My hon. friend openly admitted in the House that the question that was discussed in his county and on which he ran in 1911 was the Ne Temere
Act. And what was the promise that my hon. friend made his electors? Did he not know at the time he made that promise that the highest legal authorities in this country had decided that this Parliament had no power to deal with the Ne Temere? Was he not well aware of that? But in face of the knowledge of that fact, he made the promise to his electors that, if elected, he would see that a uniform marriage law was passed for this country. Has he fulfilled the pledge he gave?
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
carry it out? He was well aware at the time he made it that he could not carry it out. He must have been aware of it. And now he is trying to stir up another question that he expects will do service for him in the backwoods of the same riding. I think I have dealt sufficiently with that question.
I do not wish to detain the House any longer; so, to sum up:
1. I am cordially in favour of the proposed war loan. I am also in favour of such taxation as may be necessary to meet the interest on the war loan. I am prepared along with my colleagues on this side cordially to support any measure that will enable the Government to give effective assistance to the Empire in the supreme crisis through which it is now passing. To quote from my hon. friend from South Renfrew (Mr. Graham), " millions for war, but not a dollar for graft."
2. I am opposed to the 7i per cent increase in the general tariff because it is levied without discrimination. It will bear most heavily on those classes of the community least able to pay. It will not produce any substantial amount of revenue, and it cannot fail to enrich the combines.
3. I am especially opposed to the 5 per cent additional impost on British goods. By this impost, we are treating Great Britain as a foreign country, and are striking a blow at British commerce. If ever there was a time when the interests of British trade should be safeguarded it is at the present, when the old land is engaged-in a struggle involving its own existence and our future.
4. This is not a war Budget. If it were, I would cordially support it. We have the admission of the Honourable Finance Minister that not one dollar of the money to be collected under this Budget outside the interest on the war loan, will go to prosecute
MARCH 11, 191s
the war; and as a matter of fact the interest on the war loan will be borrowed as well as the principal.
5. The Government, in face of decreasing trade and a falling revenue, should have adopted a policy of retrenchment and economy; and if the Government had done this during the past four years, nay, if they do so now, this increased taxation will not be necessary.
I shall vote for the amendment.
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
Mr. Speaker, I rise to participate for the first time in the debates of this House, and I trust that I shall not transgress any of its rules. I have listened with a great deal of interest to the hon. gentleman who has just sat down (Mr. Sinclair), and yesterday I listened with an especial interest to my hon. friend from Red Deer (Mr. Michael Clark), because, from the views he has enunciated on previous occasions in this House, and the stand he has taken as a free trader and a Cobdenite, I knew that he was a lucid and clear speaker. I am not sure, however, that my views on the question of protection have been changed by hearing the able remarks of the hon. gentleman. I knew that he had lived in the old land, where free trade' has for so long stood the test of time and given such satisfactory results. I am also not unmindful of the fact that the great German Empire and the great country to the south of us have, by protection, on entirely different systems, built up their trade and grown wealthy, possibly to an even greater extent than the Motherland herself. I believe that conditions in the old land make free trade the desirable policy for that country to pursue. But so far as Canada is concerned, there has never since protection was adopted been submitted to the people of this country an alternative fiscal policy which met with their approval, or which they were prepared to try out. The hon. member for Guysborough (Mr. Sinclair) has referred to the panacea which the Government of the day applied to this country in 1911, in order to try and relieve our people from the ills that, in the Government's opinion, existed at that time -a time when the revenues of this country were buoyant, and thecountry in a prosperous condition.
Our hon. friends, in their wisdom, thought it good policy to undo the splendid structure that had been built up through the years under protection by casting in their lot with the United States, and opening up to them the markets of this splendid coun-50
try. I am glad that the hon. gentleman has given us the opportunity of considering that question of reciprocity again, and I can only say that if it should be the desire of the Opposition to discuss with the people again the same subject the Government are prepared to take the issue to the people, and I have no doubt the result will be the same as it has been since 1878. We have had similar policies enunciated at different periods in our history since 1878, and they have been submitted to the people. It seems to me that hon. gentlemen opposite take the view that the people do not really know what they want. They have had the question tested before by an appeal to the people and the country has supported the policy of protection.
The present situation is an extraordinary one. Nothing like it has ever at any time faced us in this country, and as hon. gentlemen on the other side of the House have expressed their views on financial affairs as they are now, they seem to want to impress on the country and to try to convince themselves-although I cannot believe that they are convinced-that the great war now raging is responsible only for the amount of monejfthat we actually . expend in aid of the military that we send to help the Mother Country. Surely hon. gentlemen opposite do not believe any such thing. Surely they do not believe that the conditions of war are not responsible for the decreasing revenues of this country, or that there are not losses to the country resulting from the war conditions in Europe which are entirely aside from the expenses that will be incurred in equipping the forces we are sending to the front. The failure of so many intelligent citizens to realize and appreciate the tremendous effect of this war on finance, commerce and industry throughout the whole world is to me surprising.
The world's population to-day is estimated at 1,620,000,000 people, and of these 925,000,000 reside in the countries and their colonies affected by this war. The total area of the globe, exclusive of the polar regions, is about 52,000,000 square miles, and of this the countries engaged in the war represent an area of 28,500,000 square miles. Five continents are engaged more or less in the fighting. The greatest . wars of the past centuries were but trifling as compared with this mighty conflict. To-day armies aggregating 15,000,000 of the flower of the world's manhood have been summoned from field,
forest, mine, and factory. The great armies of England, France, Germany, Austria and Russia are facing each other in deadly combat along a battle line of over 1,000 miles. The war has already cost $8,500,000,000, it having been in progress for six months, and that represents an expenditure of $17,000,000,000 a year, or $47,000,000 a day. The world's trade is estimated at $40,000,000,000, and of this total the nations at war and their colonies represent $25,000,000,000. The commerce and finance of the whole world are so closely related and interdependent that it might be said that the arteries of the whole world are as closely associated as the arteries of the human body, and yet with these conditions prevailing in the great countries of Europe hon. gentlemen on the other side of the House virtually tell us that these conditions are in no way responsible for the shrinking revenues. The war has driven the powerful German marine off t'he high seas, and the foreign trade of Germany, Austria and Belgium, representing 22 per cent of the trade of the whole world, has practically vanished. These countries did with our country, as well as with the United States, a large volume of trade. Importation from these countries has absolutely vanished. That, necessarily, must diminish the revenue of Canada. Many of the agencies of transportation have been destroyed. Trade routes being deranged, demoralization and partial destruction in every branch of commercial and industrial activity is in evidence. During the year England's exports decreased by $475,000,000 and her imports by $355,000,000 making a total decrease in her foreign trade of $830,000,000. Notwithstanding her enormous importation of food stuffs her imports in Janu-5 p.m. ary last fell off $3,000,000 and her exports for the same month decreased $98,000,000. We know that in England large numbers of men have been withdrawn from the factory and the farm to fight in the trenches of France in defence of the Empire and that there is to some extent a dearth of labour in the larger factories and industries of England which are employed very fully at the present time. It is not surprising that it should be so. Belgium's trade of $1,500,000,000 is gone entirely and her fields are laid bare.
Going back a little beyond the present conditions I asked a question of my hon. friend from Guysborough last night which he did not answer. The question was if my hon. friend did not know that a war existed in the year 1912 and that the conditions
brought About by reason of the war were conditions that led to the stagnation and to the interruption of commercial activity throughout the whole world. I referred to the Balkan war. The Balkan war, was a live, active war in that year and as a result of that war $450,000,000 of the capital of the world was obliterated. The increased outlay by armaments for the war and the gradual rise in the world's standard of prices, were the chief factors contributing to the financial depression of the time being. If hon. gentlemen wanted to be fair they would not condemn the fiscal policy of this country which for so many years has justified its existence and has been the source of a large revenue, and a source of strength in the development of our many industries. They would not deride that policy which the public six or seven times had endorsed as the correct policy of this country, nor blame the policy of protection for the conditions that prevailed at that time, which, -were, as hon. gentlemen must know, directly due to the world disturbance in finance and commerce. Reciprocity was the panacea suggested by my hon. friends. The hon. member for Guysborough (Mr. Sinclair) said last night: .
We all - recognize that Canada is passing through a period of hard times. We may differ about the cause. Statesmen on this side of the House saw the depression coming prior to 1911, and they endeavoured to provide for it by opening new markets for Canadian products. Their efforts were frustrated, and Canada is having a taste of the depression that existed prior to 1896.
The hon. gentleman seemed at that time to have a vision of the future, a thing that hon. gentlemen opposite have not been troubled with in the past, because if they had that clear vision of what would come as the result of submitting that policy to the people of this country, they would have preferred the honour of serving their country as leaders in this House to going down to ignominious defeat as the result of submitting that policy to the people. If hon. gentlemen opposite wish to challenge the Government again on that issue, I am sure we shall be prepared to meet them in the country, and I have no doubt as to what the result will be when the question is submitted again to the people.
Our friends have to some extent derided the campaign, as we may call it, of *patriotism and production. I have even heard hon. gentlemen, who are interested in matters of agriculture and who represent agricultural districts, ridicule this policy. It will be an unfortunate thing for
this country if the time ever comes when a man engaged in agricultural production thinks there is nothing more to learn. I have the honour to represent a district which is peculiarly an agricultural one. In fact, I have not in the whole constituency even an incorporated village of any kind. My constituents are a very intelligent and progressive people. The Ontario Government has established in my county a district representative of the Department of Agriculture. It is the farmers who are progressive and enterprising, and who wish to be up-to-date who read the literature sent out and who attend the lectures that are given by that representative. A patriotism-and-production meeting was held in my district last month. At that meeting I learned from the district representative in our country of the splendid results obtained by our young men in what was called the acre-profit competition in the province of Ontario last year. In my own district, in the county of Middlesex, there were three farmers' sons, one of whom, as the result of the information he had obtained and the interest he had manifested in the lectures, was able in the competition to produce from one acre 501 bushels of potatoes, at a cost of $32.50, which were sold at 40 cents per bushel, giving a profit of $168 per acre. The other two boys from the same district were within ten bushels of these results. Each of those three boys produced an average of over $160 clear profit per acre as a result of the effort they had put forth in intensive production. The campaign, as the matter has been laid before the people, is encouraging them, not so much to a greater acreage as to a better production. The great problem is that of labour. Until that problem can be solved it will 'be difficult to increase production. The farmers of our country arfe working late and early, and are unable to procure sufficient labour. Notwithstanding that, I do not think any one denies that it is quite within the bounds of possibilities to apply more science to the development of agriculture, and by that, and by a little better tillage, to produce larger results on the same acreage.
There are three ways in which a farmer can increase production: first, by the application of increased labour; secondly, by the application of more intelligent a*nd scientific methods, and thirdly, by application of increased capital. I do not say that these three are entirely independent of each other. On the contrary, they are very closely connected. No one of them can be applied by itself alone. Each carries with it the necessity in some measure 58!
of both of the others. Pure bred
stock, tile drains, improved buildings -all these things make for better
production and essential pre-requisites for them is capital. The tendency of the whole financial world is to draw capital away from the farms. We find in all the small towns the banks establishing branches. The object of this is to collect the savings of the farmers and to distribute them in the commercial centres, applying the money to commerce and industry. This is the natural thing to do but works injury to farmers themselves who used increased capital for their operations. It cannot be denied, however, that agriculture is awakening to higher and to greater possibilities. The situation within the Empire in this world crisis calls upon our people for increased production. The people in this country are largely responding to that call. To fulfil these requirements, to meet the urgent demands of the Empire, the present need is for a large increase in the amount of capital available for rural credit on conditions suitable for agricultural enterprises? What in view of the situation ds required? What can be suggested by way of remedy? It is an economic certainty that every enterprise promptly responds to the magic touch of prosperity. Let the farmer have an experience of this, and you will see agriculture expand. Better returns to the farmer need not mean higher prices to the consumer owing to improved marketing, improved methods of transportation and storage facilities, not operated in the interest of the railways and the middleman, but in the interests of the producers and consumers. If scientific production is a good thing, then why not scientific marketing and scientific distribution? We cannot enlarge our farming activities unless the means to supply the capital is provided.
The question of credit for farmers is one which I think is of greatest importance. This is one of the problems that, I hope, this. Government will be able to meet. We are told, when a subject of this kind is presented, that it offers difficulties. But in spite of the difficulties the situation has been grappled with in the United States. A movement was commenced over a year ago to meet the growing needs for extended rural credits. A commission was appointed under the authority of Congress to go abroad and make a study of this whole matter, especially the organization and operation of rural credit associations in Europe. On its return the commission made a report, and, as a result, a Bill was introduced in both Houses of Congress embodying the ideas and plans of this com-
mission. This is called the Moss-Fletcner Bill. The McCumber Knral Credit Bill was later introduced as an alternative plan; and finally the Bulkley-Hollis Bill, an amendment to the Agricultural Appropriation Bill, was the one which met the approval of the Banking and Commerce Committee of tire Senate and was reported to the House of Representatives by a committee of that body. So the Bill has made good advance.
Some plan should be devised to enable farmers to organize co-operative credit associations throughout Canada with the assistance of the Government given under proper safeguards. The matter would imply using of the credit of the Government in a business-like way to reduce the enormous interest the farmers now have to pay. The great difference between the credit required for farmers and the credit required for ordinary commercial purposes is that the farmer requires a loan for a longer period than the ordinary commercial or industrial loan is expected to run. The application for credit should be supported by the Government in such a way as will give to the farmer, under proper safeguards, the assistance of the Government. That, to my mind, will go further to solve the problem of production and the problem of labour on the farm than anything else. It is of primary importance, above all other things. The interests of the farmer imperative^ demand that we should have legislation extending direct Government aid to the tiller of the soil. Cases have come within my own observation, and in my own township, of farmers with a large area of grazing land, but without the- capital to buy the necessary stock, and so their land goes to waste. I have seen more failures, I think, directly as a result of the want of capital to carry on the work of farming than from any other cause affecting my own district. I do not say that there are many who are in that unfavourable position. In fact they are comparatively few, because the farmers of that, district are progressive. And I find that the most progressive farmers there are those who do not sell their grain at the first price the market will give them after threshing, but they feed that grain to the stock on the farm, and so, as they say, their grain leaves the farm on the hoof. These are the men who are making a success of farming in our district.
Now, I have said there are difficulties in this matter. They have had difficulties to face in their efforts to solve this question in the United States. Sam Warren defines
difficulty as being only a word indicating the degree of strength requisite for accomplishing particular objects; a mere notice of the necessity for exertion; a bugbear to children and fools, but only a stimulus to men. There may be difficulties surrounding this question, but I believe that the more the problem is pressed upon the Government, the sooner a way will be found to solve it. I believe that Agriculture should be the most important department of the whole Government. We have our experimental farms, as we call them, in different parts of the country. And while these accomplish a good deal, in my humble opinion, the system of appointing district representatives in the various communities where they can become practically the agriculturists' doctors, right among the farmers themselves, is accomplishing a great r measure of good even than the work of the experimental farms. I hope the time will come when agriculture will be deemed of so much importance in this country that in every county at least, if not in every township, we may have a demonstration farm right in the midst of our people, which can be carried on with profit, and which will arouse the interest of the farmers in the most up-to-date and scientific methods of agriculture.
It has been stated, and it seems most unfortunate if true, that in Ontario, notwithstanding the enormous production of that province, they are not producing half of what the farms are capable of producing. I have given a good deal of thought to this matter and have discussed it with our representative including hon. gentlemen who are here representing eonstituentencies in the great West and who are endeavouring to make a good living out of farming in that country. I believe the time will come when they will follow the information that can be given in their agricultural schools in their several districts, and when the farmers there will not sell their oats at 25 cents a bushel and their barley at 30 and 35 cents, nor will they sell their wheat at the ridiculously low prices that have prevailed, but will feed their grain to stock and send it off on the hoof so that a twenty-five cent bushel of oats will represent a dollar or a dollar and ten cents before it leaves the farmer's hands. Our friends on the other side constantly complain of the tariff. But I believe the time will come when they will get interested in these lines. When the great West becomes a leading industrial district the demand from that
country for extensive changes in the tariff will entirely disappear.
In regard to the patriotism and production campaign throughout the country, I desire to say a word though the Minister of Agriculture (Mr. Burrell) is not here. I would respectfully say that I think the campaign would have been productive- of even better results if the advertising campaign had preceded the meetings. I believe that the information gathered by the Department of Agriculture and issued in bulletins from time to time does not accomplish its full purpose, because the means of distribution is not what it should be. We have discussed this in the agricultural committee of this House and have not been able to suggest a method which would give the best distribution for this literature which, properly distributed, would he so valuable to the farmers of this country. I have thought, and still think, that it would be a good plan if bound catalogues of the publications of the department were in every rural reading library throughout the country. Then the man who is interested in live stock, the man who is interested in horticulture, the man who is interested in field crops, may send for the particular literature dealing with the special branch of agriculture he is particularly interested in.
I want to touch briefly on the matter of reciprocity, because that subject may, perchance, be a live issue when another appeal is made to the people. The inconsistency of hon. gentlemen opposite in connection with this matter is amusing. I have a clipping from the Winnipeg Telegram in which reciprocity is recommended because eggs in Minneapolis are only 29 cents a dozen while in Winnipeg they are from 35 to 45 cents a dozen; because butter in Minneapolis is from 29 to 34 cents a pound, while in Winnipeg it is from 30 to 40 cents a pound. In the last reciprocity campaign hon. gentlemen opposite attempted to convince the people of cities and industrial communities on the one hand that the effect of reciprocity would be to lower to them the prices of these commodities, and on the other hand, that the farmer would get a better market on the other side for his produce. Hon. gentlemen were so inconsistent in the matter of reciprocity that they could not interest the people in it. It has been said that protection is foolish, and that if it were abandoned the country would he better off. But if it were not for the duties which keep them away, would American capital and American manufacturers invest half a billion dollars in establishing industries all over our country? Almost every member of this House has within his own constituency evidence of the fact that American manufacturers are establishing branches in Canada. My hon. friend the member for North Essex (Mr. Wilcox) probably knows better than any one else what the effect of reciprocity would be upon the large industrial district of which his constituency is a part. You cannot convince the farmers of that district that the markets of Detroit are better for his produce than the home market. He has the big markets of London, Toronto, and other places, and to these markets, taking advantage of the protection which he is afforded, he may ship his vegetables and other produce. The automobile industry in my hon. friend's constituency has grown to enormous proportions; notwithstanding the financial pressure which exists at the present time, it is expanding rapidly. The question naturally resolves itself into an inquiry as to what would he the benefit of reciprocity to the farmers. It has been repeated time and again-and it certainly must be evident to any hon. gentleman in this House-that a market that produces a surplus of 300,000,000 bushels of wheat cannot be the natural market for the products of this country.
I 'believe that hon. gentlemen opposite look upon the Globe as orthodox. I have a clipping from that journal of the issue of February 13, which says:
The price of Canadian wheat is fixed not in Winnipeg but in Liverpool. The price of cattle and hogs on this side of the border cannot long remain materially above that of food animals in the United States. The value of Canadian cheese is set by the volume of consumption in the trenches of Flanders and the mills of Lancashire.
In the same editorial the Globe deals with the question of radial railways, which is a project with which I have a good deal of sympathy. It says:
If the farmer needs radial railways and better roads to help him in marketing, the Government should come to his aid in organizing such services. Even the social side of farm life might be benefited greatly by united effort. Whatever is needed to turn the stream of settlement to the land should be done cheerfully and with the good-will of all classes of the community. Ontario's prosperity, like that of the Dominion at large, must spring from the presence on the farms of contented and prosperous food producers.
Under the administration of hon. gentlemen opposite the people of this country had this matter presented to them praoti-
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
Does not the hon. gentleman think that if these gentlemen he speaks of were gentlemen who were dismissed at the end of six months they would appear on the other side of the account ? We have from the various departments a number of appointments and dismissals. If a man were appointed for six months and relieved from the service no doubt his name would appear as a dismissal.
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
That explanation was given by the minister, but I would answer my hon. friend's question by asking him this one. Will the hon. gentleman say that to his knowledge there are at the present time 10,000 more civil servants than there were in 1911 ?
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
The fact is that the returns show a larger number, for 515 additional officers in the Marine and Fisheries Department are not included 'in that 10,000, and we have not yet heard from the Department of Militia. In addition to that, the return only covers about two years.
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
I have not made any particular study of this, and I was only stating the figures given me by my hon. friend. But I think that if my hon. friend wanted to be fair and to give the proper information to this House, he would endeavour to find out from the Department. The fair comparison would be not the increase in appointments but the increase in the number of employees now in actual service. That comparison would be a proper and
fair one; if the increase were unreasonably large in proportion to the increase and development of the work in the departments there might be some cause for criticism, but there is no ground for criticism along the lines my hon. friends have pursued. This gloomy picture that is painted of our country and the conditions that exist here is not justified by the actual results as shown in the buoyant statements of the banks, with their large reserves and deposits, and also in the statements from loan companies and insurance companies. Under the existing circumstances there has been a surprising growth in our railway earnings and remarkable improvement in the bank balances and clearings. All along the line the tide seems to have turned. On the 30th of January the banks of this country had a total paid-up capital and reserve of $227,203,192. The deposits in the chartered banks in Canada were $996,877,212, the deposits elsewhere were $91,807,007, making a total of deposits of $1,088,684,219. But the increase in the deposits for January over the corresponding month in'the year 1914 is very striking. These are things that come close to us and are indications of improved conditions. The increase in the amount of deposits this year over January, 1914, was $21,929,917. In addition to the capital invested in these banks, our loan companies have a paid-up capital of $59,700,000. I have not the figures of reserves of loan companies but in many cases the reserve exceeds the paid-up capital and I do not think I would be very far mis-stating the fact if I said that the reserves were equal to the paid-up capital. We have invested in our manufacturing industries in this country $1,247,583,609; in railways $2,250,000,000; in canals $102,000,000. Our factory output amounted to $1,600,000,000, and the wages in our factories to $241,000,000. These figures are for 1910. The returns for this year show large increases over them. It does not look to me as though this country were in a deplorable condition financially, and I think that all along the line the tendency is towards improvement.
Hon. gentlemen complain about the cost of the administration of the Post Office Department in Canada. I find upon investigation that even in the United States the total revenue of the post office from 1865, the time of the civil war, to 1913, was $3,775,000,000 and the cost of operation for the same period was $4,555,000,000. There was that difference between the revenue and the cost of operating the Post Office Department of that great country. From 1884 until
1914 there have been almost constant deficits in the Post Office Department of that country. In 1902 the deficit amounted to $2,961,169, and in 1909 to $17,479,770. The aggregate deficit in the United States Post Office revenue from 1884 to 1914 reached the enormous total of $210,544,802, or an average yearly deficit of $7,797,955. That is in the great country south of us, with their much more dense population than that of Canada and their enormous revenue. Looking at that record we have reason to be proud of the administration of the Post Office Department in Canada.
The development of the parcel post system and of rural mail delivery has been a matter of very great interest to the farmers of this country. I do not know that any department of this Government has ever had to undertake a matter more difficult or complex than the arranging of rural mail routes throughout this country. The work has been done well. From the district I represent, a pretty large area, I have not received a single complaint of the service that has been given by the department. When we want to get an estimate, of the prosperity of this country we sometimes look at the annual bank reports. Hon. gentlemen opposite say that the present condition of the country is due to the gross extravagance of this Government. Let me read from the proceedings of the annual meeting of the Royal Bank of Canada which was held on January 8, 1914. Mr. E. F. B. Johnston, K.O., in seconding the adoption of the report, said:
Personally, I have great confidence in the vigour and elasticity of Canada and its people. Compared with many other countries, people in Canada do not know what hard times mean. The fact is that financial stringency in Canada is generally caused toy over-prosperity. Many business men of Canada during the past two or three years have been doing $200 of business on $100 capital. If they had confined their business relatively in volume to the amount of capital they had invested in it, they would not be hard up.
He goes on:
We may ask on an occasion like the present: What of the future? I am very sanguine as regards Canada. Let us look at some of the evi-. dences of prosperity which are laid before us:
Then after giving certain figures in regard to England, he says:
Coming to our own country, we find a pronounced feeling of hopefulness. Prom every province comes the voice of prosperity.
That was the optimistic opinion expressed of the conditions in the fall of 1913 by the
director of one of our banks at that time. The Minister of Finance too, when the Budget of 1914 was brought down in this House, was considerably optimistic as to the future of Canada; for then, neither he nor any one else knew of the great conflict that was lurking in the rear. Let me now turn to the annual meeting of the Royal Bank which was held on January 14, 1915. Sir Herbert Holt, the president, in moving the adoption of the report, said:
The outbreak of war was followed by a convulsive derangement of International exchange and general trade. Stock exchanges were closed, in many countries a moratorium was proclaimed, and a financial catastrophe of world-wide proportions was only averted by the wise and timely action of the British Government in providing through the Bank of England, powerful machinery for sustaining and protecting credit during the war, and for twelve months after peace is concluded. Much credit is due to the Canadian Minister of Finance for the emergency measures so promptly introduced to protect the situation in Canada. The efficiency of these is demonstrated by the fact that the business of the country has pursued its ordinary course, and we enjoy the distinction of requiring no recourse to a general moratorium.
And further on, he says:
Having no misgivings regarding the final outcome of the war, we venture the prediction that its economic effect upon Canada will be beneficial, although the magnitude of the struggle is without precedent. Previous wars during the past half century (namely, the war of Prussia against Austria in 1886, and against France in 1870, the South African war and the Russo-Japanese war) were all followed by active and expanding trade, but in each case, only two countries were engaged, as against the inclusion of nearly all Europe on the present occasion.. .. If the present war be long-continued, the European nations involved may become financially prostrated for many years. Even if the war is not long-continued, the flow of capital from Great Britain to this country is not likely to be resumed for a considerable time, and new . constructional work will therefore be retarded. On the other hand, we reap distinct commercial advantages from our geographical position and remoteness from the scene of warfare, which permit us to prosecute our farming and manufacturing industries unmolested in suite of our participation in the conflict
That is the opinion of the president of the Royal Bank. I have said before that I believe the time will come when our industries in the great West will be so developed that they will impress even our friends in the West that our home market, which industries alone can build up, is a matter of some interest to them; and when that time comes we shall not hear so much of the cry for free trade. I should like to give the House some figures taken from the report of the Royal Bank, from which I
have already quoted, giving the number of capital employed, employees, salaries and factories in this country by provinces, the wages, and the value of products.
The total value of the products from all the factories was $1,349,601,225. Those figures show how this country has prospered under the tariff, and I do not think they furnish any reason for discouraging our optimism. I have said that the evidence all round shows that conditions in this country are not deplorable. In Winnipeg last year, in spite of the adverse conditions, 91 charters were obtained for industries, and 22 new industries were established in that city. Twenty-four of the companies that obtained charters had a capital of from forty to sixty thousand dollars; 24 a capital of from eighty thousand to one hundred thousand dollars; 6 a capital of two hundred and fifty thousand dollars, and 8 a capital of one million dollars. The prospects in that section of the country for the coming year are most encouraging. Since 1913 a great many more acres have been brought under cultivation, and the area under crop this year will be very much larger than last year. But, estimating the crop for next year on the basis of the area under cultivation in 1913, the value of the crop, at present prices, would be $293,281,218, as against $94,604,616 in 1913.
The estimated increased production and price of wheat alone for the coming year will be more than three times what they were in 1913.
A Conservative estimate of the oats, barley, flax, hay, live stock and dairy production, in which the prices for oats are placed at an advance of 100 per cent, barley at 100 per cent, hay at an advance of 30 per cent, with dairy products, live stock and flax unchanged, implies an increase in the returns to the farmers of the west of something like $88,206,758, as compared with a return in 1913 of $63,816,307.
This article goes on to say that
It is reasonable evidence that the farmers' crops for 1915 ought to approximate in value to him something like $381,487,976.
At six o'clock the House took recess.
The House resumed at eight o'clock.
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
House took recess, I was endeavouring to point out conditions as they exist at the present time, and to show that from all evidences Canada has more reason for optimism than for pessimism. The condition of transportation companies, the improvement of banking conditions and trade generally point to a hopeful outlook. Hon members of the Opposition have endeavoured in the course of their arguments to impress upon us the necessity for economy at such a time as this, but I do not know that they are any more impressed with the need for economy than are the members of the Government. It is simply a matter of difference of opinion as to the best way in which to conduct the - affairs of the country at this time. If one wants to see the dark side of a question, it is quite easy to exaggerate conditions. I have here a clipping from the Globe under date of March 5, 1915, only five days ago, which says:
Economy is contagious. Talk of hard times, whether warranted or not, is certain to cause a tightening of purse-strings. That industrial corporations not injured but aided by the war have reduced wages is a natural though a lamentable development, the glut of the labour market making it possible. The encouragement toward business as usual will have but little influence on men who see a chance of increased profits by improving opportunities, but there is no ground for a general tendency toward personal economy by those who do not fell any pressure in that direction. Farmers have not lost their market by the war, and so far as prices have been affected the tendency has been upward. Their position, so far as production and returns are concerned, has been improved. But it is worthy of note, and perhaps to be regretted, that they have been affected by the contagion of the economy irresistibly forced on many city workers. Instead of more freely patronizing mercantile and industrial establishments in accordance with the better markets they are enjoying, the farmers have been inclined to fall into line with the prevailing habit.
The prosperity of agriculture is a matter for congratulation. The farmer has borne the heavy end of the load, and it is always cause for general satisfaction when he comes into his own. Our dependence on him is revealed and confessed in the request that he increase his output. The individual farmer, knowing how ignorant the wisest adviser must be regarding the personal considerations surrounding the operation of his farm, may resent advice as to methods or general operations. But the advice to enjoy the good things within reach and extend liberal patronage to other industries now feeling depression may be regarded from a broader outlook. The farmer has no ground for fearing the influence of the war. His business Can never be ruined. He may be injured by taxation or by the obstruction of trade routes, but the world will continue to demand all he can produce. In the matter of markets he has nothing to fear. It is in the interest of the province and the Dominion at large that the farmers fully enjoy the prosperity that has fallen to them through the necessities of an unprecedented situation. By thus benefiting themselves they will confer a still wider benefit or, their fellow-citizens now, in many cases, sadly in need.
Agriculture is the great basic industry of Canada, and its products yield practically $1,000,000,000 a year. At a time like this, when the demand for gold is so great, and when the impossibility of increasing our borrowings is so evident, the fact that the farmers of this country can produce from the soil products to the value of $1,000,000,000, is a matter of congratulation and should dissipate all pessimism.
Before recess, speaking of the development of the business of this country under our wise and prudent tariff policy, I said that this country was justified in adopting that policy by the experience of countries in Europe and on this side of the Atlantic which had adopted protection. The wealth of all the countries of the world has grown enormously during the past century. Sir George Paish, who is an authority on statistics, says that the wealth of the United Kingdom in 1814 was computed at $12,500,000,000, while a conservative estimate would place it now at about $85,000,000,000, or an increase of about 580 per cent, while its population has grown 130 per cent. The income of the British people has increased 700 per cent-from $1,500,000,000 to $12,000,000,000. We all admit that the United Kingdom has prospered under free trade to a degree which must he gratifying to that nation, and the colonies take just pride in that prosperity. For the sake of comparison I want to point out that the wealth of the United States in the same period has increased from about $1,750,000,00Q to something like $150,000,000,000, or nearly 8,500 per cent; and the income of the people has risen from less than $500,000,000 to about
$35,000,000,000 a year, a matter of 6,500 per cent. To those who uphold the doctrine of free trade we admit that it has done in Britain what protection has done to a larger extent in this country. If the nation to the south of us, following along on the lines of protection, has built up such powerful industries and has so developed its factories, and has increased its wealth to such an extent as is shown by these figures, we feel that the conditions that prevail in the United States should prevail in Canada and that it is our duty to protect our Canadian workmen. We have evidences everywhere of the benefits of protection. A clipping I have here shows how necessary it is for the large factories in the United States to establish factories in Canada. '
" Our company Is now incorporating in Canada and will build a factory at Toronto," said Mr. Booth to-day, " simply because our tariff policy is wrong. Canada is a great, aggressive vitalizing country commercially and a great market. It is naturally a commercial unit with the United States, but tariff walls separate the two countries, and we are forced to go to Canada with a factory to escape the Canadian products without asking for reciprocal advantage in their markets for 30 to 35 per cent burden their tariff imposes. Meanwhile, the Wilson administration is proposing to open our markets to our manufacturers."
That is a condition which existed some time ago. We know that Governor Foss in the state of Massachusetts, in appealing to his people, drew particular attention to the fact that $500,000,000 of American capital had been invested in industries in Canada because they were compelled to come to this country to obtain the market of which they were deprived by reason of the tariff of Canada against them. I do not see how, with such evidence before us, there can be any ground for arguing that this policy has not been a good policy for our country.
My hon. friend from Guysborough (Mr. Sinclair) in his closing remarks made one or two observations to which I wish to refer. I am surprised that my hon. friend should draw any comparison between the conditions under which the contingent was sent to fight for the Mother Country in South Africa in 1899 and the conditions under which the immense body of troops was organized to assist the Empire in the present crisis. I am surprised also that he should refer as he did to the efforts of the Militia Department in the organization of the camp at Valcar-tier. It is quite possible that, with the short time at the disposal of the department an(I the very extraordinary conditions that existed, mistakes may have been
made in connection with that camp, but I think it 'is a tribute to the capacity of this department of the Government, and of the Government itself, that so enormous a camp should have been organized in so short a time, gathering men from the four quarters of this great country, equipping them, and sending them out within the space of a few weeks. I had the pleasure of visiting the camp myself, and was very much impressed with the wonderful executive ability and energy displayed and with the wonderful things accomplished in so short a time. The contingent for South Africa, to which my hon. friend alluded, and which he compared with the contingents that the Government is sending forward to-day, consisted, if my recollection serves me well, of about three thousand men. I do not know how many trained regular soldiers we have in the country at this time, or how many we had at that time, but I think that a draft of men could have been made at twenty-four hours' notice from the regulars stationed in barracks of the Dominion at that time, and there would be no reason wjiy that contingent should not have sailed within a week of mobilization. Aside from that, we know that at that time the sea was not menaced with hostile ships. In the present case, it took a considerable time to get our men across the ocean. We know that care was necessary, and that the Government showed its wisdom in taking precautions against molestation by pirate submarines or enemy battleships on their way across the sea. It is a tribute to the power of the British navy, as well as to the organization completed here, that so large a number of men-I understand the largest body of armed men that up to that time had ever been transported across the Atlantic, were carried in safety. And to-day they are in the trenches, fighting for Canada and for the Motherland. We realize that this war is no more the war of the Empire than it is the war of Canada. We do not regard ourselves as fighting England's battles, but as fighting our own battles. And if there is one thing on which this country and the Empire are to be congratulated more than anything else, it is that Britain's command of the sea enables commerce to cross and re-cross absolutely unmolested. If we have so little commercial disturbance in our country today it is due directly to the power that the British navy wields. In view of the protection that has been afforded us not only now but in former times and that has thrown its sheltering arm around our country, we are responsive to the call of duty, which is
the call of privilege, to serve the Mother Country in this trying time.
My hon. friend from Guysborough also referred to the British preference. I would like to ask hon. gentlemen opposite who do dot see eye to eye with us in this matter how they can logically oppose the increase of the preference unless they oppose increase in the duty on raw materials. The revenue has to be raised, and they concede, 1 believe-I do not see how they can refuse to concede-that we must have raw materials for our industries. A small duty must be paid on those materials in order to produce revenue. Now, in Great Britain raw materials are free, though they come from the four quarters of the globe. Would it be just to our manufacturers here to propose that they should pay a tax of 7J per cent on raw materials and allow the manufacturers of England, who have their raw materials free, to send their products here to compete with our labour? In other words, is it reasonable that we should put a handicap of 7\ per cent on our manufacturers? Even if it were said that the handicap is not so great, the best that can be said is that while the increase is generally 7i per cent the increase under the preference is 5 per cent. Hon. gentlemen opposite have been trying to draw a red herring across the trail on this subject of the preference. I think the Finance Minister put the matter very well yesterday when he defined " preference " when he said that a preference was an advantage given to one country over competing countries in the markets of another country.
The net result of the increase in the British preference is that to the extent of 2i per cent Britain is given a greater advantage over foreign competitors in the Canadian market than she had before. I do not think for one moment that there will be any criticism of this increase in the old land; nor do I think that there is any just reason why hon. gentlemen opposite should criticise it here. Evidently their only reason for doing so is to attempt to prejudice the minds of the people by asserting that we are fighting the Mother Country with tariffs while our men are fighting in the trenches. If we had taken any action other than that which has been taken, I am sure it would have been a gross injustice to the manufacturers of this country.
I have watched with very much interest the course taken by hon. members of the Opposition for many years past, and I have
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
Mr. Speaker, I followed with very much interest the remarks of the hon. gentleman from Middlesex (Mr. Glass). He made a very moderate speech, somewhat lengthy perhaps, but that of course is to be pardoned. He touched on many matters which to my mind are hardly relevant to the discussion of this Budget. He referred, among other things, to the reciprocal trade proposals that were before the country in 1911. He anticipated that that might be a live issue in the coming election. I may tell the hon. gentleman that in my judgment it will not be an issue in the coming election. Conditions have changed since it was a live issue. So far as the maritime provinces are concerned, we appreciate very highly the reduction of tariff made by the United States. It has been a great boon to the producing interests of the maritime provinces. It has enabled the producer to earn a very much better livelihood than ever befofe. The pockets of the producers have been very much enriched because of it and I do hope that although we may be compelled under the present circumstances to put an increased duty on natural products from the United States, our friends across the line will not change their tariff which is so favourable to our Canadian interests, especially in natural products. The hon. gentleman has asked if it would be justice to put a duty of 7) per cent on raw material coming from the United States or
a foreign country into Canada to be manufactured in Canada, and not put a corresponding duty on the manufactured article. The hon. gentleman must not forget that at the present time the manufacturer has an extra duty over and above the 7i per cent, ranging from 20 per cent to 30 per cent; and with reasonable facilities and with capital procurable at a not unreasonable rate of interest, there is no reason why manufacturers in this country should not compete successfully with such a duty as this in their favour.
If the Minister of Finance were in his S' at it would give me very much pleasure to convey to him my congratulations on the Budget which he presented to the House. It also would give me very much pleasure to say that I would have been glad to have been here to listen to that address. I regret that I was not able to be here, and the reason I assign for not being able to be here is the war. I am quite sure if I were asked to establish that, I could establish it with as much success as has attended the attempt which has been made to establish that a customs duty applied for current revenue is a war tax. Let me join hands with the hon. gentlemen on this side of the House in saying to the Government that they have our hearty sympathy and our support in the efforts that they have made to stand by the Mother Country in this time of extremity. It is certainly a great struggle that the Empire is engaged in, and to Canada as a daughter nation I am sure it gives pleasure to be able to do our little part in sending our sons to the front to fight the battles of the Empire, which are practically our battles, because on the success of the Empire depends the freedom of our firesides. I wish heartily to concur in the vote for $100,000,000 for the prosecution of the defence of the Empire. I also consider it a pleasure to be able to congratulate the Finance Minister on the very favourable arrangement he has made for securing money on reasonable terms for this great purpose; and I say further that if another $100,000,000 is required we shall come to the rescue and do our part. We shall not fail to do our full duty as His Majesty's loyal Opposition to support the Government in their aid to the Empire for the defence of this great, young nation of ours. If I may be allowed to quote from Holy Writ, "To-morrow shall be as this day, and much more abundant." We are willing to give $100,000,000 to-day; and to-morrow, if
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.
000 which will go into the Dominion treasury. That is exactly how this taxation will work out. It is reasonably fair to state that it is burdensome. If the burden cannot be helped, that is another matter. It is the duty of the Government to see if there is not some other way to find the money than to make the taxes upon the farmer and the artisan burdensome.
I want to refer to barrelled pork which at the present time is dutiable. The total importation of barrelled pork in brine in 1914 was 11,960,408 pounds, valued at $1,210,473. On this value we paid a duty of $237,525.46. The total importation of barrelled beef in brine was 1,503,606 pounds, valued at 116,000. The duty paid on it was $12,000. The total importation of bacon and hams was 7,000,000 pounds, valued at $1,250,000, and the duty paid was $140,000. The duty collected by the customs on these three items therefore amounted in round figures to $390,000. If you add 74 per cent more duty you get an increased taxation of $180,000. If that is all, it means that the consuming, public must pay that same rate of duty to the packers of the Dominion, because, because their prices are put on a par with what these goods can be laid down for. I think I would be safe in saying that the packers in Canada produce more than half of the barrelled pork, and beef, and bacon and hams that are consumed in Canada. Therefore, on this food commodity the people of Canada will be paying a taxation of $379,000. I think that every hon. member should understand the whole effect of the proposals of the Government.
Yesterday the Minister of Finance, in referring to the legislation under the war revenue Budget, said:
Does any person grudge any portion of those taxes?
I say no. But he says:
Now, come to the other taxes, the sums I am raising by means of tariff increases. What has caused me to raise the tariff? I pointed out that my borrowings were cut off in the markets of the world; I cannot go to the London market and get a dollar except with the consent of the British Treasury.
If the money cannot be got except in this way, the people of this country must bear the burden. The minister, however, does not tell us in that statement that he cannot borrow the difference between the current revenue and the current expenditure of $20,000,000. If he could borrow it, it would have been very much better to borrow it. It is only fair that future generations should to some extent bear the brunt of the extreme
situation in which we are placed. If the money cannot be raised, and if the minister can suggest no other means of raising it, then I suppose the majority of the House will approve of the proposals of the minister. I presume that he considers there is no other way to get that money.
While I will not find so much fault with the 74 per cent he is putting on foreign goods and raw materials imported into Canada, I take strong exception to his attempt on this occasion to tax the raw material and the manufactured article imported from the United Kingdom.
The hon. Minister of Finance asked us what he is to do about it. He tells us that he has to put a duty of 7J per cent on the dyes and other raw materials entering into manufactures, which duty the Canadian manufacturer must pay. He referred especially to cotton. I think he might very well have said to the Canadian manufacturers: We must put on this duty of 7i per cent, but I want to show you where you will have the benefit as against the British manufacturer even though there is no change in the duty on goods from the United Kingdom. How could he have done it? In the first place he could have pointed out that the duty of 74 per cent on raw materials does not amount to more than 3 per cent on the finer line of manufactured textiles. On cheap grey cottons and common duck, it might be as high as that, but on the finer goods I think he could easily have shown that this duty of 74 per cent on the raw material would not have amounted to more than 24 per cent on the manufactured article. On the other hand, what is the British manufacturer up against? Let me tell you a little experience I had a few days ago. I sent some canned lobsters to New York for forwarding to France, and I booked freight ahead for a certain proportion of that consignment. Later I found I had another shipment to make and I asked the broker for the rate. During the interim ocean rates had gone up nearly a hundred per cent. Now, if the Canadian merchant- putting it that way in this case, though the same applies to the manufacturer-wishes to buy the goods from the manufacturer and bring them across the ocean to compete with Canadian manufacturers, is not he obliged to add these extra rates of transportation to the cost of the goods? Will not that help the Canadian manufacturer to compete at any rate to the extent of 24* per cent? More than that, might nqt the minister have said to the Canadian manufacturer: The British manufacturer must
transport that cotton from New Orleans to the United Kingdom at double rates of freight, and we will not touch the duties from the United Kingdom either on raw material or on manufactured articles. My hon. friend from East Middlesex (Mr. Glass) told us the British preference was not decreased, and that the British manufacturer has now a greater preference in our markets against the foreign manufacturer. I do not deny that. But would it not have been a magnanimous thing for Canada to have " let well enough alone," to use an expression at one time very popular with hon. gentlemen opposite, especially when we help ourselves by helping the trade relations between the Motherland and this great daughter Dominion? So I think it was unwise-I do not say it was unpatriotic, because I do not believe there is an unpatriotic man in the House-to touch these duties under present circumstances.
I have shown that this duty on raw materials would represent only 24 per cent on the manufactured article. And what protection-if I may use the word which hon. gentlemen opposite have sought to make their own, but which they have urged very strongly upon us-what protection has the Canadian manufacturer of cotton or woollen textiles as against this 24 per cent represented by the duty on raw material? I have a little table here which I will not take time to read, but the general result of which I will give. On woollen goods that come into this country from the United Kingdom there is an average duty of 25 per cent. And do you mean to tell me that the Canadian manufacturer cannot afford to pay 24 per cent when he has a protection on the manufactured article of 25 per cent? It seems to me the minister might very well have gone that far. I think that is a good reason why I can support the amendment presented by my right hon. leader. That amendment states that the Government's fiscal measure is particularly objectionable because it places extra barriers against British trade. Another reason-and I have dealt with that also-is that while this means increased taxation especially on goods from the United Kingdom, it will yield little or no revenue. Certain commodities do yield a very little revenue, but as to others, I think the amendment sets out the facts as they are.
The Minister of Finance asked us three questions yesterday, or he put the matter before us in three phases. He practically asked us to answer these questions: first, shall we cease to send troops? Well, so far 59
as I am concerned, I say send more troops if needed. Second: he puts it up to us to suggest an alternative method. Can I suggest an alternative method? Yes, my suggestion is that the British preferential tariff be not disturbed.
Subtopic: THE BUDGET.
Sub-subtopic: PROPOSED WAR TAXATION.