britain, but we do not want to discriminate in our tariff.

Then I find the following:

The Chairman:

Do you think, Mr. Bell, the

tariff should be free in pig as against the United States?

Mr. Bell: That is our proposition.

The Chairman:

You remember the proverb

about the ill wind. Am I to understand that there is no objection to free pig iron?

Mr. Bell: So far as this brief is concerned.

Mr. Long (Dominion Iron and Steel Company) : Personally I should prefer not to

answer that question offhand.

Mr. Mclnnes (Dominion Iron and Steel Company): I would say, no.

Mr. J. D. Jones (Algoma Steel Corporation): We are opposed to pig iron coming in free of duty; at any rate we do not believe it should be lowered any more than it is now.

If we have a number of manufacturers coming to the tariff board with no more unanimity than is shown from this evidence as to whether or not there should be an increase in tariff, I think it would be pretty hard for an economic conference such as has been suggested to arrive at anything definite in that respect. If a few of our manufacturers cannot agree among themselves on one particular item, with the varied opinions existing in Canada with respect to tariffs I am afraid an economic conference would not get very far.

Another item which has been stressed very often in this house is fruit and vegetables. I am not going to spend very much time on that subject, but I will say that I was rather interested in the bulletin read the other evening by the hon. member for Yale (Mr. Stirling) during the course of his remarks, the bulletin whose author he refused to name. After reading the speech of the hon. member I do not know whether that bulletin was sent to some dealer in the United States or where it was sent; there is nothing in his speech to indicate that. All I can see is that some fruit and vegetable exporter in the United States seems to have issued a bulletin in connection with some fruit damaged by

94S

The Budget-Mr. Malcolm

hail. However, I do know that so far as the people on the prairies are concerned, the people who constitute the natural market for British Columbia fruit, they cannot afford to pay anything more for fresh fruit than they are paying at present. If it should be the policy of the people of British Columbia or of this government to increase the tariff on fruit coming into Canada it would simply curtail the consumption of fruit on the prairies. Fruit has come to be recognized as one of the necessities of life, and surely we are not going to be compelled to pay more for it or else deprive our families of fruit entirely. Last fall you could not go into any fruit store in western Canada and buy the best British Columbia fruit; I do not know what they do with it unless they export their best and ship to the prairies only the third and fourth grade fruit. A11 we could buy were C grade apples; if we wanted a good apple we had to buy one which came from some place in the United States, because there is very little eastern fruit in that market. Whether or not this is the fault of the marketing board of British Columbia or whose fault it is I do not know, but I do submit that an increase in the tariff certainly will not benefit the people who have to consume British Columbia fruit, and I believe the fruit growers of that province are banking too much on what the government can do for them. When you consider that the consumers on the prairies must put up with low grade crops, with consequent low prices, you can easily realize that the amount of money available for anything which might be classed as a luxury is very limited.

Last fall in western Canada, while we had a big crop it was not a paying crop; in looking over the newspaper reports in connection with the crop last year I found some very interesting figures in a Winnipeg paper of October 23, 1928. That day there were inspected in Winnipeg 2,341 cars of wheat; of that number there were only 29 cars of No. 1 northern, 272 cars of No. 2, 412 cars of No. 3, 468 cars of No. 4, 401 cars of No. 5, 461 cars of No. 6 and 183 of feed. The prices ranged from S1.21J for No. 1 northern to 72J cents; over

1.500 of these cars were sold at prices averaging 86 cents per bushel. Then you have to pay the freight out of that, which meant that the average to the farmer for the

1.500 cars amounted to less than 70 cents per bushel. It is impossible for a farmer producing wheat at seventy cents a bushel to have much money to spend on luxuries, and I submit it would be a crime to compel him to pay more than he now does for the fruit

he wishes to purchase for the benefit of his family. The plea of the British Columbia people in asking for these legislative enactments is very well met by an article in the Financial Post of March 8, 1929. This article quotes Mr. T. H. Kirk, one of Vancouver's ablest business men, a financier of experience, as follows:

Our legislative efforts should be directed toward assisting the producer to find wider outlets for his goods. The orient is an important field. There is every opportunity for reciprocal trade within the empire; but if our producers are hampered by legislation based on entirely wrong principles our cost of production is going to be too high. If, on the other hand, we encourage production by not only assisting to find markets, but by developing by-products to deal with the surplus, we are adopting a constructive attitude toward the entire productive capacity of the people.

Hon. JAMES MALCOLM (Minister of Trade and Commerce):

Mr. Sipeaker, it is always with considerable satisfaction that one rises to compliment the Minister of Finance (Mr. Robb). He has on this occasion, as on previous occasions, presented a concise, easily understandable statement of the nation's business. I can also compliment the member for South Wellington (Mr. Guthrie), who gave the official criticism, in that he paid the Minister of Finance the tribute of having supplied statistical information as to the nation's accounting which removed from the field of controversy many subjects which had in previous debates occupied much of the time of the house.

Having had the pleasure of listening to the remarks of the official critic of the opposition, and having taken the time to read his remarks over carefully, I would say that when we eliminate the political thunder his observations and criticism can be boiled down to three statements. First of all, he admits that the country is in a prosperous condition; secondly, he admits that that prosperous condition is due largely to the intervention and assistance of a benign Providence and takes most of the eredit from the government; in the third place, he goes on to show that if the party to which he belongs were in power Providence would not have had to play such a large part, and that there would have been a greater general distribution of the prosperity which he admits.

No one can disagree with the first observation that the country is reasonably prosperous. I think anyone who disagreed with that statement would be placing himself on record as being against every known authority in the Dominion of Canada; he would be placing himself against a unanimity of public opinion such as has never been equalled.

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When he comes to the second point, that Providence deserves the credit and this government deserves none, I think he is going beyond the limit of fairness. I do not think I would yield to the hon. member in my respect and thankfulness for the bounties of Providence, but I would like to point out that Providence to-day, as in the past, is very good at helping those who look after themselves. Providence provides opportunities for an industrious man to profit by the bounties provided. Our great agricultural production is the result of scientific research on soil culture, careful working of the land and a certain amount of seeding. Providence provides no harvest of wheat where none is sown. Providence provides the soil which a man may work and from which he may reap the benefit. Providence does not mine, concentrate and refine any ore in our great mining areas.

Mr. MANION:

Does the government?

Mr. MALCOLM:

Providence provides

opportunities whereby the wealth may be taken out of the soil through the engineering skill of man. Providence does not develop any hydro-electric energy from our streams. Providence provides the means whereby man, through his engineering ability, can take wealth from nature in that way. Providence provides no pulp wood mills in the forest, but provides the opportunity for industrious and intelligent people to profit by that wealth. The credit for the development of Canada's wealth is due to the industry of her people guided by wise leaders in governments, both provincial and federal.

Then we come to the hon. member's third point, that were his government in power things would be so much better. The hon. member said that the policies of this government had caused a decided concentration of the wealth of Canada in the urban centres. The memory of hon. members of the house would indeed be short if they could not recall the speeches which were made in this chamber during the years of 1922, 1923 and 1924. At that time it was said by hon. gentlemen opposite that if the government continued in its policy of legislating only for the basic producers our cities would diminish in size, industry would languish and there would be a greater flow of Canadian labour to American industrial centres. We were told at that time that our whole policy was against the industrial centres, but the wisdom of that policy of helping the basic producers has been shown by better figures in business, in banking and in transportation. The hon. member has said that the government has neglected the interests of the agriculturist and

the worker, and proceeded to say that certain policies in which he believed would work to better advantage in distributing the national wealth. There are certain economic statistics which I do not think indicate any concentration of wealth, but rather a distinct distribution. I would like to place on Hansard one or two of these facts as an illustration of my argument. Statisticians the world over have paid a great deal of attention during the past few years to the records of car loadings as representing the movement of tonnage and the business which is carried on within a nation. Every division of the Canadian Pacific and Canadian National railways shows an increased tonnage. Some parts of Canada show a greater increase than others, but the growth has been general. The hon. member gave great credit to the managements of the Canadian National and Canadian Pacific railways for the very healthy condition of their finances, and I think he was correct. Their healthy condition was brought about by one thing, and one thing alone: They handled a sufficient tonnage to enable them to earn money and thus put themselves in that position. I think it was in 1923 that the railways began to keep a record of their car loadings. The first records show that

2,851,000 cars of freight were moved in the Dominion of Canada during 1923. Five years later, in 1928, the number of cars of freight moved by our two great railway systems had increased to 3,696,000, an increase of 845,000 cars, or 30 per cent. My hon. friend realizes also that the increase was greater than 30 per cent, because during the past five years there has been a tendency to use a very much larger car and I think it can safely be said that during that period the per mile tonnage of the two great railway systems has increased by about 40 per cent. It cannot be otherwise than that this increase in tonnage has helped employment in the transportation systems; there must be a very greatly increased employment by the Canadian National and the Canadian Pacific to have handled this amount of tonnage, and as railway tonnage represents the labours of other people who produce it, there must of necessity have been a corresponding increase in employment to produce the tonnage referred to.

I think the hon. member for South Wellington said that unemployment in Canada stood at six per cent some years ago-I have forgotten the date-and that in February of this year it stood at exactly the same figure. It would seem as though he wished to leave the impression that there is to-day as much unemployment in Canada as there was then. My hon. friend knows quite well, as does

The Budget-Mr. Malcolm

every other thou, member, that one of the great problems of the Dominion is that we will always face a certain degree of seasonal unemployment. The United States of America is said to-day by the statisticians to have somewhere between 10 and 15 per cent of permanent unemployment, and this is a subject of very serious consideration in Washington. There are always 2 or 3 per cent probably wilfully unemployed; there are always in every country in the world men who are registered as unemployed and who are still retaining their jobs hoping to get better ones. We had a great deal of that in Canada right after the war, but the figures of industrial employment as furnished to the bureau by industrialists throughout the Dominion disclose a state of employment which is a credit to the industrialists and to the whole of Canada and it is a figure of employment that corresponds very closely to the figures of car movements by the Canadian railways. Using the 1914 figures as a basis of 100, we have it actually recorded by industrialists that in February, 1927, the index number was 96.6, or 3.4 below the average of 1914. In 1928 it stood at 102 and it now stands at 110, showing an increase of 20 per cent in the number employed in industry as compared with that of three years ago. I do not think one can ask for more conclusive evidence than the corresponding relationship between our car loadings and our record of employment as provided 'by the industrialists themselves.

The industrial and urban life of Canada has undoubtedly prospered by the additional buying power of our people. If the movement of freight were entirely concentrated in Ontario and Quebec, my hon. friend's contention might be well founded, but this is not so. The tonnage of British Columbia and the prairies, the tonniage of the maritime provinces as well as that of Ontario and Quebec have correspondingly increased. Therefore I think it can be shown that with the increase of car movements and of employment, there must have been a general condition of prosperity.

My hon. friend refers to this government as being a financial one; he says that we are interested in the big financial corporations. May I point out to him that much of the phenomenal growth of building in the last few years in all our cities has been due to the necessity of providing homes for our workers who have been receiving better wages and more continuous employment than they did in the past? The building program of the past year has been the highest on record in the Dominion and I do not believe there is any other country in the world where there 78594-60

is a fairer or better relationship between employers and employees. I do not think there is any other country where the average worker is living under better social conditions as regards the type of home he has, and the facilities for education and transportation. What my hon. friend was trying to point out I cannot tell. We find, however, that the people of Canada during the past few years have, in addition to providing better homes for themselves, spent more money on motor cars and other luxuries than ever before. Therefore, if spending money on luxuries indicates any measure of prosperity, I think it can be shown that prosperity is general. It might be contended that if the average Canadian citizen spent so much on luxuries there could not be much left for savings, but during the past few years savings have risen to somewhere about $1,526,000,000, a gain of $144,000,000 in two years. Savings in savings deposit accounts in chartered banks do not constitute the principle form .of saving in which the average person invests. I think more men are to-day investing in life insurance as a form of saving than in any other. We have the illustration of the Dominion having built up the enormous total of $5,609,000,000 worth of life insurance in force from the figure of $2,935,000,000 in 1921, or an increase of almost 100 per cent. If the people of Canada have been able to increase their savings in the past two years by $144,000,000, have in the past five years increased their life insurance in force by about $2,500,000,000 and have been able during that time to give as much business as they have given to Canadian industry for its products, by purchasing motor cars and comforts beyond what were considered comforts in the past, surely my hon. friend oannot be right in his contention that the worker has not prospered under this government's policy.

My hon. friend also contended that in some particular cases the policy of the government was inconsiderate, shall I say?-or at least thoughtless with regard to the agriculturist, and the particular illustration used was the dairy industry. From what my hon. friend said one would imagine that the dairy industry was in anything but a flourishing condition. My hon. friend endeavoured to place the blame on the New Zealand treaty; he said that if it were not for the treaty between Canada and the sister dominions of Australia and New Zealand, all would be well with the dairymen. My hon. friend's contention is not very wise when the matter is dealt with as one of international or empire trade. It is true that in recent years the production of

The Budget-Mr. Malcolm

cream, butter and cheese in Canada has diminished, but this is due to the growth of production in miscellaneous dairy factories. The quantity of condensed milk, evaporated milk and skim milk powder has increased from

59,500,000 pounds in 1922 to 95,400,000 pounds in 1927. The dollar value of those two figures is quite interesting. In 1922 we produced those three commodities to the value of $29,694,000 and we have to-day a production of $44,678,000. The production of dairy butter in Canada was less in 1928 than it was in 1927. But Canada was already an importer of butter in 1927. Our exports of fresh milk and other products of the dairy factories which I have mentioned, the condensed milk group, have proved more profitable to the average farmer in the Dominion, than the manufacture of butter, even though butter has maintained in the export markets a fairly high level of price. I have the prices here. The export price of butter in 1926 was 34.2 cents. In 1927, it rose to 39.6 cents, and in 1928, to 40 cents. The advance of domestic prices shows a correspondingly high return.. The facts are that in spite of the relatively high value of butter our farmers those to sell their butter in other forms, other forms for which they received more money.

I contend, Mr. Speaker, that there is absolutely no loss to the dairying industry because our farmers are milk producers in other forms, exporting to other countries, in forms *for which they get a better return, exporting over $30,000,000 of milk products. May I ask this question, Mr. Speaker? There are certain areas in Canada, such as the Fraser valley of British Columbia, where my 'hon. friends from that province know that they have turned their production very largely into condensed milk. They are shipping a very excellent quality of condensed milk to China. The British army of occupation in China is using condensed milk from the Fraser valley. Many of these producers must find it more convenient to sell their milk in that way than to make butter at home.

But there is another side to this New Zealand butter question which I wish to call to my hon. friend's attention. Our department is looking after the interests of the trade of Canada by building up an export of as highly finished goods as possible. The commonwealth of New Zealand, with its small population of a million and a half, does not offer much opportunity for a protective tariff. As a matter of fact, New Zealand imports practically all of its manufactured goods. The goods which it has to sell, due to the very favourable climate, are largely pastoral products such as wool, frozen meats, butter,

cheese and hides. Our exports to New Zealand were quite substantial. One has, first of all, sir, to consider this question: Do we

want to trade with New Zealand at all, or not? Do we want to get $15,000,000 worth of manufactured goods into New Zealand? If we do want to trade with New Zealand there is only one thing that New Zealand can sell us. We might just as well be frank as business men, and recognize that fact. I think it can be shown that our exchange of products is very profitable.

Mr. Speaker, our exports to New Zealand cover quite a considerable range of products. We sold New Zealand rubber boots, rubber tires, automobiles and automobile parts. We sold them shoes, farm implements and many other articles. May I ask my hon. friend this question with regard to his criticism of New Zealand trade? The $15,000,000 which came to Canada provided, as I propose to show in a moment, a considerable pay roll for Canadian industry. Does my hon. friend think that the men who produced these manufactured goods for New Zealand did not eat some of the butter imported? Did they not provide some buying power in Canada in producing those goods? Were not they themselves, by virtue of the trade, able to take some of the butter which New Zealand says is all it has to give us in return for manufactured goods? I think my hon. friend will admit the logic of this.

There is another point on which my hon. friend criticized the government, and that is for allowing the cost of living to go up. I do not think my hon. friend said that the cost of living went up; I think he said it had remained stationary.

Mr. BENNETT:

A trifling increase.

Mr. MALCOLM:

In any event, he criticized the government in that respect. Now, Mr. Speaker, I contend that my hon. friend is not very consistent. He says: Keep New Zealand butter out of Canada. He also says, Give the farmer a high price for his butter, but keep the cost of living down. I do not see that my hon. friend can think anything else but that his is a very inconsistent argument. After all, however, it is only in line with other arguments used. My hon. friend said: You are injuring the job of the worker in the Dominion of Canada by importing $39,000,000 worth of agricultural implements. Quite so. It is a large amount of farm implements to import, and he led this house to believe that if the methods which he would adopt were followed this thing would not be. But I have before me, Mr. Speaker, a list of the imports of agricultural implements. It is

The Budget-Mr. Malcolm

an interesting list. My hon. friend remembers that when he was in the house a few years ago, and the party to which he 'belonged was in power, his government removed every single per cent of protection on tractors coming into this country from the United States. They did not leave one per cent of protection for tractors. I am not blaming my hon. friend; it was done in the interest of the farmer, but he cannot argue both sides of the question at the same time. He was in a government that put tractors absolutely on the free list, and of this enormous list of $39,895,000 worth of implements now coming in, I find that $21,000,000, or more than half of the whole, consists of tractors and their parts. I have nothing to say as to the advisability of the action of my hon. friend in doing this, but I do not think my hon. friend is so unfair that he will say to this government: You alone are responsible for doing this thing, and you are injuring the workers, when his government did the very same thing that this government did in considering the interests of the farmers in lowering the duty on implements of production.

I want to mention the speech of my hon. friend in one more respect. He presumed to criticize the extravagance of this government, and he made a rather unfortunate selection in criticizing the expenditures of the Minister of Public Works (Mr. Elliott) when he referred to the historical riding of North Bruce which I have the honour to represent in this house. My hon. friend showed the same lack of knowledge of Bruce that he did of the Scriptures when he substituted Macedonia for Damascus. I would like to point out to the house, Mr. Speaker, that the hon. gentleman failed to mention two of the largest industrial towns in the riding, the towns of Southampton and Wiarton, a district which incidentally at the moment is of such importance to the Hydro-Electric Power Commission of Ontario that a very strenuous battle is being waged as to who shall have the sale of power in that district. My hon. friend said that only seventeen boats cleared from ports in Bruce. The seventeen clearances referred to are self-unloading coal vessels that unload about thirty thousand tons of coal at Kincardine, much of which is used by the Canadian National Railways. My hon. friend is an Ontario man, and he knows that although the great lakes constitute the greatest inland avenue of water-borne traffic in the world, and have double the tonnage of the Panama or Suez canals, the people around the north end of lake Huron and surrounding Georgian bay have not asked this parliament for a single dollar by way of subsidy. There 785C4-60.J

is not one subsidized steamship service. All around the district represented by my hon. friend from Parry Sound (Mr. Arthurs), all around the north of my constituency, the fishermen and farmers have only one outlet for their products. All the steamship services are run privately, and have not asked this government for any subsidies. All that these people ask are grants towards the maintenance of their harbours. Referring to Tobermory, I may say that this is the finest natural harbour on the great lakes. My hon. friend from South Wellington is on sound ground in stating that Canada might well provide life-saving facilities at this point for the great lakes shipping. But it would be useless to attempt it on a small scale, and it would cost millions to provide it on an adequate scale. Tobermory is the base for wireless operations, and accordingly messages are brought there in time of disaster. The harbour will accommodate any size ship; there is no need of dredging. All this government spent was to provide a small public dock for the accommodation of the ships that anchor there. Reference has been made to an expenditure of seventeen thousand dollars at Lion's Head. From this village the products of the farm and fisheries are shipped by steamers. I do not know what the trade there amounts to, but I do know that sixty thousands dollars' worth of fish is shipped from Tobermory. To Lion's Head a regular line of boats sails weekly from Owen Sound and Wiarton and thence via Tobermory to the south shore of Manitoulin island, carrying fishing and farming products. The harbour had to be dredged and the dock repaired. Really seventeen thousand dollars is a very small contribution for the Dominion to make to assist this trade in fishing and farm produce. Apparently my hon. friend does not realize that the premier of Ontario views the district in an entirely different light. The province is spending tens of thousands of dollars every year to provide good roads in the district. I believe it is money well spent, for it will allow transportation through a district where it would not be profitable to build a railway. I do not think my hon. friend would care to be quoted as saying that if he were in power he would cut off public expenditures in these outlying ridings; certainly I would not like to be so quoted. He inferred that such expenditure was a big price to pay for my presence in this house. But let me tell him that the people of Bruce do not elect their representatives on the strength of what those representatives may be able to do for the riding by way of securing public works.

The Budget-Mr. Malcolm

However, they have the habit of electing representatives who do get public works where the works are required. So far as I am concerned, I know that the expenditures which have been made in my riding are fully justified.

Now, Mr. Speaker, may I mention a subject witih which Providence has not much to do; nor do I wish to give all the credit to the government. I refer to the export trade of Canada. I do not believe there is a man in this house who is not in absolute agreement with me-that the more highly finished the state in which we can export our products the more profitable will be the results to the country. The Department of Trade and Commerce is not exercised over the sale of such commodities as wheat, because those commodities find their own. markets'; but we are interested in assisting the sale of manufactured products. My hon. friend the leader of the opposition is quite correct in saying it is a difficult matter to draw an arbitrary line between what are manufactured and what are semi-manufactured goods, but our exports of manufactured and semi-manufactured goods last year represented a total of $648,000,000. Very few people can visualize the immensity of this volume of Canadian trade. Last year the United States-with a population of 120,-000,000-shipped $4,768,000,000 worth of goods; the United Kingdom $3,451,000,000; Germany $2,432,000,000; France $2,164,000,000. Canada stands twenty-seventh in population among the nations of the world, yet she stood fifth exporting to other countries $1,216,000,000 worth of goods, of which $648,000,000 was either in semi- or fully manufactured form, that is had been through some degree of processing.

An article may be manufactured in so far as the industry that produces it is concerned, but it may be the raw material for some other industry. Copper blister, mentioned by the leader of the opposition, is a good illustration of 'this. We import from the Argentine large-size hides. I think the hon. member for South Wellington referred to this importation. These hides are tanned in Canada, and shipped to Chicago to the harness-making plants. The large 'hides are purchased in order to give better cuts. That is a manufactured commodity export so far as Canada is concerned; it is a raw material import so far as the United States is concerned because it is bought as raw material for harness-making.

I wish to point out the value of our export of manufactured goods. The ratio of labour to the value of the goods going out of the factories of Canada is shown to be 43.8 per

cent. Hon. gentlemen who know something about industry are aware that overhead represents largely labour, expenses of sales force, advertising, bookkeeping, and so forth. All the raw material originating in Canada which goes into the factory as raw material is a finished product to the industry that produces it; therefore it represents labour. A very careful estimate-and I think it is extremely conservative-shows that for every dollars' worth of manufactured products exported from this country fifty cents is spent in the Dominion on labour in some form or other. On this basis our total of manufactured exports represents an expenditure on Canadian labour of over $300,000,000. Allowing $1,500 as the average return for the Canadian worker, it means that 200,000 workers of this Dominion are employed by virtue of our export trade in semi- or fully manufactured products. Accepting the ratio of one gainfully employed in every four, it means that the manufactured exports of this country provide employment for ten per cent of our total population.

Therefore, sir, I submit that nothing this Dominion can do is of greater importance than to assist her industrialists to find outlets for their commodities in the markets of the world; this brings employment to our working men, it brings money to our shores, and it provides markets for the raw material of the Dominion, whether wheat turned into flour, or lumber turned into sash and doors.

Without unduly flattering the officers of my department, I believe we have representing the Dominion throughout the world as intelligent and aggressive a group of trade commissioners as any country could wish to possess. It would take too much time for me to read the numerous letters of testimony which have been received. The writers voluntarily have complimented our men in the field for what they have done to gather business for Canada.

But there is another service of great importance. Some years ago we inaugurated a steamship service between the Dominion and South Africa. This service has developed a trade which has put Canada to the forefront as an exporter to South Africa. Last June we subsidized a steamship service to the east coast of South America. WTe are baying $100,000 a year for six trips from Montreal in the summer, and four trips from the maritime .provinces in the winter. We are now running four ships of eight thousand tons each to Brazil, Uruguay and the Argentine republic. We have increased the exports to these countries-substantially to Argentine

to $19,000,000. To the Argentine we sell farm

The Budget-Mr. Edwards (Frontenac)

implements to the extent of $3,000,000; rubber tires and footwear, $4,500,000; paper, $3,000,000; sewing machines, $4,200,000; automobiles, $2,000,000; dried and salted fish, $500,000.

The Canada-Australia service was started in 1892 with an annual subsidy of $100,000. The return subsidy paid by New Zealand is another $100,000, while the Fiji islands contribute $25,000. So that the service receives $225,000. There is a motor ship, the Aorangi, of 17,500 tons, and the Niagara, of 13,400. These services provide for the carrying of Canada's mail-a service which is said to be worth about $68,000. But the .point worth noting is that, when that service was instituted in 1892 Canada's trade with Australia was $293,000; to-day that trade has grown to $16,000,000. In 1911 our trade with New Zealand was $1,000,000; to-day it is over $15.000,000-that is, our trade one way. I wish to point out the value of these steamship services. I should like to refer to the service to 'South Africa.

Mr. SPEAKER:

Time.

Go on.

Mr. SPEAKER:

By unanimous leave.

Mr. MALCOLM:

I want to put on Hansard what we are doing, and it will take only two or three minutes. In addition to the servioes I have already indicated, the Canadian Government Merchant Marine have thirteen boats, with 100,000 tons gross capacity, sailing between Canada and New Zealand. From Vancouver to the British West Indies we have subsidized a service to the extent of $3,000 per trip monthly, the vessels calling at Trinidad and intermediate ports. This service was established in 1926 and as a result of it last year 86,000 tons of freight of various kinds went from British Columbia to the West Indies. Of that tonnage, 1,700 tons were transshipped to some of the other British possessions at which the steamers did not call. Valuable business was secured in Douglas fir by virtue of that service. In the development of the Maracaibo oil fields in Venezuela we managed to obtain orders for British Columbia fir, and through the service a substantial business will be retained for this Canadian product.

The service to South Africa was established in 1902 and am average subsidy of $125,000 has been paid, by means of which we have built up with South Africa a trade which has increased from about $4,000,000 to about $11,000,000.

Mr. Speaker, the house has been very indulgent in allowing me to complete the statement and I beg to be allowed to conclude in a word. I contend that Canada, in view of her export trade in manufactured goods, rendered possible by these services, can well afford where necessary to subsidize transportation to every country in the world when the results are as I have indicated. To obtain a volume of business which supports 8 or 10 per cent of our population, and this with the expenditure of less than half a million dollars, is, I believe, an accomplishment of which as Canadians we have a right to be proud. I do not believe that there is any form of government assistance which will be shown in the future to be of such importance to this Dominion as the assistance which we are giving to those who employ labour in this country, to find markets for their products in foreign fields.

Hon. J. W. EDWARDS (Frontenac Addington) :

I have listened with a great deal of sympathy to the hon. gentleman who has just taken his seat (Mr. Malcolm), because I realize that his health has not been quite good of late owing to a cold. May I express the hope that when the hon. gentleman's health improves-as I trust it will-his reasoning will improve proportionately. The hon. gentleman started by saying that there was unanimity of opinion in the Dominion regarding the prosperity of Canada. I challenge that statement at the outset, and I shall endeavour to show him that there are in Canada certain classes of people who are not enjoying the prosperity of which he boasts. The hon. gentleman referred to the part that Providence plays in our prosperity, such as it is, but in so far as the manufacture of our raw materials is concerned Providence gets no credit at all; any credit along that line must be given entirely to the government. The minister reasoned that, of course, it was advisable, it was better for Canada to have raw materials fully manufactured in this country since it gave employment to more people-that the more fully manufactured the goods which we exported from this country the more people there would be engaged in the production of those goods. Very well. Now let us measure the government by that standard and what do we find? I find that our exports of fully manufactured goods are decreasing; they are getting less from year to year. The minister shakes his head. Well, I have nothing better to go by than the report which is issued by authority of the minister himself. I appreciate the fact that, according to the judgment of the minister, in speeches made throughout Canada, and according to the statement of the Minister of Finance (Mr. 950 COMMONS

The Budget-Mr. Edwards (Frontenac)

Robb) the other day, we are not to put very much reliance upon these reports; because both the Minister of Finance and the Minister of Trade and Commerce have repudiated their own reports. The Minister of Finance repudiated them in an endeavour to bolster up or to lend colour to the treaty with France. He tried to show that a large percentage of the goods shipped was in some way diverted as it crossed the ocean. Ife said that France buys more from Canada than our records show.

Hear, hear.

Mr. EDWARDS (Frontenac):

An hon. gentleman says "hear, hear." Well, I suppose that was as true before the French treaty was arranged as after. But may I point out that the United States records show that they export to this country over 8100,000,000 a year more than our records show that we import.

Mr. MALCOLM:

Does the hon. gentleman want an explanation? It covers wheat going through Montreal-$91,000,000.