June 1, 1922

LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. gentleman

must be allowed to proceed with his speech without interruption.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
Sub-subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

George William Kyte (Whip of the Liberal Party; Chief Government Whip)

Liberal

Mr. KYTE:

I have no objection to the hon. gentleman putting the question.

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Sub-subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

John Evans

Progressive

Mr. EVANS:

I understood that it was altogether a matter of interpretation, and as the hon. member said that we were to get the benefit of the change now, will the invoice price be accepted as the valuation for customs purposes, or not?

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Subtopic:   THE BUDGET
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LIB

George William Kyte (Whip of the Liberal Party; Chief Government Whip)

Liberal

Mr. KYTE:

tion supplies. They had to buy guns, shells and fuses, harness and all the other-necessary equipment for the conduct of the war; and the manufacturers, who before had been content with a reasonable profit, suddenly found that there was a splendid opportunity accorded them to make great wealth. The profits that were made in the United States during that war were far greater than the profits that were made in peace time. And the United States is not the only country in the world that has had that experience. After the war was over these manufacturers came together to count up their profits, and they decided that war was a good thing for manufacturers because it increased their profits. And then they got to devising a scheme by which they could, in times of peace, extract from the pockets of the people the same profits, or profits similar to those which they had made during the war. The result of that conference on the part of the manufacturers in the United States was to evolve the protective system of government. They said: "We ought to maintain the home market for the home producer. During the war many men invested capital in the manufacture of munitions and they are prepared to continue investing in the manufacture of goods for the carrying on of the peaceful avocations of the country and in order to do that successfully it is necessary that we should have a monopoly of the home markets." They saw at once that if they could succeed in inducing the government at Washington to give them a protection upon their goods they would be able to preserve the home market and incidentally reap profits almost comparable to those which they had enjoyed during the war. That, Mr. Speaker, is the origin of protection in the United States. Up to that time the United States tariff had been practically a tariff for revenue.

Well, time has passed, and we have gone through a tremendous war ourselves. Canada participated in the late war with great glory, and the names of her men are enrolled in history's pages with those of the heroes of other nations who fought side by side with them on the European fields of battle. Now, we have had war profiteers in Canada. Perhaps I should not say profiteers; at all events we have had munition makers in Canada who secured large profits during the war. The fact will not be disputed by any hon. gentleman. But just as happened in the United States, since the close of the war there has been car-

ried on in this country a tremendous propaganda by the manufacturing interests for more protection. For the last two years, beginning, in fact, almost before the ink in the signatures of the Peace Treaty of Versailles was dry, pamphlets have been issued from the city of Toronto and other manufacturing cities, signed by an alleged "reconstruction committee," pointing out what the people of this country ought to do in the matter of reconstruction with a view to promoting the prosperity of Canada. And the only suggestion with regard to "reconstruction" that was contained in those documents was the suggestion that there should be a higher tariff. What else could you expect from the gentlemen whose names were appended to these pamphlets-gentlemen well known in financial circles and prominently connected with the Canadian Manufacturers' Association. Following the example of the manufacturers in the United States after the civil war there, the manufacturers of Canada made a drive upon the government and upon the public men of this country in order to have the tariff increased. And this in the name of reconstruction! I say that, quite apart altogether from the merits or demerits of the budget brought down by the Minister of Finance (Mr. Fielding) a few days ago, Canada is to be congratulated upon the fact that, while this Government is in office, that particular element who tried to "reconstruct" Canada on the high protective basis will be out of a job. They will remain unemployed in that direction until our friends opposite may happen to come back to power.

These, Sir, are things that occur to the ordinary man who takes only a cursory view of the matters that appertain to government and social questions in Canada. In my opinion the Minister of Finance has gone as far as he could possibly have gone in the direction of reducing taxation. No man in this House would have been more rejoiced than I if he had been able further to reduce the burden of taxation as it applies to the great consuming population of the country. But on this question I am at one with the hon. member for Marquette (Mr. Crerar), who leads the Progressive group in this House. Speaking a few days ago, the hon. gentleman said:

My hon. friend the Minister or Finance is coming down to-morrow to deliver to this House his annual budget. I may be mistaken-I hope I am-but I venture the prediction that the Minister of Finance, if he discharges his duty

The Budget-Mr. Kyte

to Canada, will not take the way of reducing the taxation, but must find additional taxation; there is no way out of It if this country is to meet its obligations.

I subscribe to that view, and it was the recollection of it that reconciled me to the modest reductions in the tariff which are set forth in the budget introduced by the Minister of Finance. We cannot get away from our obligations. It is all very well for us to talk about free trade and about tariff for revenue. But we are facing a condition in our financial history which is more serious than we have ever had to cope with. But, Mr. Speaker, the present Government is not in office only for a day or a year. The signs point overwhelmingly to the fact that, so far as our friends immediately opposite are concerned, the Liberal Government will be in office just so long as they want to be, at all events, so long as they fairly meet the reasonable expectations of the people.

Well, the Liberal party came into office in 1896, and we had the same propaganda during that campaign as we had in the campaign of 1921. It was stated that the Liberal party if they came into power would surely wreck and ruin every enterprise in the country. It was declared that capital would be unsafe and that bankruptcy would ensue where theretofore industry had been the order of the hour. The Liberal party, however, came into office and remained in office for fifteen years; and they went out, not on the cry that they not given good government to Canada, not on the cry that they had injured in the slightest degree any interests in Canada, but on the cry that they had governed the country so well for fifteen years that it was folly to try to improve upon their administration.

Now, Mr. Speaker, the question of reciprocity has arisen from time to time in this debate, and I desire to say to any hon. member who has any interest at all in any views that I may have upon the question, that I am wholly in favour of reciprocity with the United States. I was entirely in favour of it in 1911, and I would be equally in favour of it at the present time if we could only secure it on the same terms. The question of reciprocity did not arise in Canada only in 1911. Why, we had it discussed in every general election for forty years before that, and the gentlemen who were most in favour of reciprocity in those days were the predecessors of the hon. gentlemen sitting opposite to me to-day in this chamber. But the United States were not interested in reciprocity in those days.

Why? Because we had falling revenues, we had deficits from year to year, and our pouluation was fleeing to the United States as though this country was stricken with everything other than that which invites people to dwell in a new land. Notwithstanding that large sums of money were spent from year to year to encourage immigration, our population was at a standstill. The fact is that the great republic to the south of us was not interested in cultivating trade relations with a country whose fiscal policy resulted in constantly recurring deficits and whose population was decreasing.

But, Mr. Speaker, after 1896 a great change took place. Instead of our people migrating to the United States the improved conditions encouraged them to remain land also attracted newcomers. In case I may be challenged upon this point, let me give figures: From 1891 to 1901 the increase in population was 11.13 per cent -and, bear in mind, Sir, that the last half of that decade the people enjoyed the advantages of a Liberal government. From 1901 to 1911, the first full ten-year period, during which the Liberal party was in office, our population increased 34.17 per cent. In the last decade, 1911 to 1921, the increase diminished and amounted to only 21.94 per cent. In other words, the population during the first ten years that the Liberals were in office increased 34.17 per cent, while in the decade preceding, under a Conservative government, the increase was only 11.13 per cent, and in the decade following, also under a Conservative government, the increase was only 21.94 per cent. During the period from 1911 to 1921 the Immigration Department brought in 1,728,876 people, and the excess of births over deaths was 1,103,630, or altogether an increase of 2,832,506. But, Sir, when the census figures were published a few weeks ago we were disappointed to discover that instead of that rfate of increase having continued it had greatly fallen off.

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Subtopic:   THE BUDGET
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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

Will the hon. member give the figures for the decade ending 1891?

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Subtopic:   THE BUDGET
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LIB

George William Kyte (Whip of the Liberal Party; Chief Government Whip)

Liberal

Mr. KYTE:

The only figures I have are in relation to the total population, which amounted to 4,833,239-after a period of more than thirteen years during which our friends opposite were in power. I was proceeding to say that our American friends were never very much interested in establishing reciprocal trade relations

The Budget-Mr. Kyte

with us until after the change in government in 1896. From then on to 1911 the statesmen of the United States discovered that conditions here had changed very considerably, that our revenues were increasing; that large sums of money were being spent for the purpose of developing our resources; and above all, that a large and steady stream of immigrants was flowing into Canada. They noticed these changed conditions and they said to themselves: While we did not regard Canada as of very much consequence commercially during the regime of the old Conservative party, but now we think it would he worth while .to talk business with her. So the government of that country made a proposal for reciprocity with us; and that is how it was brought about. I remarked a few minutes ago what we might hope for in the way of further tariff reductions if the present Liberal government remains in office long enough, as no doubt it will.

But, Sir, in addition to that,

4 p.m. who knows what effect it might have upon the desire of our American neighbours for reciprocal relations if the present Minister of Finance and his colleagues bring about a recurrence of the condition of affairs that obtained from 1896 to 1911? There is not much doubt that there will be 'another offer from the United States for reciprocity.

Now, Mr. Speaker, I desire to put myself upon record as to where I stand upon this question. I repeat that, while I approve of the wisdom displayed by the Minister of Finance, I, in common with other hon. members sitting on this side 'as well as hon. members in the Progressive group, jregret the tircumstances were such as not to justify his making further reductions in the tariff. But I have confidence that in the next few years there will be such large increases in our revenues through increased prosperity and a large volume of immigration, that the Finance Minister of the day may be able to lop off here and there 'any objectionable features of the tariff so that in the near future it will approximate much more closely to a tariff for revenue only.

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Subtopic:   THE BUDGET
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CON

Robert King Anderson

Conservative (1867-1942)

Mr. R. K. ANDERSON (HaLton) :

Mr. Speaker, the budget debate so far has been interesting from several points of view: because it is the first budget of this fourteenth parliament; because we have heard the views of three distinct political parties; and also because we have a large number

of new members who for the first time are looking upon national questions from the point of view of the legislator. It is also interesting because the budget has been presented by a minister who has had a distinguished political 1 career. Although I do not agree with the Minister of Finance (Mr. Fielding) in politics, I have no hesitation in expressing my great personal regard for him as a statesman of no mean calibre. I desire to compliment him, not for the subject matter of his budget, nor for the reductions in duties announced, but for the manner in which he presented it to the House and for his ability in disguising its real character.

This budget pretends to reduce the duties on imported articles and at the same time lower the cost of living. But to my mind it would appear that the cost of living to the average consumer will be increased. , The hon. gentleman has not blazed any new trail in the way of taxation, but has contented himself with following the well-beaten path laid out for him by his predecessors in office, the Right Hon. Sir Thomas White and the hon. member for West York (Sir Henry Drayton). They are the true pioneers in introducing new methods of taxation to enable the Dominion to meet her increased expenditure resulting from the war. These were the men who bore the burden of finding increased revenue during the years of war conditions, and, although I have no desire to minimize the difficulties of their successor-for I know those difficulties are great, our national obligations being burdensome and likely to remain so for a number of years- yet I think his responsibilities are light compared with those of his predecessors.

I have listened with a good deal of interest to the previous speaker (Mr. Kyte). Some of his remarks were interesting from more than one point of view. He made statements which to my mind are directly contradictory. Of course, he made mention of the different shades of thought on the Liberal side of the House. The difference has been quite apparent during this session of Parliament when we have seen hon. gentlemen opposite disagreeing with one another on the questions which have been presented to the House for discussion. He also stated that the tariff was no longer an issue. That was also said during the political campaign which ended on the 6th of December last, that

23G5

The Budget-Mr. Anderson

the tariff was not an issue so far as the Liberal viewpoint was concerned. He followed that up by saying he was no free trader, and then he said he was in favour of a tariff for revenue purposes only. To my mind, there is no difference between those two statements. A tariff for revenue purposes only, if carried to its logical conclusion, is essentially a free trade policy. I do not think any man in this House, no matter how clever he may be, could stand up here and convince any intelligent member that there is any essential difference between those two statements regarding the tariff. The hon. gentleman gave an example of how he would change the tariff duties and get the revenue which would be lost if the protective duties were repealed. He would place on articles which we produce in Canada an excise tax, instead of the tariff duty we now have, and he would put a tariff duty, I presume, on articles that we cannot produce in Canada. That is a free trade policy, because if you place a duty of 20 per cent on the articles manufactured in Canada, and put a sales tax of 20 per cent on articles imported into Canada which are also made in this country, you only increase the price of the article 20 per cent to the consumer, and give no protection at all to the Canadian manufacturer. The consequence is that the foreign manufacturer competes in our home market on an equality with the Canadian manufacturer, and that is essentially a free trade policy. It can have no other effect on the industries of this country than to bring them into ruinous competition with the manufacturing concerns in other countries. Nor would it in any way reduce the cost of living, which would remain just as high as it was before. In effect, it would be still higher, I imagine, because there are times when the customs duty collected on an imported article migh; possibly be paid, part by the consumer and part by the producer, but so far as a sales tax and an excise tax is concerned there is no doubt they will be paid by the consumer. There is no one else to pay it.

I was also interested in what the hon. member said with regard to the American system of taxation. He said they had no protective system of taxation in the United States previous to the Civil War. If I remember aright, Henry Clay, one of the most eminent American statesmen, was a great protectionist and advocated protection. He was dead before the Civil War.

The United States, as appears from the World's Almanac, has had a protective policy for one hundred and thirty-one years, and I am quite satisfied that the Civil War did not take place that long ago. So the hon. gentleman was entirely wrong in1 his statement.

He also made mention of the small increase in population in this country in the last decade, as shown by the census of 1921. There were reasons for the small increase in population during t'he last ten years. The hon. gentleman has evidently forgotten that we had a war, which interfered very much with immigration to this country, and will probably interfere with it for a few years to come.

So far as the tariff reductions proposed by this budget are concerned, they are so small that they will not affect to any great extent the cost of living. We might designate this as a two and a half per cent budget, and so far it does not appear to be having any intoxicating effect upon hon. gentlemen to my left. They have not shown themselves very much in favour of it, and so far they have been keeping very much to themselves in regard to these proposals. I do not exactly know how it appeals to them, but taking it altogether a 21 per cent redaction on the articles affected amounts to 21 per cent on $40,000,000, or to about $1,000,000 a year. That is, the reduction in the tariff duties proposed by this budget amounts to about $1,000,000 a year. In 1919 the late government reduced the tariff duties of this country to the extent of about $17,000,000 a year, and at that time the reductions were not considered sufficient by the predecessors of the Progressive party in this House, and1 they crossed1 the floor in opposition to those proposals. I am very much interested in seeing how the members of the Progressive party to-day will view this small reduction of $1,000,000. This 21 per cent reduction is offset by the fifty per cent sales tax increase, which practically kills the reduction altogether. Both the sales tax and the duties which are reduced by 21 per cent are a tax to a certain extent. The effect of the changes that have been made is that the farmer receives no particular benefit in purchasing the implements of agriculture which he requires. The increase in sales tax will increase the taxes of this country something like $30,000,000. I think I am correct in saying that $60,000,000 was collected1 from the sales tax last year, and as it is now being increased 50 per Cent, that will mean an additional $30,000,000. So we get a reduction of $1,000,000, and an increase of

The Budget-Mr. Anderson

United States customs collections amounted to $308,564,000, or $2.88 per capita. That means $2.88 per capita collected from the citizens of the United States in customs duty, in comparison with $16.20 collected by Great Britain, Great Britain being a free trade country, and the United States an exclusion country. Canada adopted the middle course by taking a policy of adequate protection, using the duty for revenue and protection as well. In 1921 Canada collected in customs duty $105,500,000, a per capita tax of $16.40, as compared with $2.88 of the United States. That goes to show to what extent the United States is practising an exclusion policy. May we not expect that they will continue that for a number of years? It is not to be expected that the Secretary of the Treasury in Washington would favour any reciprocity treaty at the present time. It is scarcely to be hoped for, and I question very much whether such a policy, if it were submitted to the Canadian people, would not receive just as high an adverse vote as it did in 1911. The people of Canada, at the present time, are not in favour of reciprocity with the United States. In 1921 the exports of the Dominion of Canada amounted to $1,210,488,119 and her imports to $1,240,158,882, a balance against Canada of 130 million. The dutiable imports were $847,561,406 and the free imports $392,597,476. That shows that the free imports of the Dominion are about 48 per cent of her dutiable imports. That is not the very high rate of protective duty, when almost half the imports of this country are free of duty.

There is another feature of the matter which, I think, members of this House and the people of the country should very seriously consider. My opinion is that the present Government is starting on a downward trend in tariff duties, that they intend to do away with them, and gradually place in their stead a sales or excise tax to prevent any advantage to our Canadian manufacturers from the duty which is collected. The thin end of the wedge has been introduced, and it would appear to me that during the years of their term of office they will continue their present policy, until they have done away with the protective principle. During the late campaign, noting the remarks made throughout the country, I could not help thinking that the Liberals were sincere, and if they were sincere, I see nothing for it but that they will continue on the road

on which they have started and do away with protective duties. What influence will this have on manufacturing industries proposing to come into this country? Looking over the amount of investments in Canada, I find British capital is invested in Canada to the extent of two and a half billions of dollars. That means that two and a half billions of British money is invested in Canada, and' it is invested largely in stocks and bonds. Money invested in stocks and bonds helps to .build up the country. The money is invested in our industry, although the British investor does not run those industries. He lives in England, gets the interest, which is sent over to him, and spends it over there. But the money invested here helps to develop this country and to run our industries, builds up the cities, and gives employment to the labouring men. This was the policy of the British investor in past years, but there is a decided change coming over the British investors. During the last few years they are coming into this country more and more, and investing their money, and taking part in the industrial development of the country. During the last two years British firms have come to Canada and established their plants here in various cities throughout the Dominion- Quebec, Montreal, Toronto, Hamilton and other centres of population. They are coming here to manufacture articles which will compete in our home market, with the Canadian made article, and, by their competition, they will reduce the cost, and at the same time give employment to our people and furnish a market for the farm produce of the country. The number of American firms in this country is quite large. In 1921 there was invested $1,800,000,000 of American money in Canada, and, unlike the British investor, they placed their money in the industrial concerns and went directly into the business in the country. They employed our labour, built their plants in our cities, and helped, like the British investor, to build up the country. In 1914 there were something like 350 American concerns doing business in Canada; in 1921 there were 700 American concerns, an increase of one hundred per cent, showing the benefit of protection. Without that protection none of these firms would be in Canada. They would have their plants in the United States, and would do the manufacturing

The Budget-Mr. Anderson

there. The United States would have the money, we would buy the goods, and we would be building up the plants in their country. Instead, under protection they are building up our Canadian cities, furnishing a market for the produce of our farms, and helping to develop the natural resources of the Dominion.

Now taking them altogether, these people come here for the direct purpose, in the first place, of avoiding the tariff. Without that tariff they would not be here at all. They come here because of our stable form of government. We have a thrifty people, and varied natural resources from which they can draw the raw material. We have the market they want, and they can cater to that market better in Canada than from the home plant in the United States or in England. The consequence is that they are continuing to come. But if we interfere with the protective principle in our tariff, they will cease coming, because they will wait for the day when free trade will be in effect, and they can supply this market from their home plants. Hon. members to my left, and hon. members anywhere in this House, can readily understand that it is much better for this country to have the articles which we need manufactured in Canada. Canada is a large country, and it is well able to supply its own needs, and we should become, as far as possible, a self-sustaining country. There is no reason in the world why a people so verile, active and energetic as the people of Canada, with such a large tract of country, such great natural resources, able to furnish the raw materials for every kind of industry, should not develop the natural resources by its own people and make the country self-sustaining. During the war we found out that there were large numbers of articles which we did not manufacture at home and which we were buying abroad. We had to do without them until we were able to manufacture them for ourselves.

In the Dominion of Canada in 1920 34,000 manufacturing concerns were making in all 8,445 different articles of manufacture. In 1917, we produced 6,257 different articles, so that there was an increase of 25 per cent in those three years, directly resulting from increased activities due to the war as well as to the desire on the part of outside people to get into our markets. In 1917, 6,500 different firms were doing business in Canada, whereas in 1920 there were 8,500, an increase of 2,000, or 25 per

cent. Each of these firms controlled about four different manufacturing establishments, showing the tendency on the part of various firms to branch out on account of the great extent of this country.

I wish to draw the attention of the House for a few moments to a comparison between these countries, Great Britain, the United States and Canada, as regards trade. In 1919-I am taking the year 1919, because it was the last year for which I could find any adequate returns-the total British trade amounted to $12,600,000,000, or a per capita trade of $380 for a population of about 46,000,000. Her imports for that year were $7,912,000,000, or $175 per capita, large, comparatively speaking; but when we examine her exports for the same year. In 1919, she exported $4,687,000,000 worth of goods, equal to about $93 per capita of her population, as compared with per capita imports of $175, or 59.25 per cent of imports. During the same year, the customs collections were approximately $720,000,000, or $16 per capita. In 191920, Great Britain imported $100 worth of goods for every $59.25 worth of goods that she exported; the balance of trade being so strongly against her in the world's market, she must pay the difference in gold, or her money will be below par. I do not know how any country can continue to do business on the basis on which England does it, always buying more than she sells. There is an explanation for that with regard to England; but I doubt very much if Canada can do the same thing and remain solvent. No private individual, no industrial concern could do business on the same basis, and remain solvent.

In the same year Canada had a total production of $4,993,000,000, or a per capita production of $587.50 for our people. This was made up of the two great branches of production, agriculture and industry, the amount as regards agriculture being $2,251,000,000, and as regards industry, $2,742,000,000, the two sources of production breaking almost even in the race. The greater part of this huge production was consumed in the country. According to trade returns, our total exports for 1919 amounted to $1,268,000,000, that is, the exports were almost exactly 25 per cent of the total production of the entire country. This leaves about 75 per cent of the production of this Dominion, in relation to agriculture and to our manufacturing industries, consumed in this country. This certainly is a good argument in favour of the home market and of our pro-

The Budget-Mr. Anderson

tecting that home market, not only for the agricultural producer, but for the industrial producer as well. Our exports amounted to $149 per capita, and our imports to $108 per capita. The total external trade was $257 per capita of the population. While we exported 25 per cent of our total production, we imported 181 per cent of our total production, so that in reality the Canadian market could consume over 90 per cent of the total production of this Dominion if we catered to it in every way. This shows again that the home market is the best market which the people of this country can have.

In the United States, I took the year 1921, as that was the only year for which I could find complete returns. The United States in 1921 produced, on the farm, supplies of all kinds amounting to $8,420,000,000. This, I found from a statement by the Department of Commerce quoted in the World Almanac for the year 1922, at page 693. I was disposed to question that. I thought the agricultural production of the United States would probably be larger. I looked this up very carefully, and those are the exact figures stated. It was stated that they were taken from the Department of Commerce of the United States. The estimated population of the United States is 107,000,000 people. The industrial production of that country in the same year amounted to $24,624,000,000. That, added to the agricultural production, gives a grand total of $32,500,000,000 which is, roughly speaking, a production of $303.75 per capita, as compared with $587.50, the per capita production of Canada. Out of this total production of $32,500,000,000, $7,250,000,000 was exported, or approximately 221 per cent of their total production. Thus, roughly speaking, 771 per cent of the total production of farm and factory of the United States was consumed in that country. No other argument, I should say, was needed to show the people of this country and of the United States the necessity of protecting the home market. That is the market which is nearest to them, most accessible, and they know how best to cater to it. The same thing applies to the Dominion of Canada. The total imports of the United States for 1921 amounted to $3,090,000,000, or a little less than 50 per cent of their exports. But when you compare that with their total production, it amopnts to 9i per cent, so that 107,000,000 people purchase only 9i per cent of their total needs from the outside world. You can easily see from this

[Mr. Anderson. 1

how very much self-contained they are. They can live almost within themselves and feel that they do not need to take any particular part in the disputes of Europe. They stand alone, and it will be very interesting for the people of this country to watch our neighbouring republic and see how they can get along with a total exclusion policy. The total external trade of the United States amounted in 1920 to $111 per capita while their exports amounted to $73 per capita, and their imports to $28 per capita.

For the sake of comparison, we will look at the trade of these three Englishspeaking countries that are doing business on a different basis: England as a free trade country, using the tariff for revenue purposes only; the United States as a highly protected country, and Canada as a country of moderate protection. The comparison shows that England leads in the general volume of trade and does much more business with the outside world than either of the other two in proportion to population. But she buys $100 worth of goods, while she sells only $59 worth in the world's market, having a reverse balance of $41 against her. The United States reverses this order very heavily. She buys only $42.83 worth of goods, while she sells $100 worth, thus having a surplus balance in her favour of $57.17. Canada has a medium position, selling $100 worth of goods, while buying $72.50 worth, thus having a surplus balance of $27.50 in the world's market. These figures with regard to Canada and Great Britain are for 1919, but with regard to the United States, they are for 1921. Canada, then, has a per capita production of $587.50, the United States $303.75. The per capita trade in the world's market is as follows: The United States, $96.40; Canada $257; and England $302.20. That shows the varying bases on which these three different countries compete in the world's markets. England maintains her position largely because she is a world carrier and is able to make up her deficits by the moneys earned in carrying exports from and imports into the country.

I do not think it is too sweeping a statement to say that the difficulties facing the Minister of Finance (Mr. Fielding) are largely due to the war. If you could eliminate our war debt and the deficits resulting from the operation of the Canadian National railways, the Minister of Finance would have a very easy task to perform in connection with our financial

The Budget-Mr. Anderson

situation. The hon. gentleman, when speaking on the budget last year, said in this House:

In all that is necessary, as arising from the war, we desire to share with hon. gentlemen opposite the honour and responsibility of the occasion.

In these generous words he exonerated the late government from any blame in connection with the great war debt we have to-day. I do not think he could have done otherwise, since the late government had a record that has not been excelled by any other government in this country. They had to hew out for themselves a new path and follow an unknown course; they were compelled to face difficulties that were never before contemplated; and they showed great ability in meeting those difficulties and making revenue and expenditure meet. It was a very strenuous time and the government succeeded in discharging their obligations in a way no other government had done before. '

There is only one way we can meet our debt, and that is by proper economy, making annual revenue meet expenditure. We must not go further into debt. I do not think there is any class of people in this country who object to paying our war debt. The only person I heard suggesting a repudiation of the debt was the hon. member for Winnipeg Centre ( Mr. Woods-worth), who sits to the extreme left. I believe he made some remark to that effect the other day. But that view is not shared in by very many people of this country. Canada is a very wealthy country and we ought to be able to meet our obligations. It would be very much better if the same attitude were taken by Germany, and they went to work to meet their reparation payments instead of trying to evade their responsibility in this regard. I have sympathy with France in the position she takes in demanding these payments. The French people will not forget the treatment that was meted out to them in 1870 by Germany, when France was compelled to pay to the last cent. That fact will rankle in the mind of every Frenchman, and I sympathize with the French people in their demand that Germany shall pay on this occasion.

In relation to our debt and annual expenditure the Government has three definite duties to perform. First, they must practice economy in the annual expenditures. I think that economies could well be practised particularly in connection with the Civil Service, and I am not 'advocating that the civil servants shall be paid less. I believe, with the member for Sherbrooke (Mr. McCrea), that the Civil Service is very much over-manned. We could do with fewer civil servants, and those that are employed could work longer hours each day. In that way we should have more efficiency. It would be better for the civil servants to pay them more and make it worth their while to stay in the service. They could then be required to work longer hours, thus making their effort to help the government economise. I think that certain savings could have been effected in the estimates brought down this year in other directions than those in which the Government has economised. I do not think it is wise to pare down the estimates to the lowest possible figure, because that can very easily be false economy. The best economy is to get the utmost that is possible for the money you spend. I was not in favour of the reduction of $700,000 in the militia estimates, and I was sorry to see that the Minister of Militia (Mr. Graham) was compelled to submit to the importunities of hon. members on his own side. I compliment him on his ability to about-face at the command of his subaltern from Quebec South. It was certainly a manoeuvre that the hon. gentleman did not learn in any British army, to turn his back so adroitly in the face of the enemy. I regret also that the naval estimates were cut down a million dollars. They were small as they were, and it was a great mistake to reduce them, because we ought to have a small navy in Canada. In 1908 or 1909, when the naval debate was in progress in this House, under the leadership of Sir Wilfrid Laurier, the Toronto Star sent out telegrams to all the leaders of the municipalities in Ontario 'asking their opinion on the naval issue. Replies were received, the great majority of which were to the effect that the Dominion of Canada should have a small fleet as the nucleus of a navy that could in future be sent to the relief of England in time of emergency. That was the proper policy to follow, and it is regrettable that the government has now receded therefrom and practically scrapped the navy. The naval cadets in Canada are very much displeased and disappointed as a result of the reduction in the estimates, because they will have to change the plans they had made for the present year. .It was scarcely fair to them to bring the matter

The Budget-Mr. Anderson

down at the last moment and now compel them to alter the arrangements which they have made.

There is another way in which the Government can help matters, and that is hy assisting to give an equality of opportunity to all. In the matter of taxation no preference should be shown, and every man should share the responsibility of the national debt. Every individual citizen gets the benefit of the protection that is afforded by our laws, and he has a corresponding duty to the state which he should discharge. The Government can do much in seeing that every citizen has an equality of opportunity to obtain the means whereby he may provide himself with the necessaries of life and pay his fair share towards the revenues of the country. Another duty which devolves upon the Government and which the Minister of Finance takes cognizance of in the budget, is to extract from the pockets of the people, in the most equitable manner and to the fullest extent possible, the money that is required to meet our annual expenditures. This is a matter of some difficulty, and I believe that the minister has approached the question with considerable care.

The railway question has been referred to by various hon. members in the course of the debate, and I may say at once that I am in favour of the national ownership of railways. Those railways were taken over by the government, not because the government wished to, hut because they were compelled to by the circumstances. I believe it is possible to conduct our National Railways as efficiently under public ownership as under private ownership, and I think it would be a national calamity if all our railroads were under one private company. Such a monopoly would not be in the interests of the country generally. I have a great respect and admiration for the management of the Canadian Pacific Railway, which is one of the most efficient transportation companies in the world, but I think it is absolutely essential that our National railway system should remain under public ownership. The Canadian Pacific Railway will [ be a stimulus to the management of our National system to get their fair share of traffic, and it is gratifying to know that last year they secured 54 per cent. After listening to hon. members of the Government and their supporters, it would not appear to me

that the National Railways will receive a fair and just trial at their hands. When hon. members opposite are so outspoken in their opposition to public ownership in principle, it is not likely that they will make any very enthusiastic efforts to insure the successful operation of our National railway system.

With respect to immigration, I am of opinion that as far as possible we should seek immigrants from the British Isles, northern Europe, Holland and France. But I should like to see a very strict medical examination enforced either at the port of entry or the port of embarkation, for it is absolutely essential that newcomers should be medically and physically sound. From the discussion on the estimates of the Departments of Immigration and Health, I formed the conclusion that there is not a sufficiently strict inspection of immigrants from the United States. Undesirables may seek entry from the United States, and we should have a better system of medical examination. The United States authorities are ahead of us in this respect and frequently 'Canadians crossing the border are held up under slight pretexts, not so much in regard to their physical qualifications as their financial position.

The abolition of the dumping clause will prejudicially affect a large number of fruit and vegetable growers in Ontario extending along the shores of lake Ontario from Belleville to Niagara Falls, as well as those along the shores of lake Erie, who in the aggregate have a very large amount of capital invested in the enterprise. The American fruit-I am speaking particularly of the small fruits-is shipped in here two or three weeks ahead bf our domestic fruit and secures the cream of the prices, and by the time our fruit is coming on the market the American growers will have a large surplus on their hands, which they are ready to dispose of at any price, thereby depressing the domestic market for our local growers. The same conditions apply to vegetables. In the county of Halton alone there are five or six thousand people interested in fruit and vegetable growing, and altogether we have about forty thousand people in the province who are interested in this industry. It is scarcely fair to leave them open to the bad results following from the dumping of American fruit and vegetables on our market at a time when the domestic production is being offered for sale. As stated by the hon. member for Yale (Mr. MacKelvie), the fruit

The Budget-Mr. Raymond

and vegetable growers of British Columbia will also be adversely affected. In view of these facts, I think the Government would be wise to consider this matter further, and I trust it will result in their deciding not to repeal the dumping clause.

The excise tax of 49 cents per 100 pounds on beet sugar will affect a large number of our farmers who are engaged in growing sugar beets,

5 p.m. and in this case also I think the Government would be well advised not to place our farmers at such a disadvantage. I presume the matter was very carefully considered, but I hope it will receive further consideration.

With regard to the amendment, Mr. Speaker, it seems to me that honesty and sincerity should characterize the undertakings of political parties. This is essential if our public life is to be kept at a high standard. The Liberal party has not been too particular in this regard either during the last campaign or in preceding campaigns. Candidates of that party made promises prior to the election which they knew there was absolutely no possibility of their redeeming. For instance, they promised that if their party was returned to power they would reduce the cost of living by reducing the duties on imported articles. But what has the Government done? While slight tariff reductions have been made, the increase in the sales tax will result in the cost of living being more burdensome than before. In a word, the Liberal party have secured office under what amounts practically to false pretences. This is not a desirable condition in our public life, and for that reason I shall support the amendment.

Mr. WILLIAM G. RAYMOND (Brantford) : Mr. Speaker, as representing a constituency which perhaps is more affected by the tariff than almost any other constituency, I thought it desirable that I should say a few words upon the tariff as it appears to the workers in the industries at Brantford.

There are, of course, many views upon the tariff. Any one who has listened to the debate, so far must have noticed that all kinds of opinions are held by hon. members. In fact, one hon. member, I think from Fort William (Mr. Manion), did me the honour to allude to me in what I thought was intended to be the language of compliment-it might have been called flattery-when he said that I was a Liberal Protectionist. Now, I have no objection to

the term if translated in the way that I would translate it. I do not know exactly what the hon. gentleman meant, but I would remind him that a countryman of his own once said "There is many a true word spoken in jest." I think from the point of view from which we regard protection, that is to say, of a tariff for revenue with incidental protection, not by any means a tariff for revenue only-

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?

Some hon. MEMBERS:

Oh, oh.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

What is the objection? A tariff for revenue with incidental protection-

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?

Some hon. MEMBERS:

Oh, oh.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

I should think that was easily understood.

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An hon. MEMBER:

Very easily.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

I am glad that some hon. gentlemen are so easily amused, Mr. Speaker. While we may differ on the tariff, while there are points, I think, upon which we can all agree. Every man who was elected to this House, I fancy would claim to be, and I think his constituents must have thought he was, at least a good Canadian, one who loved Canada; and those who love Canada must certainly honour those who serve Canada well and unselfishly, and do her good service. In that sense I believe it is the general opinion of this House that there is no better example among men of Canada, and we have many who have done great service to our country through a term of many years, than we have in the hon. the Minister of Finance (Mr. Fielding). I believe that on that the members of this House can all unite and be unanimous in congratulating him, and I believe they will agree that this budget that he has presented to the House is one that was produced under the most difficult circumstances. I believe that the people of this country look upon the hon. Minister of Finance as a wise administrator, as a true patriot, as an honest man, and an honest man, the poet has told us, is the noblest work of God. The hon. Minister of Finance is a man who has "talked with crowds and kept his virtue" and "walked with kings, nor lost the common touch". He is one whose name will be handed down with satisfaction and pride. I believe that his last achievement is one of which the country generally will feel that it is probably the very best that could be done under difficult circumstances.

The Budget-Mr. Raymond

There is one disappointment that I have, however, in this debate and it is this, that the amendment in the form in which it was moved, instead of expressing some sound or unsound economic principle, does not express any at all. It simply derogates the whole debate and draws it down to the field of mere party politics. Anyone who read the amendment introduced by the hon. member for West York (Sir Henry Drayton) will see at once that that is the object of it, the aim and the end of it-to open up a discussion that will go back to the last election; and I notice that the speeches of many members who have followed it are purely what might be called political speeches, instead of being on the broader field of patriotism, upon our national difficulties, upon our national aims and aspirations. I cannot believe that a man with the great wisdom of the ex-Minister of Finance (Sir Henry Drayton) and one who was concerned so intimately as he was with this country's financial affairs, could by himself have framed such an amendment. I believe it was thrust upon him,

I do not think it was voluntary on his part.

I think in the amendment we can see another form; we can see it has been suggested, it has been dictated, it has probably been written for him and placed in his hand to move, and he has moved it because he is under the discipline of his masterful leader the right hon. member for Grenville ( Mr Meighen).

While I regret that the debate, as I say, has been drawn down to the field of party politics by the moving of this amendment,

I do not think it is necessary to follow the amendment, because in doing that we are only going back to the argument, backwards and forwards, that were used during the last election. We have other issues before us. We have to consider how the budget proposals will affect, first, our constituencies, and then in a broader sense, how they will affect the country. That is, we should look at this budget both as representing our ridings, and in a general sense as Canadians. I endeavour, for my part, to regard it in that way, and I endeavour to represent the constituency that elected me. The members of this House are not automatons, nor are we delegates, but representatives, and we have to the best of our ability to speak opinions, not always our personal ones, but those of ourselves and our constituents. The very derivation of the name of this assembly is by many etymologists thought to be from the words "Parler le ment"-to speak the

mind-and if we openly and plainly speak our minds, I think we shall produce better results than if we sail under any false colours or resort to any camouflage.

This House was told by an hon. member that I had out-priested the high priest of protection. That may b-' true. The returning officer said it was. While it is a fantastic and paradoxical phrase. I presume possibly it is meant for a reproof. If so, we can recall instances of where even priests and prophets were reproved. Balaam was reproved; we all remember that, and I believe in this case the reprover out-brayed the rebuker of Balaam. When I am called a Liberal protectionist, if that is what I understand it to mean, namely to desire a reasonable, rational revenue tariff on industrial products, the manufacturers of this country, I must acknowledge to being a protectionist, whatever odium the word may bear in some men's minds. But I claim that that has always been the policy of the Liberal party- always. If you go back to Confederation when the tariff was made by a coalition government, the first tariff we had was a matter of some (15 per cent, and the first time that tariff was raised, it was raised by the Alexander Mackenzie government, who were accused of being protectionist by the Conservatives of that time. The Liberals did not reduce the tariff when they came (into power; they raised it because of the necessities of the country. Then, when they came back in 1896 the same thing happened. They maintained a certain amount of protection, but the present Minister of Finance so skilfully readjusted the taxes on raw material that the commerce of this country grew by leaps and bounds, and our population increased, as was proved to the House this afternoon. So free trade has never been a part of the Liberal party, neither in theory nor in practice, and I do not think any one expected that it would be. It is well known in the older settled parts of Canada that the factories existing there are dependent on a certain amount of reasonable protection that is afforded by a revenue tariff for their existence, and while that is felt it is not likely that the Liberal party would ever announce that it was going to renounce that policy which has so long been the accepted policy of Canada. Hon. gentlemen opposite are always endeavouring to say that the aim of the Liberal party is free trade, or, as they put it sometimes,

The Budget-Mr. Raymond.

free trade as they have it in England. If they could ever prove that that was the object of the Liberal party, they know then that the policy of the Liberal party would not be popular with the people of Canada, and that is why they wish to foist upon them a policy which is not theirs, which does not belong to them, and which, when in power, they never put into practice.

Now I am not going into the details of the present tariff, there will be plenty of time for that when the House is in committee, if it is desirable; but on its general principles I will just say this. What affects my constituency is the removal of the two and a half per cent from agricultural implements-from ploughs, binders, cultivators and the various implements that are used upon the farm. Why should I feel so keenly when, perhaps, it appears to some gentleman hut a small matter? The reason is this: our city is dependent upon the

agricultural industry, upon the manufacturing of agricultural implements. When there are no agricultural implements making, our people are idle and the families are starving. At least, one-half of the employees in the city of Brantford are employed in factories that make these goods, and that half contains among it by far the larger number of the heads of families and householders in the community. When there is no manufacturing of agricultural implements, those people have no work, actually it creates a situation of starvation. The city has had to spend thousands and thousands of dollars during the last year or year and a half when this employment has been very precarious; now it has ceased in many of the factories altogether. In view of these facts when these implement manufacturers

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PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River) :

May I

ask a question?

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

Certainly.

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?

Some hon. MEMBERS:

Louder.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

It isn't private, is it?

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PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River) :

The hon. gentleman made a statement that'in several of the agricultural implement factories the work had ceased altogether.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

Yes, sir.

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PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River) :

Would

the hon. gentleman have any objection to telling us reasons why that work has ceased?

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June 1, 1922