Mr. W. F. RICKARD (Durham):

As one of the new members of ths house and a farmer I feel it my duty to say a few words on the question now before the house as it affects the people of this country, and particularly of the county I represent.

In the first place I want to congratulate the Minister of Finance (Mr. Dunning) on his presentation of this budget, andi to assure him and the house that I am going to vote for the budget and against the proposed amendment of the leader of the opposition (Mr. Bennett). I am a little disappointed that this amendment was brought forward; I thought from the attitude taken by the leader of the opposition at the beginning of the session that he intended! to follow the example of Sir Robert Peel in the session of 1834. At that time Sir Robert Peel was leader of the opposition, and he deemed it his duty to support the government of the day on its policy of peace, security and financial reform. He set the welfare of the nation above the interests of party. Miss Ramsay, in her book on Peel, at page 170 goes on to say:

The Tories were not so dainty about their methods, and many of them considered that a factious opposition was quite compatible with conservatism.

They had to learn that they must take their leader as they found him, and pardon *his liberalism for the sake of his talents, and that, hanker as they might for a reactionary policy, they were helpless to carry it out without his assistance; that in fact the only chance for their party was to group themselves once more around this most unsatisfactory chief. I am sorry that the leader of the opposition departed from the resolution which he appeared to have made earlier in the session. It is a matter of regret that the board of strategy has appealed1 to him to give battle on the budget and on the tariff question. The people of Durham county are satisfied with the budget, as are the people of most counties throughout Canada. The agricultural vote is the largest in point of numbers and financial importance in my riding. The farmers are satisfied that last year's budget, and this year's budget too, are well calculated to widen their markets.

It has not been our experience in Durham county that there has been a falling off in the price of cattle and live stock generally during the past few months. We do not find that the importation of vegetable fat

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has cut into the dairy market to any great extent. Up our way I am confident that good cooks will continue to use a good deal of old-fashioned lard and butter for their cooking. The county of Durham is famed for its fruit, its Devonshire cream, its pure bred live stock and its fertile fields. Strawberry shortcake made with Durham strawberries, and apple pie and Devonshire cream, still taste mighty good to the people of that county. No amount of advertising could induce the cooks in my riding to abandon their tried and proved methods of producing these things or to jeopardize their family reputations by introducing into their cooking too much vegetable fat instead of lard and butter.

Next in order in my riding must be considered the manufacturing interests. In the town of Port Hope a new industry has grown up as the result of a geological find in the Great Slave lake district. During last year we produced 28 grammes of radium, and thanks to the cooperation of our representative in London who is also a Durham boy, a market has been found for this commodity, which sold for $25,000 a gramme or a total of $700,000. This is one industry that is not clamouring for protection. In addition, the revival in the motor industry seems to assure a steady market for the important rubber factory at Bowmanville, the Goodyear Tire and Rubber Company, Limited. The file factory at Port Hope is the only factory in Canada producing files, and that plant is doing a bigger business than ever before, notwithstanding the fact that during the last election the men were told that if they voted for King and the Liberal candidate the doors of the plant would be closed the next morning and the men would be out of work. Women were told that their husbands would be on relief if they supported Liberal policies, but instead, as you see, an even greater business is being done. Their export trade has increased; the wages of the men have been increased by ten per cent, and in many lines they are working overtime.

We have other industries in Durham county as well. For instance, there is the Ideal works, which makes bathtubs, et cetera, and is working at full capacity, and we also have several foundries which are doing a good business. In the village of Newcastle, where I live, we have a small cabinet factory employing twenty-five to thirty men and women, which is working overtime, with orders for many months ahead. That plant is located in part of the factory where the Massey-Harris company started years ago.

In the county of Durham we have that desirable state of affairs of which the hon.

member for Huron North (Mr. Deachman) spoke in his splendid address on. Thursday last-the opportunity to work and to live in clean, healthy surroundings. The towns are not large but they are prosperous. I should like to be able to speak on this subject as Hon. Edward Blake was wont to speak. I cannot match his eloquence, but in love of the county and devotion to its interests I do not yield even to Hon. Edward Blake.

There is another section of the community about which very little is heard in parliament. I refer to citizens who, either by their own thrift and industry or as the result of those qualities in their ancestors, are possessed of a modest competency which they have invested in stocks and bonds. They are the financial backbone of the community, and they are glad to see that the Dunning budget does not indulge in any sensational or freak attempts at financing. They feel certain that their investments will not be jeopardized by any action of this government. Ours is an old, settled community, and during the course of the past four or five generations many small private fortunes have been made. I can remember in my boyhood days when the merchants of Bowmanville put on special sales for the days on which the interest on bonds was paid. "Coupon day" in Bowmanville was a big event. For the past six or seven years coupon payments have been slim, but now they are growing in importance again, and I hope "coupon day" will again return to all the towns in my constituency.

The budget that was brought down last year has worked to the advantage of the people of my riding, and we expect further benefits from the budget now under discussion. The trade agreements that have been made with the United Kingdom, Japan, Russia and other countries, as well as the agreement with the United States, have been very beneficial. I am surprised when I hear farmer members of this house talking in favour of high tariffs and high protection. Surely they must know that our market in the United States during the past year has been of great benefit to the farmers of this country. What would the farmer have received for his cattle if it had not been for the United States market, to which we shipped 160,000 head last year? I venture to say that we would have been hardly able to give them away. I would not have it understood, however, that I am an out and out free trader. I refuse to subscribe to the principle that it is always best to buy in the cheapest market. If the advantages of free trade simply mean the progressive and well-

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considered relaxation of restrictions on commerce. then I am for it. The industries that are carrying on in Durham county are well established, and by this time they have realized that they need not fear the competition of other countries. With growing markets they feel that they can carry on without asking for contributions from their fellow citizens.

Now, Mr. Speaker, I should like to say just a word about some phases of the unemployment situation. We in Durham county are not very much affected by unemployment; of course we have some people on relief, but that situation does not exist to the extent that it does in the larger cities. We have men and women who would like jobs, but in addition we have a great many young people graduating from our high schools, collegiate institutes and agricultural colleges who cannot find jobs, except possibly at something which does not pay them anything like the cost of their education. In my county we have young people of the finest type, young boys and girls who have put Durham county on the map in various judging competitions, both provincial and interprovincial. These boys and girls are the men and women of to-morrow, and it is up to us to do something for their future. They are getting to the age where they would like homes of their own, but if *conditions do not improve it will be difficult for them to realize that ambition. I have *every confidence, however, that this government will do something for the young men and women who will have to shoulder the responsibilities of the country to-morrow.

I think the government should be congratulated on the steps they have taken to relieve the unemployment situation, and especially in regard to the demobilization of the relief camps which were in operation under the former administration. By closing these camps and placing the men at work wherever possible the government have effected a great saving to. the taxpayers, and, what is more important, have restored independence to the men and brought about a general change for the better in their morale. I believe the problem of unemployment may be with us for some time, even though statistics show a marked improvement in the situation. But we must encourage our people to work for a return of the prosperity which all Canadians feel is their right. With the unlimited reserves within our boundaries, and a selfreliant people, we are bound to succeed and to restore to them the heritage with which the Creator has blessed them.

I do not feel justified, Mr. Speaker, in taking up any more of the time of the house on this question. I do venture the prediction, however, that the budget will be carried by a tremendous vote, and that the size of the vote will favourably reflect the opinion of the country as a whole on this subject.

Mr. W. A. WALSH (Mount Royal):

Mr. Speaker, before proceeding with my observations on the question under discussion, I should like personally to say that I am very happy to see the Minister of Finance (Mr. Dunning) again in his seat. Much as we dislike and disagree with his policies, we do enjoy his happy presence in our midst. May I congratulate, too, the hon. member who has just taken his seat (Mr. Rickard). Although he confined his remarks to a certain district, yet hon. members must appreciate that the conditions in his own locality are no doubt duplicated in many others throughout the country.

His reference to the budget being adopted by a large majority must, of course, go without dispute. In discussing the amendment before the house, we do not expect to convert even the Minister of Labour (Mr. Rogers) to our way of thinking. On many occasions Canada's financial position has been carefully reviewed. As a country we do not enjoy a unique position in respect of our unfortunate financial circumstances. Other countries are in a similar position and are endeavouring to find a solution of their peculiar financial difficulties. Any effort made even by the present government to find a solution which will point the way to prosperity will, I have no doubt, meet with the support of all parts of the house.

The depression hit Canada with probably more severity than it hit other countries, largely due to the slump in the price of wheat. Wheat trading does materially affect Canada, and the unfortunate position in which we found ourselves, with a large surplus on hand and falling prices, aggravated the condition that was on its way, and made it more severe than it might have been under other circumstances. May I suggest that the slump through which we have just passed is not responsible for all the ills prevailing in Canada. Certain inherent disorders were brought to the surface by the depression. Many of our present troubles were with Us before 1929, and have merely been accentuated by the conditions under which we have been living.

The Minister of Finance gave us a clear picture of the financial position of Canada as such, but he could have given a clearer picture had he gone more carefully into the finances of Canada as a whole, taking into

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account the municipalities and provinces. For a few moments I should like to discuss the actual financial conditions prevailing in Canada to-day, in order that we may see what our financial condition is, taking into account the position of the provinces, the municipalities and the federal government.

Upon reference to statistics I find that Canada's true debt, including all items, stands at $4,163,000,000. The nine provinces have a total debt of $1,415,000,000. The total debt of the municipalities stands at $1,386,000,000. These are tremendous figures for a young and growing country. In round figures the total is $7,000,000,000. That is the debt of a young country with only 11,000,000 inhabitants; it amounts to $636 per person. I want hon. members and people outside the house to realize the full significance of that statement. I repeat: Every person in Canada to-day is indebted to the extent of $636. That is an unhealthy amount per capita for a young and growing country.

Then, from the latest statistics available it appears that the total revenue of Canada last year amounted to $372,000,000; the total provincial revenue amounted to $161,000,000, and that of the municipalities, $285,000,000, making a grand total, through taxation, of $818,000,000. Of this revenue, the dominion spent 46 per cent to pay interest on debts, tihe provinces paid 37 per cent for the same purpose, and the municipalities paid 24 per cent. Of the $818,000,000 collected in Canada, 38 per cent was earmarked, before received, to pay interest on contracted debt.

Mr. MAYBANK:

Would the hon. member permit a question? Is he in a position to indicate the extent to which the per capita debt of the nation was increased in the last five years?

Mr. WALSH:

I have other figures before me, and possibly the hon. member's question will be answered as I proceed. In the first year after confederation the gross debt of this country was only $93,000,000, and the interest thereon was only $4,500,000, or $1.28 per capita. In 1900 the gross debt had grown to $346,000,000, and the interest charges worked out at $2.02 per head. Just prior to the war the debt had grown to $544,000,000, and tihe interest cost per capita was $1.87. At the present time the per capita cost of interest upon our so-called gross debt of $3,432,000,000 is $11.44. When we consider the railway debt and other charges, the per capita cost is $27.73.

The growth in public expenditures is equally startling. In the first year of the confederation we spent only $13,000,000. In 1900 our expenditures totalled $52,000,000. Just prior to the

war they had increased to $163,000,000. These figures are significant. They show the constant increase in our national expenditures and our national revenues. I must acknowledge frankly that the war had a considerable influence upon the growth of our national debt, but I would go so far as to suggest, as has been suggested on previous occasions, that Canada no doubt overplayed her hand as far as war measures were concerned, and we are paying for it now. But be that as it may, the war had a direct influence upon the expenditures not only of the dominion but also of municipalities and provinces.

I was wondering if it ever occurred to this or any other government that a budget could be balanced in two ways. Most ministers of finance and provincial treasurers know of only one way to balance a budget, and that is by increasing revenue, which means increasing taxation. But a budget can be balanced by decreasing expenditures rather than by increasing revenues. The present government proposes the appointment of a royal commission on taxation. We are familiar with royal commissions and I do not think we need one to tell us that at the present time we are suffering from over-government. We do not need a royal commission to tell us that there is too much overlapping in public service and taxation. The dominion and provincial governments must realize that there is only one source from which revenue can be obtained, and that is the people. The more we spend the more we have to ask the people to provide. A royal commission would serve a useful purpose if it resulted in definite action-if, in this case, it prevented overlapping in the field of taxation or the duplication of services as between municipal, provincial and federal authorities-but my experience with royal commissions has been rather the reverse.

Generally the first consideration in the setting up of a royal commision is the appointment of a strutting counsel at $150 or $200 a day. This gentleman then proceeds to eke out a year's existence on that small stipend trying to dig up facts which the government most likely knows already. I have not much faith in the value of the suggestion of the government that they are going to appoint a royal commission on taxation. They might be getting somewhere if they intended to appoint a commission such as was appointed in England, I think under the chairmanship of Sir George May, which brought out what is familiarly known as the " May " report. But if the commission is to be of the kind usually appointed in Canada, if it is to bring in the usual type of report, it would seem to me that the government's action in this

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regard is merely another subterfuge for their not making more progress than they are at the present time.

It was my intention to refer briefly to certain items in the budget. I was amazed on going over previous Hansards to read the following on page 2118 of Hansard of Tuesday, March 26, 1935:

With regard to ways and means, my hon. friend makes some proposals in regard to taxation to which I want to refer briefly. He retains his virtual twenty-five per cent tax on sugar, a household necessity, but he reduces his tax on liquor by over forty per cent. I had hoped, and others on this side and I believe a good many on the other side had hoped, that the Minister of Finance had intended to cancel the sugar tax this year. We supposed he put it on as an emergency tax, and he put on the gold tax he said in order to permit the sugar tax to be reduced by half. Last year in making his statement to the house he said that to replace the revenue lost by the reduction of the tax on sugar it was proposed to levy a tax of ten per cent on gold.

That is an extract from the remarks of the Hon. J. L. Ralston, who was then speaking on behalf of the opposition of that day, which opposition now occupies the treasury benches. Two more years have passed, the Minister of Finance has brought down two budgets, each of which included the same tax on sugar to which the government, when in opposition, raised such strenuous objection. I cannot see the reasonableness of complaining about something when you are in opposition, but failing to act when you are in power on the incentive that inspired you while you were in opposition.

It was my intention to discuss briefly the railroad problem which faces this country. However, I notice the chairman of the committee on railways and shipping is present and I shall not abuse the privilege of my position this afternoon by dilating further on the subject to which he listened so patiently for some considerable time this morning. I should like to refer to one statement made by Hon. Mr. Ralston. I read from Hansard of March 26, 1935:

They should tackle the railway problem courageously and not pass the buck as they do.

What is the courageous way in which this government have tackled the railway problem? They have introduced Bill No. 12, but that bill does not add one cent of revenue to the railways of Canada; it does not reduce the expenses of operating the railways; it will not put one unemployed man to work, nor will it give one man at present employed by the railways one hour of additional employment in the future. Yet that is the courageous way in which they are tackling the railway problem of Canada-by taking out of the nonactive assets of the dominion and placing in

the consolidated fund a sum almost equivalent to $374,000,000. That is their solution of our railway problem-adding to the debt of Canada by extracting it from the non-active assets of the dominion. That may be called a courageous way of meeting a critical situation, but I should like to see something which, without being characterized in quite such strong terms, would be more effective as far as results are concerned.

Last year,, participating in another debate which took place in this house, I was happy to -be able to congratulate the hon. member for Melville (Mr. Motherwell) on a theory that he propounded in connection with tariff for revenue purposes. He indicated that he gave his unqualified support to the raising of more revenue by means of a tariff. He represents a western constituency. I want this year to reendorse the stand which he took at that time and my own attitude on the same occasion. In my opinion much more revenue could be collected in Canada, without any injurious effect, through the medium of a tariff. It could be collected cheaply and without any real hardship on either industry or the population in general.

The tendency of the present government is to lower tariffs, and the lowering of tariffs naturally creates a certain amount of unemployment or the possibility of it. In passing I think I should warn the present government that if it pursues such a policy to any great length we in Canada cannot meet the competition of foreign countries in certain fields of industry. I refer particularly, of course, to industries that have been developed in Japan. If the government is not careful to protect Canadian industry against encroachments from that particular source, we shall find ourselves with a greater amount of unemployment to deal with than we have even at the present time. I have here a document published by the United States bureau of statistics, the United States Monthly Labour Review, which gives illuminating figures as to wages paid in certain industries in Japan. I shall quote a few items given in this document, in order to show the utter impossibility of Canadian industry meeting the competition of a nation that has constructed1 its economic farbric on wages such as are mentioned here:

Textile Industry

Wages

per day

Silk reelers, female

21 centsCotton spinners, female

24 "Silk throwers, female

22 "Weavers, female, cotton, machine.. 21 "Weavers, female, silk, hand.. .. 39 "Hosiery knitters, male

61 "Hosiery knitters, female

33 "

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Metal Industry

Wages per day

Lathemen $1 58Finishers 1 64Founders 1 28Blacksmiths 1 42

Leather Industry

Leather makers

92 centsShoemakers

70 "Clog makers

35 "

Among day labourers,, stevedores are paid 74 cents per day. Domestic servants, male, receive 23 cents per day; female domestic servants 22 cents per day. Those wages are actually in existence, otherwise they naturally would not be published by an authoritative body. Going further in an effort to persuade the American people to, as the writer suggests, "Buy American," I find this:

A comparison of the low wages paid in Japan with the high levels of American wage rates is sufficient to cause everyone to shudder with fear and issue a fervent hope that such debasing wages may never encompass the millions of American workers, whose efforts and high wages have built the high standard of living we now enjoy in our country.

But the menace of cheap, foreign competition exists and it is real . . . constantly becoming more threatening. Nowhere is it more pointed than in the textile industry.

I should like to urge these considerations on the attention of the government. What I have quoted in connection with American industry applies with equal if not greater force to Canadian industry, and that phase of our trade operations must be carefully watched by the present government, otherwise we shall find ourselves in a dilemma from which it will be very difficult to escape, even with the ingenuity that my good friend the Minister of Labour (Mr. Rogers) may develop from time to time in the way of commissions to assist him in solving problems that the government are likely to force upon him.

Mr. MAYBANK:

Would the hon. member at this point permit a question? Would he contend that it was the high protection policy of the last five years that made the employ-, ment situation in Canada so very good?

Mr. WALSH:

I am not advocating high protection in Canada. I am advocating a reasonable measure of protection not only for the sake of our industries but for the men and women who are employed in those industries, so that a very grave situation may not be further aggravated by throwing upon the relief rolls men who could be kept in employment if we carefully watched the course of industry and trade and prevented unfair foreign competition. I could go on at greater length, particularly in connection with the

textile industry, but I shall reserve that for a later date when, no doubt, we shall hear from that window-dressing commission.

Order.

Mr. WALSH:

When its report is presented we may have something of an interesting nature to suggest. But at this time I would point out to the Minister of Finance what has already been mentioned in this house, that the building industry is of primary importance.

Mr. DUNNING:

Just before the hon. member leaves the subject of the textile industry: has he any concrete instance in mind where the budget of last year or the budget of this year put people connected wdth the textile industry out of employment or reduced employed in that industry?

Mr. WALSH:

No. I want to be perfectly fair with the minister. At the present time I have no cause to complain of either last year's or this year's budget, except that in certain instances, particularly in connection with woollens, there is a slight danger that the industry will be somewhat disturbed. But I am afraid of this, that when the Turgeon commission reports the government may by order in council adopt certain measures that will seriously affect the trade in textiles. I am much concerned about that aspect of the situation, not, on the whole, about the aspect that has developed up to the present time. I am a little nervous about the woollen industry, having particular regard to the less extensive plants in our smaller towns. Their position should receive careful consideration by the government before any action is taken that, although not putting them out of business, may compel them to curtail their present production.

I should like to say this, since the Minister of Finance has brought it up. There are in the budget, in connection with hosiery for instance, certain features that undoubtedly place an undue weapon in the hands of certain large merchandising concerns in Canada to the detriment of the smaller merchants. I refer to cheap cashmere hosiery and other hosiery of cheaper quality that can be bought by these larger concerns, through their purchasing agents in Europe, at a much reduced cost and brought into Canada to undersell the cheaper hosiery manufactured here, to the detriment of these manufacturers and of the smaller retail merchants in Canada who have not the same facilities to make such purchases, particularly the. purchasing facilities which our departmental stores have at their disposal. I am concerned a little about that particular item of the budget.

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Mr. DUNNING:

Cashmere hosiery?

Mr. WALSH:

I am speaking of cashmere and other cheaper lines of hosiery, not full-fashioned silk hose, because as far as they are concerned we are an exporting nation; we have a fine market in England for full-fashioned silk hose. I am, however, very much concerned about the cheaper lines.

In the course of the debate we have heard much about a stimulant applied to the building industry. With that I am in hearty sympathy. and any stimulant that can be applied to that industry will certainly meet with the approval of everv member of the house. I am surprised that the government has not seen fit to introduce, in the course of this session, much more legislation than it has brought down in connection with the building industry. It might be possible to introduce something in the form of tax-free second mortgages, which would give some encouragement to the building industry.

Mr. DUNNING:

Tax-free second mortgages?

Mr. WALSH:

Yes, to encourage building. Some people can afford a first mortgage but they cannot go beyond that, and if they could get a cheap second mortgage so much the better.

Mr. DUNNING:

Will the hon. member explain what he means? The suggestion is an important one, but what does he mean by tax-free second mortgages?