Mr. STEVENS:

Pretty radical.

Mr. WOODSWORTH:

It is radical; that is why I quote it. I am one of those who believe that our present economic system is fundamentally inadequate to meet the needs of present day civilization, and it is such facts as these that drive me to that conclusion. But let me quote that last sentence again:

_ They must know that a reserve of unemployed is one of the most helpful factors in the successful functioning of our present industrial order. They must know too that the great weakness in the system is that while it produces magnificently it fails to be so impressive as a distributor-hence over-production and under-consumption; and finally they must know that any remedy they have so far put forward or ever contemplated, cannot materially change conditions which are inherent in the economic system.

The Labour members believe that the present economic system must be replaced by a different one; hence in discussing these matters we are very much under a handicap, because it is generally assumed in this house that the present system is functioning fairly well. Under these circumstances we can do little more than to show the weaknesses of the existing order. But I would point out , that even under the existing system we might expect to have have some alleviation offered by the government in power. The government, however, is offering practically no alleviation. Thus we are confirmed in our belief that there is something inherently wrong in the system. A friend beside me suggests that the opposition may believe the system is not perfect. I am glad to have the support of the opposition, and I fancy that if we were permitted to sit side by side in this

house many years longer we might make the Conservative opposition into very good socialists.

Mr. BELL (Hamilton):

My hon. friend

is not a socialist, I hope.

Mr. WOODSWORTH:

A socialist? That is why I am here. It all depends upon your definition of socialism.

Give us a definition.

Mr. WOODSWORTH:

In a word, I would say this: we believe that the concentration of capital has gone on to such an extent under the existing system that it has got into comparatively few hands. We believe that a very small group of people have managed to gain control over this great system of production and distribution. We do not believe we can go back to the earlier system of individual production, and under these circumstances it is our opinion that there ought to be some sort of democratic control over the existing system-a control exercised for the advantage of the many and not for the profit of the few.

I should like to back up the appeal made by the hon. member for West Hamilton by giving a group of statistics which are closely related, one set to the other. The Department of Labour has given an estimate of family budgets at various levels. They take what they call the average family of five- for it is supposed that it is necessary that a married couple should have at least three children in order that, allowing for sickness and death, the race may be perpetuated. Taking the average family of five, the department says that the comfort level is $2,356.82; the health and decency level requires $1,719.23; while the minimum subsistence level is estimated at $1,396.92. They also give figures for what they denominate the poverty level. This they fix at $900, and the people receiving that income are on the ragged edge, apt to fall lower at any time. As a matter of fact, even where relief is well distributed, our relief agencies are frequently forced to give to families in the vicinity of $900 in order that anything like respectable conditions may be maintained in the homes under relief.

Now let us take the wages in Canada, and here we are not dealing with what it may be charged are the exceptional cases to which the hon. member for West Hamilton referred. A very extensive survey was made in 1921; let us consider the case of a skilled tradesman such as a carpenter. In Montreal the average earnings of an ordinary carpenter were $1,109.63; in Toronto $1,187.83 and in Winni-

The Budget-Mr. Woodsworth

peg $1,224.56. Then consider the labourer; in Montreal the average earnings of a labourer were $881.41, in Toronto $965.48 and in Winnipeg $980.37. In other words, unskilled workers in Canada are down at the poverty level, either slightly aibove or slightly below it, whereas such skilled tradesmen as carpenters receive a little less than what the Department of Labour has established as the minimum for decent subsistence; they are below the level of health and decency.

We had figures given us by a gentleman representing the cotton factories of Cornwall who came before the committee on industrial relations several years ago; he told us that in certain factories workmen were receiving only $15 per week. Under the Minimum Wage Act the girls in these factories were receiving $10 per week, not too large an amount to keep them in decency, but the men most of whom according to the evidence were married, were receiving only $15.

Mr. BELL (Hamilton):

There are scores

of workmen in Hamilton getting no more than that right now.

Mr. WOODiSWORTH: Can any hon. member of this house say that is a decent wage? Can anyone say that fathers and mothers attempting to rear families can maintain them on a wage of that kind? It is all very well for the Minister of Finance, in looking over the bank clearances, the volume of trade and so on, to say that we are wonderfully prosperous, but surely when the great mass of the people are receiving wages such as I have indicated-and these statistics are furnished by our own bureau-it is impossible to say any longer that there is general prosperity among our people That is the situation we must face. Only the other day, before one of the committees of the house, a manufacturer said with regard to his own men:

I do not see how they can live, especially at this time. We are working from eight to four and not on Saturdays. They have to pay their expenses working about thirty-five hours a week.

Even civil servants in the employ of this government in many instances are receiving only $80 a month; they are down at the level of the poverty line. Now let me quote another set of statistics which seem to bear directly upon this question; let me give the average number of weeks of employment by workers of all ages in cities of 30,000 population and more, according to figures furnished in 1921. I select a few occupations and cities that are fairly representative:

Construction

Montreal 42.69

Toronto 41.34

Winnipeg 40.67

Labourers

Montreal 42.26

Toronto 41.72

Winnipeg 42.04

Therefore these people are working only forty or forty-two weeks in the year, and the wages received during that time must keep them for the entire year. If they have a period of illness; if any accident happens or there is any other calamity in the family il throws them back for years and forces then: to spend all their time paying debts. Some one may say that a number of these people have not large families. That is true, and I have here another set of statistics giving the average number of persons per family supported by heads of families of wage earners in cities of 30,000 and over, according to the figures of 1921:

Montreal 4.00

Toronto 3.41

Winnipeg 3.61

That simply means that at a very early age the children must go out to work in order to supplement the wages of the father, and in this way we are mortgaging the future of the coming generation.

Now I should like to speak for a few minutes on some matters more directly related to the budget. After all, the government is a vast collecting agency; the estimated expenditure for 1928-29 is $385,160,000, an average of $40 per head, or $200 for a family of five. I submit that no family in Canada can be really uninterested in the way the people's money is spent when each family contributes an average of $200 per year.

How is this vast sum raised? The total revenue from taxation is $391,050,000; of that amount $58,500,000 comes from the income tax, leaving a total of $332,550,000 raised by indirect taxation, or an average of approximately $35 per head. The greater part of our revenue comes from the common people, and the larger the family the more they have to pay in taxation. On the other hand, how are these huge revenues spent? According to the Minister of Finance the principal expenditures attributable to the Great war, total 42.30 per cent. I submit, as I have done in previous years, that if to this total is added the amount made necessary in the collection of the much larger revenues and other large items of expenditure of that character, the expenditure attributable to the war will be in excess of 50 per cent. Howe-*"- we will

The Budget-Mr. Woodsworth

take the figure given by the minister, 42.30 per cent. Contrast that with other expenditures. I look at the estimates which have been placed before us and I note a few of the items and the relation they bear to the total expenditure, as follows:

Per cent

Scientific institutions 29

Health 23

Old age pensions 21

Labour

1.09

On these four large and important departments of our public life we spend only one per cent of our revenues, while according to the figures given by the minister 42.30 per cent is spent on the last war. I think perhaps that very well illustrates one of the reasons why some of us connected with the labour movement are not tremendously interested in the budget. The common people of the country are getting very little out of it; the people who are receiving the greatest benefits under the budget are the people who hold a mortgage on Canada, many of whom obtained that mortgage by profiteering either during or since the war. Notwithstanding our protests of previous years the government have made absolutely no effort in the direction of a capital levy in order to extinguish our great war debt.

With regard to old age pensions, the Prime Minister said the other day:

I believe that everyone who has given any attention to public finance will agree that it is a thoroughly vicious system to have one body raise taxes and another body expend the money thus secured.

I think it was the member for Vancouver South (Mr. Ladner) who then asked: What about old age pensions? The Prime Minister then continued:

I think it is, yes: I have come to the conclusion that it is a thoroughly vicious principle.

Mr. ADSHEAD:

Who said that?

Mr. WOODSWORTH:

The Prime Minister. Let me compare that with what the Prime Minister said on March 26, 1926, when he was advocating the government taking part in such a scheme. He said:

As between the different provinces I fail to see where there is a distinction to be drawn between the money voted by this parliament say for the purposes of immigration which may go to place a man or woman in any one of the provinces, and money voted for preserving the individual no matter in what part of the Dominion he may be found. ... 1 am proud

to be able to stand here to-night and to join with others in giving permanent expression in the legislation of our country to the views and purposes that are therein expressed.

That is what the Prime Minister said in 1926 regarding the old age pension legislation, but he now tells us that it is a vicious system. I do not want to take the time of the house in discussing this question of the relative authority of the Dominion and the provinces.

Mr. SANDERSON:

I think the hon. member is mistaken when he says the Prime Minister was referring to the old age pensions when he used that phrase.

Mr. WOODSWORTH:

If the hon. member will refer to page 316 of Hansard he will find that the member for South Vancouver (Mr. Ladner) interjected the question, "What about old age pensions?" And the Prime Minister in answer to that question said, "I have come to the conclusion that it is a thoroughly vicious system."

Order.

The DEPUTY SPEAKER:

I would point out to the hon. member that in referring to a previous debate in the present session he is not in order.

Mr. WOODSWORTH:

My statement was in answer to a question.

Mr. SANDERSON:

The hon. member is wrong: the Prime Minister was not referring to old age pensions.

Mr. WOODSWORTH:

If the Prime Minister's contention is correct, what about the administration of justice? Surely the Dominion collects certain revenues and turns them over to the provinces. What about the subsidies to the provinces? The Dominion collects and turns them over. What about the grants to the Canadian National railway system? The Dominion collects and turns them over to another corporation. What about the loans to harbour boards? The Dominion collects and turns them over as loans to various corporations over which it has no direct control. If it is a principle accepted by this house and by the government that this kind of thing may be done-it is done in other countries; it is done in Great Britain-that we may make grants for certain specific purposes, it does seem to me an extraordinary thing that the Prime Minister should make such a statement as I have quoted, even before all the provinces have adopted the old age pension scheme. I hope he will explain this statement for the benefit of the hon. members opposite.

Mr. SANDERSON:

He did not make the statement the hon. member says he did.

Mr. STEVENS:

Certainly he did.

The Budget-Mr. Lapierre

Mr. WOODSWORTH:

We should soon face this question of Dominion and provincial jurisdiction. Take the question of the eight-hour day. We are told by the government that that is a provincial matter entirely and that the Dominion cannot handle the situation, and this notwithstanding the fact that Canada solemnly signed a treaty in which she undertook to carry out that principle. We bring up the matter of a minimum wage and are told that that is a matter under provincial jurisdiction, yet here again we undertook to see that the provision of the Versailles treaty and the Washington convention were carried out. In regard to a great variety of matters of this kind we are told that the Dominion has no jurisdiction. It is quite true the Labour department is very busy preparing reports and statements with regard to all these matters; it is quite true the government permits us to have set up a committee of industrial relations and to have referred to that committee various motions dealing with matters of this kind, but we sit there week after week and give our best attention to the different questions and when we are ready to bring in a report we are told by the Department of Justice that the Dominion government has no jurisdiction over such matters. I think it is nearly time that this situation should be clearly placed before the country. If the Dominion government has no real jurisdiction with regard to these matters, let that fact be broadcast from the housetops so that we shall not come to Ottawa expecting that something will be done. The government should then be unable to play with this house and pretend that it is possible to do something when they know all the time that nothing actually will eventuate. I think that is not too much to demand from the government.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Mr. E. A. LAPIERRE (Nipissing):

Mr. Speaker, notwithstanding the discursive criticism we have heard from the opposite side of the house, the Minister of Finance (Mr. Robb) should feel highly gratified at the reception accorded his budget by the press and people of Canada. His successive budgets have indicated more stability, lower taxation and a rapid advance towards a greater state of prosperity than Canada has ever before enjoyed. Time was when a budget was awaited with anxiety, but our Robb budgets 78594-61

have inspired confidence and are now showing annually that Canada has turned the corner and is rapidly becoming one of the most enviable nations of the world.

Another cause for gratification on the part of the minister is the fact that during the present year the prosperity of Canada was nation-wide, all the provinces having benefited equally by the policy of the government. The maritime provinces, which have been slow in recovering from the aftermath of the war, have, by the implementing of the Duncan report, taken their place along with the other provinces. During the last few years British Columbia has enjoyed the greatest prosperity since confederation. Agriculture, mining, fishing, industrial progress and the development of its ocean ports have placed it in one of the most enviable positions in the Dominion. The situation in regard to the three prairie provinces I shall leave to the Hon. Mr. Crerar who, in an address delivered in Montreal on February 17, made the following statement:

Western Canada's growth was described as one of the most remarkable developments in the world by Hon. T. A. Crerar, of Winnipeg, at the Thistle Curling Club's weekly luncheon to-day. As an example he stated that prior to 1908 the record for wheat production in the prairie provinces had been 100,000,000 bushels, while last year it had been 540,000,000. Last year's crop he estimated would net the farmers of western Canada $450,000,000. Profit on live stock production would net $57,000,000, and on dairy products, $56,000,000. Each year, he pointed out, the grain belt was reaching further north and in Alberta it now reached to 600 miles north of the international border, the Peace river country, in his opinion, was destined to become one of the greatest grain producing areas known.

Europe and Asia provided great markets for Canada's surplus volume of grain, Mr. Crerar continued. Canada was one-third the distance to Europe or Australia, while the rapidly increasing population of the United States -was eliminating that country as a wheat-exporting area. Russia also was pacing as a country of potential exporting possibilities and Canada was the logical country to fill the void.

The prosperity of the two older provinces of Ontario and Quebec is reflected in their budgets for the last fiscal year. Both those provinces have enjoyed the most prosperous year in their histories and they find themselves with ample surpluses that can now be used for the betterment of their people. But of all the industries which have contributed to the prosperity which has come to Canada there are three which- deserve special mention, namely, pulp and paper, water-power and mining. These three combined have perhaps contributed more to Canada's progress than any others. The pulp and paper industry, the development of which dates back less than

The Budget-Mr. Lapierre

a decade, has been developed without any governmental assistance and has placed Canada in the proud position of being the greatest producer of newsprint in the world. The capital invested in our pulpwood industry amounts to $580,000,000. At the end of 1927, one hundred and thirteen mills were operating, employing 32,876 men, disbursing in salaries and wages $46,674,293. In 1928 Canada's newsprint production increased fourteen per cent, while during the same period America's newsprint production increased five per cent. In 1913 there were produced in Canada 350,000 tons of newsprint. In 1927 there were produced 3,000,000 tons, a gain of 570 per cent in fourteen years. In 1927 Canada produced newsprint valued at $132,286,729, making Canada, as I said before, the greatest producer of newsprint in the world. When we consider, Air. Speaker, that less than fifteen years ago newsprint had taken but a very small place in our industrial life, this growth, as I have intimated, has contributed very largely to the prosperity of Canada.

Another industry to which I wish to refer, Mr. Speaker, is that of our water-powers. In these years of keen competition our water-powers are one of our greatest sources of wealth, and will in the course of time be the prime factor in making Canada one of the leading industrial nations of the world. No possession which Canada has is more envied by other nations than our almost unlimited water-powers. Those of us who were in the north country less than twenty-five years ago have lived to see that great area transformed from a wilderness into great industrial centres, of which newsprint is the basic industry, all due to the presence of a large amount of water-power.

The potential water-power of Canada that we know to be available amounts to 33,000,000 horse-power. We have at the present time a capital investment of over one billion dollars in developed water-powers. Of that 33,000,000 horse-power, in 1900 we had developed 170,000 horse-power. In 1928 we had developed 5,100,000 horse-power, an increase of 2,900 per cent in that period. As every thousand horse-power developed in connection with industry creates employment for 385 men, when we have reached the point of total development we will employ, directly or indirectly, 15,000,000 men, which means that Canada will have sixty millions of a population when all her water-power is developed. Our water-powers have been developed as follows: in the province of British Columbia there are now developed 9-2 per cent; in Alberta, 0-3 per cent; in Manitoba, 4'75 per cent; in Ontario. 26 per cent; in Quebec,

15-8 per cent; in New Brunswick, 50 per cent; in Nova Scotia, 21 per cent, and in the Yukon, 5 per cent. Possessing such an enormous quantity of horse-power, these sections of our country which have available so much of this white coal will, I have no doubt within the lives of those who are here to-day, rank amongst the largest industrial centres in the world.

Another industry, Mr. Speaker, which has come to the forefront very rapidly during the last twenty-five years is the mining industry. For many years those who were first interested in this industry found it very difficult to convince the average citizen of the tremendous potential value of our mining area. We have heard a great deal about agriculture, but it may surprise hon. members when I say that less than fifteen per cent of our great country is suitable for profitable agriculture, and that the other eighty-five per cent of our great heritage comprises the largest mining area known to science, an area that contains all the best and most valuable metals known to geology. This vast precambrian formation, which is as yet only barely scratched, has perhaps the largest potential wealth of any of our natural resources. Our mining industry, which produced $273,000,000 during last year, is but in its infancy, and the amount of its production during that period is no indication of what the near future has in store for us. Some of the recent discoveries made in Quebec, Ontario, Manitoba and Alberta indicate greater possibilities than in any other of our natural resources. Mining will also contribute very largely to the solution of our transportation problem. We are informed by economists in the United States that sixty per cent of the tonnage of American railways originates in the products of her mines. And it does not take much imagination to visualize what will happen in this country when these vast areas are fully developed. At the present moment we are producing 85 per cent of the world's nickel, 90 per cent of the world's asbestos, and we will soon rank amongst the largest copper producers in the world. Gold, silver, nickel, platinum and zinc are now being found in large deposits, and as only a small area of this vast formation has been explored, its future possibilities are beyond calculation. The mineral production in Canada for the year 1928 was $273,000,000, a gain of 140 per cent in sixteen years. In 1910 Ontario produced $42,637 in gold, and in 1927, $33,627,040. In nickel and copper, in 1928 Ontario produced $30,000,000. The gold, silver, nickel and copper mining industry gave employment to over five thousand men, and

The Budget-Mr. Lapiene

distributed in wages $9,520,939. To the end of 1927 Sudbury nickel and copper Cobalt silver, Porcupine-Kirkland gold had produced over one billion dollars. In dividends Sudbury nickel and copper had distributed over one hundred million dollars, Cobalt silver a like amount, and Porcupine-Kirkland gold seventy million dollars.

Time does not permit my going into further details of the wonderful development of our mining industry. Recent discoveries in the constituency which I have the honour to represent are such as to attract the attention of mining men throughout the world. As was stated by the thon. member for Vancouver-Burrard (Mr. Clark), there is a mine- in my district which in three years has increased in value from one hundred million dollars to one thousand million. These figures may sound fantastic, but they are known to the mining men of the world to-day. I may say [DOT] that from present indications other mines now being developed may also become great producers. In the Sudbury area we are producing all the -base and precious metals, and I have no hesitation in saying that we have in a small area of forty by twenty miles what at an an early date is going to become the largest mineral-producing area known to the civilized world. This is but one of the several mining camps which are rapidly becoming producers, and which in a few short years will be contributing largely to our national wealth.

British Columbia is fast coming to the fore as a producer of copper, and in northern Quebec there is a co-pper mine of great potentialities. In fact within the next few years we are going to 'become an important factor at a time when there may be a world shortage of this metal. During the visit to this country of the British Empire Mining and Metallurgical Association grave fears were expressed of such a shortage in the near future. Well, should that contingency arise, these recent discoveries of rich copper deposits will enable us practically to dominate the situation.

The rapid development of our great mining resources is reflected in our trade and commerce. The figures show a very satisfactory expansion, and this is most gratifying to those of us who have always had confidence in the wise policies of the government, policies which have tended to build up our overseas trade to its present impressive volume. We are now competing in the markets of the world with our manufactured products. The following figures of exports per head of population show that we lead the w-orld:

United States $ 77 per head

Great Britain 190 per head

Canada 241 per head

This demonstrates the very satisfactory development of our foreign trade, and is ample proof that the tariff policy advocated and put into effect by the government is the policy best suited to our economic needs.

During the debate, Mr. Speaker, there have been frequent references to our trade relations with the United States, based on President Hoover's inaugural address. In my view those references are most -inopportune, for I 'believe that the wise policy of the administration has manoeuvered Canada into such a favourable position that she will be able to obtain from the United States a satisfactory trade arrangement without any resultant loss to our agriculturists. As a result of the investigation before the ways and means committee in Washington, the people of th-e United States are beginning to realize that their high protective tariff policy is responsible for problems of such gravity as have not confronted any president during the last quarter of a century. That investigation has disclosed that after a period that has been, perhaps, the moit prosperous in the history of the United States, President Hoover and his administration are face to face with several grave questions, such as the rapid concentration of wealth in a few hands, surplus production, chain stores, mail order houses, the agriculturists' demand for relief, and unemployment. Those of us who have followed the economic development of the United States realize that, being highly industrialized, their manufacturers must look to foreign markets for the disposal of their surplus production, but that their high cost of production will be an almost insurmountable -obstacle to their competing successfully in the markets of the world. This means that the Republican administration cannot afford to put into effect any tariff policy which will shut out from their market their best customer-Canada. Moreover, there is a rapidly growing sentiment in the United 'States that a high tariff policy is no longer applicable. The solidarity of opinion in regard to tariff which until recently characterized a large portion of the industrial population of 'the United States is rapidly diminishing, and before the ways and means committee at Washington a large nu-mber of industrialists demanded a lower tariff and in some cases free entry -of raw material. Some of the leading financial newspapers in the United States are to-day sounding a note of warning. I have here an article from the Journal of Commerce in which the following appears:

According to reports which have been sent to various newspapers in this city by trust-

The Budget-Mr. Lapierre

worthy correspondents in that country, the inhabitants of Canada from west to east are feeling a good deal of worry at the proposal that has been made to adopt tariff duties at Washington which are quite manifestly intended to discriminate against them. Among these are the very high rates on farm products of various classes. True, they do not specifically discriminate against Canada, because they are technically applicable to goods from all parts of the world, but since Canada is the only quarter from which we are likely to get these goods in very large volume, they do, as a matter of fact, operate as a severe handicap upon Canadian trade with the United States. There are many other phases of the situation that appear to figure largely, but this one may be taken as a sample of all.

It ought not to be necessary to enlarge upon the various reasons why a friendly and considerate policy ought to be pursued by this country toward Canada. There are many such, and most of them are based upon the highest grounds of international good feeling. For the immediate purpose however, it is necessary only to refer to an obvious, but essential consideration -it would be bad business for us to do anything that could alienate the good feeling of the conservative men in Canada, or that could afford a reason to those who are alwiays seeking to find some cause of offence in our conduct for attacking our trade and subjecting it to hardships.

The Journal of Commerce has on former occasions called attention to the fact that our export trade is a home industry which is greatly in need of attention.

The Boston News Bureau on the same date gives out the following:

It may not be true, except as a matter of business policy, that "the customer is always right." But two great neighbours who are a geographical unit would gain more from an approach to economic unity than from a tariff war. Far better the greatest possible interchange of goods than an unconsidered increase of duties that would affect adversely a fifth of our entire export trade.

In connection with the findings of the ways and means committee at Washington during the months of January and February, I would quote the following:

But industry and finance speak with divided minds. There are some great enterprises in this country that require foreign markets. Such industries as the automotive, secure in their dominance of the domestic field, are more interested in cheapening costs of production to improve their competitive position abroad than in the tariff. Other manufacturers want cheaper materials from abroad, like dyestuffs, to enter the country. Merchandisers, naturally, seek cheap supplies of finished goods. International bankers are becoming so heavily committed in other countries that there has developed in that quarter a more liberal view- toward opening the American market to products of specific foreign industries or countries.

The foregoing quotations indicate that the tariff policy of the United States has created there a condition which has become quite

acute; and to-day, owing to the far-seeing policy of this government, we find ourselves in a position where we can await with complacency any action taken by the congress of the United States, feeling that in our present industrial situation we can fully cope with any contingency that may arise. It would be a great calamity if, after more than one hundred years of peaceful relations between Canada and the United States, and at the present juncture, when the relations between that country and Great Britain demand that we become more or less the liaison nation between them, we should enter upon a policy of retaliation in respect of the United States. I say to my hon. friends opposite, therefore, that, in my opinion at any rate, our position in that respect at the present moment is far better than it would have been had we adopted their policy of "no truck or trade [DOT] with the Yankees" or their high tariff policy of "brick for brick" with the United States. We have lived peacefully with our neighbours, and under the existing conditions we have grown to prosper. If, therefore, we continue on the lines along which this nation has prospered, we are bound in the very near future to take our place amongst the leading nations of the world.

Mr. H'. E SPENCER (Battle River): In

rising to take part in this debate I wish first of all to congratulate the Minister of Finance (Mr. Robb) on the very fine presentation he made to the house in submitting his budget. I wish also to congratulate him upon being able at the present time, with the trade of Canada as it is, to announce a surplus of some $69,782,000. To this extent the national debt has been reduced.

The budget has been praised by all members to the right of the Speaker, quite naturally, and criticized by those members who call themselves the official opposition. This is natural under the party system; but as one who does not believe in the party system I will neither praise entirely nor blame entirely the matter contained in the budget. I shall not stint in my praise of those things in it which I think deserve praise, nor shall I hesitate to criticize where criticism is due.

During his speech the Minister of Finance referred a good deal to the prosperity of the country. I am glad to say that to a certain extent there is prosperity, if you take bank clearings, car loadings and so forth. But can we say that we have prosperity throughout this country if the standard of living among the masses of the people is not as high as we might prefer it to be? I would say that 80 per cent of the people of Canada are more

The Budget-Mr. Spencer

worried over making both ends meet than over spending any surplus income which they might have. If twenty people have an aggregate income of $50,000 yearly and one of the twenty happens to receive $40,000 of that total, there is not very much left for the other nineteen.

When all is said and done, what is prosperity? According to aggregate statistics the people of the United States have it in abundance, yet James J. Davis, the United States Secretary of Labour, as recently quoted by the Calgary Albertan, states that 86 per cent of the Americans are poor. Figures compiled by the Federal Trade Commission at Washington show that one per cent of the people own 59 per cent of the wealth of the country; 13 per cent of the people own 90 per cent of the wealth; 87 per cent of the people own only 10 per cent of the national wealth, and of the total national income 50 per cent goes to capital. The United States is enjoying great prosperity; so is Canada, to a certain extent, but if Canada is similar to the United States in the figures I have given,-and I think we are very much like that country in this respect, can we say that we have general prosperity?

We find that our national debt is still very large, totalling $2,227,068,000. A certain amount of that debt is being written off this year, but I claim that we should have a more systematic way of dealing with this debt than by chance surpluses shown in the budget. A few nights ago the hon. member for Wetaski-win (Mr. Irvine), speaking on the budget, made some reference to the need of care being exercised by the Minister of Finance in either paying debts or issuing bonds. At the time the Minister of Railways (Mr. Dunning), was rather critical of the statements made by the hon. member, but I claim that my hon. friend from Wetaslciwin was treating a serious subject in a very able way, and it would be well for this house if more hon. members made a study of the problem my hon. friend was trying to place before us. In my opinion care should be taken by any Minister of Finance not only in issuing bonds but also when he is paying off debts, because if instead of taking advantage of the Finance Act and the treasury board we raise money by issuing bonds or treasury bills, it is a fact that as the hon. member for Wetaskiwin said-in the paying of a government debt we simply create a private debt. To meet the payment of a bond coming due, the Minister of Finance must obtain money through taxation, either directly or through tariff taxes, but in any event the taxes are drawn from the people.

They are paid to the minister, and he pays them out to meet the bonds ot treasury bills. That money is again released, but it is released only to investors, and while the taxpayers are many the investors are few. If the Minister of Finance tries to pay off large debts in dull times he reduces the purchasing power of the people and drags down prices, making times so much harder; on the other hand it is essential that we should try to raise as much money by way of taxes as the people will stand in prosperous times, when the effect of paying off amounts owed by the government will not be nearly so harmful. There is no doubt in my mind that in Canada we have not taken advantage of times of inflation to pay off our debts. The greatest mistake of all was made during the time of the war, when we did not tax the people who were making large incomes to meet a part of the war debt which was being created.

Referring again to the necessity of watching not only the issuing of bonds, but also the paying of debts by the government, I would remind the house that with a given amount of money and a given quantity of goods, if you put more money into circulation and do not increase the quantity of goods, you will enhance prices, assuming that the velocity of money in unchanged. On the other hand, if you reduce the amount of money by taxing the people heavily, and do not alter the quantity of goods available, you will change the basis of the purchasing power by lowering prices; and therefore it is the business of any Minister of Finance to watch both the payment of bonds coming due, and the issuing of new ones, so that he can act according to the necessities of an inflation or deflation period.

Looking for a moment to the revenue of the country I find that in customs import duties we raised no less than $185,000,000, or 41.11 per cent of our total revenue. According to the Liberal Party handbook of 1919, it is claimed that for every dollar raised by customs duties at least three dollars go into the pockets of protected interests. If this is true -and we will take them at their word- in raising this $185,000,000 for the exchequer $555,000,000 has gone into the pockets of protected interests; if we add the two amounts together we find that this year the people have been taxed to the extent of $740,000,000. Does this look very much as though the party in power have gone very fair in redeeming their promises of lower tariff, or have travelled very far toward the ultimate goal of free trade? From excise taxes, the stamp tax and the sales tax we received $81,500.000 or

The Budget-Mr. Spencer

IS. 11 per cent oif the total; through the income tax we received $58,500,000, or 13 per cent of the total, and by means of excise duties $63,500,000 or 14.9 per cent of the total. I notice that the income tax stands fourth in the amount of taxes produced, and I want to congratulate the Minister of Finance and those who assisted him in drawing up the budget in that they have not seen fit to reduce the income tax as a certain minority throughout this Dominion have requested during the last few years. During this period of so-called prosperity-and I will admit that it is a prosperous time for the few if not for the many-I will say that we might have gone further and increased the income tax on a sliding scale in order to obtain a little more revenue to pay off a little more of our national debt.

The following are a few items of expenditure :

Penitentiaries $ 1.800,000

Health 900,000

National defence

18,000,000Scientific institutions

1,100,000Agriculture.. .;

7,390,000

It is rather a blighting criticism to make when one can say that we are spending twice as much on our penitentiaries, in this law-abiding country of Canada, as we spend on health; that we are spending on scientific institutions only about half of what we spend on our penitentiaries; that we are spending $18,000,000 on national defence, just after having signed a peace pact to outlaw war, and not quite half that amount on the basic industry of this country which employs 54 per cent of the population. I think those figures will be worth looking into, and I am sure that certain adjustments could be made with profit.

In looking over the budget speech of the Minister of Finance, I notice that we are paying annually for the cost of the last war no less than $162,911,000, or 42.3 per cent of our total expenditure. We know very well that the last var was an absolute failure, both to victors ind vanquished. What are we doing in a public way to eradicate the roots of war and eliminate the possibility of another such conflagration? We know that wars are no longer caused by religious controversies or national animosity, and very rarely by the need of land for national expansion. But we do know that there is an economic war going on all the time which, if we do not find ways and means to stop it, will lead to military warfare. It is rather interesting when you consider the fact that in olden times the victors in any war always took goods away from the vanquished. 1 o-day all that is changed. When we have

fMr. Spencer.]

half the world at war with the other half today, what do the victors do? We know what they did under the treaty of Versailles: they tried so to arrange things that the victors could force their goods on the vanquished- just the reverse of what was the custom in dajrs gone by. Why is this? Through the aid of science and machinery we have brought about a condition where we have to face the problem of consumption and not of production. Science is rapidly transferring the work from the shoulders of men to that of machinery, and it will only be a few years before we will see individual factories in industrial countries-and most of the countries are becoming industrialized-operated by a dozen men only. Under such conditions we have to recognize that unemployment is a sign of social development. We cannot consider unemployment as a passing event or something that will happen only now and not next year, because the countries are turning out goods so much more rapidly than in the past they feel they are forced to look for markets abroad. Most countries are also putting up tariff barriers of one kind or another in an effort to prevent goods from coming in from the outside. If we do not put a stop to this economic warfare it can only lead' ultimately to military warfare.

I congratulate the government on the various treaties they have negotiated in an endeavour to get away from this condition, but I cannot agree with their Australian treaty. I think that was a one-sided proposition, because they penalized agriculture for the benefit of industries which were better able to look after themselves. I criticized it and I voted against it when it was before this house. I did so because I believed it worked a hardship on the public of this country in the matter of a very necessary food-raisins. A three cent duty was put on raisins in anticipation of obtaining most of this commodity from Australia. The latest figures I have been able to obtain on this question show that although we consume annually some 37,000,000 pounds, Australia has only supplied us with 824,000 pounds.

I appreciated the minister's budget speech very much, but I would have liked him to go into the problem of how we are to meet this situation of economic warfare and obtained his suggestions how to prevent it from going on and turning into something worse.

The minister claimed that he had a trade balance of $154,100,000, and he tried to make the house believe that that was something to the advantage of Canada; that it was something we could put aside to our credit and

The Budget-Mr. Spencer

use another year. I think it would have been only fair had he reminded the house that this balance should be put against certain invisible items which are now figured against us, such as freight payments and receipts, tourists' expenditures, interest payments and receipts, immigrants' remittances, expenditures of government, charitable and missionary contributions, insurance transactions, advertising, motion picture royalties, and capital of emigrants and immigrants. When all such items are taken into consideration any difference shown would represent capital movement into or out of the country.

Much criticism has been made during the course of this debate, particularly by hon. members directly to the left of the speaker, with regard to the large amount of goods which the United States send to Canada, compared with the goods Canada forwards to that country. The hon. member for Fort William (Mr. Manion) stated the other day that although the United States send so much more to us than we do to them, on the other hand several other countries treat us much better. He referred to the following countries, and said:

The Argentine buys from us nearly twice as much as we buy from them; Belgium two and a half times as much; Brazil over three times as much; Chile nearly seven times as much; China over six times as much; Denmark twenty-five times as much; Germany two and a half times as much; Japan three and a half times as much; the Netherlands over five times as much; Portugal eight times as much.

I ask the hon. member this question: if it is not fair for the United States to send more goods to us than we send to them; if he is advocating that we trade fifty-fifty with the United States, surely he must be logical and suggest that we should cut down our exports to the different countries I have named until we are on a par with what they are exporting to us. Trade is a natural development and no goods will come into a country unless they are required.

The minister states that about one-third of our total exports is grain. I should like to remind him that if we consider the tremendous percentage of our exports that giain constitutes, we should be placed in a position to secure our farm machinery just as cheaply as possible. We have no opportunity of taking advantage of the tariff schedules, and therefore I advocate most strongly what the hon. member for Last Mountain (Mr. Fansher) asked for a few nights ago, namely, that the Minister of Finance reduce the tariff on combine harvesters from where it is at 10 per cent to 6 per cent. It is, I think, intended to come under the 6 per cent schedule,

and it is only fair that in a business like agriculture where we are producing so much of Canada's exports, and where we cannot take advantage of a protective tariff, we should have consideration in this respect.

I notice the hon. member for South Wellington (Mr. Guthrie) gave the price of the Massey-Harris binder, eight-foot, at $288. That might be so in eastern Canada, but in the west we pay $325 for the same machine. To give the house an idea how prices have risen in western Canada, I might point out that the same type of machine could be bought seventeen years ago for $165 to $170, whereas to-day we are paying $325 for it.

While I am making reference to grain I should like to say a few words regarding some trouble we have been having lately with the Board of Grain Commissioners. Hon. members know full well that some little time ago an amendment was passed to the Grain Act known as the "Campbell" amendment, the purport of which was to enable the farmer to consign his grain in carload lots to a terminal elevator of his own choice. If this amendment had been carried out in the spirit in which it was passed, the pool elevatot terminals would have received in a normal way more than 50 per cent of the grain oi the country; but owing to outside grain interests bringing out what we usually term a "hybrid" ticket, and this being permitted by the grain commission, a very large quantity of grain has been diverted from its proper and intended channel to other terminal elevators. It has been suggested that amendments might be made to the Canada Grain Act, but what is the use of making more amendments to the act unless we enforce the act as it stands at present? We need amendments, but if whatever amendments we pass are not enforced better than the present Grain Act is, it is useless passing them. I would therefore request that the government at the earliest possible moment see that the Grain Act is carried out as it was intended; otherwise they should find a new board to look after it.

I should like to say a word with regard to this last year's crop in western Canada. There seems to be very little known in eastern Canada of the unfortunate set-back we had in the west during 1928 owing to the effect of frost and some hail. It was very unfortunate that a good deal of idle boasting was done by misinformed people-not by people on the land. This misinformation had the effect of lowering the price of grain. Canada as a whole will suffer through the partial failure of the crop, and there is no doubt that in twelve months, business throughout Canada will feel it.

The Budget-Mr. Spencer

I notice that the Minister of Finance, during his budget speech, made this statement:

Our dollar is no longer at a depreciated value.

I should like to remind him that a slightly depreciated currency is sometimes a good thing; that exports can always be sent more readily from a country with a slightly depreciated currency. Moreover, if the money is too dear, it is all the easier for goods from outside to enter. We are in a peculiar situation with regard to Germany, a country that was our main enemy during the war and was defeated. One would think she would be on her knees, but we find through her manipulation of her currency-and I am not supporting that manipulation-the situation to-day is that Germany has a per capita debt of $8.67 as against Canada's per capita debt of $246.64.

I well remember a few sessions ago the consideration being given in the house to the building of several ships for our West Indian tmde, and it was found out at the time, that if Ihose boats had been built in Germany instead of in Canada, we could have secured them at half the price. This alone shows that we should pay more attention to how to handle our own credit, and that it is not always safe to consider you are in the very best position possible just because your dollar happens to be at par.

Another statement made by the Minister of Finance was as follows:

As the years go by an increase in quantity of our domestic production must necessarily be marketed abroad.

What does he mean by this? Does he mean that as the years go by we must have more and more of our goods sent to other countries and not receive anything in return? On the other hand, does he mean that if we export more and more, as I hope we shall, we shall naturally have to receive more and more goods and services in return? That is the only way in which we can trade. If he does not mean that; if he means we are going to send something away and not get anything in return, I am afraid his argument will not hold water. I claim that all countries must consume the money value of their total production, allowing, of course, for all natural exchange of goods and services. If we are not doing that, there is certainly something wrong with our economics.

I am glad to see the slight reduction in the tariff and the benefit that will accrue to the mining and fishing industries. I should like to have seen more attention paid to agriculture, and to the rank and file of the people in the way of cutting down the tariffs on not only

boots and shoes, but woollen underwear, something that is so essential in this country.

I know the Minister of Finance wants to get the feeling of the people across the Dominion of Canada, and therefore I am going to read a short resolution passed by the United Farmers of Alberta at their convention this year:

Whereas the farmers of Alberta have to sell their produce in a world market and at the export price, and whereas their purchases are made in a restricted and protected market, therefore be it resolved that this convention go on record in favour of the principle of world free trade, and in the meantime, support the general policy of substantial reduction in the tariff.

I want to say that I appreciate the abolition of the nuisance taxes. It is true that, directly, the poor man will not benefit very much, but I am against the system of nuisance taxes because they interfere with business. I would much rather have the income tax increased-and would of course pay it myself when I had an income to call for it-than to be bothered with a lot of small nuisance taxes.

I am also glad of the altered tax on sales and transfer of shares, and hope to see this idea developed.

A further statement from the Minister of Finance is "that the administration will refuse to support any extravagance in the spending of the taxpayers' money." That, of course, I heard with a good deal of amusement, Mr. Speaker, considering some of the items that passed through this house last year. I might mention, for instance, the item in the estimates-which was ultimately cut down, I think, from $300,000 to $100,000-for dredging at the island of Anticosti. I would also refer to an item of $231,178 for equipping and furnishing of the citadel at Quebec, a vote which was challenged in this house and was carried by a majority of only eight votes. I would also point to what I consider the unwarrantable expenditures last year at the harbour of Quebec.

I wish to say a few words, Mr. Speaker, in support of the tariff advisory board. The principle of the tariff advisory board is, I think, perfectly sound. It has been criticized as being simply a buffer between those who want protection and the Finance minister. But even if it is nothing more than a buffer I should be in favour of it, because I do not think we have a right to expect any finance minister, whether of the Conservative party, the Liberal party, or the Progressive party, to stand the tremendous pressure that must have been put upon finance ministers

The Budget-Mr. Lawson

in past years, before the budgets were brought down, by those wishing special favours under a protective tariff. But to-day we have something better; we have hearings before a public commission so that those who are opposed to requests made by different corporations have a perfect right to appear and submit their arguments in support of their claims.

Now, Mr. Speaker, I come to the last phase of my address. We have heard a great deal during this discussion with regard to the possibility of interference with our trade by what the American congress might do. Some hon. members have advocated, particularly those directly to the left of the Speaker, that we should have a special session or give power to the government to raise our tariff in case the tariff is raised by the United States against us. The government, on the other hand, has taken a position of watchful waiting. I am going to suggest, Mr. Speaker, a third way. I think it would be foolishness itself to attempt to carry on an economic warfare with the United States. We are just as liable to be as unevenly matched as though. we tried to meet them on military grounds. But we have other means. We have to recognize, and they must recognize, that we are one of their best customers. If they do not want us to trade with them, we do not have to trade with them. We can turn our attention in other directions, and I am going to point to two directions only, although there are many. I am going to point, first of all, to Russia, a country of immense potential markets; a country, I might say, to which a delegation of British industries is going, to investigate for themselves conditions there, with the one idea of creating a greater trade between Great Britain and that country. I have not yet seen a real reason why the Dominion government broke off negotiations with Russia when they did, and I only hope that when the Prime Minister speaks in this debate he will state to the house that so far as the government are concerned they are again prepared to recognize that country.

The other channel in which I think we might develop tremendous trade is that of Great Britain. I strongly urge the view that if we are turned off from a market in one direction we can open markets in the other, by enlarging the British preferential tariff. Great Britain takes enormous quantities of our exports, so why not give them an opportunity of sending us their goods in return?

As my time is coming to a close, Mr. Speaker, and not wishing to break the rules of the house, in support of my belief that we

should enlarge our preference for trade with Great Britain, I beg to move a subamendment, seconded by Mr. Heaps:

That the amendment be amended by striking out all the words after "house" and substituting therefor the following:

"urges upon the government the consideration of an immediate and substantial increase of the British preference as a step towards freer trade relations between Canada and other nations."