April 6, 1916

CON

John Hampden Burnham

Conservative (1867-1942)

Mr. BURNHAM:

If the people are living under a delusion, how does it come about that there are complaints?

Topic:   QUESTIONS.
Subtopic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

No complaints? My

hon. friend is wrong in saying that there are no complaints. -

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Subtopic:   TAXATION OF PROFITS.
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CON
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

It is a notorious fact. I am saying that the delusion is harboured toy hon. gentlemen like my friend.

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Subtopic:   TAXATION OF PROFITS.
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CON
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

He is under the delusion that this ^country is living in a period of such prosperity that no one is suffering from the high-pri'ced commodities which are of daily domestic use. For this reason, therefore, Parliament should take into consideration the question of the elimination of the surtax of 7j per cent, first, because it gives us no substantial additional revenue, and, secondly, because it operates as an unnatural degree of protection, and works out as practically a prohibition against importation, and consequently con-

tributes to the making of high prices of products.

We require additional revenue in this country, and ,we upon this side of the House, realizing that fact, do not Object to any efforts made by the Government in order to secure that additional revenue. Our interest account is climbing. Very shortly we shall be obliged to meet a very heavy pension list. There will be a diminution in excise revenue from liquors because of the general adoption of prohibitory measures by the several provinces. Therefore, for these and other causes, it is desirable that our revenue should be increased. There are some hon. gentlemen who consider it is not good business to impose additional taxation upon the people of a country in a time of war. Personally, I do not agree with that view. As I have pointed out on more than one occasion in the past, there are two ways of securing revenue: first, toy the imposition of fresh taxation measures, and, secondly, by measures of internal economy and the abandonment of expenditures that can be postponed, or that can be done away with entirely. These are the only two methods of meeting the financial necessities of the country to-day.

We upon this side of the House have frequently endeavoured to impress upon the Government the great necessity of economy in expenditure. We have urged this in the House and in Committee of Supply on many occasions, but I doubt very much if we have succeeded in impressing the members of the. Government as much as we hoped to do, or as we believe ,the country would like them to be impressed. The people will not object to taxation provided that it is used for the purposes for which it is imposed; but they will object to any taxation measures to produce revenue if a saving corresponding to the amount of such taxation might have been made in our ordinary expenditures which would have obviated the necessity for this taxation. There is- no purpose in securing twenty-five or thirty million dollars of revenue by fresh taxation if an equal amount by careful, economical administration might be saved in our general expenditures.

I think that that is a statement which can scarcely be gainsaid, and I am glad to see the hon. member for West Peterborough concur in it.

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Subtopic:   TAXATION OF PROFITS.
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CON
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

It is our duty as representatives-particularly is it the duty of

hon. gentlemen on this side of the House- to continue to press upon the Government the great necessity and importance of reducing expenditure to the lowest possible amount.

The member for Edmonton (Hon. Frank Oliver) the other night read a statement recently made by the Prime Minister of Great Britain which I should like again to read, because some of the members present to-day may not have heard the member for Edmonton give that statement to the House. The statement of the Prime Minister of Great Britain, which refers to expenditure, was as follows:

In view of the stupendous and unprecedented liabilities and obligations which the war is imposing upon us, if we are, as I think we are still agreed that we are to subordinate every other purpose to its effectual and successful prosecution, one of the first means which prudence and policy prescribe in the attainment of that object is the temporary reduction in every form, both of public and of private expenditure, which can be shown not to be directly conductive to that purpose.

Hon. gentlemen opposite, in answer to my contentions, will say: we have reduced very considerably the expenditures in this and that department-and they will point to very substantial reductions in what we call the larger expenditures. But the Government cannot effect the necessary reduction in public expenditure unless they recognise the value of reduction in the expenditures in connection with smaller matters; unless they go into the expenditures of the various departments in detail and endeavour to save here and there this and that amount, be it small or large. It is not sufficient for the Government to postpone the expenditure of amounts of money which involve millions of dollars, because the millions are, after all, composed of thousands, and if they can save the thousands they can effect a saving of millions.

We have discussed the expenditures of several departments here on many occasions; I wish very briefly to address myself to the House on that subject. We have frequently referred to the expenditures of the Public Works Department. True, there has been a reduction in that department. In the fiscal year ending March 31 last there was a very substantial reduction in expenditure over that of the previous fiscal year. But this reduction, after all, was not sufficient. I was surprised when I saw the character of some of the expenditures made up to December 31 last. I could understand that for the fiscal year ending March 31, 1915, we would have some large expenditures which had been commenced before the beginning of the war and which it was necessary for the Government to proceed with, but for the year ending March 31 last there were many expenditures upon public works which might well have been postponed. The expenditures of that department for 1911-12, as has been frequently pointed out, amounted in round figures to $10,000,000; they amount to over $12,000,000 for the year which has just ended. Will any man say that the Public Works Department could not have conducted its affairs during the past year with $10,000,000 as well as it could in 1911-12 under much more favourable conditions? Had they done this it would have effected a saving of $2,000,000, one-quarter of the amount which the Minister of Finance will get out of the operation of the Bill which is now before us, I assume that he contemplates a total revenue from the business profits tax of between $25,000,000 and $30,000,000 in the three years, or an annual revenue of about. $8,000,000. The Minister of Public Works and all members of the Government say that they do not purpose expending all the amounts set forth in the Estimates. Here let me say that when the Government take the position that they are justified in asking Parliament to vote sums of money which they do not contemplate expending, they are assuming a position which is constitutionally wrong. Hon. gentlemen have read an address delivered by a member of the parliamentary press gallery at a political club in Montreal the other day in which he dealt with the idea that Parliament is abdicating its true functions. Unfortunately, there is a good deal of truth in that view. In this country we have not Government by Cabinet; it is for Parliament to determine what moneys shall be voted and the purposes for which those moneys shall be expended. It should not be left to the discretion of members of the Government to determine whether they shall or shall not spend certain moneys. If Parliament does not contemplate the expenditure of certain moneys, the items in reference to them should have no place in the Estimates, and constitutionally speaking the Government are taking a false position when they ask us to vote moneys which they do not purpose expending.

Let me take another illustration in order to point out that the Government are not properly seized of the necessity of a proper investigation of the smaller expenditures

with a view to reduction and the curtailment of the total expenditure. In 1911-12 civil government cost the country $4,774,000; in 1914-15, $6,157,000, and we are asked to vote for next year $7,240,000, an increase of nearly 80 per cent in four years. The, fact that the .Estimates provide for a larger amount for the present fiscal year than was expended last year is an intimation that there is to be an increase in the Civil Service somewhere, either in numbers or by way of salaries. I think I may say without fear of successful contradiction that there cannot conceivably be anything to justify an increase in the cost of administration on account of civil government. There are many branches of the public service where the employees can have very little to do to-day. It is true that in one or two departments the number of employees has had to be increased. I assume that in the Militia Department a great number of clerks must have been added to the staffs since the beginning of the war. I can understand the necessity for that. I notice by a printed document which was distributed to the members of the House today that a great number of persons have been employed and are being employed by the War Purchasing Commission, numbering some 200. I suggest, and I think it is a fair suggestion, that the Government should have taken employees from these departments of the Government in which work has decreased and transferred them to those departments where additional work was created by the war. If 200 or 300 more people are employed by the Militia Department, if 200 persons are employed by the War Purchasing Commission, why could there not have been a transfer of civil servants from other branches to these particular departments, thus effecting a saving? The fact that civil government next year will likely cost over $7,000,000, as against something like $4,500,000 four and one-half years ago, is deserving of the investigation of Parliament and the consideration of the Government. I venture to say, even in a dogmatic fashion, that there can be no justification whatever for the whole of this increase. And we must remember that if in this way $1,000,000 could be saved, that would provide one-eighth of the total amount which the minister expects to receive from the Bill we are now considering. I say it is better to get a million dollars of revenue in that way than by taking it from the pockets of the people, and I know rMr. A. K. Maclean.]

that my hon. friend from Peterborough will agree with me.

Topic:   QUESTIONS.
Subtopic:   TAXATION OF PROFITS.
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CON

John Hampden Burnham

Conservative (1867-1942)

Mr. BURNHAM:

Since my hon. friend

has referred to me, I think the statement that there is no justification for this increased expenditure certainly ought to be revised and ought not to go to the country.

Topic:   QUESTIONS.
Subtopic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

I should not like to be understood as saying that there is no justification for any increase in any of the departments of the Government, but I repeat that I doufbt if there is any reason for that increase from $4,470,000 in 1912 to $7,240,000 in civil Government for the present year. It may he that my hon. friend may be able to justify some slight increase, but we will not occupy the time of Parliament this afternoon in discussing that. I was speaking in a general way.

Let us take the large expenditures in connection with immigration. This was discussed at length a few evenings ago, when the Minister of the Interior was in Supply. We find that the expenditures for 1914-15 were larger than ever before in the history o'f this country. The amounts which we are asked for the next fiscal year *are very substantial. Our im-

4 p.m. migration has fallen to a negligible quantity, and it is very doubtful indeed if we should even make any great effort at the present moment to secure immigration into this country. I think it is hardly fair to go to Great Britain and the European countries which are our Allies and there carry on an immigration propaganda.

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Subtopic:   TAXATION OF PROFITS.
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CON
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

Many things contribute to operate against a successful immigration campaign in the United States at the present moment. I do not say that we should abandon altogether our efforts to secure immigration, but I do say that we might very well pause and determine what will be our policy in respect to immigration before we again embark upon any vigorous policy in that regard. It is true, as has been said by some hon. gentlemen opposite, that the Immigration Branch has in its employ, in Europe, the United States, and elsewhere, a great number of officials who have been long engaged in this work, and that it would be unfair and unjust to deprive them of their employment. My answer to that is that their services could be transferred from that branch of the public service to another department of the service.

that other work could .be found for them to the advantage of the country. Closely related to immigration, there is the quarantine service, and while the expense in that connection is, relatively speaking, small, still it is quite a substantial amount. One would think that having no immigration or practically none, we would see some diminution in the cost of administering the quarantine branch, particularly at the eastern ports. During the last calendar year, there were landed at Halifax only 1,425 immigrants; at St. John, 1,697; at Quebec, 6,168; at Vancouver, 118; and at Victoria, 477; practically none. One would imagine that with this small immigration the expenditures of the quarantine branch might be very well reduced to a small amount. Surely the services of most of the medical men employed as quarantine officers at the several ports might be dispensed with. They are usually professional gentlemen who have private practices, and they could be very easily removed without causing any hardship. For instance, I find in the port of Halifax this condition, that there are there three medical men employed at yearly salaries of $1,200, $1,800 and $1,200 respectively. That is $4,200 altogether. During last year only 1,425 immigrants landed there. Two of these medical gentlemen have enlisted with pay. 1 do not see why medical gentlemen employed in the quarantine branch, if they enlist, should receive their salaries. I cannot understand that. It is surely unfair. They were only employed for a few months in the year at the most, and I say it is unfair to pay them their usual salaries. It is absolutely unfair, and there is no justification for it whatever. I find that one other medical officer has enlisted without pay. but another man has been appointed in his place. Among the quarantine officers at Quebec there are a great number of highly paid men and quite a number who are paid small amounts. They are employed for only a few months in the year. Some of them are medical gentlemen ' and have large practices, and I submit it is most objectionable that all these men should be continued in employment when there is practically no work for them to perform. These emjployees occupy quite a different position from the ordinary civil servant.

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Subtopic:   TAXATION OF PROFITS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER:

Do they receive both salaries?

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Subtopic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

Those who have enlisted? Apparently yes.

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Subtopic:   TAXATION OF PROFITS.
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CON

Frederick Laurence Schaffner

Conservative (1867-1942)

Mr. SCHAFFNER:

That is not the custom in the Civil Service.

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Subtopic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

I think it is true in that case. That is a relatively small matter, but a very great saving could be affected; it perhaps would amount to $100,000 anyway, and I say that that is worth saving. During the present and last session the Minister of Finance, in explaining his revenue taxation measures, stated that from this particular source, or that paritcular source, he expected to obtain $100,000 in revenue. I emphasize this point particularly for the purpose of pointing out to hon. gentlemen that a very great saving could be affected in our expenditures if some attention were paid to the smaller amounts. This is perhaps a small matter, but I refer to it more to illustrate the possibility of a total saving through various branches of the public service, if we lopped off $100,000 here, and $200,000 there, and a million dollars somewhere else.

Take the Indian Branch of the Department of the Interior. The amount there expended is quite substantial. In 1911-12 it was $1,756,000. In 1914, it had grown to $2,400,000, an increase of $700,000, without absolutely any justification whatever. I referred to this particular matter in discussing the Budget at the last session of Parliament. I think I gave to the House very cogent reasons why the Government, in increasing their expenditures in respect to this department, were open to censure, and I venture to say that I was not successfully answered. The expenditures for this branch for 1916-17 are estimated to amount to $1,965,000. There is no reason in the world why at the present moment, in connection with the Indian expenditures, we should not get back to the expenditures of 1910 and 1911. We would affect thereby a very considerable saving. There has been a very notable increase in my own province in connection with this branch.' The year before last a man was appointed as inspector who was not needed. The man who was then inspector had not enough to do, and did not want an assistant, and the Government could not even tell us who was responsible for the appointment. The Minister of the Interior threw the burden upon the Prime Minister and the Prime Minister disclaimed any knowledge; and the result was that not a single member of the Government would assume responsibility for this appointment. I venture to say that the person thus appointed as

inspector has not performed twenty-four hours' real service since his appointment. There is no reason why he should be retained; there was no reason why he should have been appointed. In my own province there are scores of doctors employed by the Interior Department as medical attendants for the Indians who cannot perform .any real service, and who were never expected to do so. Even if we cannot agree upon the desirability of dismissing them entirely and abolishing the office, surely hon. gentlemen opposite will agree with me that for the moment we should temporarily dispense with the services of most of them, *and thus effect a very considerable saving in this particular service.

Let me repeat that, in the Indian branch of the Department of the Interior, we could effect reductions in expenditures which would equal one-ninth or one-tenth of the total amount which the minister estimates to recover from the tax upon business profits. .

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Subtopic:   TAXATION OF PROFITS.
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CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN:

I heard the hon. gentleman say that two medical officers employed by the Government in the city of Halifax had enlisted, and that they were receiving double pay. I wish to make the statement that that is incorrect. A moment ago I telephones to the Immigration Commissioner, and he says they do not receive double pay.

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Subtopic:   TAXATION OF PROFITS.
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

Why ask the commissioner? You might as well ask my hon.' friend from Richmond (Mr. Kyte.)

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Subtopic:   TAXATION OF PROFITS.
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CON
LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN:

He has nothing to do with it at all.

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Subtopic:   TAXATION OF PROFITS.
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April 6, 1916