May 13, 1921

PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

This year another

excuse has been advanced for the failure TMr. Maharg.]

to enter upon tariff revision and that is the Fordney Bill-that was one of the excuses presented by the Minister of Trade and Commerce the other day. He declared that the Fordney Bill is now before Congress, and we should not interfere with the tariff in this country until we know what is to be done with that measure. The statement is made that we must not trade with our neighbours to the south. If we are not to trade with the Americans why worry about the Fordney Bill? If we are not going to import goods from the United States, we certainly cannot expect to send exports to that country, and therefore we need entertain no apprehensions on the score of the Fordney Bill. But, Sir, the Fordney Bill is only an emergency measure; it is not intended to be permanent legislation. It is admittedly legislation intended to meet a condition which- prevails in the United States at the present time.

The Minister of Trade and Commerce referred to our interchange of wheat with the United States, and I believe he made the remark in Montreal that the United States consumer would have to pay the duty and1 not the Canadian people. That is perfectly true, and it is an admission that I scarcely expected to get from him. However, if I remember correctly, he discussed the matter a little further and referred to our wheat being milled in bond over there to escape the tariff, as though that were something new. Now, Mr. Speaker, up to the1 time that we had free interchange of wheat and wheat products with the United States our wheat was being continuously shipped to that country and milled in bond there. To put the matter plainly camouflage has been resorted to in connection with this matter; and the agitation raised in the United States at the present time in connection with this privilege of milling wheat in bond is only for the purpose of beclouding the issue. It is only intended as a palliative to the consumers of that country in the effort of trying to make them believe, by roundabout means, that what is proposed will not increase the price of their bread. Personally, I doubt very much whether the consumers of the United States will permit themselves to be led astray by any such argument. The big financiers and the milling interests over there know very well that they have got to have Canadian wheat. It does not matter what the United States tariff against Canadian wheat is, American millers have got to have Canadian wheat to blend with

their own, otherwise they cannot sell their flour on the world's markets. It is absolutely impossible for them to dispose of their flour unless sufficient Canadian hard wheat has been mixed with it so as to give it that quality that will permit of its finding a market. So that as regards wheat we do not need to worry very much. But wheat is only one of the products of Canada. I often wonder where the livestock man is going to land if the Fordney Bill goes into operation, because that legislation will make it very awkward for him to market his stock, especially when we consider the restrictions on the export of cattle to the Old Country. That legislation will likewise be a handicap to other producers as well as to livestock men. The argument has been advanced that if the Fordney Bill becomes effective we will have to enact retaliatory measures. I doubt very much whether any country benefits by resorting to such measures. The retaliatory principle is one that does not get you very far, and I am doubtful myself whether it will prove of very much benefit in the present instance. Sir, I am wondering what the excuse for not revising the tariff will be next year. We hear considerable these days, not about the Fordney Bill altogether, but respecting a gentleman who is, we are told, perfecting a system of manufacturing milk without the cow. Now I imagine that next year instead of the Fordney Bill being assigned as an excuse for maintaining the tariff at its present level, it will possibly be the prospect of "Fordney milk." Doubtless it would be a very serious thing if we were obliged to discard the meek and gentle old cow, and I have no doubt this Government will give that fact serious consideration in an attempt to use it as an excuse for retaining the present tariff.

The hon. member who preceded me (Mr. Anderson) dealt with the value of the home market to the people of Canada. We have been told in the West that Eastern Canada furnishes a home market for our products. I would like to inquire for what class of products Eastern Canada provides a home market? Let us take the province of Ontario for the purpose of illustration. The two chief products from Western Canada that Ontario uses are wheat and oats. In Ontario they use the wheat for blending purposes to bring up the standard of their flour, and they use the oats for milling operations to prepare the different oatmeals. But, Sir, Ontario is a producer of wheat as well as Western Canada, and she produces annually anywhere from

twelve to fifteen million bushels. Now if you take the per capita consumption of the province of Ontario I venture to say that it will run between four and five bushels. That is considered a high consumption, and I doubt, in view of the fact that very1 many substitutes are produced in that province, whether the consulntpion will run to four bushels per head. However, we Will put it at four bushels per head, and we will take the population of the province as being between two and a half and three million-I believe that 2,600-*000 are about the right figures. But we will take it at two and a half millions of a population. At four bushels per capita that would mean 10,000,000 bushels. Now, you will see that they have a surplus of anywhere from 2,000,000 to

5,000,000 bushels, which will provide liberally for seed and other contingencies. So that in reality while in Ontario purchases a certain quantity of our hard wheat; she also has a surplus of her own wheat which takes the place of her purchases from Western Canada, whatever they may be. Therefore, in that case the market provided in Eastern Canada in so far as our western wheat is concerned is very very small indeed. There is a considerable amount of oats purchased from Western Canada for milling purposes, but on the other hand we are very often importers of oats from Ontario. Hundreds of thousands of bushels were imported a few years ago, and almost every year when there is a short crop of oats in the West we import from Ontario. So far as the home market for the produce of Western Canada is concerned, to all intents and purposes it does not exist.

But what about the market provided in Western Canada for the products of Eastern Canada? That is a very different matter. Western Canada does not produce the variety of articles produced in Eastern Canada, and practically all our requirements are purchased either in Eastern Canada and the country to the south or from overseas. But the fact remains that instead of the East furnishing a market for Western Canada the opposite is the case. As an illustration, take fresh fruits. Millions of dollars worth are imported into Western Canada, in addition to canned fruits and vegetables. Our fresh tomatoes are largely purchased from Eastern Canada. There is no manufacture of cheese worth speaking of anywhere in Western Canada, so that we have to buy practically all our cheese. We also get from the East all our leather goods,

machinery, tools of all kinds, binder twine, rope, furniture, barbed wire, clothing, boots and shoes, and a multitude of other articles, so that instead of Eastern Canada furnishing a market for the West, we are continuously purchasing from Eastern Canada. I have no fault whatever to find with this condition of affairs other than the misrepresentation that we are subjected to, and I think in all fairness both sides of the case should be presnted.

There are one or two matters that affect Western Canada particularly, and, incidentally, all Canada that I should like to refer to, and they have got to be regulated in some way or other, otherwise not only the prosperity of Western Canada but of the whole Dominion will be seriously interfered with. First, I refer to freight rates. Last fall a new schedule of freight rates was put into operation. Values of products in Western Canada were fairly good at that time and the increased rates did not seem so serious, but things have changed, and apart from wheat, which has retained a fair measure of the value that it had, other products of the West have reached a point where it is practically impossible to ship them any distance and receive any return. Now, this is a condition of affairs that cannot be permitted to continue if we are going to prosper not only in the West but in the East, as I do not think there is any doubt but that the prosperity of Eastern Canada depends on the prosperity of the West, and as the prosperity of the West increases so will the prosperity of the East keep pace with it.

Take oats as an illustration. At the present time it does not matter how close a man lives to the market, he may be in the province of Manitoba, but at the present prices paid for oats at the local point, after the shipper has paid his threshing bill and his freight to the head of the lakes in nine cases out of ten he has'a debit balance. But when you get farther west what is the condition? We have cases by the score of actual loss, and I want to give the House one particular case of a carload of oats shipped from Northern Alberta. When the freight and commission charges had been paid-in fact, the commission charges had not been paid-a debit account was received by the shipper of those oats for $38 and some cents. In other words, he had $38 less than nothing for his carload of oats shipped from Northern Alberta. This, of course, is an extreme case, but neverthe-

less it is an indication of what we can exipect in so far as the effect of freight rates upon Western Canada is concerned. Take livestock, at the present time the ranchers are laying their plans on the basis of $4 beef next fall. Now, Sir, if any one thinks that under the present high cost of production in the West the ranchers can hope to break even on a price of $4 per hundred for their beef, well, Sir, he will have to figure it out again, for it will be an absolute impossibility. Then, take hides, I know of a case that happened a few months ago, in fact, I was in the office of a large hide concern in our own city to whom had been shipped a first-class hide from a point only about forty miles from the city of Moosejaw, and the' actual net return that was being sent to the shipper was forty cents.

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?

An hon. MEMBER:

He was lucky.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

Yes. He was a lot luckier than some others who did not get any return. I merely mention these few instances to show what we can expect unless something is done to reduce freight rates on our railroads.

But those are not the only rates that require attention, and I have a suggestion or two to make to the Government tonight which I hope they will act on. For a number of years the hon. member for Lambton (Mr. Armstrong) has brought before this House a Bill to place the shipping on our inland waters under the control of our Railway Commission. Year after year he has introduced that Bill with a persistency that only he is capable of, but it has been repeatedly defeated. However, he is not daunted yet, and he is going to keep at it, and eventually, unless some other measure is adopted, his Bill will be accepted by this House. At the present time an inquiry is being held in the Senate through a committee appointed to inquire into the question of why so large a quantity of our western grain goes through American ports.

I will give you one reason why. They do not need to hold an inquiry there; they do not need to summon anyone to appear before them. All they need to do is to get the figures as to the lake freights charged, and they will have the answer. We have been endeavouring to bring the lake shipping under the control of the Railway Board, but we have been unable to do that. There is only one way in which the Government can accomplish this purpose without doing that, and it is by abolish-

ing our coastal laws so far as inland shipping is concerned. I was talking to a prominent gentleman the other day when I was it. Montreal with other hon. members, and the question came up why a greater proportion of our products were not shipped through the port of Montreal. I do not wish to mention names; the gentleman to whom I put the question has probably moire to do than any other man with the regulating of the port of Montreal. I inquired whether it was a matter of facilities or of rates on [DOT]the lakes, and the answer was that it was almost entirely a question of rates. The freight rate from the head of the lakes to the Georgian bay ports is almost invariably as high as the rate from the head of .the lakes to Buffalo, almost double the distance. If you examine the map of Canada you will see what a circuitous route the grain has to take after it leaves the Georgian bay ports before it gets to Buffalo.

NoVv, there is the reason. The grain from Georgian bay ports has either to come around the lakes to Montreal in small boats or has to pay the overland freight haul. The grain is lahded in Buffalo as cheaply as it is landed in the Georgian bay ports. I say that the only way to remedy that condition-that is, if the shipping on the lakes is not to be brought under the

Railway Commission

is to abolish our

coastal laws. Under our coastal shipping regulations a vessel loading at a Canadian port must unload at an American port, and vice versa, consequently our vessels going to the head of the lakes to take their load on at Canadian ports cannot unload at Buffalo; they must go to Georgian bay ports or. other Canadian ports. The result is that the rates to the Georgian bay ports are pratically the same as the rates to Buffalo, practically twice the distance. American boats carry tremendous quantities of our grain, and whether they wish it or not they have to unload at American ports and the result is that they go on to Buffalo. There argument is this-and there is something in it-that they get a full return cargo from Buffalo which they cannot get from the Georgian bay ports. But why should we permit that condition to continue when it is so detrimental to our own interests? We have one of the finest ports for grain handling in the world. I think I have visited most of the shipping points in the United States, and I can say that they have nothing to equal Montreal. Why, New York is antediluvian compared with Montreal in the handling of grain.

At the port of Montreal -the grain can be conveyed for many miles. I do not know how many miles of belting they have now, but several years ago they had over four miles of overhead belting which enabled them to run the grain almost over the whole harbour and load it in boats almost anywhere at that port. They have not those facilities at United States ports on the Atlantic coast to the same extent. The only reason why so much of our grain can be handled at United States ports is because they have so many of them-Portland, Newport News, New York, Philadelphia, and so on. If all our grain had to go through New York, they simply could not handle it. Why, I ask, should we permit this condition to exist, when it is practically threatening the prosperity of our country? Something must be done at once to prevent these people from jumping their rates in the way they have done. It is not only the farmers of the West who are affected by this condition; the consumers of Eastern Canada are equally affected, because they have to pay their share as there is the long haul both ways. Why, then, should the consumers of this country have to pay double price for having their products carried across the lake? What excuse can there be for allowing this condition to prevail? In 1920 the rates on wheat from the head of the Lakes were practically double what they were in 1919. The sooner the Government takes this matter into consideration the better it will be for everybody concerned. It is true that the crop is only now being sown, but in a matter of three or four months it will be harvested and on its way again. Consequently if any action is to be taken in this matter it should be taken very soon, otherwise the purchasing power of Western Canada will be very limited-and we know what that means. We had a very severe lesson in that regard in 1913 and 1914, just as we have had this year. In 1913-14 the crops in Western Canada were very light, and everything became stagnant. This is not an after-war condition; we had it prior to the war. I make this statement that had we had the freight rates to pay in 1914 that we have to pay now, the condition would have been much more serious than it was; the purchasing power of the West would have been almost entirely eliminated. Unless we can remedy this condition in some way we cannot expect the purchasing power of Western Canada to be very great; indeed, it will be so re-

stricted that the effect will be very serious upon the industries of the East. Up to the time of the drop in wheat in Western Canada business was flourishing all over the country, hut it was only a matter of three or four weeks after that drop in price that those industries were curtailing their output, employees were being laid off, and eventually some of them were closed down. The reason for that can very clearly be traced to the loss of purchasing power in Western Canada.

Statements have appeared in the press recently with regard to the closing down of implement manufacturing concerns. Well, there is a reason for that. The farmers of the West have been, purchasing only what it was absolutely necessary for them to purchase-and by the way, I have a little criticism to offer against the manufacturers of farm implements in Eastern Canada; perhaps it applies to others as well. -Why should they refuse to accept their share of the loss occasioned by the reduced value of goods? Everybody else has had to do it; the farmers of Western Canada have had to do it. In fact, the western farmers are to-day accepting a loss of about 500 per cent in many cases by reason of the drop in prices. But what do we find? We find that, on' the other hand, if we go to buy implements in the West, they have been increased in price all the way from 10 to 20 per cent. Why should the manufacturers not be prepared to accept a portion of this loss? They will accept it eventually; they are accepting it now, because their warehouses throughout the country are piled to the roof with implements, and there is an overhead charge going on which they will have to stand whether they wish to do so or not. It would have been good business for them to accept their share of the loss instead of increasing their price. I am not speaking from hearsay in regard to increases in price, because I had a personal illustration of this in the month of February before I came here for the session. I required an implement, and I called up a large distributing firm in the city of Moose Jaw which distribute everything in the line of farm implements. I asked the manager for a price on this special article, and he quoted a price to me, but he said: "Wait a minute; I do

not know whether this has advanced in price or not; if it has not advanced, it is the only article that we sell that has not advanced in price from 10 to 20 per cent." He looked up his invoices, and he said that

this particular article had not advanced, but that it was the only implement which they sold that had not advanced from 10 to 20 per cent. Their argument-and there is something to it, I suppose-is that the trade purchase their requirements of raw materials one year ahead. But they say that they have always been doing that, so that evidently they must have secured the advantage of the increase in the price of raw materials when they were advancing, because we know very well that implements advanced very rapidly until at the present time an article that we used to buy for $80 to $85 is costing us $220, $225, or $230 now. We used to be able to buy binders for $145 to $150; last year we paid $289 cash for them, and this year , we shall have to pay $339 for them. How long can we continue in this business if this is the way in which things are going to increase in price? I bring these matters to the attention of the Government and of the people of Eastern Canada to show that any measures that tend to increase cost of production in Western Canada must react on Eastern Canada as well. It is impossible to escape that result, and unless the fullest co-operation is given in order to reduce the cost of production, I do not know just how it is going to be done and it certainly will not be done by increasing the cost of importations.

If I might be permitted to make a further reference to the Budget, the statement has been made that it is not a people's Budget; that it is a Budget for the manufacturing industry. I should like to draw the attention of the House to one item in the Budget, and to me it can be nothing more nor less than an attempt to compel everybody to use the middleman, as it were. Where goods are imported by wholesalers or others, the total tax that they will have to pay-the Minister of Finance (Sir Henry Drayton) will correct me if I am not right-is 3 per cent; but if a retailer or an individual or a group of individuals undertake to reduce the cost of living by purchasing his or their own requirements and importing them, the tax is 4 per cent. I do not know just what the argument is.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

If the hon.

gentleman would like the exact rate, the tax to the manufacturer and the jobber on the local sale is 1J per cent; the tax to the jobber on the imported article is 2i per cent; the tax on the local sale from the manufacturer to the retailer is 3 per cent, and the tax on the sale from the

importer to the retailer is 3 per cent. It does not make any'difference in the cost whether it is imported by the retailer direct or whether it is imported through the jobber.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

Why has the retailer, if he imports direct, to pay 4 per cent?

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

The hon. gentleman does not get the point. The taxation on the article in Canada is 3 per cent. It makes no difference whether it goes direct or whether it goes through the middleman. The taxation on the article imported, by reason of the fact that the raw material entering into the article has not paid a sales tax, is 4 fpef cent. In any case, it does not make any difference whether the article is imported directly or indirectly, the tax is the same.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

I fail to see the point in the minister's argument, for it states very clearly in Hansard that when a retailer or an individual imports, he has to pay 4 per cent.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

That is right.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

But if he purchases

from a wholesaler, he pays only 3 per cent. If I can read the figures, that is the way in which the thing works out.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

If the article goes to the wholesaler, the tax is 21 per cent. If the wholesaler turns around and sells, as he .must, to the retailer, the tax to the retailer is 11 per cent. Two and a half per cent and one and a half per cent, the hon. gentleman sees, make four.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

What is the object of imposing a tax of 11 per cent on the jobber when an article is sold to him? You are compelling the wholesaler to buy from the jobber and the retailer to buy from the wholesaler.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

No. The

terms "wholesaler" and "jobber" are used interchangeably. There are only the two sets of taxes in this case-to the manufacturer and to the wholesaler or jobber as the case may be.

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PRO

John Archibald Maharg

Progressive

Mr. MAHARG:

I fail to see the point. In the one instance the retailer pays only 3 per cent, and in the other he pays, according to the minister's admission, 4 per cent. The minister shakes his head, but 3 and 4 are two distinct and different figures and that is what is in the resolution.

One other question, that I wish to bring to the attention of the House to-night and which affects Western Canada very seriously, is the railway situatioft in certain sections of the country. We have had the question of immigration before the House on two or three different occasions. We spent a good deal of time, and we are spending a great deal of money in connection with it; but as regards Western Canada, the sum total of your efforts will amount to nil unless something is done.

' The other day the hon. member for Mackenzie (Mr. Reid) gave some figures to show that, instead of increasing our population through immigration, we were losing it as far as the United States were concerned. That condition is more acute today than it was at the time those figures, were compiled. We have in the West large areas where people have to draw their products anywhere from 40 to 60 miles over a country that is almost impassable. Rivers and streams have to be forded, and sand hills and other obstacles have to be surmounted in order that they may deliver their products to the market. We have in the Estimates in the neighbourhood of $800,000 for canals. When that Estimate was before the House, I said a few words in connection with it, and I intimated that a portion of that could very profitably be used, instead of in canals that would give us no immediate benefit whatever, and which could give us benefit only by the expenditure of hundreds of millions more, in the extension of branch lines in Western Canada. One of the reasons which the minister gave us was that we had to spend this money in order to save a monetary loss; that the works would crumble and decay if this money was not expended. That is a serious matter; but we have a greater and much more important loss going on continuously in Western Canada as a result of lack of railway communication into those several districts and that is this. We are losing our settlers continually from day to day. I have scores of letters to that effect from southwestern Saskatchewan and the conditions throughout the southern portion of Saskatchewan are similar. People are leaving the country by the score; there is not a district where people are not moving out, and the reason is because they can get no satisfaction whatever as to any prospect of relief in the shape of railroad facilities. But that is not the worst feature. There is a loss of life continually; there is a lack of edu-

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cation continually. You cannot expect school teachers to isolate themselves miles away from a railroad. Many of them are doing it, but there are many districts where school teachers cannot be secured. The parents of the children will stand these conditions for a time, but eventually they will move out, for the welfare of their children is much more to them than any monetary consideration. We have also in that country a lack of medical attendance. Doctors are miles away, and in some districts days away, from cases where they are wanted. The situation simply has to he dealt with, or it will become more and more serious every day. Why should we be spending all this money in Eastern Canada on canals, docks, harbours, and such like, when we are not spending a dollar to give relief to these people? The situation is such that unless some assurance of relief is given to these people you may as well stop your immigration so far as Western Canada is concerned. Further immigration would only increase the difficulty. You cannot secure land near the railways unless you have the money to purchase at a high price; you have to go to portions far distant from a railway. If money was spent in providing relief for these people in Western Canada, instead of spending these immense sums on works in the East which are not necessary at the present time, and which can only be available for use with the expenditure of hundreds of millions more, the results to Canada would be much more beneficial. It would be better to shut off immigration work altogether and use the hundreds of thousands of dollars you are spending on it to provide for the people you have here at the present time. I remember when the Prime Minister was in charge of the soldier settlement Bill, I made the statement that it was much better to hold in the country the returned men who had an interest in the country, than it was to assist those who had no such interest in the country. I said that it was all very well to assist them all, but a distinction should not be drawn between the two. We are not only losing people from this country, but the infant mortality rate in the West is also very serious. Taking these two factors into consideration-the people who are moving out from day to day, and the high infant mortality rate- I am of the opinion that they will offset your immigration unless something is done to relieve the situation, and the last state will be worse than the first. The expenditure on the Trent Valley canal was referred to by the hon. member for North Oxford (Mr. Nesbitt) a day or so ago. He stated that this work was absolutely unnecessary at this time and that there was absolutely nothing to be gained by going on with it and spending the sum of $300,000. I could draw a nice picture of a tourist trade growing up along the Trent canal, and also of conditions in the West, that would furnish food for thought, and would be very illuminating, but I shall not take the time now. With regard to the Welland canal, the Minister of Railways attempted to show to the House the other day that it had been of great benefit to the West in the reduction of freight rates, but he had to go back some thirty years to make his comparison. I would like to know how much wheat was shipped from Western Canada and went through the port of Montreal thirty years ago. I have been in the West over thirty years, and there was a very small amount being shipped out at that time. We did not have the railway system then that we have now, otherwise we would not have had to pay the rates that the minister claimed had to be paid in bringing the grain across the lakes. He stated that we had paid 20 cents a bushel thirty years ago for bringing grain from the head of the lakes to Montreal. At the present time the rail rates from the head of the lakes to Montreal is only 25 cents a bushel, and that is after we have had practically 100 per cent of an increase in the rates. We have had an increase of 15 per cent, another of 25 per cent, and another of 35 per cent. That goes to show that we have not received the benefit from the Welland canal that the minister would have us believe, and that the minister's figures were very misleading to the House. However, $500,000 has been voted for the Welland canal. I think that at least a portion of that money could have very well been spent in Western Canada, and I am sure it would have given much better results. I have already detained the House too long. As a final word I would say to the Government that the situation in Western Canada demands serious consideration at the hands of the Government, and unless they have the interests of Canada as a whole at heart, and have a kindly feeling for our people, I can assure them that they wilf find the progress in Western Canada will be very, very slow. I make this statement, that the fewer immigrants you bring into Canada under present conditions, the better off Canada will be for some years to come. On the motion of Mr. Cowan (Regina) the debate was adjourned. On the motion of the Right Hon. Arthur Meighen the House adjourned at 11.55 p.m. Saturday, May 14, 1921.


May 13, 1921