Mr. J. E. LAWSON (West York):

Mr. Speaker, as I was so fortunate as to be elected a member of this House of Commons by acclamation, I shall not regale the ministry with recriminations as to election pledges. They, in their collective wisdom, deemed it advisable not to create the necessity of mak mg promises in the constituency of Wes York.

In this, my first utterance in this chambei, I desire to advance a plea on behalf of the vegetable growers, of West York in particular and of the Dominion of Canada in general. I am inspired to that subject by the hope that the government will justify, by action, the policy enunciated on its behalf by the Minister of Finance (Mr. Robb) in his budget address to this house when he said, referring to the government:

Its policy is to encourage production at home and the marketing of our excess of production abroad.

Under normal conditions the vegetable growers of Canada require no assistance from the government, but when there is a surplus of production in the country to the south then some protection is required for our home market. Climatic conditions do not respect international boundaries, and it must be borne in mind that we are on the northern fringe of the. vegetable-growing belt of the North American continent. The normal movement of the vegetable products is from south to north. In the most southerly states the crop-let me take, for example, tomatoes-ripens about the middle of April, and the vegetable growers obtain for the first tomatoes they put upon the market, we will say, eight dollars a bushe^ a little later on seven dollars a bushel, and a little later still six dollars a bushel, until such time as they have obtained a return which covers the cost of production plus a reasonable profit. In years of plenty they still have several hundred bushels of tomatoes in thei' fields, on which, if they can realize the cost of picking and shipping, plus the freight rate, they are that much better off. So they pick this crop and start it "rolling" as it is termed in the trade. They have not found a market

The Budget-Mr. Lawson

for it, they have not even arranged a sale. The crop is started rolling north, and the commission agents along the line are wired to dispose of the commodity at whatever price they can obtain to cover the freight rate and the other costs. So just at the time when the vegetable growers of Ontario have their product ready for the market it is glutted with the surplus crop from the south. Hence the home market is destroyed, and in some cases our tomatoes are left to rot in the field.

Year after year since this government has been in power nothing has been done to preserve the home market, and yet its avowed policy is "to encourage production at home and the marketing of our excess of production abroad." I know some hon. gentlemen will say that if a certain amount of protection is given to the home market you prevent the public from profiting by the bargain prices which sometimes prevail. If the allegation is that this is a temporary condition, I wili not attempt to deny it. But what do we find? When our market is glutted with an excess of American production our vegetable growers decrease their plantings the next year. The result is that in time the home market is lost, and just as soon as that happens those who advocate the doctrine that I have referred to will find that no longer will the surplus from the south be started "rolling"; it will be sold in Canada at a fixed price, and our consumers will not in any way benefit.

Let me take the alternative suggestion: Assuming that our market is adequately protected, what will happen? If our vegetable growers find that this year they have a good home market, then next year they increase their plantings, and by virtue of that their cost of production is reduced, the ratio of profit which they require can be spread over a much larger field, and in the long run the consumer in Canada, although at times he will lose a bargain price, will get lower maximum prices at other seasons of the year. In that way a safe, sound and stable home market will be preserved for our home grown products.

It seems to me, Mr. Speaker, that we have a selfish as well as a public interest in maintaining such a market. I find surrounding all the large centres of population in this country great numbers of returned soldiers who have settled upon the land. In appreciation of the services which they rendered Canada we placed legislation upon the statute books to assist their reestablishment in civil life. I find that in the province of Ontario alone the Soldier Settlement Board has for this purpose advanced $9,367,062, thousands of dollars of which are loaned right in the constituency of

West York, which is contiguous to the city of Toronto. Those loans bear interest at five per cent, amortized and repayable in twenty-five years. Surely as business men charged with the administration of the public affairs and the public funds, we axe desirous of creating and preserving a home market for our vegetable growers, so that those men may be provided with the wherewithal to repay their loans.

Our present tariff is wholly inadequate for this purpose. With one exception, I think potatoes, we have an ad valorem tariff varying in percentage, but-to continue my illustration -the rate on tomatoes is fixed at 30 per cent. May I ask hon. gentlemen what is the advantage of an ad' valorem duty of 30 per cent, when that duty is imposed at the point of shipment and not at the point of entry, and when the tomatoes to which I have referred may be selling at fifty cents a bushel in the far southern states from which they have been started rolling? Such an ad valorem duty will not preserve our home market, and yet the policy of the government, as enunciated by the Minister of Finance, is to encourage production at home and the marketing of our excess of production abroad.

Now, sir, I would feel that I had been remiss if I did not suggest a remedy. The remedy required to preserve the home market for our vegetable growers is a seasonal specific duty of so many cents per unit of any particular commodity. This suggestion is not original; I believe some thirteen countries of the world have such a seasonal specific duty in force to-day. The Advisory Tariff Board, to which the hon. gentleman who preceded me (Mr. Spencer) referred, had a hearing of the vegetable growers and horticulturists of Ontario on December 16 and 17, 1926; they had a second hearing on February 22, 1927, and a third hearing on December 8 of the same year. I find on referring to the estimates that this tariff board costs us $120,000 a year for maintenance; it pays $71,000 a year for advisers, a total of $191,000, in order that, having been advised by their advisers, they may in turn advise -the Minister of Finance, and yet they have allowed fifteen months to elapse without rendering any such advice following those hearings. Or if they have rendered any advice to the minister then he has failed to advise the market gardeners of this country what they may expect in the way of protection for their home market in the year to come. And yet the policy of this government is "to encourage production at home and the marketing of our excess of production abroad." I wonder if, while there

The Budget-Mr. Letellier de St. Just

is yet time, the government will justify by action that policy which the Minister of Finance enunciates, or leave it merely as a euphonious phrase for the consumption of those who, apparently in the opinion of this government, are the gullible electorate of Canada.

Mr. J. E. LETELLIER DE ST. JUST (Com.pbon): It is a great pleasure to me Mr. Speaker, to rise at this time to express my views on the present budget, and I wish to extend my heartiest congratulations to the Minister of Finance (Mir. Robb), on his ability in .the success obtained on realizing such, an important result. The people of Canada welcomed Last year's 'budget, which caused great ioy and brought about the largest sale of certain classes of goods resulting in great benefit to the people of this country. The expectation of the people, this year, was for a further reduction of the sales tax. Surely they have not been deceived when we contemplate a reduction of the net debt in 1928-29 of $69,782,000. From the beginning .of the fiscal year 1923-24 to the end of the present fiscal year, the net debt has annually decreased, the total reduction in the six-year period amounting to about $226,708,000, or a yearly average reduction of some $37,700,000.

It is evident that the people of Canada are not all satisfied with the budget, but it seems fair to say that the great majority of Canadians know very well that, with the conditions that the King government had to face during the past years, it would have been impossible for any finance minister to satisfy everybody. I am more than delighted to concur with the minister and to give him all my approbation when I realize the influential support he receives from the most important business associations and boards of trade of Canada. These associations comprise a large membership. I do not believe I am mistaken in saying that there are more than 100,000 merchants who are distributing over $4,000,000,000 worth of goods each year, or an average of approximately $421 per capita; and they are satisfied to proclaim that there is great prosperity in the country, in that the distribution of goods in the year 1900 as compared with the present would be about as 3 is to 5. This will be nearly enough a correct calculation, without considering the increased needs of the public. The value of the goods distributed in 1900 would have been only $2,400,000,000 if we had our present population, but as we had then over 5,000,000 people as compared with 9,500,000 to-day, we have to reduce the amount of goods consumed by the relative proportion of population. On that basis the

value of the goods distributed in 1900, amounted to approximately $1,400,000,000 as compared with $4,000,000,000 to-day. This shows the growth of distribution with the progress of other development in Canada during the past twenty^five years, and yet there are people who criticize the government, proclaiming that there is no such prosperity existing in Canada. The widely prevalent belief, Mr. Speaker, that Canada is entirely dependent upon capital from outside sources to finance her development is rudely dissipated by the disclosure that the Dominion is exporting more capital than she is importing, and has been doing so for the past four years. Canada has always had considerable investments abroad in the form of banking .balances in London and New York, railway lines in the United States, and investments in foreign securities by banks and insurance companies as well as by private individual who require well diversified lists of securities. A rising Canadian prosperity, however, with a greater volume of funds seeking investment outlet, has resulted in a situation where the capital to leave the country exceeds by a substantial marign that coming in.

In 1925 the figures of Canada's capital exports over capital imports in round millions were $150,000,000; in 1926, $90,000,000; in 1927, $30,000,000; and in 1928, $25,000,000. The decline in these figures for the last two years is explained by a growing Canadian interest in domestic securities. An increasing absorption of Canada's part of her own bond issues has been a feature of the past few years. In both 1927 and 1928 the Dominion accounted for roughly 50 per cent of the total bond sales, in the former year exceeding the purchases of these issues by the United States. In 1925 Canada had even an export balance in capital with the United States, and in each of the last three years Canadian capital account with the republic has practically balanced.

After careful compilations Canadian investment abroad in 1928 is placed by the Financial Post at $177,000,000, as compared with $207,000,000 in the previous year. Of the 1928 total $112,000,000 went to the United States, $63,000,000 to other foreign countries, and $2,000,000 to the United Kingdom. Taking into account the decreases in government and bank balances due to the expansion of business at home a net new investment of $157,500,000 is left as against a net of $184,000,000 in 1927, and after deducting $11,000,000 from this account and $35,000,000 from other countries, we have a net increase .of $59,500,000. A deduction of $5,000,000 in government and bank balances from the total goinig to the United Kingdom results in a

972 COMMONS

The Budget-Mr. Letellier de St. Just

net loss of $3,000,000 in new Canadian investment in that country. Based on figures issued by the Dominion Bureau of Statistics as of January 1, 1927, careful estimates made upon information from most reliable sources by the same authority give the total of Canadian investments abroad on January 1, 1928, at $1,514,500,000 and on January 1, 1929, at $1,672,000,000. Of this total at the opening of the present year Canada had $939,000,000 invested in the United States, $112,500,000 in the United Kingdom, and $620,500,000 in other countries.

This survey furnishes further proof of Canada's advance among the creditor countries of the world as a factor in international finance, with capital furthering industrial developments of many kinds in many distant parts. Investments by Canadian insurance companies in diversified foreign securities continue to increase rapidly with the development of both their domestic and foreign business. Direct Canadian investments in branch plants in the United States commercial field and elsewhere are growing steadily. Canadian holdings of New York stocks and of European and South American government bonds have increased enormously, and altogether the record testifies most eloquently to Canadian prosperity and world progress:

Canadian Investments Abroad

1927 1928

British $118,479,000 $112,500,000United States 723,328,000 939,000,000Other countries.. .. 488,779,000 620,500,000Total $1,330,586,000 $1,672,000,000

Now, Mr. Speaker, I pass to the agricultural industry, and with great pleasure and true spirit I say that since the beginning of the year 1922, when the present administration assumed office, many new policies have beep introduced and developed by the federal Department of Agriculture with a view tc increasing agricultural production, and many of these policies have had no small part in bringing about the present prosperity which Canadian -agriculture enjoys. These new policies have naturally involved greater expenditure on agriculture on the part of the federal government and the employment of a greater number of agricultural workers, but this expenditure has been more -than justified by the increase of out agricultural wealth and in our agricultural revenue which can be traced, directly or indirectly, to those new agricultural -activities. In dealing with these new activities probably it will be well to follow the organization of the department and discuss it very briefly, branch by branch.

[Mr. Letellier de St. Just.l

As the Dominion experimental farms provide the basis for the working out and the demonstration of problems dealing with Canadian agriculture in all its -phases, new activities on these farms naturally must have a most important effect over a wide area. During the seven-year period under -consideration this organization has grown in size, volume of agricultural research and -practical aid to the farmer to a degree greater than any previous fifteen-year -period in its history. I wish to take the opportunity of expressing my appreciation to the Lennoxville experimental farm, by which the farmers of the eastern townships district, have acquired considerable knowledge through the activities of the active superintendent, Mr. McClary. Many contests have been held there; many old and young farmers have received most important lessons in judging milch -cows, and greater interest has been fostered by the establishment of this policy. I have been personally taking a great interest in this special work of helping boys' and girls' clubs in their work in connection with cattle, sheep and swine in my constituency, and I am more than -pleased to mention to the members of this house that I was greatly honoured during the course of the year 1927-28 through the members of the young breeders' clubs of the following places obtaining the best classification with their milch herds at the great eastern township exhibition held at Sherbrooke lu 1927 and 1928: Compton, Waterville, Bury, Bulwer, Sawyervil-le, St. Hermenegilde, St. Hedwidge, East Hereford, St. Malo. The hon. member for Sherbrooke, (Mr. Howard) has taken a great interest in the farmers, and he was a witness of this event. Great progress has been noticed since the federal department stated its -calf club work in 1923. The encouragement given to the younger generation and the interest fostered among them by these club activities has been reflected in the marked improvement in live stock production in the districts in which clubs have been organized. I hope the department will continue to give assistance to these organized clubs and develop new efforts through their agronomist in urging new -clubs to cooperate with the provincial government.

I desire also to voice my appreciation of the dairy and cold storage branch. The two main lines of endeavour inaugurated by this branch since 1922 have been that of dairy *produce grading and the inception of dairy research work. The dairy produce grading has resulted in a great improvement in quality, while thp -publicity given to that quality through the grading records has brought about a new attitude on the part of

The Budget-Mr. Letellier de St. Just

producers and manufacturers. The grading has facilitated the trade in dairy produce and increased the good will shown toward Canadian dairy produce in the markets of the world; the increased premium which Canadian cheese now receives on the British market is due very largely to this grading system. Not only on the export markets, but also on the domestic markets has the improvement in the quality of our butter and cheese been marked. The Canadian housewife can now be more reasonably sure of the quality of the dairy products which she purchases. The investigations of the dairy research division have enabled the butter makers and cheese makers to correct some serious defects in the quality of their butter and cheese. Through the elimination of losses considerable profit has been added to the proceeds received from this industry.

The estimated value of the cheese and butter produced in the province of Quebec during 1928 is $30,098,541. This represents a total production of 1,452 factories in the province, as per the reports made by the inspectors at those provinces. This number is made up of 678 butter factories, 537 cheese factories and 238 combined factories, and constitutes an increase of three factories as compared with the number operating in 1927. The production of 721,924 cows was used in these factories. The production of a number of cows was used to produce butter for consumption in a few cities. The number of cows producing for these factories in 1927 was 679,119, so the 1928 figure shows an increase of 42,175 cows. The number of pounds of butter manufactured was 54,904,046 pounds as compared with 55,098,768 pounds during the preceding year, a decrease of 194,722 pounds. The total output of cheese was 44,326,885 pounds as compared with 37,510,737 pounds during the preceding year, an increase of 6,816,148. The minimum price per pound received for butter during 1928 was 37.9 cents, and the price received for cheese was 20.9 cents. This represents an increase of 12 cents per pound for butter and 28 cents per pound for cheese, as compared with the prices received during the previous year. The sale value of the butter produced by the factories in 1928 was $20,832,898 as compared with $21,216,505 during the preceding year, an increase in value of $616,393. The sale value of cheese produced amounted to $9,265,643, as compared with $6,805,658 in 1927, or an increase of S2,459,985. These figures were submitted by the inspectors and were sent directly to the provincial agriculture department, and therefore might be subject to some revision.

The work of bovine tuberculosis eradication through the restricted areas has been and is of incalculable advantage to Canada's stockmen and to Canadian citizens generally. It means more profitable herds and healthier people. There are now about 1,000.000 cattle under this system, and the related policies of accredited herds and municipal testing. The most effective method for the control of bovine tuberculosis so far is that of eradication by slaughter of reactors. This work is carried out in definite areas under the restricted area policy put into operation in 1922. Since that time over 700,000 cattle have been, tested in the nine areas already established or in process of establishment.

I should like to mention a few details about the sheep industry, which is one of the most important industries in Canada. During 1928 Canada added 153,082 sheep to her flocks, the increases over the previous year being 4-6 per cent. Every province, without exception, added to its sheep holdings. Ontario, in which approximately 53 per cent of the sheep of the Dominion are to be found, increased its sheep population by 57,839, or more than 6 per cent, while British Columbia added 40,064, or nearly 33 per cent. Other increments ranged from 5,000 in Alberta to 13,060 in Saskatchewan. The relative standing of the various provinces in the middle of the year was as follows:

Province

Ontario

Quebec

Alberta

Nova Scotia

Saskatchewan

British Columbia.. .. New Brunswick.. ..

Manitoba

Prince Edward Island

Number of sheep .. 1,014,106

.. 863,757

.. 515,000

.. 270,461

.. 183,098

.. 169,057

. . 160,514

.. 144,713

.. 97,082

The related wool clip of 1928 discloses a pleasing progress in this industry. An increase of more than 5 per cent is shown in the volume of the Dominion clip, in which increment every province without exception shared. The total Canadian clip is estimated

at 19,611,430 pounds, worth $5,099,000, as compared with 18,672,766 pounds worth $4,108,000 in 1927. The following are the figures for the various provinces in order of importance for

1928 and 1927:

1928 1927

Province Pounds PoundsOntario 5,677,088 5,326,651Quebec 4.969,126 4.956,418Alberta 3,116,609 3,033,181Nova Scotia 1,535,462 1,480,541Saskatchewan 1,064,608 987,458British. Columbia .. 973,400 717,892New Brunswick 916,007 873,724Manitoba 801,468 765,609Prince Edward Island. 549,675 513,882Indian reserves.. .. 17,987 17,410974 COMMONS

The Budget-Mr. Letellier de St. Just

A large number of my farmer constituents are greatly interested in the development of their flocks.

Another important factor which has contributed to the progress and development of poultry breeding is the effort made by the Department of Agriculture in organizing the holding of the World's Poultry Congress in Ottawa in 1927, which undoubtedly had a tremendous effect in stimulating the Canadian poultry industry, and at which Canada, and especially Ontario and Quebec, held first rank among the many countries which exhibited.

In conclusion, I should like to direct the attention of the government to the many colonization lots which are available in my constituency. The soil of these lots is of the most fertile nature, and I wish to impress upon the Prime Minister (Mr. Mackenzie King), the Minister of Immigration and Colonization (Mr. Forke) and their colleagues the other members of the cabinet, the importance of giving consideration to colonization bill No. 16, which was introduced in 1926 but which, on account of the dissolution of parliament at that time, did not become law. I believe this bill could be redrafted so as to help a certain class of labourers who are actually working in mills and factories, but many of whom have been brought up on farms and with a little help of this nature would be willing to take up some of those lots and make them profitable for themselves and the country. I have also received requests from parents having as many as four young men in the family who are just at the proper age to do splendid work on farms and who, if they were protected by such a law, would be willing to purchase some of these lots. If this legislation were passed it would promote great interest amongst labourers who have children of age to help them while they were getting established on the land, and later on these children could establish themselves on farms of their own where I should think they could do splendidly. At the same time it would prevent emigration and induce many Canadians to return to farming, a consummation which would be of the greatest benefit to our national life.

Mr. F. W. GERSHAW (Medicine Hat):

Mr. Speaker, in rising to make a few observations on the budget, I must first of all say that I believe the financial statement of the Minister of Finance (Mr. Robb) has been well received from coast to coast. In this house, however, it has met with two amendments. The acting leader of the opposition (Mr. Guthrie) presented an amendment for the party to your left, Mr. Speaker. True

to form, they regret that the financial proposals of the government make no provision for reasonably safeguarding and protecting the interests of those engaged in agricultural pursuits and in industrial employment in Canada. Then we have to-night an amendment by the hon. member for Battle River (Mr. Spencer), which calls for an increase of the British preference.

It would thus seem, Mr. Speaker, that the government is faced with two votes of want of confidence, first, because they have not more adequately protected the interests of Canada, and secondly, because they have not extended the preference more widely throughout the British Empire. Of course, we must have a tariff against non-preferred countries or we cannot extend a preference, and it seems to me, Mr. Speaker, that this government has fairly steadily and consistently been making trade treaties to increase our trade throughout the empire. Trade treaties have been made with the United Kingdom, with Australia, New Zealand, South Africa and the West Indies, and I hardly see that they are open to a vote of censure because they have not acted energetically enough in that regard.

Now, Mr. Speaker, owing to the widespread circulation of the press, and the news which is broadcast by radio, the people to-day are well informed, and I believe that the people of the rural districts are particularly well informed as to the conditions confronting the country at the present time. They have heard -and they have been watching with some anxiety-the news that is coming across the border from the United States. Hon. members here argue that we have nothing to fear from this source. I can hardly agree with that. Our markets suffered some years ago when the Fordney tariff was placed against our cattle going into that country, and already the rumour of a further increase in that particular duty has done much damage to the cattle industry in the west. I believe that definite and considered action will have to be taken, by negotiation and by dealings with countries who will deal with us, but I believe that the real thinking people of Canada wilt deprecate any attempt to work up an unfriendly feeling with our great neighbour to the south.

The first police barracks, Mr. Speaker, of the royal northwest mounted police were located in the Cypress hills south of Medicine Hat. From there, these pioneers of police forces in Canada, and from other bases, policed the country during the early days. They overcame great difficulties, and they were undaunted by the dangers which beset

The Budget-Mr. Gershau)

them on every hand. Many of those pioneers have, through sickness and old age, been retired, and the pensions which they are receiving at the present time are altogether inadequate to compensate them for the services which they have rendered. I have in mind one brilliant police officer who rose from the ranks to be a superintendent of the police. He died and left a widow and two minor children. The pension she receives brings her below the poverty level, amounting to only S45 or $48 per month, and that, Mr. Speaker, you will agree, is altogether inadequate when we take into consideration the cost of living to-day. The pensioners of the Great war have fared fairly well in Canada. Canada has perhaps done more for her returned soldiers, and her disabled soldiers, than any other country engaged in the Great war. It is true that some are breaking down now, and some deserving cases do not come under the provisions of the act. But on the whole they have fared fairly well. The amount spent by Canada in pensions comes to $42,000,000 a year. As time goes on, more and more will require to be spent, but at this time, Mr. Speaker, I would like to urge the Minister of Justice (Mr. Lapointe) to reconsider the pensions which the veterans of the royal northwest mounted police force are receiving.

Now, Mr. Speaker, there has been much debate as to the capital debt of Canada. We find, however, that the leaders are fairly well agreed that the capital debt is about two and a quarter billion dollars. Mr. R. A. Daly, president of the Investment Bankers' Association, at the eleventh annual convention, proposed that the debt could be retired in forty years if $23,447,000 were taken off it each year, if this amount per annum, said Mr. Daly, would represent the minimum amount to be retired each year. And, as this amount is no bigger than the average amount of debt that has been retired in each of the last four years, it is apparent the plan is perfectly feasible, especially when we consider that we are now running into a much more prosperous period. Perhaps it will not always be possible, Mr. Speaker, to reduce the debt by the same amount. When revenues are high, such as they have been during the past year, a larger amount of debt might be paid off, and if bad years should come, a smaller amount could be paid off.

There has been a good deal of discussion in this house, Mr. Speaker, as to what prosperity is, and I have a clipping here from a western farm journal, The U.F.A., dealing with that:

What is prosperity? The people of the United States have it in abundance, according

to aggregate statistics, yet James J. Davis, United States Secretary of Labour states that eighty-six per cent of Americans are poor. Figures compiled by the federal trade commissioner at Washington show that one per cent of the people own fifty-nine per cent of the country's wealth; thirteen per cent own ninety per cent of the country's wealth, while eighty-seven per cent of the population own ten per cent. Startling inequalities of this character are not confined to the United States. British statistics are also very impressive. And in Canada there is exactly the same tendency at work as elsewhere. We are certainly not in a position to give thanks that "we are not as these others". We have no just grounds for national self-complacency, even though inequality may not have reached such extremes in this country as yet as in some of the older commercial regions of the world.

And then I would like to add, Mr. Speaker, that Adam Smith recognized the principles that citizens paying into the public treasury should be taxed according to their ability to bear taxation; and surely in a civilization where the gulf between the average citizen and that of the comparative few who amass large fortunes is constantly widening, the larger fortunes should bear the larger portion of the taxation. I think this is particularly fitting to have on Hansard just at this time when the Finance minister has not reduced the income tax. This year $58,000,000 was derived from the income tax, and the people of Canada will not object to the minister retaining this tax. Those who are paying it are gaining most by the present good times. There are grounds for objecting to the double taxation, but it must be remembered that any incomes doubly taxed are derived from investments; incomes from salary are not so taxed. The present exemptions are so generous that the tax does not bear heavily on the wage-earner with a family.

I believe, Mr. Speaker, that the greatest dissatisfaction in the west at the present time is in connection with the grain grading system. The producer feels that he is not getting the full value for his crop. One inspector may grade a sample No. 3, another inspector may grade it No. 4, and the same inspector may grade the same sample differently at different times, with the result that the man whose grain just misses getting into No. 4 has to take a discount of 17 cents in grade. I am very glad that the whole matter has been referred to the agriculture committee, and I hope some workable scheme will be developed so that this injustice will be discontinued.

Harvesting and threshing combines are being more and more used throughout the west, and if the Minister of Finance could see his way clear, as urged by the hon. member for Last Mountain (Mr. Fansher) to

The Budget-Mr. Gershaw

classify swathers and combines so that they will come in under the six per cent rather than under the ten per cent duty, his action would be very much appreciated.

May I, sir, draw the attention of the house to some of the conditions that exist in the so-called dry belt? In times gone by the settlers there suffered great distress, and many of them had to move out of the district. But experience and better methods of farming have made it possible for nearly all the remaining settlers to make a good living. There are, however, certain difficulties in the way of progress, and I hope this parliament will be able to correct some of them. Last session legislation was passed making it possible for a man to file on a second homestead. In the district called A, south of township 16, in the provinces of Alberta and Saskatchewan, no outsider was allowed to file on a homestead. This turned out to be a wise provision, for if a number of inexperienced homesteaders came in, and there was a return of the dry years, we would have a repetition of all the suffering and poverty and privation that prevailed in the past. At the same time provision was made to encourage those who had remained in the district to obtain more land, and from the handbook issued by tire Dominion government I desire to quote the following with respect to area A:

Lands south of the south boundary of township 16, in the provinces of Satkatchewan and Alberta, are open only for entry to a person who submits evidence satisfactory to the Minister of the Interior that he or she is in permanent residence and conducting farming operations upon a farm of not less than eighty acres and not more than nine miles distant from the proposed homestead.

This second homestead could be taken up by such a person or by his father, mother, son, daughter, brother or sister. The act has been extended to include some other relatives. Unfortunately when the farmer's son or some other close relative applied for one of these available homesteads he found many difficulties. First of all. he had to assume responsibility for all relief seed grain liens, improvements, or other debts contracted and standing against the land in the books at Edmonton or at Ottawa. These debts were contracted by the first settler who had abandoned the homestead, but the relative of the resident who took over the holding must assume all those liabilities. True, he may pay off the indebtedness by instalments, but the interest compounded at seven per cent is mounting up all the time. The joint board of representatives of the Dominion and provincial governments may make a reduction,

but the prospective settler has no assurance that this wifi be done. Some of these homesteads have three, four, or five hundred dollars against them, and in certain cases the indebtedness runs as high as a thousand dollars. This is most discouraging to the youth born in the district who wishes to make his home close to his relatives. The case in regard to preemptions is evbn worse, as the interest piles up to such an extent during the bad years that many deserving men and women find it impossible to retain holdings that they need so badly. Why should the department charge se'ven per cent interest when they borrow the money at five per cent or less? Let me give the house a few examples of how burdensome this interest becomes. The original price of one quarter section was $456, interest $361, making the present price $817; in another case the same condition obtains, while in a third case the original price of $477 is swollen by interest charges of $284. The farmer under such circumstances finds it impossible to finance his undertaking. The government and parliament of 1910 to 1913 encouraged the people to settle in that district. Those who did so were lacking in the experience necessary to make the venture a success. They made their homes there without warning or advice from qualified persons, and without any supervision. Therefore I submit that parliament should do something to remedy these unfair conditions. Debts due to the crown cannot be reduced by the minister or by any member of his department, nor even by the governor in council. This relief can be effected only by an act of parliament, and I hope that if in the near future the minister sees his way clear to introduce legislation to remedy the evil, every hon. member will support it! If even the accumulated interest could be cancelled or reduced it would bring great hope and encouragement to the people of that large district, and the development which would follow would help also the urban centres. The progress of any town or city depends to a great extent on the prosperity of the surrounding country, and when one large district, namely, the Tilley East area, is virtually not developing at all, and another large district, area A, in that southern country is struggling under suoh a handicap, city progress must necessarily be slow.

Mr. BRADY:

Mr. Speaker, I beg to move the adjournment of the debate.

No, no.

97?

The Budget-Mr. McKenzie

Mr. ROBERT McKENZIE (Assiniboia):

It is my intention to take up but a few minutes of the time of the house to make a few observations with regard to the budget. In the first place I would congratulate the Minister of Finance (Mr. Robb) on again bringing to the house a satisfactory budget, the sixth that he has brought down, showing a surplus and a reduction in the national debt as well as a reduction in taxation. The national debt has again been very substantially reduced, and there is also a reduction in the taxes which are oollected from the people. Yet in spite of this, we have an amendment moved by the hon. member for South Wellington (Mr. Guthrie) to the effect that:

This house regrets that the financial proposals of the government make no provision for reasonably safeguarding and protecting the interests of those "engaged in agricultural pursuits or in industrial" employment in Canada.

We who come from the farming areas know quite well that it is impossible for any government to impose tariffs which will in any way safeguard the agricultural interests. We know that up to the present time there has been no purely farmers' organization which has put itself on record as being in favour of increased tariffs on their products. The United States has been pointed out to us as an example, but our farmers are wise enough to regard the United States rather as a warning than as an example to be followed. I do not think this government would be well advised to take any notice of the talk about retaliation because of anything which the United States may possibly do.

We have heard from the hon. member for South Wellington something about the increase in expenditures being out of proportion to the increase in the business of the country. In this connection I would suggest that the business of this country is run, after all, on the same principle as and only on a larger scale than is the business of any of the smaller organizations, such as the provinces, our municipal institutions and so forth. We know that during the later years of the war and the few years following we were not spending a great deal of money in keeping our buildings and other property fully up to their usual state of repair. Hon. members here who own property know that in spite of all they were able to do their property depreciated in value owing to the fact that they were not in a position to maintain repairs. Now the Dominion of Canada, when the Prime Minister (Mr. Mackenzie King) took charge in 1921, was in the same demoralized stale, and since the year 1921 it has been necessary in some cases to increase expenditures in order to re-78534-62 [DOT]

store public property to a proper state of repair, just as was the case in private businesses.

We have heard a good deal from the opposition in regard to the loss of population; we are told that our people have gone in great numbers to the United States. This, we know, is a fact. I was reading a few days ago in a magazine, an article giving statistics in connection with the United States which went on to show that two-thirds of the citizens of that country who have permanently left the United States are living in Canada, and while it is true that they are getting many of our citizens, it is also true that we are getting a great many people from the United States. After all, is it not only natural that two countries side by side should have a large interchange of citizens? This has always been so. There has always been an exodus from one country to the other, but there has also been the reverse movement. I would point out, however, that the greatest exodus that has been known, in my time at any rate, began when our hon. friends opposite were in power, around the years 1919, 1920 and 1921; and it took considerable time to overcome that.

Mr. ROWE:

You have not overcome it

yet.

Mr. McKENZIE:

Yes; read the statistics and you will find that it has been overcome.

It is not my intention to dwell at any length on the budget; anything I might say would be but a repetition of what has already been said. I desire, however, to take just a little time to mention one item in particular and to point out the effect which a reduction in the tariff will have in the constituency I represent. At page 595 of Hansard, March 1, the Minister of Finance in his speech stated:

The resolutions now submitted provide for a revision of certain tariff items of particular interest to the mining industry. In accordance with the traditional policy of assisting the development of our basic industries, the rates of duty on certain machinery and equipment used in the mining industry have been reduced.

We had the pleasure of hearing a very fine address from the hon. member for Nipissing (Mr. Lapierre) with regard to the metal mining industry. The only mining industry about which I am concerned, so far as the constituency I represent is concerned, is the coal industry, and we leam that it is an industry of considerable proportions in Canada. I find that in the year 1927 there was a production of some 17,400.000 tons odd of coal in Canada, being one-tenth of the production of the world that year. Canada too, we are told.

The Budget-Mr. McKenzie

has the second largest coal resources of any country in the world. The constituency I have the honour to represent has a considerable coal mining area, and for the information of the house I wish to make a statement in connection with that industry.

I am sure that the people engaged in that industry will be very thankful indeed that the Minister of Finance at this time has made a reduction in the tariff in this regard. The coal producing area in the districts of Estevan and Bienfait, in the constituency of Assiniboia, which I represent in this house, has recently arrived at a long sought goal, in the progress of converting their lignite coal, of which there are enormous quantities, into high class fuel by the actual production of briquettes from this soft coal. In this area there is an immense quantity of soft coal, and for a long time the finest scientific minds have been engaged with the problem of marketing this fuel. They have attacked the problem from different angles with a view to utilizing this fuel in the most feasible and profitable manner, and now it is thought that this ambition has been realized through the establishment of a carbonizing plant near the town of Bienfait. In this connection I might say that some years ago a lignite utilization board was formed and after investigation they found that by carbonizing this lignite a coal or charcoal was obtained which briquetted quite readily and without reference to the byproducts, such as oils, coke, and so on. The result of this carbonizing process was to turn two tons of inferior fuel into one ton of briquettes, which had approximately the same value as anthracite coal and about the same heating value in the furnace as two tons of the lignite coal from which it was made. At present this process is being carried on at the rate of about one hundred tons of briquettes per day, with the possibility of this output being increased to two hundred tons when the plant is fully in operation.

For the information of the house I might say that some ten or eleven years ago the federal government, in conjunction with the governments of Manitoba and Saskatchewan, spent approximately $1,000,000 in the erection of a plant near Bienfait for the purpose of converting this coal into briquettes. The plant was intended to have a capacity of

30,000 tons of briquettes per year, but this venture was not a success because of the unsuitability of some machinery which had been installed. The venture was temporarily abandoned and the plant closed for four or five years. During this period the government of Saskatchewan, after the federal gov-[Mr. McKenzie.?

ernment and the government of Manitoba withdrew from any further connection with the enterprise, became trustees of the property, and in 1927 they announced that they had been successful in interesting certain people in reestablishing the plant. Through their efforts British capital was forthcoming for this purpose and in the spring of 1928 the reconstruction of the plant was commenced. There was an understanding between the government of Saskatchewan and the interests concerned with the reestablishment of the plant that when $600,000 had been expended in remodeling the plant it would be turned over to this company for a nominal fee. The plant was rebuilt during the summer of 1928 and up-to-date machinery installed at a cost of $600,000. This included a Lurgi carbonizing machine the only machine of its kind in Canada. Then the plant was turned over to the company by the government and since then the work of briquetting this soft coal has been going on at the rate of about one hundred tons per day. In addition, in order to encourage the industry and to further the investment of British capital, the government guaranteed to find a market for the output of the plant for one year. This coal will be burned in the public buildings of Saskatchewan for one year at least, or until the plant is properly established.

I may say that this coal is very soft and is readily affected when exposed to the air. This makes the available market very limited, because it cannot stand to be shipped over long distances, and it was for this primary reason that the briquetting process was first introduced by the governments concerned. People who reside in that part of the country look upon this as the nucleus of a great industry which no doubt will be established in that part of the country; very ambitious plans are being outlined and British capital is said to be ready to finance much greater expansion in this field. In that connection I would say that with cheap fuel available in such large quantities; with the possibilities of utilizing the by-products from the carbonizing of this coal, together with the advantages of power and light at a resonable rate, we believe this field well worth investigation by people looking for locations for industries.

On motion of Mr. Brady the debate was adjourned.

On motion of Mr. Robb the house adjourned at 10.52 pm.

Private Members' Days

Friday, March 15, 1929