May 10, 1921

THE CONSERVATION ACT


On the Orders of the Day:


L LIB

Henri Sévérin Béland

Laurier Liberal

Hon. H. S. BELAND (Beauce):

The

Prime Minister is not present or I would ask him whether it is the intention of the Government to introduce a Bill this session to repeal the Conservation Act, as foreshadowed in the speech from the Throne.

Topic:   THE CONSERVATION ACT
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UNION

Charles Joseph Doherty (Minister of Justice and Attorney General of Canada)

Unionist

Right Hon. C. J. DOHERTY (Minister of Justice):

I am not quite sure, but I am strongly of the opinion that it has been introduced in the Senate.

[Mr. Guthrie.l

Topic:   THE CONSERVATION ACT
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BANKRUPTCY ACT AMENDMENT


On motion of Hon. Hugh Guthrie (Acting Solicitor General), Bill No. 118, to amend the Bankruptcy Act, was read the third time and passed. f!J


THE BUDGET

DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE


The House resumed from Monday, May 9, the debate on the motion of Sir Henry Drayton (Minister of Finance), that Mr. Speaker do now leave the Chair for the House to go into Committee of Ways and Means. -


UNI L

William Stevens Fielding

Unionist (Liberal)

Hon. W. S. FIELDING (Shelburne and Queen's):

Mr. Speaker, in one important

respect the task which falls to my hon. friend the Minister of Finance (Sir Henry Drayton) in these days is one that must demand our sympathy rather than adverse criticism. At a time of severe depression, financial, industrial and commercial-a condition which, I am afraid, will have to become worse before it can be better- the hon. gentleman is called upon to devise ways and means for raising enormous sums of money, sums so large as to be almost beyond the comprehension of the average citizen, sums so large that, by comparison, the Budgets of a few years ago, large as they seemed in their day, dwindle into insignificance. In a very large degree we recognize that these demands which the hon. minister is obliged to make are the result of the war, and we must treat them accordingly. The people of Canada willingly, cheerfully, even enthusiastically, entered into the Great War; and now that the war is over, and the day of settlement is come, we must all be prepared to accept the consequences with the utmost possible equanimity. However much we may differ from my hon. friends opposite with regard to some of the methods they employ in the raising - of these moneys, and in their distribution, in all that makes for meeting our obligations arising from the war, in all that may be necessary to make provision for the dependents of those who made the supreme sacrifice, in all that may be necessary to make adequate provision for the men who have come home wholly or partially disabled, in all that is necessary as arising from the war, we desire to share with hon. gentlemen opposite the responsibility and the honour of the occasion. It is when we come to questions not directly arising from the war that we are obliged to differ from those hon. gentlemen.

The situation is a very grave one financially. It calls for very serious deliberation, and for a larger measure of economy than the Government have been able to observe. With the details of the proposals which my hon. friend submitted to the House last night, I do not propose to deal at any length, although some of them I may refer to. They will require more careful consideration than any of us can give on a moment's notice. There are, however, some general principles involved in the minister's Budget to which we may properly make reference. I notice that my hon. friend has made no change in the income tax. It was not without some difficulty that the previous Government, of which my right hon. friend the Prime Minister was a member, under the leadership of the late Prime Minister (Sir Robert Borden), were induced to take up the question of the income tax. They clung to the old notion that all you had to do to raise money was to boost the tariff, and for a time they seemed to rely on that theory. However, sounder judgment prevailed in the end, and they adopted the income tax. If they had deemed it necessary even to increase the tax at the present time, I do not think any of us on this side could complain; but the tax has become a rather serious burden, nevertheless. Now, one of the virtues of the income tax is that the people know exactly what they are paying; while an alleged virtue of indirect taxation-it is not really a virtue, but rather a weakness, as a matter of fact- is that the citizen pays his money cheerfully and is not quite aware of what he is doing. And that is a fact. It is economically better to have direct taxation than indirect, and yet indirect taxation has a convenience and an advantage which often recommend it to favourable consideration. In this case the Government are raising very large sums from the income tax and we commend them for it. In the first year, or possibly two years, of the imposition of the tax there was some complaint, perhaps not without reason, of laxity in the enforcement of the law. Possibly that condition was unavoidable, as the system was a new one and the machinery was not complete. But I want to do the Government the justice to say that if there was any laxity at the beginning they are now making amends for it and are apparently putting forth great efforts to collect the income tax. I commend them for so doing, although I cannot commend the methods they are pursuing. This tax is a great burden to-day. It is a burden to people of moderate means and even to those who are in the possession of large incomes, who may not find it very easy to provide quickly large sums that are needed. I think, however, that, considering the novelty of the tax, and the indisposition generally of people to bear this direct taxation, the effort of the Government should be to apply the most convenient method of administering the law. It would be absurd for me to say that the Government have tried to find the most inconvenient method possible; that would be silly. But I think I may say that if they had been aiming to devise an inconvenient and troublesome method, they could not have succeeded in hitting upon one more difficult than that which is at present in operation. The complaint to-day with most people paying the income tax is not with the tax itself. The tax has to be paid, although it is a burden. But the penalties which my hon. friends are imposing in their efforts to get money are the cause of much vexation', and give just cause for complaint. I recognize the fact that the Minister of Finance, like any other creditor, must get his money, and he must exercise a little pressure sometimes to obtain it; but I do not think he is justified in out-shylocking Shylock by charging 60 per cent interest to the poor devil who fails to pay promptly. Yet that is what my hon. friend is doing. Shylock demanded his pound of flesh because it was so nominated in the bond. It is not nominated in the bond that my hon. friend shall charge some poor defaulter with 60 per cent interest because he happens to be a short time behind with his payment.

That is with regard to the past. With regard to the methods employed during the present year, if there is anything in the world calculated to give every Canadian a headache-to-day, now that there is no whisky to b.e obtained, it is the making up of the return which the hon. gentleman calls for. It is exasperating; it is creating a new profession, the business of making up returns. The average man cannot make it up with satisfaction to himself, and I trust that my hon. friend, who has once or twice referred to some change which he intends to make, will make the thing a little less disagreeable than it now is. Here is a description of the system which the hon. gentleman has employed. It is not my description-it will only take a minute or two to read-it is a description given by one of the great trust com-

panies of Canada, the Royal Trust Com pany, which issued a book of instructions to tell income taxpayers what they should do. I am now quoting:

"The citizen must not wait till he is asked for his tax; nor may he leave the calculation of this amount to the officials. He must calculate it himself and pay it without being asked. Along with the form showing his income for 1920 he must send in (by April 30, 1921) at leat one-fourth of the actual tax which he reckons himself liable for-the rest being payable later with six per cent, interest in three two-monthly instalments.

"If he puts the figures too low he becomes immediately liable to several penalties, even if his error is unintentional. The government officials have no power to let him off. The law decrees the exact .sum which he must be fined,

"For instance: If he understates his income by a trifling amount, up to one-tenth, he must pay income tax on the deficiency with ten per cent interest. If he understates his income by more than ten and less than twenty per cent, the fine is one-half the amount of income omitted-not merely half the tax. If the deficiency is twenty per cent, or more, the whole of the unreported income is taken. Thus, if he states his income as $4,500, when it is $5,650, he is fined $1,150, besides of course the unpaid tax.

"If he is late in sending in his return, twenty-five per cent, is added to his tax.

"If he pays less than a fourth of the tax as estimated by himself to begin with, or less than the proper amount in the case of later instalments, twenty-five per cent, of the deficiency (and in no case less than $5.00) is added to his tax. The same penalty is prescribed for not paying within thirty days any sum demanded in addition to the tax as estimated by himself.

"If he is asked for further information and is late in sending it, or if he fails to keep such adequate records and acoounts as the Finance Minister may prescribe, he may be fined $100 a day for his default; and a false statement may be punished with a $10,000 fine and six months in jail."

Now I humbly submit, Mr. Speaker, that the income tax is burden enough to impose on the people without adding all these pains and penalties which are, I do not hesitate to say, of a very ridiculous character. I do trust that before the session is over my hon. friend will make such changes as will, at all events, enable the unhappy taxpayer to feel that the thing has been made as easy as possible.

Mr. BUREAU You might add flogging.

Topic:   THE BUDGET
Subtopic:   DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE
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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

Yes provided he is

under twenty-one years of age.

Now the present financial situation is such that we need to think seriously of what we are to do to meet it. I am going to read the opinion of some wise men as to what are the sound principles that should govern public bodies in meeting the difficulties of the situation. We were represented at the Brussels Conference, a meeting of very prominent economists and

financial men some months ago, by three delegates, one of whom was my hon. friend the Minister of Militia (Mr. Guthrie). The Conference adopted a number of resolutions to which I nfa . have cause to refer as I proceed. Here is one of them and the explanation given by the president:

The President: The third part of the resolution says: It is imperative that every Government should, as the first social and financial reform, take the following steps:

(a) Restrict its ordinary re-current expenditure, including the service of its debt, to such an amount as can be covered by its ordinary revenue.

(b) Rigidly reduce all expenditures on armaments in so far as such reduction is compatible with the preservation of national security.

(c) Abandon all unproductive extraordinary expenditure.

(d) Restrict even productive extraordinary expenditure to the lowest possible amount.

This resolution was carried unanimously, and approved by the Government of Canada through the Minister of Militia who, as I have said, was present. I deeply regret to say that though the Government of Canada supported that excellent proposal at Brussels they do not seem to be willing to support it at Ottawa. There does not seem to be as much zeal for sound financial principles in the climate of Ottawa as there was in the delightful climate of Brussels. Now it seems to me that if we inquire into the manner in which we are disposing of the public funds we shall have some difficulty in bringing all our appropriations within the four corners of this excellent resolution. We are asked by the ministers of the Government, from time to time, to pass what I may call "a self-denying ordinance". We are all told that we must not make unreasonable demands upon the Treasury. Each one of us, no doubt, in his community has some public work which is demanding attention-it may be a public wharf, it may be a pier, it may be a breakwater for the fishermen, it may be a public building; all these things, worthy and commendable in themselves, are pressing upon us. But when we present them to the Government we are met with the declaration that these are not urgent matters, that in these days we must have economy, and these things must wait. And it is a reasonable answer if the Government would only live up to that idea all through-then we might have no difficulty in explaining matters to our constituents. The trouble is that when temptation-say an election or something of that kind

arises, my hon. friends are not willing to be the exemplars of the excellent doctrine

which they preach; they are quite willing to yield to the temptations which arise, and to make appropriations which are not of an urgent character. Now, if we want a sample, let us take the case of the dry dock out at Esquimalt, Victoria. Victoria is a beautiful city, a lovely residential city, and a city of commerical importance too. As I think of the prairie farmer and look ahead and see the day when, as the fruit of his toil-he is not going to accumulate much just now; but when as the fruit of a life period of hard work-he acquires a competence and wants some place to rest and enjoy the evening of life pleasantly, I do not think he could do better than turn his vision out to the Pacific and sit down in the beautiful city of Victoria. It'has advantages, it has charms; but what earthly reason was there which demanded that millions of money be spent on a dry dock in the presence of these advantages? I do not think it was even necessary politically. Why, my hon. friend the Minister of Agriculture (Mr. Tolmie) could be elected out there on his personal merits-a good many of us would be willing to vote for him. But the Government do not seem to have had enough confidence in themselves, or in him, or in their cause; and so at a time when they were preaching economy to us they undertook to expend millions of money for this dry dock at Victoria. There is a dry dock, too, at Prince Rupert, which is not very busy; and a dry dock is under contract at Vancouver. Now, as to why, under these circumstances, it was necessary to spend millions for a new dry dock at Esquimalt, where already there was a small dry dock, I do not think any explanation can be given to the people of Canada which will be satisfactory. Each one of us when he goes back to his constituents will be asked: "Why didn't you get this public building? -that public work?" We may say: "Oh, the Government cannot do anything for us, they have not any money." But of course we shall be met with the answer: "They had millions of public money for a dry dock out in Victoria." For my part, I think that case is a very strong illustration of the fact that the Government are not willing to follow out the excellent principles that they laid down in the case of the Brussels resolution. The principles set forth in the Brussels resolution are very sound, but I am afraid they are not going to be carried out to any very great extent.

Now come, if you will, to the question of naval and military expenditures. If anybody says that in this country we have no

need of any naval or military expenditures -once in a while I hear some suggestion of the kind-I do not wish to be included among the list of people who entertain such views. A self-respecting country must have a small standing army, a nucleus that would be available when an emergency arises, and it must have, in a moderate degree, even some naval organization. But, A do humbly submit, this is not the time for these things. My hon. friend the member for Quebec South (Mr. Power), himself a gallant returned soldier, the other day reminded us of an important fact. We have 400,000 trained soldiers in Canada today-the best material for fighting that the world has ever produced. These men can be called upon if any emergency arises. Why we should anticipate any emergency at this time is not easy for anybody to conjecture. If there ever was a time when we had need of but little military expenditure it is to-day, and I believe the men who will be most ready to confirm that view will be the returned soldiers themselves. They have had all the war they want; they want a chance to get back to the arts of peace. And so I say that the military expenditure might well have been curtailed in the present year in larger measure than has been attempted by my hon. friends opposite.

Then, if you turn to the question of naval expenditure, the only good thing to be said in favour of the Government's policy in that respect is that it indicates repentance in sackcloth and ashes for the wrong they did the Laurier naval policy a few years ago. It has that merit, and one should not ignore it altogether. We have all reached the con-clusio nnow that, whether our expenditures be large or small, whatever may be done in the way of naval policy in Canada must be done on the lines laid down in 1909 and 1910 by the Laurier Government; that is, a local navy of a modest character, constructed under advice of Imperial officers and designed to co-operate in time of war with the Imperial navy. That "tin-pot navy," as some of my hon. friends opposite described the Laurier policy of that time, they have accepted to-day, and to that extent I am willing to give them credit. But the volume of money that has been spent in that direction is largely unnecessary. The time will come when we must take larger responsibilities for our share in the defence of the Empire, and the best way we can share in that defence is by making adequate provision, as far as that may be possible, for the defence of our own shores, and in that way relieve the Mother Country of the

Topic:   THE BUDGET
Subtopic:   DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE
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REVISED EDITION. COMMONS


burden which she would otherwise have to bear. In that respect it is gratifying to know that we have reached this common ground, that whatever may be done in naval affairs is to be done on lines which will be no longer the subject of conflict between political parties in this country. The British Government offered the Government of Canada several ships, and in a moment of weakness the Government of Canada accepted the white elephant. We did not need them at that time, we do not need them to-day; but we have them, and since we have them I suppose we must provide decently for their upkeep. But I think the country will say it was an act of unwisdom on the part of the Government to accept this white elephant that the British Government were kind enough to offer. I credit the British Government with the best intentions in the matter, but I do not think we should have accepted their offer. The great need of the world everywhere is disarmament. The efforts of one nation to prepare both in naval and military organization for another war, and then to plead that it is in favour of disarmament, do not seem to result in any progress towards the end desired. Everybody is waiting for somebody else to take the lead. It is to be hoped that the statesmen of Europe may find some basis upon which all countries can begin to engage seriously and to a greater degree than they have yet done in effecting reasonable disarmament. We have not a very extensive organization to disarm, but I think we should be careful at all times not to plunge into naval and military expenditure which is really not likely to be needed, and which, speaking generally, is not going to be of any value. Now, when I come to the question of the tariff it is difficult to be serious in dealing with the convolutions of the Government with respect to the work of tariff revision. There has come to be a well understood rule that the tariff of Canada should be revised about once in ten years. There was a revision in 1897, followed by another revision in 1907. Our successors in office have accepted the rule. If I am not mistaken, the late Minister of Finance, Sir Thomas White, stated in one of his Budget speeches that the time for revision was long overdue. It is well understood that the ordinary process of tariff revision had to be suspended on account of the war. The revision which might have been made in 1917 could not very well be undertaken. The Goijprnment had good reasons for delay -the war was gtill on. But when the war ceased, then the demand for tariff revision began, a demand begun among friends of the Government, as well as by hon. gentlemen on this side of the House. My hon. friend the member for Macdonald (Mr. Henders) in a moment of-shall I say?- indiscretion, told us of what had happened in caucus. He said he had insisted that there should be tariff revision. But they jollied him along somehow or other, and he comforted himself with the idea that it would be all right next year. In 1919 Sir Thomas White, in the course of his Budget speech, spoke of an inquiry that ought to be held. He said: The result of such an inquiry should be a body of information which will enable the Government to effect a general revision of the tariff, fair to all parts of the country and effect ively promoting the national welfare of Canada This inquiry should proceed just as soon as con ditions are sufficiently stabilized to permit it My own view is it might well be commence*, about the autumn of this year. That was in 1919. Well, Sir, the autumn came, but there was no tariff inquiry and no tariff revision. What they did was to send out a polite intimation that everybody who had anything to say on the tariff should send in a letter on the subject. I suppose that was done. At all events there was no tariff inquiry and no revision. The Government again were able to jolly along that portion of their friends who pressed for revision. When it came to 1920 my hon. friend the present Minister of Finance (Sir Henry Drayton), was not lacking in the positive assurance that we were going to have this inquiry and this revision. We brought forth a motion calling attention to the fact that the promises of the Government in that respect had not been kept. The answer was, "Oh, all right, we will have it next year." They have been going on this way for three or four years. I quoted a couple of lines on a former occasion which I might repeat with greater force to-day. In this matter of tariff revision the course of the Government has been to: Promise, prepare, propose, postpone And end by letting things alone_ I want to return to the Brussels conference. I am glad that my hon. friend the Minister of Militia and Defence (Mr. Guthrie) is present. I find that they not only gave consent to the doctrine of financial management which I have read, but they also gave consent to sound tariff principles. Here is the resolution supported by the Government of Canada through my hon. friend the Minister of Militia and Defence: The Conference recommends that within such limits and at such time as may appear possible each country should aim at the progressive restoration of that freedom of commerce- Will my right hon. friend the Prime Minister (Mr. Meighen) note these words?



of that freedom of commerce which prevailed before tho war, including the withdrawal of artificial restrictions on, and discriminations of price against, external trade. Carried unanimously. Another resolution to which the Government of Canada subscribed through their delegate to the International Financial Conference was as follows: The International Financial Conference affirms that the improvement of the financial position largely depends on the general restoration as soon as possible of good-will between the various nations; and in particular it endorses the declaration of the Supreme Council of the 8th March last "that the States which have been created or enlarged as a result of the war should at once re-establish full and friendly cooperation and arrange for the unrestricted interchange of commodities in order that the essential unity of European economic life may not be impaired by the erection of artificial economic barriers.'' Our representative helped to carry that resolution unanimously at Brussels. Then my hon. friend the Minister of Militia and Defence came home and assisted his friend the Prime Minister in a declaration that we wanted artificial barriers and did not want to have anything approaching freedom of commerce! My right hon. friend the Prime Minister in his interesting trip out West made frequent references to the tariff. He pictured more than once the small reforms, as he described them, which had been made by the Liberal party. He was very strong on the matter of percentages; he compared one tariff with another and was quite ready to show that there was only a fraction of difference between them. Now, my right hon. friend has perhaps not given the matter sufficient attention to know that there could be a large measure of tariff reform, without any reduction of percentage at all. If you increase your taxes on luxuries and diminish your taxes on the common things of life, the net result may be a larger average rate of taxation than you had before, but you have made a tariff revision which the mass of the people can understand and appreciate. If you turn to the Liberal policy-and I wish only to briefly refer to it-of 1897 you will find that in order to value the measure of tariff reform that was then given, you need to look at it from three viewpoints. In the first place, there was the advantage that came to the people from the direct reduction of duties. It can be established positively, I believe, that if you take into account simply the difference between the duties that were paid during the period of the Liberal Administration and the, duties that would have been paid had the Conservative tariff remained in force, the money that went directly into the pockets of the Canadian people on that account alone was from $85,000,000 to $100,000,000. But it must be remembered-and economists, I think, will agree-that the saving you make in a case like that is not to be measured only by the amount that you did not pay into the Customs; you have to take into account also the check that was put upon the rise of prices at home, and that for every dollar saved to the people in that direct way probably two dollars were saved in the difference between the prices prevailing and those which would otherwise have been charged by the home manufacturer. The third point is this: at that time, although very great changes were made in the tariff as respects commodities consumed by the public generally, the duties were increased upon wine, cigars, tobaccos, spirits and all things that might be deemed luxuries. If, therefore, you make a distinction between the luxuries and the common things of life you will see that the reduction made to the masses of the people was even much larger than I have indicated. Now, when my hon. friends on the other side, in an effort to defend their position, represent the Liberal party as having made no material change in the tariff, they are not doing justice to us; they are not doing justice to common truth. I could, if time permitted, give a long list of reductions that were made. I can give one case which I have in mind. I remember very well, in the campaigns in which I took part, I acquired a bag containing samples of goods taken from the shelves of a wholesale house in the Maritime Provinces. To every piece there was attached a label telling exactly what the goods cost, what the price was to the consumer, and what the duty amounted to. I remember that on articles of common cloth, such cloth as would be found in the clothing of most of the people, the farmers and workingmen of Canada, the duties were so much per cent and so much a pound; there was a mixture of specific and ad valorem duties-any sort of scheme to make the people pay more without their knowing



it-and the combined ad valorem and specific rates on these articles of clothing amounted in some cases to from 50 to 60 and 70 per cent. Well, when you cut down duties* of that character to 22, 23, 24, 25 and 30 per cent, who will say that there .was no tariff reform? Sir, there was a great tariff reform. My hon. friends opposite are. very fond indeed of making assertions which would give the impression that our tariff reform did not amount to anything. More than one minister has been in the habit of saying: We are going to stand by the policy that we have had continuously for the last forty years thereby implying that there was no change of policy; that the policy of the Liberal party was merely a continuation of that of the Conservative party. Sir, the facts do not warrant any assertion of that kind. When hon. gentlemen say that they are going to stand by this policy which has been followed continuously for forty years, they are saying something which is at variance with the facts of our tariff history. If it be true that we have had the same policy for all these years, what did the Conservative leader mean when, at the time of the bringing down of the Liberal tariff reform policy in 1897, he spoke about the "sorrowful wail" that went up from the country? Hon. gentlemen have heard it before, but it is really interesting enough to submit to the House again- this is what the leader of the Conservative party of that day said when the whole matter was fresh in his mind and everybody understood the facts: Now, what is the result? The result is that this tariff goes into operation, and the hon. gentleman knows that the industries of this country are already paralysed in consequence. While hon. members gloat, vindictively gloat, over the destruction of Canadian industries, I was reading the wail, the sorrowful wail, of those industries in the Montreal Gazette, where one manufacturer after another declared that their industries were ruined, that their mills must close, and that they saw staring them in the face a return to the deplorable state of things that existed when the hon. gentleman who last addressed the House'was in charge of the fiscal policy of this country. I say that a deeper wrong was never inflicted upon Canada. Well, Sir, if we made no material change; if we continued the old national policy, why did the venerable statesman who then led the Conservative party make such a rumpus? We have all heard the story of the superstitious thief who had invaded a butcher shop and carried away a ham. When he got out on the street a tremendous storm of thunder and lightning came on, and the thief had a superstitious feeling that the storm was a kind of penalty for his deed. So he said: "Oh Lord, I am sorry I took the ham, but isn't this a dreadful row to raise about one small piece of pork?" It is the same in this case; if there was nothing in the tariff reduction made by the Liberal party; if the changes were insignificant,-if, indeed, there was practically no change in the fiscal policy under that administration, then it seems to me that my hon. friends have been making a terrible noise for a long time with regard to the matter. However, they have now given that up and are approaching the other side of the question. [DOT] My right hon. friend the Prime Minister, speaking at Winnipeg, made an allusion to myself which I must be permitted to quote. He said: Mr. Fielding has time and again given his adherence to the protective principle, and never in language more unequivocal than employed in recent years. My right hon. friend is mistaken. I never gave any adherence to the principle of protection. I have said again and again, and I say now with increased emphasis, that you cannot make a sound fiscal policy for Canada by rigid adherence to any particular theory. I accept the philosophy of that much-quoted expression: It is a condition, not a theory, which confronts us. But I say that if I had to bhoose between the two principles, by all means I would start from the standpoint of free trade, because I believe it can be defended far better than the principle of protection. I say without hesitation that the public man who aims to build up a tariff in this country starting from the standpoint of protection, basing it on the principle of protection, carrying it through on that principle, will neVer produce a tariff with which the people of Canada will be satisfied. You may win a temporary victory; it was done in 1911, but the men who brought about that victory, so far as the commercial side of it is concerned, have had sad reason to regret the blunder they made. For the condition of unrest which prevails in this country, they are largely responsible, a condition which is not likely to end in the very early future. Someone has said, and the expression is often quoted, that "nothing is settled until it is settled right." You may depend upon it that a tariff built up on the protective principle, a tariff designed to protect industries merely because they are industries and without regard to the economic conditions of the country, cannot and should not sue- ceed. If there are any people in Canada who are contemplating the establishing of new lines of business in which they feel that tariff protection is necessary, I do them a friendly service when I say: "Don't do it," because anybody who counts upon the continuance of a protective policy is bound to find that he is pursuing a delusion. If any outside capitalist purposes coming to Canada to start some industry which he believes can only be kept alive by protection, again, I advise him not to come. I say, Sir, that the policy of indiscriminate fostering of industries in that way, without regard to economic conditions, is not a sound one. The Prime Minister has said again and again that there must be sufficient protection to protect and keep the industries we have and to bring others to us. That sounds like a nice statement, but it is much too broad to be accepted without qualification. The general statement that you must establish industries in order that you may create business and give employment involves the adoption of a dangerous doctrine. My hon. friend the Minister of Agriculture (Mr. Tolmie) gave us some information the other day of a very interesting character with regard to the city of Victoria-and in this case it is not the dock I am referring to. My hon. friend gave us a pretty picture of the gardens of Victoria in this early spring season. Amongst other things, he said that they have been experimenting in growing tea in Victoria. See the oportunities afforded there for development under a protective system! You can give immense employment in the growing of tea out there! Think- and that is the main point; you want to keep the people busy-think of the employment you will give to carpenters in making green houses! Think of the glass industry you will build up in British Columbia! If the question were only one of giving employment, perhaps nothing could be better, in the hands of my hon. friends opposite, than that they should start to grow tea out in Victoria. Then, of course, the question is only one of degree; they need not confine the tea-growing to Victoria; they can come further East. There is plenty of vacant land in the Rocky mountains where, with a little more expenditure, you could give more employment, more work to the carpenters, more work for the glass-makers. If the question were only one of giving employment, one might say that the Minister of Agriculture (Mr. Tolmie) should be given a large subsidy to cultivate the tea-growing industry. The true policy, however, is to cultivate chiefly those industries which are based upon the natural resources of the country. I would not have any industry which is at present established in Canada unfairly dealt with; I would not try to strike down any industry that exists to-day, even if it were not wisely established. But when we are looking to the future, for the purpose of adopting a sound policy as regards the creation of industries, let us not be carried away with this idea of creating industries in order to give employment. Let us create industries which, based upon the natural resources of the country, will give rise to healthy enterprises with a good prospect of future success. Certain conditions are required to justify the creation of an industry. What are they? First, there is abundance of raw material. Surely, we produce some things in Canada in abundance. Our protectionist friends will hardly admit that we can produce anything in competition with others. I believe myself they would want a duty on icicles to keep them out. They think that Canadian industries need to be protected by glass houses. Protection, like conscience, "makes cowards of us all." We lose faith in our country. Let us get away from that; let us find the things that we can produce, that God and nature intended us to produce; let us try to develop industries based upon those conditions, and then such industries will not need much protection. Fuel is a great asset in the creation of an industry. You may establish an industry simply because you have an abundance of fuel. A combination of coal and iron is a great combination on which to establish an industry; that is the strong point of the industry in Cape Breton to-day. There are in Cape Breton no known large bodies of iron ore, but across by a ferry in Newfoundland they have iron ore, and Cape Breton has coal in abundance. Thus you have a combination of those twd things, if not at the same point, at any rate, close together. There you have a sound basis on which industries ought to be built up, they should not need much protection to enable them to be developed. We have abundance of water-power in Canada, and that is another condition on which industries may be established. There was a time when cheap labour had something to do with the establishment of an industry. There are sections of Canada in which industries were established chiefly because


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labour in those sections was deemed to be cheaper than elsewhere: but with the changes that have taken place under our modern conditions, in the nineteenth and twentieth centuries, with the rapidity of communication, railways, telegraphs, telephones and all the other modern improvements that we have, with the organizations of workingmen in the different sections of the country, there is no longer cheap labour in any part of the continent of America, at least amongst the white population; rates of labour are not materially different to-day in different parts of Canada,-the labour unions look after that point,-so that cheap labour is not a live asset. There is another condition by which an industry can be established. It is possible by the ingenuity of man, by the skill of some group of men, to establish an industry. I heard an illustration of that given some years ago by a distinguished Irishman when he was making a speech in London urging the people to cultivate home industries. "Look at Dundee;" he said, "you do not grow oranges in Dundee; you do not produce sugar in Dundee; you do not produce anything in Dundee that goes into the manufacture of marmalade. But there was a Scothman up there who produced a combination called marmalade, who gathered around him all the raw material necessary for the making of marmalade and who developed a great industry in Dundee. Although Dundee did not produce the fruit nor the sugar, the skill, the enterprise and the reputation of that man built up the industry". All these are conditions upon which industries may be built up. If we build up our industries, based upon the natural resources of our country, we have just cause for believing that with reasonable enterprise and without any high protection, those industries may flourish. That is the true policy for Canada; that is the policy that I would strongly advise to-day rather than the general statement that we must have industries regardless of the economic future. I notice that the Minister of Finance (Sir Henry Drayton) made a very brief reference to the condition of the American jtariff, though I must do him the justice to say that he treated it with more gravity than some people do. There are people throughout Canada who flippantly say that they do not care what the American tariff is. There is an Irish proverb which says: "It is aisy to bear another man's toothache." Stock raisers in Western Canada and, for that matter, further East, do not regard it as a small matter that they are likely to be shut out of the American market. That prospect is grave and serious to them. They may be comforted by the remark that the Minister of Trade and Commerce (Sir George Foster) made in Montreal the other day, when he was giving good advice, as he thought, to the women of that city. He said in effect: "As regards the American tariff, there is this to be said: if they adopt that tariff, the consumers in the United States will have to pay the bill." Speaking broadly and generally, one may say that there is a good deal in that. It is not, however, worth while entering into a debate now as to the conditions under which the consumer pays or the shipper pays; there is something to be said on both sides. But I have not found my right hon. friend telling the consumers of Canada that they pay the duty. In general he cultivates the notion that the man who ships the goods into Canada is the man who pays the duty; but when he gets into Montreal, before the women of that city, the truth comes out of him that the consumer pays the duty. There is this to be said with regard to the American tariff. For many years our American friends did not treat us fairly in tariff matters; for one reason or another they built up high tariff barriers against us, and we felt that we had just ground for complaint that they were not treating us generously. There came a time when they saw the error of their ways, when their leading men frankly said that thiy ought to deal more generously with their great neighbour, Canada, and they made a proposal; they met us half way, and between us, we agreed to a certain thing. The present Government of Canada has opposed that; the people of Canada, through their constituted representatives, have turned that down. Therefore, we have no longer any right to complain of what the Americans do in tariff matters. They made an approach to us; we rejected it, and no matter what tariff they may impose now, we have no right to complain. They did long ago treat us unfairly, but in this case we are in the wrong. I am going to make this suggestion to the Prime Minister (Mr. Meighen). If we are going to adhere to this view, to have a quarrel with the United States again and to build up barbed wire entanglements on both sides, I want him to say to the Minister of Trade and Commerce: "Do not go down to New York again and make a whining appeal to them not to pass the Fordney Bill. That is not a dignified position for Canada to take." In view of the large trade that we have with the United States, in view of the fact that we are one of the best customers that the United States has, I still cherish the hope that, before this matter is all through, a ground will be found upon which we can come together, notwithstanding the differences that may have arisen in the past, and that instead of building up barbed wire entanglements on both sides, some such arrangement, call it by what name you will, as that which characterised the reciprocity agreement of 1911, may be entered into. I have made some reference to what my right hon. friend the Prime Minister has said in the West. I want, before I conclude, to make a passing reference to something my right hon. friend said in the East. Speaking at Sherbrooke, a manufacturing town, after presenting his own views on public affairs generally, he used -these words: "We have therefore a clear-cut issue: Do we want free trade in this country, or do we not?" I am sorry to have to say that I regard that as a statement which does not do credit to my right hon. friend. In the strife of political parties there is always a temptation perhaps to build up your own case by misrepresenting what your opponent says and does. It is a small political game, which small politicians easily fall into, but we have a right to expect something better from the right hon. the Prime Minister of Canada. When my right hon. friend told the people that the issue now before the country is, shall we or shall we not have free trade? -my right hon. friend must have known that he was making a statement (that lacked the essential element of truth. There is no issue of free trade in Canada to-day. The Liberal party of Canada has not proposed free trade, did not propose free trade when it was in office, does not propose free trade to-day. The Farmers' party, though they go further than we do, have not proposed free trade. Who is it then that talks of free trade? ' Only my right hon. friend and his friends. They talk of free trade. Why? Simply to conjure up a bogey with which they may scare the manufacturers of the country. I again say that the Liberals have not proposed free trade; the Farmers do not propose free trade; only my right hon. friend and his friends talk of free trade, and they use it simply as a bogey to scare the manufacturers of the country. It has not even the merit of novelty. It is a very old yarn indeed. It is the old story of 1896 over again. I really think that my right hon. friend, whose ability we all know, might have done something better than to revive that old game of 1896. In 1896, on every hustings in this country, they told the people that if the Liberals came into power there would be free trade and the industries of the country would be ruined. Everything that can be said today on these lines was said in 1896. Fortunately, the people of Canada knew better than to trust these representations, just as the people of Canada will know better to-day than to trust representations of that character when made, unworthily made, by the right hon. the leader of the Government of to-day. The Liberals won in 1896 and they came into power. Did they destroy the industries of the country? Did the prediction of the great Conservative leader, and the"sorrowful wail" about the industries of this country, come true? The fifteen years of the Liberal Government, so far as their tariff policy was concerned, were fifteen years of progress, peace, and prosperity. It was the golden era of Canada's prosperity. And just as we said then to the people that they could trust the Liberal party, if they came into power, to be fair and just while following sound principles, so we say to the people of Canada and the manufacturers of Canada to-day: Do not be misled by the statement made by my right hon. friend about free trade, because it is merely, as I said, a repetition of the old game of 1896; and as it failed in 1896, so it will fail in 1921 or 1922 whenever the election arrives. Mr. Speaker, I beg to move, seconded by Mr. King: That all the words after the word "that" to the end of the question, be omitted, and the following inserted instead thereof: The House regrets that, after repeated assurances by the Government of an intention to have a revision of the Customs tariff, and after a protracted inquiry extending from ocean to ocean by a committee of cabinet ministers, the Government have made no proposals for any reduction of the tariff; That, while recognizing that existing financial requirements of the Dominion demand the maintenance of a Customs tariff, the House is unable to concur in the declarations by the Government that the tariff should be based on the principle of protection ; the tariff is a tax, and the aim of legislation should be to make taxation as light as circumstances will permit; That the aim of the fiscal policy of Canada should be the encouragement of industries based on the natural resources of the country, the development of which may reasonably be expected to create healthy enterprises, giving promise of enduring success; That such changes should be made in the Customs duties as may be expected to reduce the



cost of living, and to reduce also the cost of implements of production required for the efficient development of the natural resources of the Dominion ; That, -while keeping this aim clearly in mind, the House recognizes that in any readjustment of the tariff that may take place, regard must he had to existing conditions of trade, and changes made in such a manner as will cause the least possible disturbance of business.


?

Some hon. MEMBERS:

Oh, oh.

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UNI L

William Stevens Fielding

Unionist (Liberal)

Mr. FIELDING:

If I would make any comment on that it is that it should have the same result as the policy of 1896 upon the industries of the country:

That the House, while recognizing that the obligations arising from the war must be met, and declaring its readiness to make all necessary provision for that purpose, regrets that the financial proposals of the Government are not made with due regard to the economy that is so urgently needed, and expresses the opinion that, before resorting to new taxation, the Gov

ernment should make a substantial reduction in the proposed expenditure.

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May 10, 1921