June 11, 1931

LIB

William Daum Euler

Liberal

Mr. EULER:

May I ask my hon. friend a question? He made a very illuminating analysis of the increases in taxation on moderate incomes up to the point where advances cdmmence. Would he care to continue that progression and ^how how in the higher bracket taxes have been reduced and to what extent? The information would be interesting.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
Sub-subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert Charles Matthews

Conservative (1867-1942)

Mr. MATTHEWS:

I shall be delighted to furnish that information. I do not think I can do it better than by indicating to the house where the decreases occur and what they are.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
Sub-subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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THE ROYAL ASSENT


A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows: Mr. Speaker, the deputy of His Excellency the Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate. Accordingly, the house went up to the Senate, And having returned, Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills: An Act to ratify and confirm certain agreements respecting the joint use by Canadian 2532 The Budget-Mr. Matthews



National Railways of certain tracks and premises of Canadian Pacific Railway Company at Regina. An Act to amend the Canadian National Railways Act. An Act to amend the Canada Evidence Act. An Act to amend the Ticket of Leave Act. An Act respecting Northern Alberta Railways Company. An Act to amend the Salaries Act. An Act to amend the Royal Canadian Mounted Police Act. An Act to amend the Government Employees Compensation Act. An Act respecting The Essex Terminal Railway Company. An Act respecting The Burrard Inlet Tunnel and Bridge Company. An Act respecting the construction and maintenance of a bridge over the river St. Lawrence at Caughnawaga. An Act respecting The Restigouche Log Driving and Boom Company. An Act respecting a certain patent of A. R. Wilfley & Sons. Inc. An Act for the relief of Agnes Sarah Evelyn Ballard McNaught. An Act for the relief of Dorothy Helen Marie Debnam Almon. An Act for the relief of Rosa Maud Thomson Checketts. An Act for the relief of Mary Ellen Margaret Montague Burrows. An Act for the relief of Olive Hamley Fraser Mann. An Act for the relief of Eleanor Fritz Lawson. An Act for the relief of Ellen Jane Easton Graham. , An Act for the relief of Joseph Norman Berger. An Act for the relief of Joan Marguerite Loggie. An Act for the relief of Alice Boyne Ostiguy. An Act for the relief of Eileen Sybil Wolfe. An Act for the relief of Helen Borland Beattie MacNicol. An Act respecting The Algoma Central and Hudson Bay Railway Company. An Act to amend the Armistice Day Act. An Act respecting Grain Insurance and Guarantee Company. An Act respecting The Subsidiary High Court of the Ancient Order of Foresters in the Dominion of Canada. An Act to incorporate Acme Assurance Company. An Act to amend the Copyright Act.


THE BUDGET

CONTINUATION OF THE DEBATE ON THE ANNUAL


The house resumed consideration of the motion of the Right Hon. R. B. Bennett (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Ralston.


CON

Robert Charles Matthews

Conservative (1867-1942)

Mr. R. C. MATTHEWS (Toronto East Centre):

Mr. Speaker, I was requested by hon.

members opposite to give certain figures which I have in my possession. I will be delighted to do so if I may be permitted to place them on Hansard, because I have not time in the few minutes at my disposal to read them. They have regard to the increases and decreases in income tax from all taxable income in tens of thousands up to $1,000,000.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I am afraid they can be only placed on Hansard if read during the course of the remarks of the hon. member.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

Some hon. MEMBERS:

By consent.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

James Ewen Matthews

Mr. MATTHEWTS:

The decreases begin

on incomes of $140,000, and at that figure the decrease is $163-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

William Daum Euler

Liberal

Mr. EULER:

Do I understand my hon. friend to say increase or decrease?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert Charles Matthews

Conservative (1867-1942)

Mr. MATTHEWS:

The decrease amounts to $163. I would also say that I have a statement of the number of individuals in Canada who paid income tax on incomes of $100,000 or over, covering the last ten years. I will read the figures:

Fluctuations Of Large Incomes Individual incomes of $100,000 and over fiscal year ended March 31st-

Individuals

1920

1922

1924

1926

1928

1930

60

107

40

49 37

50 75

129

1931-Number of incomes over $140,000-69.

I have obtained the figure for 1031, which shows a decline in the number of incomes over $140,000, the number being 69.

Now, my time has about expired, or I would argue the question of the advisability of increasing the progressive rate over 25 per cent. I hope that those gentlemen who have these large incomes will continue to be domiciled in Canada, but the high rates have done something to create domiciles elsewhere.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Eugène Fiset

Liberal

Sir EUGENE FISET:

I wonder if the hon. gentleman would be kind enough to complete his very interesting statement by telling us whether the 20 per cent deduction approved last year still applies to the new schedule.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert Charles Matthews

Conservative (1867-1942)

Mr. MATTHEWS:

I think not.

The Budget-Mr. Spencer

Sir EUGENE F1SET: It was not mentioned by the Prime Minister when he introduced his budget.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert Charles Matthews

Conservative (1867-1942)

Mr. MATTHEWS:

I do not think so.

Now, Mr. Speaker, I would say that in my recollection of budgets, I have never known one concerning which there has been less dissatisfaction on the part of the public. Additional taxation is never very welcome, but the Canadian people had made up their minds that more revenues were necessary, and were prepared for such proposals as the government has made. Now that they have been made, there is evident satisfaction throughout the country, as voiced by the public and by the press. They believe that the taxation proposals are as fair as they could possibly be in the circumstances surrounding Canadian conditions, and whatever criticism there may be in the House of Commons, the public have accepted the new taxation with good grace. I therefore find myself in the happy position of being able to congratulate the Prime Minister and the government on the feeling of goodwill and confidence that the public are showing.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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UFA

Henry Elvins Spencer

United Farmers of Alberta

Mr. H. E. SPENCER (Battle River):

this very much, although I think the government will find they are in rather a difficult position if they apply this only to wheat for export. The 5 cents should apply to all wheat; otherwise it is going to be very hard on British Columbia, as pointed out by the hon. member for Comox-Alberni (Mr. Neill). The 5 cents a bushel on wheat is going to be offset, however, largely if not entirely by the extra taxation which the farmer will be called upon to pay. To-day the farmer is in the position of operating what is probably the least-paying business of any in, this country. As a general rule the farmer has to pay all the freight both ways. He pays most of the taxes because he is the one man who cannot pass on taxes either in the price of his products or his services. He has to sell in a wholesale market, largely under world competition, and he has to buy in a retail market and that a protected one. With these drawbacks the farmer finds himself to-day in a position where although he is receiving the advantage of the five cents per bushel on his wheat, on the one hand, he finds himself having to pay a share of the 300 .per cent increase in the sales tax, a share of the tea tax, the stamp tax, the postage tax, the excise and the tariff tax, and when he has finished paying his share of those taxes he will find himsedf in no better position than he was heretofore. The prices' of agricultural products to-day are at a very low level; it is not necessary for me to mention this fact in this house because it has been brought up many times during this session. The price of meat products, such as hogs, sheep and cattle, is very low. The price of wheat is the lowest in 133 years, the price of butter on the prairies ranges from 12 to 15 cents per pound, while eggs are down to five cents per dozen. I have in my hand a voucher which shows figures even worse than that. This is a statement sent to a man in the Peace River district. He had forwarded thirty dozen eggs to the Pat Burns company, the gross return for which was $1.44. The express amounted to $1.05, which netted the fanner for thirty dozen eggs the handsome sum of thirty-nine cents. If any hon. member desires to see this voucher I shall be very glad to let him have it. It is a good thing the stamp tax had not come into effect, otherwise this farmer would have received only thirty-seven cents. The man who wrote out the cheque must have had a sense of humour because he filled it in with the words "thirty-nine cents only."

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

Mr. GOOTE@

The farmer would need to have a sense of humour when he opened the envelope.

(Mr. Spencer.l

Mr. SPENCER; I regret to find that eighty per cent of these new taxes are being imposed upon the consumer. The figures given in the budget show that during the last five years the amount received by means of the income tax has increased from forty-seven to seventy-one millions of dollars, showing a gradual and steady increase. As only three per cent of the people in this country are in a position to pay income tax, it shows that wealth is going more and more into the hands of the few, the rich are becoming richer while the average "man on the street" is having difficulty in making both ends meet. The hon. member for Toronto East Centre (Mr. Matthews), who has just preceded me, gave some figures with regard to the income tax. A reduction in the income tax has been made on incomes UP to $9,000, from then on there is an increase until we reach $130,000, and from then on there is a decrease. A man receiving $130,000 per year must pay $513 more in taxes this year, but the man who receives $140,000 or $10,000 more, is better off to the extent of $163. A man receiving $300,000 benefits to the amount of $15,923, and the one receiving $500,000 has a reduction of $41,827 in his tax. The hon. member for Toronto East Centre gave the number of people receiving these large incomes, I think it was around one hundred, but even if there were ten only receiving these large incomes it would show the injustice being done to the small salaried men in allowing these men a further reduction in their tax.

Another item in the budget which attracted my attention was the statement that Roumania and Greece owe this country an amount of $30,609,720, upon which loan they are paying interest rates of four per cent and five per cent respectively. To those of us who attempt to speak for the basic industry of Canada, that is agriculture, it seems strange that with the present need of some sort of credit for the farmer at a reasonable rate of interest, to find that the most the federal government has done-I do not blame this government any more than any other -for agriculture is to advance $5,500,000 to tile farm loan board, while they are able to advance $30,609,720 to Roumania and Greece at a rate of interest from four to five per cent. Surely a similar amount of credit could be granted to our own people at a similar rate of interest.

The Minister of Finance mentioned that he expected that $52,500,000 would be raised by means of the sales tax, and $9,500,000 by means of the income tax. I do not think that is the way it should be; it ought to be

The Budget-Mr. Spencer

reversed. I would like to quote a statement entitled "Impressions of U.S.A. Conditions'' by Mr. Stephen Graham, which appeared in the Manchester Guardian, and which should apply to Canada because our conditions are somewhat similar. It reads as follows:

In America, as a result of the great Wall street bubble, the rich have become much richer and the poor have become poorer, while the purchasing power of the middle class has been ruined. The abyss between the rich and the rest of the community is rapidly widening. In truth, this process was already noticeable before the slump. It is fraught with great social danger and must result in revolutionary ferment. I am not a socialist, far less a Marxian; but it is difficult to deny that capitalism as evidenced by the present _ system in America bears in itself the seeds of its own destruction.

We were informed by the Minister of Trade and Commerce (Mr. Stevens) that some eighty-seven new factories have been established in Canada because of the policies adopted by the present government. I think it would be far better for this country if the people had a purchasing power which would enable them to buy the goods already manufactured, rather than to attempt to bring in more factories simply to create a glut of goods. As has been pointed out already, only two of these eighty-seven factories are outside the provinces of Ontario and Quebec. The Minister of Trade and Commerce commented upon the wheat which had been exported by this country since this government came into power; he seemed pleased, and rather boasted of the fact that a much larger quantity had been exported this year as compared with the one previous. Does anyone in this house realize that on the exports of wheat from this country our farmers lost about 40 cents on every bushel? When that is known, I do not think it is anything to be proud of, and certainly the farmers are not shouting about it.

He made a further statement with reference to the decision of the federal government to keep used automobiles out of Canada, and mentioned that they were so numerous in the United States that they were actually being taken out in large quantities and dumped into the ocean. Now if it is the proper thing to take automobiles out and dump them into the sea, the same thing might be done with regard to manufactured goods, or food or anything else. Personally I am absolutely against such a procedure. I think that as long as there is anything that we have which the people need, whether it is food, manufactured articles or anything else, there should be some means of getting

them to the people. To-day we have poverty in the midst of plenty and such new factories as are brought into this country will only intensify the situation. I am quite sure in my own mind that the system of protection which is the policy of the government, sincere as they are, no doubt, will never be a solution for unemployment. At the same time I am frank to say that I do not think free trade is a solution, but I do think that the greater the freedom of trade that we can have, either between province and province, or internationally, the better for all concerned. Today we are in the position of having the country flooded with goods. The trouble is that we need buyers. To-day we find ourselves in the position of having, on the one hand, large quantities of goods, and, on the other hand, a lack of purchasing power, or a shortage of the medium through which to transfer one to the other. Those in control of finance appear to have no system by which sufficient money is created at any given time, to take care of the goods produced.

There are two things it seems to me to which we should devote a great deal more attention. One is the financial question, and the other the land question. I am not going to say much about the latter except that I think we shall have to take more and more of the unearned increment of land and give it to the community to whom it belongs, rather than allow it to go as at present to the speculator.

To-day we find that those who control finance are so powerful that they regulate goods to money. Rather, to my mind, the amount of goods and services in a country, that are needed by its people, should regulate the supply of the medium of exchange. Our aim should be to make it possible for the people to purchase the needed goods which can easily be produced.

Although the budget on the whole is complete in its way, more so than previous budgets, at the same time it is not as full as we should have it. For instance, I think the finance minister when he brings down his budget should give to the house a complete statement of the total annual production and the total annual consumption of goods in Canada.

Again the finance minister in his budget speech did not say anything this year about providing a solution for unemployment. Perhaps he thinks that that is not necessary, because the tariff will do it. Unfortunately as a solution I think that it will be a failure. Nor did the Minister of Finance say anything with regard to giving the people greater purchasing power, which I think is the solution

The Budget-Mr. Spencer

to a great extent. He said nothing with regard to changing the financial system, and until we do change it I do not think we have much hope of going through this crisis. He said nothing with regard to what brought on the world crisis. Although Canada is not wholly responsible for that, she has to carry her share of responsibility for any world crisis.

To-day we have what we might term an elastic yardstick with regard to money. Under the control of the present financiers there seems to be very little effort to coordinate their work, to put out sufficient of the medium of exchange at any given time.

I should like to quote two short statements in this connection, one from Lord Milner, in his book "Problems of the Hour," in which he gives one probable reason for the deflation. He says:

Just as the productive industry welcomes rising prices, the moneyed interests must always be in favour of falling prices, because they render its own wares-money-more valuable.

That is possibly one reason why we have a deflation at the present time. Again, I quote from the Right Hon. Reginald McKenna:

How car. the supply of money be increased? The amount of money in existence varies only with the action of the banks in increasing or diminishing deposits. We know how this is effected. Every bank loan creates a deposit, and every repayment of a bank loan destroys one.

Those two short statements confirm what I said, that the financiers to-day-although I think the government should have this function-largely govern the amount of money or purchasing power in. the hands of the people at any given time.

I want to compliment the hon. member for Maeleod (Mr. Coote) on the very able speech he made to this house a week ago. It contained one of the most constructive proposals we have listened to this session, and with his statements outlining it I entirely agree. I shovdd also like to bring to our support a statement by Sir Basil Blackett, a director of the Bank of England, who speaking in Ottawa some months ago and referring to the gold basis, said that there was not the slightest need for a country to hold any gold behind its currency that was used within the country, that the matter of currency and credit used by a country' as a medium of exchange should be regulated only by legislation, and that in regulating it there should be sufficient of the medium of exchange, it does not matter whether it is bank credit drawable by cheque or by currency, to enable

the people to transfer all the goods and services needed by that nation. He said that there is a value for gold, however, in settling international balances, but even then it is looked upon as a commodity and not as coin. The Prime Minister in presenting his budget and in referring, I believe, to statements made earlier in the session by the hon. member for Maeleod, stated that we have more gold behind our currency to-day than we had a year ago, and, intimated that on that account we were so much safer. In reply to that I want to put on Hansard a brief statement from the Saturday Night of Los Angeles headed "When Gold is Unwelcome." The article is as follows:

It is estimated that the amount of gold stored in the United States is close to $4,700,000,000 and a little less than half that sum is held in France. Combined, the huge pile represents more than half the coined gold in the world. We have so much gold on hand in this country that new shipments are unwelcome, witness the arrival last week of $16,000,000 from France, much of which was derived from London and the Transvaal.

Looking to the United States we do not find conditions of enormous prosperity, in spite of their huge quantities of gold. On the other hand there is much poverty and unemployment.

Every hon. member knows that the great difficulty to-day lies in the mechanization of industry. Certainly mechanization of industry is something to be wished for; it represents a definite advance. At the same time however this same mechanization is rapidly transferring the load from the shoulders of men to machinery. The payroll of the people represents largely their purchasing power. If their work is done by machinery they are deprived of that purchasing power to buy the increased amount of goods made by machinery, and the result is an army of unemployed such as we see to-day. Unemployment coupled with money is called leisure. Unemployment without money, however, is enforced idleness and want, and there is a distinct difference. So that at each end of the scale we have unemployment. I think I am safe in saying that under our economic system all the moneys paid out to-day in the cost of production cannot possibly buy back the goods produced because, first there is inequality of income; secondly, a large amount of money is continually being put into capital investments; and thirdly, money is being reinvested in interest bearing securities. In other words our purchasing stream is being continually short circuited and the result is that there is not sufficient money to buy the goods

The Budget-Mr. Spencer

on the market. If we require money to-day we have to go to the financial houses and obtain further credits, in other words go further into debt, because when credits are advanced an equal amount of debt is created. In that connection there is one interesting point which I do not think has been sufficiently brought to the attention of the public, namely that all debts carry interest, and that interest is not payable in goods. When there is interest to pay on money, and only one place from which money can be secured when the loan or debt is to be paid, another debt has to be incurred to take care of the interest on the loan first made. So long as this situation exists we are simply multiplying debt individually, municipally, provincially and federally. A debt on a 5 per cent gilt edged security will double itself in twenty years. With reference to the position in which the farmers find themselves owing to the large interest they pay, a debt may easily double itself in fifteen years, and that is one of the reasons for the present difficulties in regard to agriculture.

Under our present system, a glut of goods is always accompanied by unemployment. As soon as a glut occurs factories shut down, and when factories are closed men are thrown out of employment. Such unemployment means lack of purchasing power, and the people who are employed have to stand the cost of those who are not employed. Purchasing power drops, prices go down and the farmer who is the least organized of all has to bear the brunt of conditions because his prices have dropped the lowest of all. Owing to the fact that my time has nearly elapsed I shall have to bring my address to a close.

I have in my hand a statement from a paper printed in England which bears the title of "Age of Plenty." This article expresses in a * few words my sentiments in regard to the financial side of the subject I have endeavoured to present to the house. I read as follows:

The amount of money in circulation to-day is not sufficient to purchase one-fifth of the goods we are able as a nation to manufacture. The present money system places industry and the people in a straitjacket, leaving no room for natural expansion. This is a condition of not being able to buy what is and could be produced in all modern countries. Hence, the struggle for foreign markets: hence, trade

warfare, which engenders military warfare; and wars will continue as long as the present false money and economic system lasts.

Our country tries to get rid of surplus goods by methods of export. However, our country is not only a home market to ourselves but at the same time a foreign market to others.

because every country is trying to do the same thing. If, however, we have not sufficient money in the aggregate to buy the total goods made at a given time, how are we going to have money to buy imports sent to us?

Feeling as I do on this subject, Mr. Speaker, and following up the outline I have given to the house, I beg to move, seconded by Miss Macphail:

That all the words after "whereas" in the amendment be stricken out and the following substituted therefore:

This house recognizes that while certain commendable features are contained within the present budget, it is to be regretted that no provision has been made for unemployment relief, and this house further regrets the proposed decrease in the income tax as applied to the larger incomes as a retrograde step and wholly unwarranted in the present state of the national exchequer, and especially in view of the heavy additional taxation imposed upon the consumers of the country.

And whereas the general economic situation in the dominion as reflected in the financial statement contained in the present budget is extremely serious and indicates shrinking revenues consequent on business stagnation, and a tremendous decrease in commodity values accompanied by a corresponding decline in general purchasing power;

And whereas a further result of this condition is to greatly increase the burden of public and private indebtedness to a point where repayment would appear to be almost hopeless;

This house is of the opinion that the present economic conditions demand intelligent and intensive study and definite planning upon a national scale, with the view of substituting well defined cooperative principles in respect of production and distribution, together with the mobilization of our natural resources, technical equipment and financial machinery, in place of the highly competitive system under which wc are suffering at the present time.

As it is apparent that these fundamental changes cannot be put into effect in the immediate future, and that the present situation requires some prompt action.

And as the present financial situation is in many respects similar to but more serious than that which prevailed in 1914, at which time extraordinary measures were taken by the government, including the suspension of the redemption of dominion notes in gold:

This house is of the opinion that it is expedient to again suspend redemption of dominion notes in gold in order thatfa) Commodity price levels may be raised, thus increasing the purchasing power of those engaged in agriculture, mining, forestry, fishing and other primary industries, and in this way promoting a corresponding increase in the volume of employment;

fb) That the burden of both public and private debts and the interest thereon may be lightened:

(c) That the amount of currency and credit available for the purposes of trade and commerce within the country, may be increased;

(d) That through the increased volume of trade thus secured there might result larger revenues without any increase in the rate of taxation.

The Budget-Mr. Marcil

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
LIB

Charles Marcil

Liberal

Hon. CHARLES MARCIL (Bonaventure):

now being adopted by the administration is bound to be disastrous. What Canada needs is a moderate policy and a moderate tariff in order to bring about an exchange of goods with other nations. We must strive to bring about trade within the empire, of course, but also we must deal fairly with other countries, as we expect them to deal with us. How can we expect other countries to trade with us if we put a high tariff on all the goods they produce? That policy is bound to bring disaster.

I do not want to refer to the promises made during the last campaign; everyone is familiar with them. I do not want to refer to the promises made in my own constituency, which were perhaps even more numerous. I regret to say, however, that many of those promises have not been fulfilled. My people are still without employment; agriculture in the eastern part of Quebec has received no benefit from the budget, and there is nothing which will help our lumber industry. Last winter, in the counties of Bonaventure and Gaspe, in what we call the Gaspe peninsula, there were thousands of men out of work; the shanties were all closed down, and this year all but one or two of the sawmills are closed. There is no market for the potatoes grown in the lower part of Quebec, and conditions are worse than they ever have been. I am sorry the Postmaster General (Mr. Sauve) and the Minister of Marine (Mr. Duranleau) are not here. The only activity in my county since the last election has been the employment of commissioners for the purpose of firing every Liberal in the county. "To the victors belong the spoils" is an old maxim; the present government have their friends, for whom they are trying to find positions, and I do not blame them. That practice has been followed by all parties. I have seen this game played from all angles; I have seen men take one stand when sitting to your right, Mr. Speaker, and take a diametrically opposite stand when sitting to your left. Times change. I remember when the right hon. Prime Minister came to this house and made his debut as a promising member from western Canada, but my experience and my memory go far beyond that. I have seen a dozen governments change, and as I said before I have taken an active part in every contest since 1878. The policy has always been the same-to hold out prospects that will gather the most votes, and once you are in office try to get along as best you can.

Promises have been made which so far have not been fulfilled. There are, for example, such promises with regard to the

railway situation. I feel it necessary to say a word in this regard because it is one of the outstanding questions at the present time. Our railways in Canada are our barometers. We have had many policies with respect to them. The government first entered upon public ownership by the construction of the Intercolonial railway. That venture was the result of confederation, and we all know how it succeeded. There was a deficit year after year and the railway had to be kept going. Then Sir John Macdonald, in his day, decided to try private ownership. He brought about the creation of the Canadian Pacific Railway, which to-day is the greatest railway company in the world. It is a world business and is an honour to Canada and to the man who brought it about. I remember, away back in 1882, listening to a speech delivered by Sir Charles Tupper in the old Queens hall in Montreal, when he came to explain the Canadian Pacific Railway contract. He could make his explanation only with the greatest difficulty, because the people were convinced, seeing that this came so soon after the Canadian Pacific scandal, that the government had sold to the Canadian Pacific Railway. In 1885 I described, for the Montreal Gazette, the first train that left Viger square station in Montreal on its way to Vancouver. Many things have happened since then. When Sir Wilfrid Laurier came into power he had a request from western Canada to open up that country, and he was faced with a difficult railway situation. There was one line of railway and people wanted a second line. He could have done what Sir John Macdonald did: he could have incorporated a private company. But he thought he would try both private ownership and government ownership with company operation. We have not been very successful so far, but I hope that better days are coming and that many of us will remain in the land of the living to see Canada still more prosperous, because she is bound to be prosperous with all that Providence has bestowed upon her.

I uphold government ownership for the reason that there are many districts that could not be served by private railway companies. Private railways are always willing to operate in districts from which revenues are certain; they are always prepared to build railways there. But there are other districts in this country which would never pay from a railway point of view but which must have railway communication inasmuch as they contribute to the revenues of Canada. They must be served by railways. After all, the government is not a money-making concern.

The Budget-Mr. Marcil

We maintain many services that are absolutely indispensable. For example, we must keep up the postal service, we must maintain lighting services all along our coasts, we must provide life saving apparatus, and so forth. Those people who live in the remote parts of the dominion, those who are far away from the glare of the cities and who do not enjoy the luxuries which are available to the people of central Canada, must have means of communication with the rest of the country. Take for example, Mr. Speaker, the people who live in the far west in the constituency you represent, or those who live in the constituency which I have the honour to represent in this house. These people must be given their fair share of the good things that are available, and to this end railway communication is necessary in parts of Canada that would not be served by private enterprise. The Gaspe peninsula, for example, is the oldest part of Canada. There in 1534, four hundred years ago, Jacques Cartier, the discoverer of this country, planted the Cross of Christ in the old town of Gaspe and opened up this land of Canada which has since become one of the greatest countries in the world. Without government ownership of railways such parts of the country would never be served.

Now that we are having a hard time with our railways there is a question of merging the two. I should be opposed to that from early morning until late at night. Monopolies are to be feared in this country; they are to be feared in railways as in trade. Imagine a government in office with a single railway system dominating the whole country: what a monopoly, wffiat a merger that would be. We would not stand for it; the country would not stand for it.

There was some question, when the Liberal party came into office in 1901, as to the stand it would take with respect to government ownership. The Canadian National Railways, as we know the system, is the creation of the Conservative party, and I must give credit to the Right Hon. Arthur Meighen for the splendid work he did in that connection. He certainly rendered valuable services to the country, because on the downfall of the Mackenzie-Mann regime, we found ourselves in a difficult position. On coming into office in 1921 we found a deficit of $60,000,000 a year, and it certainly needed some courage to bring about public ownership. However, that gentleman did the best he could, and government ownership is still on trial. Government ownership will be successful when things improve. When the country is prosperous the Canadian National Railways will feel the effects just as will the Canadian Pacific. If the shareholders of the Canadian Pacific Railway can afford to lose a portion of their dividends in the hard times through which we are now passing, the Canadian people, as shareholders in the national system, can at least face the situation in the same spirit.

There are other things I should like to have touched upon but time will not permit. I am sorry the government has taken the retrograde step it has in regard to the penny postage. Penny postage was the work of Sir William Mulock, now the leading citizen of Ontario, in the highest court of which province he has the honour of presiding. He was immensely proud, and he had reason to be, of the fact that he was the father of penny postage, which advertised Canada throughout the world. We sent letters throughout the empire and the system which he established has been of very considerable advantage to the country at large. WThen he took over the department with three cent postage there was a huge deficit, and in the course of a few years there was a large surplus. He extended the postal service, opening thousands of offices. When I was first elected there were post offices in Canada, the postmasters being paid $10 a year. This was increased to S25, then $35, and later on to ?60; and finally, under the late administration, the rate was increased to $100.

Now, Mr. Speaker, the facilities afforded by the postal service for communication with the outside world are the only means which very many people have of getting in touch with what is going on in other parts of the country. There are people who live far from railways and they' must therefore depend upon correspondence. And the low rate of postage encourages correspondence. One cent additional on a letter does not seem much, but for poor people who have many letters to write it is a considerable item; they will think twice before writing. I regret this retrograde step on the part of the government; penny postage should have been allowed to stand. Canada has set an example to the rest of the world in many things, and this is one institution to which we should have adhered.

Shall I mention old age pensions and unemployment? The house is familiar with these topics; I will not take up time discussing them. Nor will I discuss butter. Why are there so many members opposite representing the province of Quebec to-day? Quebec is a dairy province and in my own constituency there is a butter factory in every

The Budget-Mr. Marcil

parish. In the last election the promise was made openly-not by the leader of the Conservative party, because he would not make such a promise, but by members of the party -that if hon. gentlemen opposite were returned to power butter would sell at 40 and 50 cents per pound as soon as the New Zealand treaty was done away with. Well, in Bonaventure to-day the farmers are receiving 15 cents per pound while eggs are being sold at 10 cents a dozen. Pulpwood is not selling at all. And as regards fish, the people are drying their fish or salting it, waiting for better prices later on.

Another promise made was in connection with the old age pensions. This promise was broadcast in the province of Quebec, and in my own constituency canvassers went from house to house making the formal promise on behalf of the incoming administration that there would be an old age pension paid of which the federal government would pay one hundred per cent. The province of Quebec is one of the oldest provinces in the dominion. The position there is somewhat different from that pertaining in the other provinces. We have many religious institutions for the purpose of looking after the lame, the infirm, the blind, the orphan and the old man and woman; we are equipped already with institutions to look after all classes of unfortunates, and to knock down and destroy this system overnight is an act which should receive serious consideration. The provincial government has appointed a royal commission to make a report on these institutions, but in the meantime Quebec will have to pay 75 per cent of the cost of these pensions, whereas the other provinces have to pay only 50 per cent.

I thank the house for the patient attention it has given to my remarks. The right hon. the Prime Minister (Mr. Bennett) has been working night and day, and in my opinion there has never been a public man who has applied himself so devotedly to the public interest as has the right hon. gentleman. I hope he is equal to the task, and I trust he will live long enough to admit the great mistake which he has made. I hope that many of these resolutions which bear so heavily upon the poorer classes will be modified before they are presented to the house.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 11, 1931