Hon. R. J. MANION (Fort William):

May I ask the minister if it is true, as I have heard it stated, that the re-appraisal means an increase of about 40 per cent in the valuation of the lumber which is coming from certain states which compete in the manufacture of lumber with that section of Ontario whence this question was raised.

Mr. EULER:

There is no re-appraisal of anything but furniture.

Mr. MANION:

I meant furniture. What is the increased value put upon furniture.

Mr. SPEAKER:

I would remind hon. gentlemen on both sides that the budget debate will commence shortly.

Hon. ERNEST LAPOINTE (Minister of Justice):

My hon. friend from Fort William (Mr. Manion) asked a question yesterday concerning the case of two men, Lacasse and Fontaine, who are now serving a sentence in Kingston penitentiary. I have inquired into the matter. It appears from press reports that three other men have admitted participation in the robbery in question, subsequently pleaded not guilty, and then later pleaded guilty, and two of them are now awaiting sentence. The case has been referred to by the press as one of the most puzzling in local police annals. Be that as it may, the Department of Justice has as yet received no official report from the attorney general and action of any kind by the Minister of Justice while the case is sub judice would appear quite inadvisable and might be interpreted as an interference with the jurisdiction of the courts or the administration of justice, with which the attorney general of the province is charged. No doubt as soon as the situation is cleared up the department will be advised accordingly by the provincial authorities, and there will then be no delay in reaching whatever decision may seem justified in the circumstances as they then appear.

Hon. R. J. MANION (Fort William):

In view of the fact that the Minister of Justice (Mr. Lapointe) admits that these other two men have pleaded guilty and are now awaiting sentence, surely it is only justice that the two men who have apparently been unjustly

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condemned to the penitentiary should be given the benefit of the doubt and be released from the penitentiary until this case is settled.

Mr. LAPOINTE:

Unfortunately I have to await the report of the attorney general rather than act upon a report from my hon. friend.

Mr. MANION:

Then I think we had better change some of the laws of this country.

Mr. LAPOINTE:

May be.

Hon. R. B. BENNETT (Leader of the Opposition):

Mr. Speaker, when this debate was adjourned a few days ago I had made a few preliminary observations with respect to the statement then made by the Minister of Finance (Mr. Dunning). I am sorry that I cannot call it a budget statement. When this house meets, it has been its custom for years to set up two great committees. One is the committee of supply, and the other is the committee of ways and means. The committee of supply is to determine what sums shall be expended by the government of the day during the fiscal year under consideration. The committee of ways and means is the committee that determines how the supply voted shall be made good, what taxes shall be imposed, what probable revenues will be raised, in order that there may be, if possible, an equalization between expenditures and revenues. I have under my hand, for instance, the speech delivered a few days ago by the Chancellor of the Exchequer in London, and when one realizes the time and effort that he took to make it apparent to that house that he had to meet a deficit, and the means to which he would have recourse for the purpose of meeting that deficit, one can readily understand why I am not now applying the term budget statement to the speech of the Minister of Finance to which we listened the other day.

If my hon. friend the Minister of Finance will turn to Murray's Oxford dictionary, he will find that the word budget is defined as follows:

A statement of the probable revenue and expenditure for the ensuing year, ivith financial proposals founded thereon, annually submitted by the ministry, for the approval of the House of Commons. Sometimes put for the condition

of the national finances as disclosed in the ministerial statement; also for the financial measures proposed.

In view of that definition of the word budget, a definition held in high regard in practice by every member of this house, I would think that there would be little or no difficulty in realizing that we have had no budget statement for the year ending March 31, 1931. Will any member on the opposite side of the house indicate where in the statement of the Minister of Finance one can find any estimate of the revenues for the year ending March 31, 1931? Will any hon. member deny that that is the year for which we budget, and not the year that is past? Will any hon. member deny that when the hon. Minister of Finance used the word " estimate " with respect to revenues, he was dealing with a year which had passed and which closed on the 31st of March last? So far as this house is concerned, we have had no budget speech with respect to the fiscal year now under review, and I say that I regret that I cannot congratulate the Minister of Finance with respect to that because, being an old treasurer in one of the provinces of this country, he knows that there is no province, however small, in Canada in which there would not be a budget statement submitted indicating the prospective revenues and the proposed expenditures for the year under consideration. I ask the minister where in all these pages of his speech that are now on Hansard there is a single indication of what the revenues are to be for the year ending March 31, 1931. Find it if you can. I challenge any man to find where it is in that statement, and yet you call that a budget statement. It is no more a budget statement than the speech that was made by the Minister of Finance last evening on the Peace River question is a budget statement. I challenge any member of this house to say whether he knows within hundreds of millions of dollars what the revenues of this country will be during the present fiscal year. Will any hon. member say that he knows? If he does, he will have to perform a surgical operation for the purpose of ascertaining it in the mind of the Minister of Finance.

To some this may seem a trifling matter, and yet it strikes at the very foundations of our institutions. It goes back to the earliest days when from a reluctant sovereign redress for grievances was obtained before supply was granted, and the amount of the supply that was granted was determined entirely by the ability of those who were taxed to make good that supply. For this year we know the increased charges that must be put on the taxpayers of this country under the main estimates. We have not yet received the

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supplementary estimates, we have not, yet had communicated to us, as we had a right to, what the charges will be with respect to statutory claims against our revenue. That has not been communicated to the house. Nor, sir, have we had communicated to us in any way, shape or form just what the charges will be with respect to undertakings with which we are connected. Yesterday we were called upon to provide 361,000,000 for our railway enterprise. But tell me where within the four corners of that document you will find any indication of just what the revenues are to be forthcoming from taxation. We do not know what the customs revenue will be as a result of the changes that have been wrought by the alterations in the tariff. These things we do not know. I submit that under the conditions that now prevail with shrinking revenues, with diminishing trade, with lower railway earnings than have been recorded within recent years of the history of our railways-I submit that under those conditions this house had a right to know what the effect would be upon the revenues of the changes made in the ways and means by which supply is to be made good. I say this further, sir, that if the hon. gentleman will take as a model those great budgets that have been delivered in times past in this house or in the British house he will find that it could not be regarded as worthy of the name unless there was an indication of the estimated results of the taxation imposed for the purpose to meet the demands made upon the treasury. That, I think, is fundamental.

Having said so much with respect to that omission-and I think there can be no question of the correctness of the observations that I have made-I now proceed for a few moments to deal with the result of last year's operations, that is, the year ending on the 31st day of March, 1930, with respect to which the minister was pleased to say that he gave estimates. No chancellor in England, no treasurer in the provinces nor in a small city would venture thus to endeavour to becloud the issue with respect to the question of the financial position of his country, or his province, or his town.

Now, what were the operations of the past year? The hon. gentleman made

perfectly clear that during the past year we received large sums of money, we made large disbursements, we had a surplus and we reduced the national debt. In that we rejoice. But I should like to ask hon. members by what method do they suppose a surplus was obtained, and by what means do they suppose that the debt was reduced? There are three methods by which the revenues of this country were obtained. They were

obtained, first, by taxation, secondly, by interest upon and dealings with our cash balances, and, thirdly, by receipts which came to us from reparations and from interest upon our investments. Broadly those are the three sources of the revenues of Canada.

With respect to the first, taxation, the hon. gentleman a few days ago was pleased to read to this house the results of the imposition of taxes upon the people during the year that has passed. I will not repeat those figures beyond saying this, that whatever the tax may be, it must in the end be paid by the taxpayers, and that whatever taxes are imposed for the purpose of raising the money necessary to meet the requirements made upon the exchequer must come out of the nine or ten million people who inhabit the Dominion. If hon. gentlemen will take the trouble to look at the figures they will observe that during the last few years, ever since this government came into power, we have had in most instances increasing revenues until this year when we have had a diminishing revenue. I do not say that the lessening of that revenue is very important at the moment except as indicating that we have reached a position where it is highly desirable that the greatest possible care should be exercised in the administration of our finances, and that economy should prevail not only because of the value of economy itself, but because it is absolutely essential for us to do so if we are to conduct our affairs without a deficit. For instance, had this house not a right to know what the estimated revenues would be during the current year, from excise sources? We know the money we received from those sources during the past year. We know that the legislation we have recently enacted will diminish those revenues. Had we not a right to be told exactly what the expectations of the government were in that regard? Is there any other legislature of an overseas dominion in which you could have such a statement masquerading under the name of a budget? This house had a right to know what the effect of the recent legislation will be upon the excise revenues of this country; we had a right to know what the diminishing customs revenues will be; we had a right to know what the effect of the new legislation will be upon other branches of the public service; we had a right to know what we had received from reparations, and we had a right to know whether the interest from investments might be continued during the coming year. We have not received this information, but we know what the revenues

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were in years past. We have before us in a tabulated statement which the minister has placed on Hansard-which I will not take up the time of the house to read-figures indicating that during the years that are past we have increased our revenues, although the hon. gentleman says that he has diminished taxation.

Now, when I point out to the house just what has been the result of our fiscal operations during the last twelve months in connection with the revenues that come to us from other sources than pure taxation, namely, from reparations, from investments and from sources of that kind, I think it will be agreed that no statement such as that which the hon. gentleman made the other day, a statement that this country had reduced taxation, can for a moment stand the acid test of investigation. Whenever you impose upon the people taxation which produces additional revenue, you have placed a greater burden upon the people, and however cleverly you may disguise it the fact remains that it means taxation. You cannot change that. For instance, in the year ending 31st March, 1923, the total revenues of this country raised by taxation from all sources amounted to $335-453,000-without giving the odd figures; next year, $341,718,000; then came 1925 with a shrinkage of taxation revenues below $300,000,000; in 1926, slightly above $327,000,000; in 1927, slightly over $346,000,000; in 1928, slightly over $364,000,000; in 1929, slightly over $395,000,000; but last year, that is, according to the figures given to this house on Thursday last by the hon. Minister of Finance, it will be observed that we have already collected through taxation-although it may be increased when the figures are finally adjusted-$378,321,000. In other words, from taxation there was collected from the Canadian people last year a larger sum than in any year since the government came into power except one. That means that the taxation per capita was larger last year than in any year since 1922 when this government came into office.

Now, what is the purpose of endeavouring to mislead public opinion, or to induce the country to believe that the taxes have been less upon the people. The backs of the people have borne a greater burden because they have paid larger siums, and the methods by which those sums were obtained were methods peculiarly and entirely within the government's power and control; for during the last seven years, that is, since 1922, this government, and none other, have had complete control of taxation methods, and they,

and they only, are responsible for the methods employed for the purpose of collecting the revenues of this country.

Let us look for a moment at what the other revenues have been apart from taxation. The other revenues of this country, were in 1930 practically the same as they were in 1923.

In 1923 they were $67,600,000 and in 1930 they were $69,000,000 Those revenues came from interest on investments, from premium discounts and exchange-that is from our cash balance-from special receipts and credits- that is from the repayment of loans-and from other sources, such as post office and the grain act, which I will not include in the summary. What does that mean? It means that the interest on investments-investments, mark you-from all sources during the years this government has been in power, from the year ending 31st March, 1923, to the year ending 31st March, 1930, amounts to the very large sum of $93,270,000. The premium discount and exchange, that is, the banking operations of our country, brought us in an additional $8,629,000. From special sources, the repayment of loans, etc., we received $45,43^,000, which makes a total of $147,000,000. There are other sums in addition to that in connection with British debts, and in that respect debits and credits were about equal and we will not utilize any amount at all in this statement. However we have $147,000,000 :n the hands of the government from other than taxation sources for reducing the national debt of this country. That was not obtained by taxation but it was money that came from banking operations, money that came from the repayment of past debts and interest on our investments. The minister told us the other day that the total reduction in the national debt amounted to $257,000,000, commencing with the year 1925-26 because in the years preceding that during which this government was in power there was an increase in the general debt in two years. During six years the government has paid off a total of $257,000,000, including sums used for acquiring stocks and bonds for the sinking fund. They had $147,000,000 without imposing a dollar of taxation upon the people of Canada. So that the total amount raised by taxation and used in reducing the debt amounted to something like $110,000,000.

Let us see where that amount came from, and for that purpose we shall turn to one particular item, namely, the sales tax. When this government came into power the sales tax for 1921-22 was 3 per cent; in 1922-23 it was 44 per cent; 1923-24 it was 6 per cent, and then it was reduced to 5 per cent the next

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year. It remained at 5 per cent the year after, and the year after that, and in 1927-28 it was reduced to 4 per cent; in 1928-29 it was reduced to 3 per cent, and this year, 192930, it stood at 2 per cent, and has now been reduced to one per cent.

I wonder if the hon. gentleman realizes what the books show as to the total collection of sales tax in Canada since 1921-22. The total amount of tax collected by sales tax in that period amounted to the enormous sum of $612,556,000, in round figures. Had the rate remained at 3 per cent to the end of 1929 it would have amounted to only $424,000,000; in other words, $188,000,000 more were taken from the people of Canada by this government on the sales tax than would have been the case had it remained at 3 per cent. I wish to remind the house that these are figures furnished by the department. That is all I can say on the matter. Let me repeat the fact that the sum collected was $612,556,13157, to be exact, and that the tax would have been $424,400,026.92 had the rate remained at what it was in 1921-22, namely, 3 per cent. You can see that there is a

difference of $188,000,000, and $78,000,000 less than the amount required to effect the reduction that has been made in the national debt. So that the additional sum taken from the taxpayers of Canada by sales tax over the tax imposed by the former administration was $188,000,000, and the total reduction of debt was only $257,000,000. As I have pointed out, the amount received from sources other than taxation during that period was $147,000,000. So that the government not only has not reduced the national debt to the extent to which it has increased taxation under the sales tax, together with revenue other than taxes, but it has failed to realize that the money available for the purposes which I have indicated would have reduced the national debt by at least another $75,000,000. There, shortly, is the story with respect to the national debt. If the figures supplied by the department over which the minister himself presides are to be relied upon there is no gainsaying these facts; but, sir, there are other matters.

Mr. MACKENZIE KING:

Oh, yes.

Mr. BENNETT:

Well, the figures are

available for the right hon. gentleman if he wishes to look at them.

Mr. STEVENS:

The right hon. gentleman always wags his head.

Mr. BENNETT:

I shall hand these figures to one of the page boys, so that the hon. gentleman may have an opportunity of perusing them personally.

Mr. DUNNING:

My hon. friend knows

where he misused the figures.