Mr. BENNETT:

That is what I am trying to point out. In other words, we shall have a tariff from month to month, depending on what the United States does. The president of the United States has to sign the executive order on the recommendation of his tariff commission and any increase up to 50 per cent comes into force thirty days later. Thus Canada's tariff is to be made by the president of the United States.

Mr. DUNNING:

As against themselves.

Mr. BENNETT:

Against the attitude I

protest. I ask these men to leave the treasury benches and give place to Canadians who

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The Budget-Mr. Bennett

are prepared to enact a tariff for Canada. Suppose Germany has another tariff, Austria another and Czechoslovakia another with respect to every one of those items mentioned in the countervailing tariff, this country will have a new tariff with respect to all those items. That is what happens. Just as rapidly as they change their tariff, under this countervailing provision we get a new tariff also, so that Ganada no longer has with respect to those designated articles a fixed or stable tariff. It has a tariff that mas' be amended in Czechoslovakia or Austria or the United States or Latvia or Esthonia, we know not which, depending on which country we import goods from within the list mentioned. There is no getting around that. All the sophistry in the world cannot disguise a fact which is so patent to everyone. What do the government say? They say: "We will not retaliate." Oh, no! One minister says: "We will not retaliate." The Prime Minister says: "We will not

provoke." But what do they do? They "countervail!" It is difficult to understand a government that will so presume upon the intelligence of the Canadian people as not to realize that they are trying to do by indirect means what they have not the courage to do directly. They had not the courage to do it, but the people of this country have shown in no unmistakable way that they no longer propose to be serfs for anyone and that they are not going to have their markets con- ' tinually filled with goods dumped upon them from the mass production of the United States, whether it be from the factory or the farm. Against that growing tide of disfavour the government realized that they were powerless unless they did something, and so abandoning all their past protestations and forgetting the Prime Minister's fine frenzy about not provoking the United States by putting up the British preference, and his fine frenzy against retaliatory measures against the United States, they say: All this is forgotten. Just let the president of the United States sign the order, and then that becomes the tariff of Canada.

Now I proceed to the item of tea, which has been put on the free list. In 1018 this country imposed a tax on tea as a war measure. In 1019 there were certain modifications of that tax, but only modifications. That tax has been on the statute book ever since this government has been in power. Why did they not make tea free before? Why did they not have a free cup of tea in any year since 1921? Why? Because it yielded some little revenue. But now, just on the eve of an election, they suggest how farreaching

might be the consequences if they only take the duty off tea. Well, Mr. Churchill took a duty of fourpence a pound off tea in a budget in England just on the eve of an election.

And see what happened to him.

Mr. BENNETT:

He did it because he

thought it was good policy to do it. He thought it would get some votes. I have here the language of Mr. Lloyd George in that regard, which I fancy will be somewhat interesting to hon. gentlemen opposite. This year Mr. Lloyd George was dealing with that very question, and in the course of his observations. he found it necessary to refer to the action of the Conservative administration in England in that regard. He said that it was purely an election dodge on the part of Mr. Churchill to take fourpence a pound off tea just before an election, and he said it did not do Mr. Churchill much good. It did not. Do hon. gentlemen opposite think that it is going to do them much good? Let me read the figures, showing the revenue we have been receiving from tea:

1910 $ 7,032

1911 4,251

1912 4,463

1913 4,236

1914 5,506

1915 8,957

1916 7,931

1917 4,952

1918 15,648

1919 11,801

There was little tea imported in 1919, because the year before vast supplies had been purchased, over 58,000,000 pounds, and only

17,000,000 pounds were bought in 1919. But from 1920 up to March 31, 1930, the tax on tea has brought this country roughly $2,-

500,000 every year, and most of that time this government has been in power. In 1922 the revenue from tea was 82,900,000; 1923, $3,000,000; and for the present year ending March 31, 1930, $2,596,000. Now I ask hon. gentlemen this question: When the government have lost, mark you, the excise tax, when they have lost the customs tax, and when they have lost other forms of taxation by reason of business conditions, why do they now take the tax off tea? Do they do it for the good of the country or for votes? Well, Mr. Lloyd George used these words on the 17th of April of this year:

Mr. Churchill complained that taxation was concentrated upon a small portion of the community. Who set the example there? Last year Mr. Churchill took 4d. off tea. Was he going to say that there was no bribery in that? Was that done as a great financial measure, or was it done in contemplation of an election which was about to take place?

The Budget-Mr. Bennett

I commend that to the government opposite: Go and tell the housewife that you are taking the duty off tea now; that last year you took the duty off cheques, parlour and sleeping car tickets; and that this year you are taking the duty off tea on the eve of an election. I cannot without having before me the figures express any opinion with respect to the condition of the revenue generally but I should say that if there is one war tax in all the world that should have been dealt with as soon as possible it was the tax on tea. Every member of this house will say that. But, as a matter of fact, the government had not seen fit to take the tax off tea until now, on the eve of an election. Who will say, in the words of Lloyd George, that there was no bribery in that? Those were his words, not mine.

Let him mind his own business.

Mr. BENNETT:

I should say that that

would be the general attitude of the hon. gentleman. I only quote the words of Mr. Lloyd George because in England fourpence a pound was taken off and seven cents a pound here.

I come to the income tax. How many people in Canada do you think pay income tax? I have not yet, of course, the figures for 1930, but for the year ending March 31, 1929, the total number of individuals in this country who paid income tax was 129,663 out of a total population of nearly 10,000,000. That figure was divided by provinces as follows:

Prince Ed \va rd Island 367

Nova Scotia 3,693

New Brunswick 2,682

Quebec 28,918

Ontario 55,743

Manitoba 10,174

Saskatchewan 7,799

Alberta 8,221

British Columbia 11,732

Yukon 334

That makes a total of 129.663 individual income taxpayers. The government now propose to grant some relief to the income taxpayer with respect to gifts given to charity, tc churches and eleemosynary institutions. I wonder if the government recall how strongly we urged them to take action last year. I wonder if they remember that we pointed out that the income tax was having the effect of drying up private benefactions? Now they agree and are sticking to the old biblical rule that the exemption shall not exceed one-tenth of the income. We have urged it invariably for years, and I rejoice that the government has at last taken this action.

Let me point out one of the difficulties in connection with the income tax. Did it ever

occur to the government that there must be something wrong when only 129,000 individuals out of 10,000,000 people pay income tax in this country? There was something wrong in Lethbridge not long since, as the Minister of National Revenue knows. There must be something wrong in other parts of Canada. How is the tax being evaded? If there are only 129,000 people paying income tax in this country, it is obvious that there is something wrong. One of the reasons is this, that money in the hands of the taxpayer is taxed three times. First, the moneys from which they receive their dividends, and many of them receive their money from investments in joint stock companies, pay the corporation tax on income. Secondly, the taxpayer is called upon to pay a full tax upon that money which he receives as a dividend. That is the second time that that dividend pays a tax. not only is it double taxation, but the taxpayer has to pay a tax upon the very money with which he pays the tax. He gets no exemption for the tax he paid last year out of this year's income. So his money is taxed in the hands of the company, in the hands of the individual, and the money with which he pays the tax is taxed. Now I submit that the time has come when the minister should revise the whole theory of income tax to see that more than 129,000 people in receipt of an income of 83,000 or over make some contribution to the revenues of the country. Placed upon an equitable basis the income tax in Great Britain has been the greatest source of revenue. In this country, administered on a just and equitable basis, it would yield increasing sums. In years past the largest sums from income tax have come, not from individuals, but from corporations, for the income tax paid by individuals last year amounted to only a little over $24,000,000 of the total. I suggest this as a matter worthy of consideration by the government. The adjustments that have been made have tended not to lessen, but rather in some instances to increase the tax, apart altogether from the exemption of gifts to churches, hospitals, and institutions of that kind. I am glad the minister has made that exemption applicable to the 1929 period, because many efforts have been made to induce men of means to make large contributions, to universities, schools, hospitals and churches, but they found themselves unable to respond on account of the burdensome taxation imposed. This is a step in the right direction. It is long overdue. We urged it on the government last year and the year before, and it is satisfactory to us that the minister has at last yielded to our representations.

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The Budget-Mr. Bennett

Here is another question that I desire to ask the hon. minister as well as the right hon. Prime Minister that rises out of this. When you are dealing with taxation why was no effort made to deal with problems that arise in connection with the duties imposed by foreign countries against importation of Canadian wheat? It is true that under the provision of the countervailing duties, the tariff on our now going into the United States being 42 cents, any wheat we buy from them will also pay 42 cents. It is also very useful legislation to suggest that wheat brought from France will now pay 53 cents, from Italy 73 cents, and from Germany 87 cents a bushel. The figures I obtained yesterday from the department were that the United States duty on imported wheat was 42 cents per bushel, the French 53-454, the Italian, 73-63, the German 97-363 cents per bushel. Why have not the government done something about countervailing in those cases? Why have they not done something to provide that when any country in Europe imposes a prohibitory tariff against our wheat we will impose a supertax on their exports to this country? Why has not something been done to protect our wheat growers? Look at what happened the other day. France with her wheat tariff was able to dump 18,000,000 bushels of wheat on the British market. As the hon. Minister of Trade and Commerce knows, the effect was that wheat on the Winnipeg market dropped between 5 and 6 cents a bushel. The direct result of those European tariffs against importations of Canadian wheat has been, as I indicated; that is, our market has been restricted and more or less destroyed, and the British market, which of right was ours in days gone by, has been taken from us. Wheat from Germany and from France, grown under subsidies in some instances, has been sent to Great Britain to the exclusion of our wheat; but this government has done nothing to deal with that situation. Is human ingenuity beyond dealing with it? Any government that lets the president of the United States make its tariff might permit some of us to suggest measures that would safeguard our wheat.

I think, sir, that I have dealt with the problems arising out of this budget. I have not yet endeavoured to go into them in detail -the five hundred and eighty odd items; they must be dealt with in committee, as they are in England. In England some of the most important speeches by Mr. Lloyd George and By Mr. Churchill were made in committee when considering the resolutions themselves,

because they required detailed knowledge and an ability to deal with the technical questions that arose thereon.

Now, sir, I propose to indicate in a summary way the attitude of this party with respect to the problems with which we are dealing. I would regret to think that it was not the duty of the official opposition to indicate what the fiscal policy of the country should be when it has been entrusted to the president of the United States to do so. Our duty is to point out what the proposals of the government involve and to ask the people to accept or reject them in the light of fair criticism urged against them.

The Conservative party stands for the safeguarding and stability of agriculture and industry, and to that end. for protection by laws made in Canada. The countervailing duties of the hon. gentleman are in truth a renunciation of his party's creed; but they are as well an ineffectual attempt to embrace the doctrine of Conservatism; for they do not safeguard and they do not stabilize. They constitute an acknowledgment both of the futility of Liberalism and the impotency of its present proponents to legislate for the good, not of other countries, but of our own. The government, alarmed at the signs of the times, forsake the faith of Laurier and, failing the usurpation of the Conservative doctrine, finds itself suspended midway between the two, shorn of its old faith and doctrine denied the solace of its new,-a warning of the nemesis that awaits those who subordinate principle to personal advantage.

Tested by the laws of political morality or of good business, his action stands equally condemned. To the great Liberal party I offer my sincere sympathy. Before this time of industrial world strife, in the days of lesser competition, the Liberal party was encouraged to prosecute its principles by leaders faithfully, though mistakenly, dedicated to their advancement. But now, when economic battle is joined between the nations of the earth, when every country is raising or preparing to raise its tariff walls higher and yet higher, when we have left behind the calm of slow growth and find ourselves in the storm and stress of rapid development, when the very existence of our industries demands a moderate tariff imposed in our own interests, does the Liberal leader rally his followers for one last fight in the cause he has sworn to espouse? Does he say to the tens of thousands who have been loyal to him? "The cause is in desperate plight, but we will fight it through."

The Budget-Mr. Bennett

No! He calls to them over his shoulder as he speeds from the battlefield, "Recant, recant; the cause is lost; every man for himself."

Mr. MACKENZIE KING:

What is this

document my hon. friend is reading?

Mr. BENNETT:

Some notes I have made. And where is he speeding? Anywhere so long as it is away from Liberalism. And in his desperate flight he seeks as his only hope-protection behind the strong arm of the Conservative party. He rushes to us and cries, "I am of the faith. Behold! I bring with me as proof of that my countervailing duties." But there is no place among us for the right hon. gentleman and his government. A steadfast Liberal we can, and do, honour and respect. If he has fought bravely a losing fight, we for that reason the more honour and respect him. But to the leader, who, to save himself, is willing to forswear his faith and disguise his meanness in the mantle of Conservatism, we will lend no aid; we will endure no compromise. We can do no other in duty to our friends, in fairness to our foes. Countervailing duties! Free trade had at least a meaning. But to surrender our sovereignty-the right to make our own laws for our own good-to hand over the conduct of our agricultural and industrial affairs to the tender mercies of competing nations, is an insult to Conservatism, a mockery of Liberalism and a catastrophe to agriculture and industry alike which we as citizens with no interest at heart but the welfare of Canada will forever oppose.

Hurrah!

Mr. BENNETT:

Go down to the province

of Quebec and tell them that is your faith. Go down and explain the seasonal tariffs; when they hear the details of them as they apply in actual operation they will be greatly surprised. It is unthinkable that a responsible ministry to save itself will prostitute its country to the interest of others.

Oh, oh.

That is a good word

Mr. BENNETT:

My right hon. friend will

talk of the welfare of industry and agriculture, of his measures for the orderly advancement of Canada. If he means this he must have forgotten what every schoolboy knows, that our national prosperity is founded on stability of trade, on freedom from change, on an assured market for our natural and fabricated products. That will suffice for countervailing duties.

Oh, oh.

Mr. BENNETT:

Wait a minute, until I finish my statement. I do not however approve of the practice of making that appear to be a preference which in reality it is not. A sound partnership is founded on mutuality of interest. Good business is predicated upon reciprocal benefits. This is neither. Here is a great principle being destroyed in the manner I have already indicated. There is no true Canadian who would not gladly surrender some personal advantage to help the people of the parent state; Britain however neither needs nor asks for help like that. What she wants is what we want-broader areas of trade developed through an alliance to which we each bring the powers which have made us what we are. She wants with us a greater empire of the future, and for that we Canadians must build a greater Canada. I say now what I have said from my youth, that the future of empire depends upon the upbuilding of Canada; it depends upon the development of the great resources of Canada. Any sacrifice that we may make of our position whereby we oease to be autonomous in the development of this great state is fraught with the gravest disaster not to us alone but to the empire of which we form a part. What is good for one is good for both, and what is bad for one cannot avail the other. Is that not clear to hon. members? To grant trade preference to another state or empire without forming those preferences on a mutually helpful treaty is unsound business, profitless and filled with ill will and misunderstanding. Can there be any doubt about that? The New Zealand experience proves the case.

The budget in so far as it endeavours to deal with trade preferences within the British Empire, which trade preferences are in reality nothing, is nothing more than mere deception of the body politic; to my mind there can be no doubt with respect to that. The development of this country is the development of the empire and we constitute an autonomous unit in the empire. I turn to the words of a great Conservative statesman who said that a woollen mill in Canada is as great an

The Budget-Mr. Bennett

asset to the British Empire as a woollen mill in Yorkshire. The empire must be founded on common advantage, stabilized by the unhampered cooperation of its component parts and sustained by the boundless strength of this great nation. That is the position which we submit to the people of this country. I realize that the present government has experimented with the most priceless possessions of this country, such as the railways; it has formulated various policies and has attempted the operation of policies from time to time. I have heard its professions of faith, which professions are wholly lacking in effectiveness so far as practice is concerned. Time will not permit me to read the speeches made by the Minister of Railways (Mr. Crerar), the Minister of the Interior (Mr. Stewart, Edmonton) and the Prime Minister (Mr. Mackenzie King) in the Canadian west. There may be an occasion when those speeches may be read. In the speech of the hon. Minister of Finance (Mr. Dunning) delivered on October 8, 1925, as reported in the Regina Leader, dealing with the proposal of Mr. Meighen, we find the expression:

-in my judgment such a proposal would ruin the agricultural interests of western Canada.

To-day we find ourselves in the position where there is a duty of 42 cents a bushel imposed on American wheat, 42 cents on butter and 8 cents on eggs. We have given effect to the words of Mr. Meighen as quoted by the hon. gentleman (Mr. Dunning).

After the United States raised their tariff I would have raised the Canadian tariff to the same height. All the farmers, with the possible exception of the wheat producers, would have benefited.

Mr. Dunning further then stated:

I have said before, and I say again to-night in the most solemn way that in my judgment such a proposal would ruin the agricultural interests of western Canada.

Well, he has himself proposed it to this parliament; he had not the courage however to do it directly, but he has left it for the United States to do.

Mr. DUPUIS:

Mr. Meighen wanted to be led by congress.

Mr. BENNETT:

No; he said he would

take action, but the present government said that they would fix the tariff at 7 cents on butter and 4 cents on eggs, knowing when they did it that the tariff in the United States was 42 cents on wheat, 12 cents on butter and 8 cents on eggs; that is the tariff to-day in Canada as well as in the United States. The hon. gentleman probably knows that.