Certainly. You can see, therefore, that if all tariff restrictions were taken off as between these countries there would be no reduction of the price in Canada of the commodities which are mentioned in this list.
The Government have been asked, through petitions and that sort of thing, to prohibit the export of such goods as eggs, butter, cheese, and meat. I think that would be a great mistake, because the farmer is making no more than an ordinary profit on his production now, and if the export of these commodities was prohibited he would cease to produce them and they would get dearer instead of cheaper. The Government would be very foolish to interfere with the regular channels of supply and demand, and I hope they will not do so.
During the war a good many commissions were appointed and maintained at the expense of the country. The cost of these commissions, which has to be paid by the people in taxes, tends to increase the cost of living. I think that there were more of these commissions than were necessary, and that they involved the establishment of expensive staffs and departments that were not absolutely -necessary. I venture to say that the work could have been done as well with half the service that was maintained.
Moreover, about the time the war started, the Government, owing to the failure of the Canadian Northern to pay its way, either had to take over the Canadian Northern or advance money year after year to maintain it; and they decided to take it over as a Government road. Though I was opposed to the taking over of the Canadian Northern the Government thought it wise to do so. Recently they had to take over the Grand Trunk Pacific; I saw no other course for them to adopt. But you must bear in mind the fact that when the Government took over the Canadian Northern, freight rates were immediately increased by 40 per cent -15 per cent at one jump and 25 per cent at another-thus largely contributing to the increase in the cost of living.
I am glad to say that most of the commissions have been dissolved but there is still a tendency to appoint commissions. Commissions have been appointed since the Armistice was signed, one to go to England, and one here to keep in touch with the one in England. These commissions will follow the usual practice of building up departments around themselves and employing an excess number of assistants, all of which is expensive to the country. Another commission is now to be appointed,
a purchasing commission, consisting of three men at high salaries, who- will also build up a department around themselves. I said the other night, when that matter was before the House, and I repeat it now, that I could- supply a man, who, with one first-class stenographer and two inspectors, could do all the purchasing necessary for the Government departments, and do it well. I say that the Government are to blame in this respect; they could have cut down this expenditure. With reference to the work of the committee of the House which is examining into conditions in the Civil Service, I may remark that half the number of clerks now employed in the various departments would do the work just as well as it is done now. The Government could, therefore, very easily reduce expenditure, thereby giving an example to the people and helping to reduce the cost of living,
I have always been, and am still, a low tariff advocate. I do not believe it is necessary in the interests of the manufacturers that we should have a very high protective tariff. In the first place, I think it gets the manufacturer into a slovenly way of doing business. By intensifying his organization he could reduce his costs quite sufficiently to make up for low tariff protection. All tariffs are on protective basis; there is no doubt about that. But we must not run away with the idea that the amount- of the duty on a particular article is always added to the price of that article manufactured in Canada. I know something about the way manufacturers arrive at their selling prices, and I know of none who take the tariff into consideration when they are determining the selling price of their goods.
Almost constantly you hear city people say, because of the high price of farm products, that the farmer is making a fortune. In the country and, in a good many instances, in this House, there is a feeling that all Canadian manufacturers are making fortunes; that they a-re all rich. I would suggest to the man in the city who thinks that the farmer is making a fortune, to buy a farm and go on to it himself and see how he comes out-. On the other hand, I would suggest to the man who thinks all manufacturers are making money, to form an organization and go into some line oi manufacturing, I do not care which, and see how he comes out, and then he will have experience to show him how much of a fortune the manufacturer is making in his particular line of business. That will
give him a knowledge that perhaps he does not have at the present time.
I should like to say to those who think that every manufacturer who starts in business makes a fortune, that statistics show that, out of every five men who enter the manufacturing or commercial business of this country, four fail. Some of them profit by their experience and afterwards become wealthy or well-to-do; some are too old to profit by their experience, and some are too foolish and the latter just branch out again if they have an opportunity. Experience teaches us that while a farmer works from daylight to dark, many manufacturers who have succeeded in this country work not only from daylight to dark but for several hours after dark. Many of them put in from eighteen to twenty hours a day for years before they make a success of their business and many of them go without any dividend for a number of years. That brings me to my remarks on the tariff.
A feeling has many times been expressed in this House that if the tariff were taken off agricultural implements, the cost of production would be decreased; that living expenses, at least as regards foodstuffs, would come down. I was curious to know what the effect of taking off the tariff would be, and, therefore, I went to the trouble of getting figures-and again I apologize for using figures-as to just what effect the tariff had on agricultural implements. I took the ordinary equipment of 100 acres of land in Ontario, or as I understand it, the ordinary equipment of 160 acres of land in the West, and I took the wholesale prices because the duty is paid on the wholesale and not on the retail prices. The duties quoted are exclusive of the war tax. The following is what I found:
Article. Value. Duty. *Binder. . . .. $2.0-0 $25. 00Mower . . 77 9. 62Horse-rake . . 4:5 6. 75Corn binder 25. 00Disc drill. 16. 95Roller . . 65 13. 0-0Manure spreader . . 180 2-7. 00Corn cultivator . . S7 13. 0-5Disc harrow . . 44 6. 60Cultivator, spring: tooth.. . . 64 9. 60Seuffler . . 12 1. soLumber wagon . . 103 20. 60Walking plough 2. 55Gang plough.. .. ;. .. ii. 10Iron harrow . . 22 3. 30Two double harness.. .. . . 120 36. 00One single harness.. .. . . 50 15. 00Tools 15. 00Buggy 22. 50Total . $280. 4-2
That is at 15 per cent, or the proposed tariff. It is an understood fact that if a farmer takes ordinary care of his tools, the life of a tool on a farm is ten years. The duty paid is $260.42, so that if you take it over ten years, the duty paid is $28 a year. If you take the old tariff, exclusive of the war tax, the duty amounts to a total of $309.62 or $30.91 a year. If you take the tariff off entirely, there would be saved in duty at the proposed tariff, $28 a year. But we have to fill that in with something else, and as the income tax has been increased almost as much as the minister can increase it without driving people out of the country, and as the business profits war tax is certainly as high as he can raise it without driving business out of the country, there would, in any judgment, be only one recourse, and that is a land tax. To provide the amount that -would be lost by the removal of the tarifl would take a land tax at municipal assessments of about two per cent or twenty mills on the dollar, and that tax on 100 acres of land in my county would amount to about $140 a year. If you take the land at a price for unimproved land of $25 to $30 throughout the country, you do not receive any benefit because the lower the assessment, the greater the rate of taxation because you have to raise a certain amount. Therefore, as regards myself as a farmer, I would prefer to pay the duty proposed on these goods to having a land tax imposed. We are all selfish to a certain extent, and I am just selfish enough to prefer paying the tariff proposed on these goods to paying a land tax, because if the land tax were only one per cent, I would be a great deal of money out of pocket. I believe that the proposed tariff will allow a very keen competition from both Great Britain and the United States. It is a fact, I must frankly say, that we get very few agricultural implements from Great Britain because the British manufacturers do not make the class of agricultural implements we require. We buy a large quantity of agricultural implements now under the old tariff from the United States, and the United States manufacturers, owing to their vast market which enables them to employ men day in and day out, for instance, drilling a hole or making a bolt, can pay the proposed tariff of 15 per cent and import goods into this country, and they will do so. It is said that our agricultural implement manufacturers can compete with the world and do export a large quantity of implements to Australia in open competition.
That is quite true. Every man who knows anything about manufacturing knows that if you are turning out every year $100,000 of goods, we will say, and you base your overhead on that amount, if you can increase your output up to $200,000 you decrease your overhead nearly by half, or at all events, by fully a third. So that when you have supplied the home market if you can get an export trade, you can afford to sell at a lower price and still make money because of the reduction in your overhead. That is a simple fact that every man in the manufacturing business in this country thoroughly understands, and which cannot be disputed.
As to the rest of the tariff, there are a number of articles on which the duty in my opinion is too high, but I will come to that a little later on.
I wish to say something on the Business Profits War Tax. This tax was imposed for the war. The reason given at the time was that there were a great many men in this country manufacturing munitions of war who were making very large profits, and it was thought that part of these profits should be devoted to paying the cost of carrying on the war. I think that was quite proper, but we must bear in mind that while this is a war year in the sense that we are paying the expenses and reaping the results of the war, the men who were turning out munitions have had to stop their factories almost entirely or pick up some article here and there which they can manufacture and put on the market. These men will make no profit this year. The ordinary business man had to come under the tax with the munitions manufacturer, because it was thought impossible for the Government to pick out men here and there who happened to be engaged in the munitions business and tax them, and let everybody else go free. So all were taxed. Now my contention is, and was at the time, that it is an unfair tax, because it works out improperly. A corporation that is over-capitalized, for instance, gets off much more lightly than the man who has a small capitalization and is borrowing all his money from the bank in the endeavour to build up a business. That man is practically in the hands of the bank, and it is absolutely necessary for him, in order to build up his business, to put into it whatever' he can earn over and above six or seven per cent to the stockholders. Now while banks are very generous at times if you are engaged in a profitable business, at other times, when money is scarce, they get a little frightened and put on the screws
just when the small man wants money to carry him over; so it is a dangerous thing to depend entirely on banks to carry you along in your business. The Business Profits War Tax taxes practically everything over 7 per cent; profits up to 15 per cent are taxed. 25 per cent; from 15 to 20 per cent, 50 per cent; from 20 per cent upwards, 75 per cent. You might say that 25 per cent up to 15 per cent is a small amount, that a corporation incorporated for $100,000 that made 15 per cent would only pay $8,000. But that same corporation may be borrowing $120,000 from the bank to carry on its business, and not only that, but nine times out of ten when the company borrows from the bank the directors have to put up their personal credit before they can get a loan. It is the small man we want to encourage in this country, not the corporations with large capitalization, although 1 think they are just as fair as the ordinary company if their capitalization is actually paid-up; where it is not paid-up I do not believe in them at all. I do not believe in two or three kinds of stock and two or three kinds of debentures and all that kind of thing. I am pleading now for the ordinary manufacturer or businessman throughout the length and breadth of this land, that he may be given an opportunity of building up a reserve so that he will not be at the mercy of the bank or any one else.
I hope before these taxation proposals are disposed of, the Government will see its way clear to so re-adjust the business profits tax as to provide that on profits between seven per cent and twenty per cent, instead of seven per cent and fifteen per cent, the tax shall be twenty-five per cent, while on profits between twenty per cent and thirty per cent, instead of between fifteen and twenty per cent, the tax shall be fifty per cent. A man starting into business with $100,000. must turn that over three [DOT] times a year, to make a reasonable profit he must make sales up to $300,000. If he is going .to make ten per cent he must turn his capital over three or four times per year to earn that profit. You must remember that he is not making more than two and-a-half or three per cent on his turnover. That amount looks big if his capitalization is low, but it is not very big on the turnover. I would like the minister who is representing the Minister of Finance here this afternoon to call the minister's attention to the point that I am now going to refer to. Farm tractors were allowed in free last year, and of course
the material entering into their construction must also be allowed in free. The manufacturers get a drawback of ninety-nine per cent, but they sometia.es have to wait for six or eight months to get that drawback. I do not see jdiy the Customs Department should not be instru 1 ed to allow that material in free at th<, time it is imported, in place of making th s. n pay the duty and compelling them to lie out of the money for from six to ten months before they get the drawback.
I am satisfied with the assurance of the minister that this is a temporary revision of the Budget. I perfectly agree with the ' proposition that the Minister of Finance, together with some other ministers-not a commission-I am sick and tired of commissions-should travel through the length and breadth of this country and burrow into the business establishments from every standpoint, farming, manufacturing and commercial. Then a tariff should be devised which would be a revenue-producing tariff and at the same time afford a reasonable protection for the manufacturers who require it. It should be a revenue-producing tariff. I am very much pleased with the proposition, and I would like to say to my friends opposite-I think they are all my friends yet-I have a very kindly feeling towards them anyway