Mr. BOUCHARD:

April 2, 1924. The following comment was made at the twentieth annual meeting of the Canadian Council of Agriculture, held in Winnipeg on February 25, 1929:

-Canadian farmers should be warned insistently against the danger of allowing themselves to be drawn into the vicious circle of protectionism. The farmers of the United States have listened to the specious plea that agriculture is entitled to receive the same protection as is accorded to other industries. Equal protection for all industries is impossible of attainment. It would, in fact, mean that none of them were protected. By an endeavour to share in the alleged benefits of protection the Canadian farmers must inevitably be the losers.

I would like to quote the remarks of two of the leading rural economists of the province of Quebec. In 1927 Professor Bois of the agricultural college at Oka said:

We levy, he says, a tax on goods which we wish to keep out of the country. But why and how are we to protect by means of the tariff a system of agriculture organized especially with a view to exportation?

We sell our butter and cheese to England and on foreign markets: how can we expect that a customs tariff will improve our situation?

The tariff is an excellent measure, inasmuch as it helps to develop the necessary industries which are too weak at the outset to compete with the older and more firmly established foreign industries, however, we must acknowledge that the tariff has also had the effect of allowing artificial industries to establish and maintain themselves in the country: we must also acknowledge that the tariff has had the effect of maintaining the high cost of living.

And so forth.

The tariff, however-

We shall return to this subject later on.

-perhaps may be of some benefit to the vegetable growers or market-gardeners. Here again, we must not exaggerate but remember two

things: that in the country, there also exists both an urban and farming class and that the former is equally entitled to be treated as fairly as the latter. Excesses are detrimental to all.

Professor Charles Gagne, of the agricultural college at Sainte-Anne de la Pocatiere said:

To the question: Have our farmers an interest in claiming protection for their products? he answers: On the whole, we do not think so.

He bases his opinion on the two following reasons: A protective tariff, he maintains,

can at the most but relieve temporarily the market on some of our farming products.

Everybody is aware, he states, that Canada exports more than it imports of these products; this simply means that the price is fixed abroad and not in this country. Therefore placing a protective^ duty, on products entering this country and of which we export a surplus can in no way be effective. The Americans or at feast their economists realize now that protection is useless for the products of which they export a surplus.

Mr. JAMES ARTHURS (Parry Sound):

Mr. Speaker, I feel sure the hon. member for Kamouraska (Mr. Bouchard) will pardon me if I do not follow him in the various recitations which he quoted from different articles in opposition to a tariff for farm protection. His remarks might be effective here but they certainly would not be across the line. The American farmer knows what he wants and he knows what he is after. He wants higher protection, and any argument put forward by the hon. member against that protection would have no effect so far as the United States is concerned.

For many years the annual presentation of the budget was looked forward to in all parts of Canada. The people were anxious to learn to what degree they would be relieved of the burden of taxation, or of other burdensome conditions which might apply with regard to their business or calling. After several years of disappointment that interest has died out and the present budget has practically passed unnoticed throughout the country.

We have heard a lot regarding the prosperity of Canada, and we on this side of the house rejoice in any measure of prosperity which there might be. But this prosperity should be general all over the country, and it is the duty of the government to do everything possible to remedy any condition which oppresses any section of Canada or any class of our people, whatever their calling or trade may be. Thanks to Providence, we have had large crops in most parts of Canada, but in many cases the crops have not been profitable to the farmer and the

The Bud-gel-Mr. Arthurs

chief benefactor has been the transportation company. The mining industry has had a very good year, and the increased valuation of some of our mining stocks, as well as some of our other stocks, has had a great deal to do with the apparent prosperity.

Mr. DUNNING:

They have gone down

as well.

Mr. ARTHURS:

They are still much

higher than they were. After a slight set back, our pulp and paper industry is progres.- ing and is giving employment, directly and indirectly, to a large number of people. But these three industries, agriculture, mining and paper, are to a large extent independent and are not controlled by this government or its lack of policy. This would also apply to the tourist trade, which has been growing year by year and is at present one of the most important assets of this country.

The exception to this rule is the agricultural industry, especially the fruit, vegetable and dairy sections. They have been asking in vain for protection in their home market, but owing to the opposition of certain members to the right of the gentlemen opposite, whose support is very necessary to the government, although their appeals have been heard they have passed unheeded. Every year we see more of our factories and workshops closed owing to the lack of fair protection against the products of cheaper labour and the competition of others who, after supplying their own markets, are allowed to bring in or dump their surplus stock upon the Canadian market. No new factories are being built in our smaller towns because it is impossible to get men to invest where our own markets are not assured and where a neighbouring country can and does raise its tariff overnight when we commence to export any article which can be profitably produced there. It is very hard to believe that this country is prosperous when we see the large number of factories in our smaller towns and cities which have been closed. Those factories were once busy, but the workmen who were employed there have mostly followed the industry which is now located outside of Canada. The result has been a loss of population in the towns and cities and the placing of a greater tax burden upon those who have remained.

The Minister of Finance (Mr. Robb), and other speakers on his side of the house, boasted that there had been a surplus and a reduction in the debt, but they did not say that this was owing solely to increased taxation. The government collected more from the people this year than ever before, even

during or subsequent to the war, and almost all by taxation. A comparison of some of the figures will be very interesting. According to the Minister of Finance the income from taxation, leaving aside all other sources of ordinary revenue, will be 1391,050,000 for

1928-29 as compared with $319,926,013 in 1922, the last year for which the Conservative party was responsible. Taking the year 1921-22 as a basis, we find that during the six-year period before and including 1922 we collected $525,808,963 in war taxes. This does not include customs duties. During the next six years following 1922 we collected $974,618,136. In other words, during the war and up to and including 1922 we collected on an average $87,634,823 per annum, but after the war, from 1923 to 1928, we collected on an average $162,436,356 per annum. Thus after the war was over and after our expenditures for the Department of Soldiers' Civil Reestablishment, hospitalization, physical training, war gratuities, and so forth, were practically over, war taxes nearly doubled; they increased on an average $75,000,000 per annum. This means an increase of $8 per capita, or $40 per family per annum, while the minister has been telling parliament year by year that he is reducing taxation by $25,000,000 or $30,000,000.

We also had a sales tax in 1921 and 1922, the average receipts for those two years being $49,818,907. But after the present government came into power this tax was doubled, and during its six fiscal years, 1923 to 1928, the average was $89,534,934, or an increase of over $4 per capita for every man, woman and child in Canada per annum on the sales tax alone.

Let us consider our customs tax, which is the bete noire of our Progressive friends. Our receipts in 1922 amounted to $105,686,645, while our receipts in 1928-29 will ,be more than $185,000,000. If the argument put forward by our Progressive friends were sound, that for every dollar collected by the government three dollars were collected by the manufacturers, we must be in very bad shape, because no such collection has ever before been made in Canada, even in war time. But the real reason for the increase in the customs is that by the steady withdrawal of the necessary protection but the retention of a duty, our factories have been closed and the goods that were previously made in them are being imported. There has been no reduction but rather, in many cases, an increase in price to the ultimate buyer while our factories are closed and our workers are out of employment.

The Budget-Mr.' Arthurs

There was nothing in the fiscal year 1927-28. As a matter of fact, none of these payments should be charged to the war. It was abscn lutely essential that they should have been made in any event, and the increased debt to that extent should not be charged against the war.

Our friends opposite, in boasting about the reduction in debt, should remember that they have received large payments by way of reparations, repayments and so forth, every dollar of which should have been applied directly to the reduction of the debt which was contracted in that regard.

Mr. BENNETT:

Or paying reparations. Mr. ARTHURS: These payments were as

follows:

Reparations $6,314,500

Imperial government exchange. 8,199,333Imperial government exchange. 632,500

Redemption of bonds... 8,305,760

German reparations 659,311

Payment by Greece 479,526

Payment by Roumania 3,520,636

German reparations.... 1,593,503

German reparations.... 1,756,704

German reparations.... 6,791,479

Housing 9,768,440

Repayment of loan by Belgium. 4,528,336

Repayment of loan by Greece. 195,000

The Budget-Mr. Arthurs

From 1922 up to the present time there has been received by way of reparations and repayments of loans, $52,745,000, every dollar of which should have gone directly towards the reduction of the debt. In addition we have received very large sums by way of repayment of soldier settlement board loans, for which there is no account in the Auditor General's report.

So far as expenditures are concerned, some are warranted and others are not. The payment of about $3,000,000 to reduce maritime freight rates is justified, but if we continue to meet out of the public treasury the deficits on the eastern branches of the Canadian National Railway these deficits are apt not only to occur regularly, but to increase, especially in the case of the newly acquired lines. I am firmly of opinion that these deficits should be a part of the ordinary business administration of the Canadian National Railway, and should not be chargeable directly to the people of Canada.

Our grants to the provinces for old age pensions are necessary, but I still think, as I said at the time the act was passed, that this Dominion should have assumed the whole burden, and in that way we would not have two sets of overhead expenses. It would also have resulted in a uniform law, and the poor and aged could then get a pension, when otherwise entitled, without regard to residence in any particular province.

The payment of $2,190,000 to the Federal District Commission, largely for the improvement of certain small squares in Ottawa, cannot be justified, at least at the present time.

We are all anxious to do what we can to build up Canada and Canadian trade, but there is a vast difference between giving, not loaning, $2,873,000 to Quebec harbour, and spending $1,000,000 to cover deficits of the Canadian government merchant marine. The Canadian government merchant marine is exploring new channels of trade, and has been very successful in that work until other steamship lines have been prepared to supply the service. The sum is small compared with the subsidies which have been granted by the United States under the camouflage of mail subsidies.

The tariff changes proposed in this budget are very slight and will not affect the ordinary man to any considerable extent. This is also true of the proposed war tax reductions, which are all in favour of the wealthy man and the larger corporations.

The small reduction in the tax on railway tickets and the large reduction in the tax on sleeping and parlour car tickets are both direct benefits to those who can best afford to travel. The man on the farm or the

workingman may save 3 cents a year on the average, but the brokers, the banks and the large companies will get the greatest benefit from the removal of the tax on telegrams and cable messages.

The sales tax, which should have been abolished long ago because it is paid by the poor man, has been reduced by one cent on the dollar. This reduction is so small that it cannot be passed on to the consumer, and it will benefit only the middleman. This tax should now be entirely abolished, in which case the consumer would receive the benefit of approximately 5 cents on the dollar in the purchase of all articles which are affected by the tax.

Another instance of how this government taxes the poor man and relieves the rich is shown by the tax on the transfer of stock shares. The minister proposes a tax of one cent per share on stocks up to the value of $3. The minister knows as well as I do that there are no $3 stocks on the market of a par value of $3. All these shares that are below $5 or $10 are SI stocks. The minister knows also that the great majority of these stocks are sold below an average price of 40 cents, but if we take the average at even 50 cents a share, the tax amounts to 2 per cent on each transfer. I might add that many of the best mines we have in Canada had their stock placed on the market in the first place at around 10 cents per share, stock today which is very, very valuable. It is almost impossible to float a company with the stock placed at a very high figure. Every mining company requires capital for its initial operations, and the stock must be issued at a low price. On the other hand, if the tax upon 9100 shares, the average price of which would run up to $200, were on the same basis of 2 per cent, the $100 shares would be taxed $2 per share, whereas the minister proposes to collect only 4 cents on each transfer of these shares. The thing is absolutely absurd. The minister is proposing to tax the lower priced stocks from fifty to one hundred times as much of their market value as he taxes the higher priced issues.

A short time ago a friend of mine read to me a parody on a great poem, which I think is quite pertinent. You all remember that verse of Longfellow's Psalm of Life:

Lives of great men all remind us

We can make our lives sublime,

And, departing, leave behind us Footprints on the sands of time.

My friend's parody reads:

All King budgets tell our workers,

They should work at every chance,

But each year they wear behind them Larger patches on their pants.

At six o'clock the house took recess.

1310 COMMONS

Esquimalt and Nanaimo Railway

After Recess

The house resumed at eight o'clock.

Mr. DUNNING:

Section 1 as amended, Mr. Chairman.

The CHAIRMAN:

Yes.

Mr. DUNNING:

This bill has been

amended.

The CHAIRMAN:

Yes, it has been

amended in committee, and section 1 now reads:

1. The Esquimalt and Nanaimo Railway Company, hereinafter called "the company", may within five year's after the passing of this act complete and put in operation the line of railway which it was authorized to construct by section two of chapter eighty-three of the statutes of 1919, as amended by section one of chapter eighty of the statutes of 1924, namely: -from a point between Port Alberni and Bain-bridge on the company's railway from Parks-ville Junction to Port Alberni, thence in a northwesterly direction, via Great Central lake and the valley of the Ash river, to Comox lake; and, if the said line of railway is not so completed and put in operation within the said period, the powers of construction conferred upon the company by parliament shall cease and be null and void as respects so much of the said line of railway as then remains uncompleted.

Mr. NEILL:

Mr. Chairman, I gave notice on the order paper of some amendments which I proposed to move either at this stage or at the third reading. The amendments were for the purpose of putting into effect certain suggestions I made on the second reading to render the bill a more workable one, and to provide for a better guarantee of the early completion of the work authorized. My suggestions were couched in temperate language and were made in a spirit

of helpful, constructive criticism. At the time I asked the hon. member in charge of the bill (Mr. Dickie) to convey those suggestions to the promoters. To my surprise I found myself the object of immediate attack by hon. gentlemen opposite, as the house may recall. They accused me of an endeavour to prevent the building of this railway.

Mr. BENNETT:

The word "attack" is not parliamentary.

Mr. NEILL:

Also I was accused of making misrepresentations. Further, I was accused of baiting the corporation for political effect. These charges were made at a time when it was impossible for me to reply to them. But I do not feel called upon to do so now when I have the opportunity. Considering the source from which those charges emanate, I think they are more amusing than important. It was the same hon. gentleman a few years ago who told a committee of this house that I represented four thousand bolsheviks. Perhaps to his mind I did, because his idea of a bolshevik is somebody who differs from him in political opinions. However, I do not propose to be too hard on the hon. member. We must remember it is as natural for human nature to be true to type, as it is natural for water to run down hill. There is a certain form of mentality, Mr. Chairman, which at the first hint of opposition, or even of expression of a divergence of opinion from its own, throws reason to the winds, forgets logic and resorts to personalities rather than argument. That apparently is what happened in this case. I do not propose to reply in kind to the hon. member for Nanaimo (Mr. Dickie). I prefer to preserve the dignity of debate; and besides, no one has yet discovered a method of throwing political mud without dirtying his own hands. I prefer to leave the hon. member in that position, to derive what sordid satisfaction he can from the methods he pursued on that occasion.

But, Mr. Chairman, I will answer the whole of the charges by putting forward a question. Did you ever hear of a member of parliament opposing the bona fide construction of a railroad within his riding when the promoting company was the only company that could reasonably undertake the work, when the railway was much needed for the development of a large area, and when it meant the expenditure of three or four million dollars in his constituency? I think the answer to this question is the answer to the charges to which I have referred.

Now, sir, finding I ocmld get no eympathy from the hon. member who was endorsing the

The Budget-Mr. Arthurs

bill, and who would not even consent to hand on my representations to the promoters -a courtesy I never saw refused in this house before-I took my courage into my own hands and approached them myself. I found them, as I expected, men of broad vision, men of affairs, and entertaining no idea of opposition because I happened to have ideas different to theirs, and certainly not the class of men to allow themselves to be baited by me or anybody else. The result of the little conference we had was that they agreed to introduce and did introduce into the bill in the railway committee certain amendments which gave me nearly all that I suggested on the second reading. They did not give me all I wanted-I never expect to get all I want or deserve for my constituents; we shall not get that until perhaps we reach a happier sphere. However, there is sufficient to justify me in saying that the bill is much improved and that there are better prospects of an early commencement and completion of the work. In other words, it is a reasonably fair compromise and enables me to accept it on behalf of my constituents. I therefore will not move the amendments I had intended submitting. I wish the bill godspeed in the hope that it will result in a reasonably early construction of this railway, which will do a good deal to develop an important part of my riding. This is something we shall all appreciate.