Just before recess I was referring to the Budget that had been presented to this House and country by the Minister of Finance, and I took occasion to observe that in my humble judgment it was an admirable presentation of our financial position. It was a businesslike Budget-I should say, a model Budget, and so far as I have been able to observe, it has met with almost universal favour. Any comments concerning it in the public press have been for the most part favourable to it; very little adverse criticism has been offered. This is a matter of congratulation to the minister, to the Govern ment, and to Canada as well, having regard to present conditions. All countries have been passing through a period of transition, a time of upheaval in commerce and dislocation of trade, a time of deflation and extravagance, a time of unfavourable financial, commercial and economic outlook. It is evident from the admirable statement rendered by the Finance Minister that Canada's position is an enviable one among the nations of the world; she stands second to no other country in the matter of her economic operations for the year that has passed. This is indeed a great tribute to Canada. Nations, like individuals, benefit by their youth. The blood of national youth courses through the arteries of our country. Canada has all the energy, all the ambition of youth, and we have firm ground for our faith in her great future.
According to the figures presented by the Finance Minister, Canada's trade for the past fiscal year exceeded that of the previous fiscal year by $125,000,000, in round figures, indicating a remarkable advance in trade in the face of unfavourable conditions. Our greatest trade is, of course, with the United States and Great Britain. The balance of trade as between Canada and the United States is against us; that is to say, we purchase more from the United States than we sell to them. That is an unfortunate condition of things, and one which it is difficult to overcome, though it is hoped that before very long it will be considerably improved. It would seem, however, that the legislation recently brought into effect in the United States is not favourable to that end. The Young Bill which has been passed by both Houses of Congress puts up against Canada as well as against other countries very strong barriers in the way of trade. It is to be presumed that this matter will be dealt with later by our Government and such action taken as is deemed expedient. Of course, that is a matter for the future. The balance of trade as against Canada for the last year and in favour of the United States amounted to $296,000,000. On the other hand, our trade with the Mother Country has been more favourable. The balance of trade in our favour in respect of our trade with Great Britain in the fiscal year 1919-20 amounted to $369,000,000, in round figures. The balance has since shown a tendency to swing against us, but that con-
dition may adjust itself. The trade balance in our favour in respect of trade with the Mother Country for the last year was reduced to $100,295,402, according to the figures of the Minister of Finance. Our total foreign trade per capita during the calendar year 1920 was $293.30 as against a per capita trade on the part of the United States of $127.78. In connection with our trade relations with the Mother Country, it is worth while noting that according to press despatches the Government of Great Britain are taking steps which indicate a wide departure from the policy of free trade. A Bill has been introduced in the British House of Commons-it may be passed by this time-placing a high preferential tariff on the key industries of the country. If that Bill becomes law, certainly a great step will have been taken by Great Britain in the direction of a protective tariff.
Now, Mr. Speaker, I wish to say just a word or two with reference to the financial position of our country. The figures disclosed in the financial statement of the minister show that the revenue for the fiscal year ended March 31, 1921, amounted to $432,000,000 as against $349,746,334 for the year 1920. The estimated expenditure for 1920-21 amounts to $533,368,077. Let me say a word regarding how the money raised was spent and the condition of the balance sheet when the revenues and expenditures had been compared and the bills for the year had been paid. I.et us see what a favourable showing was presented to the House in the annual statement of the Minister of Finance. As I have just said, it is shown in the financial statement that the revenues amounted to approximately $432,000,000. Expenditures on consolidated fund, that is to say, current expenditures, strictly speaking, for the operations of the fiscal year, amounted to $362,600,000; but in addition to this amount, there was a capital expenditure of $36,-
972,000 and an expenditure on demobiliza-tiop of $20,130,000, making a total pay-1 ment under the head of expenditure chargeable to consolidated fund of $419,702,000. This presents to us a satisfactory condition of the revenue as compared with the expenditure, showing that after payments made strictly speaking on consolidated fund or ordinary expenditures were met, there was left a balance of $69,400,000. Moreover, after those two items, that is the capital expenditure of $36,972,000 and the demobilization expenditure of $20,130,000, to which I have referred, were paid, there
was left, over and above all these payments, a balance of $12,298,000.
In the ordinary language, the authorized language that has been invariably used in connection with our financial operations in Canada since Confederation, this amount of $12,298,000 is a surplus. That is how all these balances have been denominated or described by every Government that has existed in Canada since Confederation. It may be said that there were capital expenditures that would very much exceed that balance. Such has nearly always been the case. There are not many years; indeed, there are very few, when mere has been an actual surplus; but in the language of finance used in this conection all down through Canadian history, this amount may be and is properly called a surplus. Therefore, there is no reason this year why we should depart from the usual language and call this amount by any other name.
Another exceedingly gratifying feature in connection with our finances for the year that has passed has been presented to us by the Minister of Finance, and that is that out of available cash at their disposal, the Government have acquired tax exempt bonds aggregating $89,288,3)0. These are bonds which were issued by the Government to the people and on which money was secured to carry on the war and other necessary expenditures. Bonds to that amount have been taken off the market; they have been bought in by the Government with the cash at their disposal, and they will be cancelled. Thus, there will be that amount removed from the debt of Canada. That is a very fine condition of affairs, and it is highly to the credit of the Government, that, at this stage, so early in the life-time of these bonds, the Government have been able to take off the market and cancel' so many of these promises to pay that, in the ordinary course, would stand against the Government until the term of the bonds expired. No doubt from year to year, as the Government will find that they have cash at their disposal, they will continue this method of reducing the financial obligations of Canada by acquiring a number of these bonds, removing them from the market and cancelling them, so that they will no longer form part of the debt of this country.
Another feature that has been presented in the fiscal statement of the Minister of Finance, is, I think, worthy of consideration, inasmuch as it shows what part of the debt created by the war, which, of
course, was a debt that was unavoidable and to which no estimated bounds could be placed, has been taken care of out of the current revenues of the country from 1914 up to the present time. This statement is to be found in the Budget presented by the Minister of Finance-and it is important to note it-that notwithstanding the largely increased cost of government, apart altogether from the war-and the expenses of the Government were much increased during these years-the country's war activities have been financed to a certain extent out of current revenue. The net result of financial operations in this country from 1914-15 up to and including 1920-21, a period of six years, shows that war obligations, current and capital, have been met and paid to the extent of $698,809, 700. That, I think, is a most gratifying feature of our present financial operations. It is one that, perhaps, we would not be disposed to take very much note of; but it is one deserving of the greatest possible consideration; it is one that shows how carefully our finances have been guarded; how carefully every phase of our public business and fiscal operations have been taken care of by the Government and the Minister of Finance.
With regard to the financial operations of last year, no new loans have been issued, and I think that is a matter for congratulation. I think it is also a matter for congratulation that in view of the world-wide trade conditions Canada has come through this trying period with a better showing than most other countries. Our position in comparison with other countries of the world is really an enviable one.
Turning to the current year upon which we have just entered, the uncertainty is no doubt greater even than last year, especially as to the revenues of the country. There are many reasons for this. In the first place, the Finance Minister finds it very difficult accurately to forecast what the probable revenues may be. This uncertainty is due to several causes. He feels satisfied, however, that the revenue from customs taxation will be somewhat diminished. Again, we have to take into account the tariff legislation which has just been passed by the United States. It is difficult to see just what the future holds in store in that direction; there may be some further legislation in this Parliament which may ameliorate present conditions, but so far as we can size up the present situation a diminished customs revenue is expected, and we have the
Young Tariff Bill imposed against us as well as other countries by the United States; so the situation this year presents considerable difficulty for the Finance Minister.
From ordinary sources the Finance Minister expects to raise, unless all signs fail, a minimum of $373,600,000. The Main Estimates for the year have already been tabled; there may be, however, some Supplementary Estimates brought down. Altogether, the Finance Minister calculates that a total revenue should be raised this year of at least $435,360,971. The outlook, it must, be confessed, is not the most encouraging, but I am satisfied th*'t from the taxes which the Finance Min ister is imposing, together with the revenue we expect to derive from one or two other sources, we shall raise sufficient to enable us to make up the difference between our expenditure and our ordinary revenue.
There is, for instance, the new sales tax. There is no doubt at all that the revenue from that will be very much increased this year over last. Then there is the increase in the liquor duties, from $5 to $10 per gallon. Probably we shall not have any liquor in Canada at all now, because there is prohibition in nearly all of the provinces. However, if any liquor is obtainable, those who drink will have to pay the price, and I suppose that is only right. Most people will agree that liquor is a luxury, and the man who wishes to indulge in that luxury must be prepared to pay the tax. I imagine only the wealthy will be able to indulge in this luxury in view of this new taxation. I think from these two sources alone the Finance Minister will be able to derive quite a large amount of money.
I do not wish to say very much about the income tax, as that has already been referred to by a great many other speakers in this debate. It is noticeable, however, that the revenue derived from income taxation last year was very much in excess of the amount received in previous years, and I have no doubt that there will be a still further increase this year. Some criticism has been offered as to the form in which the returns have to be made out. It is said that it is a little difficult for the ordinary man to make out an income tax return. That may be so. The Minister of Finance will no doubt be able to remedy that, and I understand that he intends to do so. So far as I am concerned, I have always been able to make out my return for the little amount I have to pay to the
treasury, and I think most ordinary mortals with a little assistance are able to make out a return in a manner that will be understood by the officials of the department.
There is another source of revenue. We have a credit with Great Britain of $150,000,000. That is the amount they owe us, and it is possible that within the coming year some portion .pf that may find its way into the Dominion treasury. I think from these three sources alone we shall derive a sufficient amount to enable the Finance Minister to meet the expenditures of the country, and perhaps leave a surplus over at the end of the present fiscal year. I appreciate the fact that mere figures are not very interesting, but in a Budget debate one can hardly avoid dealing with figures to some extent.
However, I shall now take up another phase of the Budget which I shall endeavour, if possible, to render somewhat more interesting. The tariff is a subject thau is very much discussed at the present time, and a good deal of fault has been tound_ with the Government by our friends opposite because no general revision of the tariff is contemplated immediately. There are many reasons why a tariff revision at this juncture would be inopportune I have already referred to the adverse legis-ation which is about to become operative in the United States and which may necessitate very radical and far-reaching c anges in our present fiscal arrangement m order that we may properly protect Canada s interests from the injurious forces of the Act which is going through Congress at Washington. Under the eir-cumstances, every one who gives any thought to the subject must concede that it is only the part of wisdom that the Canadian Government should be circumspect at the present time and make no great changes in our tariff until we know how the adverse legislation of the United States will affect us in every respect. I do not intend to say very much more on that Question, but I think that the tariff which we shall have in this country, after the United States tariff becomes operative, should be framed in such a way as to protect Canadian interests as far as possible. Of our total imports last year, amounting to a sum very considerably over $1,000,000,000, there came from the United State's goods valued at $856,000,000 odd, or 69 per cent of our whole import trade. That fact in itself constitutes a sufficient reason why we should be very deliberate and care-
ful in any changes we make to our tariff; we must of necessity, in our own interests, wait until we see how the adverse legislation at Washington is going to affect us. Although no extensive revision of the tariff is being made, however, there are some changes, due to one cause or another, particularly in respect of the trade agree- ment with the West Indies which was recently ratified by both Houses.
In reference to the subject of taxation, the principal changes are the abolition of the business profits war tax, the removal of the so-called luxury tax, and the increase in the rate of the sales tax, matters which will come up for consideration when the House is in Committee of Ways and Means. I think, Mr. Speaker, that is all I shall say on the subject of expenditure and taxation.
I might properly refer, before going further, to some of the statements that have been made, and the attitude that has been assumed in this debate, by our friends on the Opposition side. The hon. member for Shelburne and Queen's (Mr. Fielding), a former Minister of Finance, has voiced some rather strong free trade sentiments. Now, as everyone is perfectly aware, our Opposition friends have not been very consistent on the important question of the tariff. From time to time, while in Opposition, they have strongly advocated free trade, but while in office they were unquestionably protectionist. Throughout the fifteen years the hon. member for Shelburne and Queen's was Minister of Finance he was a consistent protectionist ji he presented to the House every year a protectionist budget. He made no essential change in the tariff which the National party had had in force up to the time his Government took office. While hon, gentlemen opposite were in office they had a protective tariff amounting to an average of nearly 27 per cent; at the present time, this Government, whom they are pleased to describe as high protectionists, are carrying on the public affairs under a tariff which is about 5 per cent less than that,-a trifle over 22 per cent. In the face of that, how can hon. gentlemen opposite talk free trade? A year ago, when the hon. member for Shelburne and Queen's was discussing the budget, he was inclined to the view that free trade was not practicable; that there was no such thing as free trade. I shall quote his words in a moment or two, and endeavour to show the contrast between his opinions then and those which he expresses now. Last year he did not seem anxious to fraternize with
his friends to the left of him, the Agrarians; he rather gave them the cold shoulder. This year, however, it would appear, he is disposed to get closer to them, or have them draw closer to him. He evidently wants the two sides to coalesce and work together. Well, as a matter of fact, that is just what they are doing, conceal it as they may, endeavour to hide it as they will. Their object is to impede the Government, no matter what their assumed attitude may seem to be. One member on the other side gets up and utters some protective views, and another talks free trade. It is a drama; they are all actors, and each member of the dramatis personae has his own little part to perform. But the tout ensemble is a campaign against the Government. What is the drama they are acting? A tangled web of political deception. Their object is to deceive the people with the ultimate end in view of getting into power. They want to throw dust in the eyes of the people; they are trying to pull the wool over their eyes. While they are ostensibly preaching free trade for the benefit of the public, they go round secretly and whisper confidentially into the ears of their friends, the manufacturers, that everything, from their viewpoint, is safe and sound. They tell these people: "Don't be afraid of us. You know we did nothing to you before. Don't mind our talking this way about free trade; you know it means nothing. Let us say this and that about free trade for the sake of effect; you know what we will do when we get in." That is the way they have been acting, Mr. Speaker, and in order that I may be able to convict them I shall quote from Hansard. I desire to read from the statements of the hon. member for Shelburne and Queen's, quoting Hansard.
I will now read from Hansard of 1920 to show what the hon. gentleman's views were last year and I will then contrast these views with what the hon. gentleman has stated during the present debate.
Topic: REVISED EDITION. COMMONS