March 9, 1937 (18th Parliament, 2nd Session)

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
The Budget-Mr. Walsh

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 "
The Budget-Mr. Walsh
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.