Mr. BENNETT:

The figures are exactly

as they are given.

Mr. DUNNING:

The figures are.

Mr. BENNETT:

Yes, the figures are, and I have made a correct statement. For the information of the Minister of Finance, who has raised some question about my statement, I will just put the figures on Hansard. The amount collected from sales tax in 192122 was $61,518,751.13, at 3 per cent. The amount which would have been collected if the tax had not been increased is the same. In the next year the amount collected at 4i per cent was $91,262,254.13. With the same volume of business at the rate-

Mr. DUNNING:

Does my hon. friend

say that the department supplied the identical statement he is reading?

Mr. BENNETT:

These figures came from the department.

Mr. DUNNING:

My hon. friend knows

that the incidence of the sales tax was completely changed.

Mr. BENNETT:

The incidence of the

sales tax, because it was raised to 6 per cent.

Mr. DUNNING:

No.

Mr. BENNETT:

Next j'ear they raised

the sales tax to 6 per cent with the result that the amount obtained was $100,990,07780, which was twice as much as would have been raised if it had remained at 3 per cent. The three following years the rate remained at 5 per cent, producing the sums I have mentioned. That continued down to 1928-29 when it stood at 3 per cent. The total amount raised was $424,400,026.92. I shall place this statement on Hansard so that the hon. gentleman may have the opportunity to study it as I have done:

The Budget-Mr. Bennett

Amounts Collected from Sale Amount collected Tax Amount which would have been collected if tax had not been increased]Q?l-9 ... $ 61,518,751 13 3 % $ 61,518,751 131922-3 91,262,254 13 44% 60,841,502 751Q92-4 100,990,077 80 6 % 50,495,038 40] 924-5 66.707,369 96 5 % 40,024,421 981925-fi 74,025,093 31 5 % 44,415,055 9982,305,670 60 5 % 49,383,402 361097-8 .... 72,100,244 12 4 % 54.075.183 091928-9 63,646,671 22 3 % 63,646,671 22$612,556,131 27 $424,400,026 92 .. $612,556,131 27A.iuOUiit of Scilf Amount which would have been collected if tax had not been increased .. 424,400,026 92Amount raised on account of increase

$188,156,104 35

But, sir, that is not all. It must have occurred to the hon. members of this house that the government of the day imposed additional taxation upon the Canadian people since it came into power in the year 1922. That additional taxation however has to some extent been removed. Some of the nuisance taxes have been abolished. For instance, the tax on telegrams has been taken away; the tax on steamship tickets, receipts, promissory notes, and the graduated taxes on cheques have also been abolished. These are taxes most of which were imposed by the administration and which have now been taken away. However, as I have indicated the result is that had the sales tax remained as it was there would have been $188,000,000 less collected from that source alone. My hon. friend has said that there has been a change in the incidence of the sales tax. Essentially the principle was a tax on sales, and that tax which was at one time increased to 6 per cent has been reduced to 1 per cent. By the way, it is amusing to hear the "chancellor of the exchequer" talking about reduction in taxation. He said: Look what we have done this year; we propose to cut the sales tax in half. Hon. members must know that what they did was to reduce it by 1 per cent.

Mr. DUNNING:

No. no.

Mr. BENNETT:

Yes, just 1 per cent.

Mr. DUNNING:

No, no, it was reduced

by 50 per cent.

Mr. BENNETT:

He has cut it in two, and it my calculation is correct two into two goes once. All I can say is that the hon. gentleman himself made the observation that he would cut the sales tax in two.

Mr. DUNNING:

That is correct.

Mr. BENNETT:

And it will now be 1

per cent. Previously it was 2 per cent. That is all there is about it. I merely mention that in passing because it accentuates the point I desire to make, that notwithstanding the alleged decreases in taxation it must be remembered also that the government increased taxation, and the result is indicated by the revenues to which I referred. How else did you get the money if you reduced taxation to a greater extent than you increased it? From where did the money come?

Bigger business.

Mr. BENNETT:

But the figures show a

diminution of business; the figures show that during the year ending March 30, 1930, there has been a diminution of the national business; the volume of trade has lessened and the adverse balance against Canada is over $100,000,000. That is the answer.

Now, sir. as I have said I do not propose to deal with the national finances beyond traversing what the hon. gentleman said the other day. When he claims great credit for the reduction of taxation I only venture to remind him again that last year the taxes were larger than in any single year but one since this government came into power; that the amount of diminution of the national debt is only $110,000,000 out of moneys that did not come from interest on investments, from banking transactions and from special sources such as the repayment of our debts. That does not take into account the matter mentioned by the right hon. Prime Minister in connection with the collection of the $83,000,000 of British indebtedness through the late Mr. Larkin, which really consisted of an adjustment as between debits and credits. They surrendered certain bonds, which were cancelled, which they held in connection with the debt we owed

The Budget-Mr. Bennett

to them, and so the debt was wiped out. That was the end of that transaction.

I will leave that for the moment, for I think it serves no useful purpose beyond just pointing out the facts. The public can draw the inference; public opinion can decide. Those who have to contribute the taxes know they had to raise $369,000,000 last year from taxation, and they know this was a greater amount than was raised by this country in any year but one since the Liberal party came into power. So we may leave that point, with the statement that the income tax has been increased in its incidence, because dividends were taxed by this administration that previously had not been taxed. Under the former administration they were taxed in the hands of the companies and then were free from normal taxes when in the hands of the taxpayers, but now they are taxed. However, there has been a reduction of 10 per cent in two years and there have been other adjustments which amounted to increases, so by increasing taxation the government was able to take up the slack so that the increases and the decreases about equalled each other and the amount taken by taxation from the people of this country remained at the figure I have indicated, about $370,000,000.

That is a statement of the situation of this country at the end of March, 1930. What was the condition of trade at that time? Trade, as the hon. gentleman said, is a decidedly important matter. I turn to the summary of trade for the twelve months ending in March of this year and I find that the total trade of this country with the British Empire during that period amounted to $632,446,000, in round figures. As the hon. gentleman indicated the other day, I find that this was a very great diminution from the volume of trade during the preceding year. I also find that the volume of trade with the United States of America was $1,362,423,000 disregarding the odd dollars, which represented a decrease in importations from the United States of a little less than $21,000,000 and an increase in exports to the same country of a little less than $15,000,000. It is not necessary to retraverse the figures which the hon. gentleman already has indicated as showing the adverse balance of trade of this country during that period; it is sufficient to say that the importations into Canada show a distinct increase of something more than $100,000,000 over the preceding year. There is a school of economists who say that it matters not if a country has an adverse balance; there is a school of thought in this country which writes often to the public press indicating that is desirable to have

Mr. Bennett.]

greater importations than exports, that in any case the imports pay for the exports and that there must be an adjustment of these in some way in order that the country may flourish at all. Well, we live side by side with one of the greatest countries in the world, where there are 120,000,000 people living under one form of government. I find that last year the favourable trade balance of that country was upwards of one billion dollars; the year before it was also upwards of one billion dollars, and during the periods of time which we have had under discussion the balance of trade in the United States has fluctuated between one-half billion dollars and upwards of one billion dollars.

It is not necessary for me to express an opinion as to what may be the true view with respect to the matter, but this I will say: If the late Minister of Finance and his predecessors were correct in claiming that a favourable balance of trade was an indication of the flourishing condition of this Dominion, then it must be that an adverse balance of trade equally is an indication of a poor condition in this country. There can be no half wray position about it. Certainly, sir, it is somewhat difficult to have it both ways; you cannot do it. If last year hon. gentlemen opposite cheered so lustily, as I recall they did, when the late respected minister deolared that we had a favourable balance of trade, I wonder what their views are now. If the government created the favourable condition last year then the government is equally responsible for the adverse condition now; if the government claims credit for large harvests and favourable trade balances, equally it must accept responsibility for poor prices and adverse trade balances.

A poor harvest.

Mr. BENNETT:

I beg your pardon? Do not hesitate to speak up. In that regard I point out a matter which hon. gentlemen opposite to the right of the Prime Minister always should recall, that during the campaigns which they conducted in 1925 and 1926 in western Canada they laid great stress upon the customs duties and the necessity of lessening them. Yet for the twelve months ending in March, 1929, the total duty collected, according to the document I hold in my hand, was only $479,000 more than $200,000,000, while for the year ending March 30 last it amounted to $199 011. So that despite the circumstances to which these hon. gentlemen alluded in their election campaigns, the great basis of taxation from the Canadian people still remains the customs taxes, and during each of the last two years about $200,000,000

The Budget-Mr. Bennett

has been taken from the people of Canada by those taxes, although hon. gentlemen opposite led us to believe that if only they were able to make their influence felt upon the government of the day the customs taxes would almost disappear and direct taxation would take their place.

Mr. VALLANCE:

My hon. friend will admit that the influence was felt, would he not?