June 1, 1922

CON

George Black

Conservative (1867-1942)

Mr. BLACK (South Huron) :

Only two binders are manufactured in Canada today against nine or ten twenty-five years ago.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

If you will allow me a moment since you raise the question. The International Harvester Company was started as a branch of McCormick's and Deering's, and the reason was that those two companies thought they would rather start a branch factory in Canada than pay duty on binders from their American factories. So they started this factory at Hamilton, whence they distribute binders all over Canada. That is now a Canadian industry, and if there had not been a duty on binders you would not have got that factory established at Hamilton.

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CON

George Black

Conservative (1867-1942)

Mr. BLACK (South Huron) :

Binders

were manufactured in Canada before that.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

Certainly, but not by the International Harvester Company. Binders were manufactured in

6 p.m. Brantford by the Massey-Harris Company and at Smith's Falls by the Frost & Wood Company. There are several other companies that make binders in Canada.

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CON

George Black

Conservative (1867-1942)

Mr. BLACK (South Huron) :

Just two -to-day manufacturing binders against ten manufacturers twenty-five years ago.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

We not only make binders in Canada but we export them. The question brings back to my mind my first association with the International Harvester Company. When the company was coming here from Chicago an effort was made to get them to locate their factory in Brantford, and I saw their representative as I happened to be a member of the city council at that time. They were going to start this branch in Canada, and this gentleman, who came from the McCormick company, said they were going to start a branch in Canada rather than pay the Canadian duty on their American product.

Now, Sir, does not that prove, or at all events, strengthen my argument that it is to your interest to have these factories at your command, to have them developed close to you, so that if those industries are the four basic industries, the industries from which they derive supplies, tools and employment should be close to them and dependent on them, and that we should endeavour to foster such industries rather than exotic industries which are not so immediately necessary to our people.

At six o'clock the House took recess.

After Recess

The House resumed at eight o'clock.

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LIB

William Gawtress Raymond

Liberal

Mr. RAYMOND:

Mr. Speaker, when

the House rose at six o'clock I was endeavouring to make plain my attitude towards the tariff and my constituency in occupying the place I do on this side of the House, and being, as it is termed, a Liberal protectionist.

I endeavoured to show that the position I held was not at all incompatible with the principles of the Liberal party, and that if to believe that a revenue tariff adjusted in such a way as to provide an incidental protection to the manufacturing industries of our country was to be a protectionist, I must acknowledge that in' that sense I am a protectionist, because I believe that is the best tariff. As I stated before six o'clock, the consistent attitude of the Liberal party has always been, when it was in office, to carry out that policy. I am aware that at election times gentlemen on the other side of the House have endeavoured to state that the only policy of the Liberal party was free trade, or, as they loved to put it, free trade as they have it in England, but I think I was successful in showing that that had never been the policy of the party, was not now, and is very much less likely to be the policy of the party in the future. I think that we have in the present tariff one that is in the general interests of this country, and if the manufacturers of agricultural implements in my constituency have to lose 2J per cent of protection, if that is in the general interests of Canada, as it must have been thought to be by the Finance Minister, I oelieve they are men who will cheerfully acquiesce in that tariff, though realizing it would have been better for their own business, if the old policy had been maintained. Why there should be anything incompatible in one holding such views being on this side of the House, or in being a Liberai, it is impossible for me to understand. I can only say in defence of my being a Liberal and being on this side of the House, that as I read history, and as I always have read it from my youth up, I have always inclined to the Liberal side of politics and to the principles that that party have held and have carried out.

I was very much surprised when I heard an hon. member who has charmed this House with his eloquence and inform-

The Budget-Mr. Raymond

ed it with his erudition, the hon. member for Centre Winnipeg (Mr. Woodsworth), say that as he read history he could see no difference between the two old parties.

I hope that as he reads it with added years he will see a vast difference between the principles of the two old parties, for as I read history I find on every page the principles, wherever there is action, of the one side or the other always at work. Not to mention what is trite and obvious, and well known to hon. members of this House, who are, of course, all readers of history -it is not necessary for me to recapitulate the gradual growth and development and building up of our freedom, of our liberties, and of this very assembly of the people, as a product of the growth and development of Liberal principles. If you go back to the earliest days and take those measures which have been for the good of the people at large and in the direction of good government, in which power has been made to feel its responsibilities and obligations to those over whom, it exercises control, I say that there you will see the growth and development of what I consider and call Liberal principles. If you take the other side-you need not go further than Magna Charta. Everyone knows who was the Tory on that occasion; they do not need to be told it was King John. If you come down further in our parliamentary development you will find it was the people of Liberal principles who rose and fought for the liberty of Parliament against the Stuarts, and in that long and bloody war achieved an independent place for the Commons of England such as they have never lost to this day. If you want to find the opposite principles, the principles of true Toryism, you find it when the thirteen colonies of the United States were forced away from Great Britain by the exercise of tyrannical power by George III and his Tory advisers. One can hardly read a page of history from earliest times down to the present day without seeing these principles clearly and plainly at work.

I will not weary the House but if you come to the emancipation of the slaves, if you come to the Catholic Reform Bill if you come to the Great Reform Bill when the franchise was given to the people, and so on right up to the present day, you will find that those who resisted those movements were those that believed in the

practise and exercise of what I call the principles of Toryism. In fact you have it right down to modern times, right down to our own days. Those were the principles that so actuated the Government of this country that after ten years experience of it, from 1911 to 1921, the free independent spirit of the people of Canada rose against it and in one form or another the people said they had had enough of it. On the other hand, if you take those things of which we as Britons, as Englishmen, have most justly to be proud I maintain it is where Liberialism has won victories, where we have gained constitutional liberty, and where such a system was established,-in which Canada took the foremost place, resulting in the institution of representative government in this country,

that we now have the free governing nations that now form the British Empire held together- sometimes they say by the spirit of loyalty. But it is not loyalty alone, gentlemen, in the case of those men who were driven from England by Tories and helped to establish the thirteen colonies in the country to the south. They were loyal, just as loyal as anybody else; but they were driven out because there was not such a system in which they could exercise what they considered their just freedom and their just liberty.

It is because of these things that have been accomplished, because we have autonomous nations within the Empire-self-respecting, self-governing, but united in forming the great galaxy of nations that we call the Empire-that I see the great triumph of Liberal principles and hence, Mr. Speaker, I feel that I should have no occasion to defend myself against the charge of being a Liberal. If I have, then the crime charged is one of which I have always been guilty in the past, and I fear I cannot, at my time of life, so change as to be innocent of it in the future. For it seems to me that those things of which we are most justly proud, those things of which we have the most right to boast of in the achievements of our race-not merely what we have done in the way of commerce, of colonizing, of producing great money or wealth, although those are great things and have filled their purposes-those things that we have done in solving the problem of the proper government of the people, for the people and by the people, have been accomplished through the agency of Liberal principles.

I hope, Mr. Speaker, that the gentleman who referred to me as a Liberal protec-

The Budget-Miss Macphail

tionist will feel satisfied with iny answer, and that the hon. members of the House will think that I have so far made clear my position that at all events it will be worth the consideration of those who did not at first agree with me.

Miss AGNES C. MACPHAIL (Southeast Grey) : Mr. Speaker, I want at the outset of my remarks to assume full responsibility for what I am about to say; I do not want any one else to have to bear that responsibility with me except my constituency. Now almost all who have spoken in this debate have made pleasing and kind remarks about the Minister of Finance. I am glad that I also can say that personally, I do admire very much, as I am sure every one in this House does, the Minister of Finance. It would be too much, however, to go further and say that I was disappointed in the budget. I was not disappointed in the budget because I did not look for anything from it. I could not be after having studied the Liberal budget of 1896; knowing as I do that under the Liberal regime we got the rebate; knowing also that the British preference was not increased but decreased under Liberalism in 1907; knowing, or suspecting at least, that had there been a desire now to bring down a more generous tariff it could not have been brought down because of the high protection which to-day permeates the Liberal party and the Liberal Government. Of course, this is nothing startling that I am telling you, the country knows this and knows it very well. And so it would be going too far to say that I was disappointed in the budget. It has been said many times that the budget was a step in the right direction. If that he true then I think it was one step forward and one step back; because anything that was gained was pretty nearly lost in other directions and so the total, or the sum gained, did not amount to anything of any material value.

We have heard some interesting things this afternoon from the hon. member for Brantford (Mr. Raymond). It seemed to me as I heard him present his argument that he was building the roof of his house first, and I wondered all the time how he could support that roof while he was getting the walls built and then the foundation. I think he was going on the assumption that if it were not for protection, or other artificial stimulation, there never would be any manufacturing to supply the need of the four basic industries; that

those key industries he speaks of would never develop, unless under protection of an artificial character. That, I think, is a fallacy. I think, just so surely as there are four basic industries, just so surely will the secondary or key industries follow the development

Now, possibly it would be a very good thing to test protection by seeing what has been the effect upon the greatest of the basic industries under the protection we have had for some time in Canada. I think it is true that rural depopulation has become so intensified a problem that it is a worry to every one, not only those who live upon the land but those who earn their living in these highly stimulated industries. Because, as we were told this afternoon, they want someone who is going to buy the product of the labourers in the factories ; they cannot keep factories going if the warehouses are full. And just here let me ask: Why has trade been very dull lately? Of course there are world conditions which tend to make it so, but surely every one in this House knows-I am sure hon. members know and I hope they will admit- that the lack of buying power of the four basic industries has had a great deal to do with the full warehouses that made trouble for the key or the secondary industries. We find that of the population of Canada in 1901 the rural percentage was 62.04, and the urban 37.06. In 1911 the rural population had fallen to 55.05, and the urban had gained until it reached 45.05. In Ontario, between 1901 and 1911, the rural loss in population was 52,184, without taking into account the increase in birth and immigration, which would have brought it to a total loss of 373,567, or 29 per cent. In obtaining the census they are not always strictly accurate. Take such ridings as East and South York; the city of Toronto has over-run into the surrounding country, and the people there live on very small holdings, which they do not work, because they go back and forth to their work in the city. These people are, in a great many cases, called rural people, when, in truth, they are not. I gave these figures before, but not completely, and I

The Budget-Miss Macphail

desire to repeat them, because I was startled when I saw them. My own riding of Southeast Grey, since 1911, has lost 14.22 per cent of its people. My riding, with the ridings that border on it, Dufferin, North Grey, including Owen Sound, South Bruce, North Simcoe, and North Wellington, have together lost 18,170 people. The township of Egremont, which is one of the best townships in Grey, and has splendid land, lost 15 per cent of its population between 1901 and 1911. The question is, can this go on longer, or how much longer is it to go on? Has protection, under which we have been living, been good for the basic industries of Canada? Can the manufacturing industries continue to flourish, if the very roots that nourish them die? I do not think they can.

I always take it for granted that we are all loyal Canadians, and I never question any one's loyalty. I believe that each member in this House hopes for the day when Canada will be even a greater nation than she is to-day. But when I look at it from a national viewpoint, I am alarmed when I see the artificial stimulating of the secondary industries at the expense of the basic industries. Those basic industries, of which the greatest is agriculture, are slowly-not so slowly either-and surely, dying in Canada. The history of the world proves that in civilization finally urban life dominates the rural, and then rural life dies, and then, finally, we have national decay. History teaches us that lesson. It is true that the people of Denmark and the people of the Scandinavian peninsula have gone one step further than we have, and they are trying by their own exertion to save rural life, and it seems that they have been successful. The odd thing is that when we try to do that here we are called very hard names, and you would think that we were trying to disrupt all the national life in Canada, though in reality we are trying to save that national life by saving the foundation on which it is built. In 1918, in Ontario out of 5,957 rural schools we find this result:

Schools No. of pupils

5 1

12 2

33 3

46 4

79 5

524 6 to 9. average

1_400 10 or less

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LIB

William Duff

Liberal

Mr. DUFF:

Is that in the whole of Canada or one province?

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PRO

Agnes Campbell Macphail

Progressive

Miss MACPHAIL:

In the province of Ontario.

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LIB

Joseph Archambault

Liberal

Mr. ARCHAMBAULT:

You do not see that in the province of Quebec.

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PRO

Agnes Campbell Macphail

Progressive

Miss MACPHAIL:

Then they say that they can protect the farm. Well, if you ruin it first, you can try to protect it afterwards, but you must first ruin it, and we have not done that yet. The United States is further on in the same road of protection than we are. Their farmers are demanding protection for themselves, and there must soon come a reaction, and in the very thickly populated portions of the United States half or more of the population are going to be clamouring for no protection on food and will wage a similar fight to that which took place at the time of Cobden and Bright long years ago in England. So it is going to go on in a circle that gets nations nowhere.

I do not for a moment assume that protection alone is the cause of the deplorable rural condition. I do not even think that. I think there are many causes for rural conditions such as we find to-day and I think possibly it is not asking too much to take just a few minutes to tell you what I truly believe they are. I believe one of the basic things that makes life unsatisfactory today is our school system-a school system which is based on the idea of classic education, a system which has got into a rut. You go from public school to high school and from high school to the university, and once you have gone all the road you very rarely come badk to live by any of the basic industries. There is no rural system of education. It is true there is an urban education transplanted into the country.

Then, again, we have the lack of cheap credit, and of long time loans. It is very difficult for farmers to get credit, because the assets they have at their command are not accepted as security for loans. With regard to transportation, our railways having been built away ahead of the development of the country, the overhead cost that has resulted has led to heavy transportation charges. I hope it is not too much to say that I think our national ideal is not a true ideal, that we have in the last 25 years possibly allowed ourselves to think that money, dollars and cents, the successful gathering together of a large pile of capital, is success, when it is not really success. Everyone has tried to acquire capital by doing his fellowman, and if he could not do him well enough without legislation, he cleverly sought legislation to help him do the other fellow more successfully. Because of that we have had legislation

The Budget-Miss Macphail

which no one can deny has taxed all the people for the benefit of a few.

I want to give you what I consider three or four proofs that farming does not pay to-day. Of course, any one who farms does not need any proof, but, possibly, it is well for the people who do not farm to realize something about farm conditions at the present time. Not one per cent of the farmers pay an income tax. Only 45 in Ontario paid the tax last year. People do not run from a paying proposition, and they are running from the farms in Ontario at the rate I have quoted to the House. Not one farm between one ocean and the other will rent for enough to pay 6 per cent on the investment. Two or three generations ago the old pioneers came out to Canada and with great labour hewed down the forests and established homes. Gradually one generation after another improved the property, put buildings upon it, draining it, fencing it, and to-day their descendants find that they have not help of their own, and that their children will not stay with them because they cannot pay them as other industries can. When they cannot afford to hire help they give up the struggle and sell the property that their parents and grandparents have possibly hewed out of the bush. They find that they can sell the land and give away the buildings and improvements if they like, or they can sell the improvements and give away the land; but they cannot sell both because nobody will pay for both. Anybody who has tried to sell a farm knows that is true. When we went on to the farm that we are now on seventeen years ago this spring, the taxes were $16; this year they are $92, and yet what that farm produces to-day is no greater than it was then. One is, therefore, led to think that sometime, somewhere, an end must come to this thing. It cannot go on, because the basic industries cannot carry the overhead expenses that are thrust upon them; so people are trying to get out from under the load and are going into other industries that are artificially stimulated. No less eminent an authority than Sir Thomas White referred to this when he said:

The future of Canada rests with the development of its great resources, of which the greatest and most fundamental is agriculture.

I hope his followers will remember that. It is true, and it is something which Canada, a young nation, should learn now before it is too late. When we look at the trade reports of Canada, we find what a

prominent place farming and the other basic industries play in it, because, for the year ended March 31, 1921, the total export trade was $1,190,000,000, of which farming, lumbering, mining and fur-trading, with almost no manufacturing-with a little, I will grant you, the manufacturing of wheat into flour-provided 80 per cent. Of this total, manufacturing provided 20 per cent, and agriculture alone provided 47 per cent. That surely convinces one that we need to stimulate the basic industries if we are going to build up an export trade. I think-and I hope I am not wrong in thinking; I am willing to be convinced if I am wrong-that trade is what makes a nation great. That is what made Great Britain great, because she is the greatest trading nation on the face of the earth today. If trade is not a thing that nations should seek, why is it then that we do not find small nations with poor harbours and high mountains, nations that cannot trade much, the greatest nations in the world? One would almost think trade was fundamental because,' in spite of all the artificial restrictions that parliaments and men can throw up around it, trade persists, and the United States, one of the greatest of high protectionist nations, rejoiced some years ago when her foreign trade approximated that of Germany. One would wonder why they should do so if trade is something to be deplored. For many years many ^people thought, when you had high protection, you produced a revenue; but you cannot make them believe that to-day; the people know better. The fact of the matter is that we who sit in this corner of the House are the proof that the people know better. When you make protection so high that goods do not come into a country, you produce no revenue. Then the manufacturer who stands behind that wall of high protection gets the benefit of that protection, and he waxes rich and strong, so that now we, who live in the country, cannot keep our hedges or gardens looking well on account of the motors that pass them on the way out from our large, well filled cities.

Supposing that we did give protection and that this protection made the quality of Canadian goods greater than the quality of any other goods; or supposing that all the protection went into the revenue; or supposing all the protection went into the workingmen's wages, there might be some plea made for protection. But since none of those three things is true, one wonders

The Budget-Mr. Ward

why we have tolerated it so long. I am sure no one in Canada wants to cut off protection at one fell swoop, because if a person has never learned to walk, it will be difficult at first, so it will possibly take some careful teaching. I remember that, a long time ago, when people first wanted protection, the idea was to help infant industries. Those infants have now become so strong and heavy that we can scarcely carry them; but yet they want protection.

Cotton and woollen goods are two things that we use a great deal. The farmer is favoured no more than the person who lives in the town or city if we have cheaper cottons and woollens. They are two articles that are highly protected; and we find, if we look back over the history of the cotton and woollen trade, that they have waxed exceedingly strong and fat, and that capital invested in them receives very good returns, better than 6 per cent on the investment. We find that all down the tariff list there has been a discrimination against ordinary things that are used by everyday people, in favour of the luxuries that are used by the few, and which could be easily done without. What I, in this corner of the House, believe in -whether the rest do or do not is for them to say-is that as rapidly as possible we should get away from the idea of indirect taxation and should get back, or come, to direct taxation. Possibly Barnum really found out the trouble when he said that the people loved to be fooled. That may be true; it seems sometimes that people would rather pay $5 indirectly than $1 directly. Possibly it is like getting a tooth pulled. You could get one pulled painfully and the whole set out painlessly; and only afterward do you realize the awful damage. I often think that is the way with taxation. People would be much better off if they paid their taxes directly; and when they are educated up to the true idea of taxation, where the money goes and where it comes from, I think any one would be willing to have direct taxation. That would tend towards the careful expenditure of public money, because when people know that they have paid the money out of their own pockets, they are going to watch it more carefully than if they did not know that. The national expenditure has reached a most alarming figure, and it must be cut down. I know this is hard, and I very much sympathize with the Minister of Finance, because, no matter whom you tax, nobody wants to pay the tax; every 152

one wants the other fellow to pay it. That is true everywhere and at all times; but we have paid it so long, we think it would be very well for the other fellow to pay it for a while and see how he likes that. Therefore, we look with hope to a day, when the indirect method of collecting taxation will be abandoned and the direct method adopted. I do not believe we should be ashamed to say that; I believe we should take definite steps in that direction, and I am willing to say that a government that starts this is possibly going to take its life in its hands; but a government that is not willing at any time to take its life in its hands for what it deems best, is not perhaps the best kind of a government that a nation could have.

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LIB

James Malcolm

Liberal

Mr. JAMES MALCOLM (North Bruce) :

Mr. Speaker, at the outset of my remarks, I should like to compliment the Minister of Finance (Mr. Fielding) on his very excellent presentation of a most excellent budget under most trying circumstances. I only hope that the budget which the minister has presented will be followed with the same degree of prosperity that followed his famous budget speech of 1897. The minister has pointed out, and the fact has been dwelt on to a large extent and in an able way by hon. members who have preceded me, that the obligations of the country are great; and were we not an optimistic and resourceful people I think the chances of meeting those obligations would be very slim indeed. I think, however, that as a young country, with the natural resources which we have and with that buoyant optimism which is inherent in all Canadians, we shall be able eventually to solve the problems with which we are now faced. The Minister of Finance in considering the proposals of the budget has, I believe, acted very wisely in providing for the payment of the national charges for this year. To discharge the obligations for interest on the national debt, for the expenses of government for the re-establishment of and the pensions to soldiers, and for the interest charges and probable deficits for some time at least on the National Railways, he has imposed all the taxation which he considers the country can bear at the present time. Had he made provision to meet capital payments he would have been imposing a degree of taxation which would have been a hindrance to the development of the national industries on which so much of our prosperity depends, and would have been placing upon the people a load which

The Budget-Mr. Malcolm

at present they are not able to bear. I think, therefore, that we should compliment the hon. gentleman for at least devising a system of taxation that will meet the obligations of the country for the year; and we must also compliment him on his wisdom in not burdening the country with taxation to meet capital payments during the present period of industrial and agrarian depression.

Knowing the West as I do, and having been associated with many of the western and Agrarian members, I believe there has been exhibited here a very much broader spirit of co-operation in legislation than the majority of hon. members might think. All hon. members of the House have evidently come, after a few weeks of parliamentary experience, to recognize the fact that Canada is not so easily governed. There is an East and a far East, there is a West and a far West; and there is a new North developing. And the Minister of Finance in preparing his budget has, I think, given a good deal of thought to the interests of each section of the country and has acceded, in so far as it is possible for him to accede, to the ideals and the hopes of the Dominion as a whole.

In order to meet the taxation which is inevitable this year, the Minister of Finance has increased certain existing kinds of taxation. He has also proposed entirely new methods, and has returned to some of the luxury taxes that were in existence during the war. I will refer to the increase which he has made in the existing method of taxation, and justify it, so far as it can be justified, because no tax such as the sales tax can be justified by anything save necessity. Some hon. members have pointed out that the sales tax falls equally heavily on those who have many dependents. The hon. member sitting beside me representing the constituency of Cape Breton South and Richmond (Mr. Kyte) pointed out this afternoon the exemptions that exist in connection with the sales tax. I need not therefore dwell on that point. I would point out, however, that while the sales tax undoubtedly falls more heavily on the man with a certain income and five dependents than it does on another man with the same income and two dependents, the tax does not really change the ratio; the only difference is in the amount. The sales tax is levied on what we buy, and it must be clear to every hon. member that a man spends money according to the wealth he has. It could be

said with equal truth that the man of means having a great many dependents would naturally pay a greater amount of sales tax than the man with fewer dependents. The tax is levied entirely on the amount spent, and inasmuch as the spending is heavier among the wealthier classes, in the long run the very large percentage of revenue from the tax comes from those that spend the most money. We had an investigating body in this country from Washington recently looking into the Cana dian sales tax. I was told that, in a jocular way, one of these men remarked when he went home that the only criticism which the American government had of the Canadian government's tax was that they could not suggest any improvement upon it.

The Minister of Finance has introduced a new piece of legislation in the stamp tax and also in the share tax on the transfer of stocks. Both these taxes will undoubtedly be subject to criticism by the bond dealers and the brokers, and possibly by the bankers. But I want to compliment the minister to-night on his courage in introducing this legislation, the first of its kind that extracts money from this particular class in the community. The average business man will not complain because he has not in the past complained of taxes administered by the late government for war purposes. The stamp tax and the transfer tax may possibly be subject to some modification, but they will produce a decided revenue and will not fall heavily on the shoulders of the average citizen. The minister has seen fit to revive a tax, put into force by the late government, on motor cars. I do not think that hon. gentlemen will disagree with the statement that there is possibly no industry in Canada that is in as good a financial condition as the motor car industry. An automobile is possibly a necessity, but it is mostly a luxury; and as regards tractors, the late government exempted them from customs duties while the present Minister of Finance proposes to make that exemption permanent by act of Parliament. The minister regards motor cars as to some extent a necessity, and as such he has exempted them up to $1,200. The tractor is free from duty while the commercial machine is exempted from the tax.

In dealing with the general tariff the Minister of Finance has pointed out the relations that exist between ourselves and

The Budget-Mr. Malcolm

our natural geographic customers, the United States. He has explained how that country, which has always maintained a high tariff on manufactured goods, has now turned to a tariff on the products of the farms and intends shortly to supplement that legislation by still higher protection for the farmers, which is the request of the agrarian bloc in the American Senate. He mentions with a good deal of justifiable pride his reciprocal bargain with the United States in 1911 and points out that as that bargain was agreed to by the American government and rejected by the people of Canada, it is natural to expect that in any reopening of negotiations with a view to entering into another bargain for reciprocal trade the initiative must be taken by this country. He has stated that such an advance was made by himself, but that in the meantime the American government knowing the mind of the Minister of Finance, naturally cannot expect him to make tariff reductions on American goods entering Canada that might influence a bargain for a reciprocal agreement which he will eventually make if he gets the opportunity. That is the point which he made clear,

9 p.m. and I think his logic is perfectly sound and acceptable to the majority of hon. members. The exceptions made on implements of industry are in line with the views he expressed last session, and taking into account the conditions I have referred to, I think that is as far as any reasonable member could expect the minister to go.

Regarding the British preference, I feel that as an integral part of the Empire hon. gentlemen will agree with me that everything should be done as far as possible to encourage trade with Great Britain. The minister has made a decided step in that direction by granting a greater preference on goods of British manufacture, and I heartily commend him for his action in this regard. I would, however, point out to the British manufacturer (if he were here) that he himself would do a very great deal towards capturing Canadian trade if he would be willing to make the style of merchandise that appeals to his overseas customers instead of following his more or less timeworn custom of trying to make us buy what he has to offer.

The hon. member for Halton (Mr. Anderson) expressed the opinion, with which I do not agree, that American branch industries are being established here because of our protective tariff. I do not

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think that is the principal reason for their locating here. I think the main reason at the present time is because of the better trade relations existing between Canada and the other parts of the British Empire, and the American manufacturer, who is now more or less in trouble with his export trade, sees a possible way of doing better business with the British Empire from a Canadian branch than he could from his headquarters in the United States, as on his goods exported from the United States he is probably not going to receive the same preferential treatment from the British dominions that he will receive on goods exported from his Canadian branch.

I am very heartily in accord with the establishment of American branch industries in Canada. Some people contend that the profits from those industries usually go to the States; but, Mr. Speaker, the past history of American branch industries has been that after one generation, if not before, they have a habit of passing into the hands of Canadians, or the principals of those branches in many cases become Canadianized and real citizens of our country.

The Marking Act and the Depreciated Currency Act have been abolished, I think very much to the satisfaction of the Canadian importer and consumer. In the case of the former act the minister stated w'hen introducing his budget:

We propose, in any particular case of an exceptional character, when there are reasons why articles imported from abroad should be marked, that we should have the right by Order in Council to deal with the matter; but we propose that, as a general law, this provision shall be repealed.

With respect to the Depreciated Currency Act, I would point out to the hon. minister that he has apparently overlooked making a similar provision. It must be admitted that the German mark has fallen in Germany compared with its trading value for merchandise; but it is not to be admitted that it has fallen to anything like the same extent as in relation to British, American or Canadian gold. If he is to consider his tariff for revenue alone, he will find that the revenue to be derived from the importation of German goods will be entirely wiped out in many cases by the depreciation, so that if be leaves the protective side of the argument out altogether and considers only the revenue side, he will do well to make provision also that in exceptional cases of a like nature,

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or for obvious reasons, it will be necessary to have some sort of legislation. The British government, which has been cited so often as being very much of a free trade government, has an act known as the Safeguarding of Industries Act, providing that where goods are to be dumped into England to the detriment of British workmen, the government may take cognizance of the fact and govern itself accordingly.

The minister has not informed the House what he proposes to do in regard to the income tax. I refer to this item only on account of a remark made during the course of the debate by the hon. member for Centre Winnipeg (Mr. Woods-worth) whose speeches we have enjoyed on several occasions. The hon. member refers to a capital tax to pay the national debt.

I would point out to the minister, in dealing with the income tax, that all countries such as Canada are more or less in competition for foreign capital, and that with the United States having a maximum income tax of 50 per cent and we having a 75 per cent maximum, we are not likely to share to any great extent in foreign capital which will be necessary to develop our natural resources, if we are going to maintain a 50 per cent higher maximum. The United States did not build itself up by a natural process of development, but by importing capital and workers from the Old Land to a great extent; and if the growth of this country is to be in any degree rapid, we will of necessity have to follow similar methods. Therefore I contend that as capital is very necessary to our development, we will do well under existing circumstances to hold the capital that we have here, and try to attract more, and I think the minister will have to consider that point very carefully when bringing down his income tax proposals.

There always seems to be in the remarks made by the hon. member for Centre Winnipeg a rather mistaken idea with regard to capital. His viewpoint has always appeared to me to be that capital is the property of a few individuals. In my opinion capital is largely the accumulated premiums held by the big insurance companies for their beneficiaries, -and the accumulated savings held by our banks and trust companies. These funds they lend to governments, municipalities and individuals, and when you start in on a plan to tax capital you are taxing not only the wealthy man but also the small man- the small investor and the small policy-

[Mr. Malcolm.!

holder, whose funds in the aggregate constitute these insurance companies, banks and trust companies, the greatest capitalistic institutions in the land, and that if you enforce any policy of confiscation, you must of necessity pretty well Iconfiscate )the capital of all together.

Another factor which to my mind must be very carefully considered by the Minister of Finance in dealing with income tax is not to discourage enterprise. We in Canada have as much enterprise as the people of any other country on the face of the globe, and enterprise is a very-necessary third factor along with capital and labour in developing our country. It does not make any difference how enterprising we are to-day, if we have not the capital and labour along with enterprise we will not get very far. Nor does it, in the second place, make very much difference how much money we have if we have not the enterprise and the labour to use that money, and in the third place, we may have much unemployment and much loose labour, as we have in Canada today, if we have not the enterprise and capital to make use of that labour. It seems to me that hope of reward is at the very foundation of all endeavour, and if you take away or discourage that hope of reward, you cannot expect enterprise to be exhibited. I rather like the thought that Providence has placed an abundance of wealth in the earth, but that it takes enterprise and labour to get it out.

I would like for a moment to deal with the problem of immigration as it pertains to industry. I most heartily agree with what has been said by practically all hon. gentlemen who have preceded me, that we must put immigrants on the land if we are to develop this country in a way that will be reflected in our national credit. I consider the development of our western prairies as probably the most important factor in our national growth. It is important from the standpoint that it will be practically impossible for the Minister of Railways (Mr. Kennedy) to meet with any degree of success the deficit on our national system unless we have a more thickly populated western territory, and I agree very much with some of my Progressive friends that industry in the East cannot flourish until we have people in the West to consume the products of those industries. I do not altogether agree with the ex-Minister of Interior, the Hon. Sir Clifford Sifton, that the reason why

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we lose our immigrants is because they go to a warmer climate; that they are not able to stand the rigours of our winter. I am rather inclined to agree with the remarks made by the ex-Minister of Trade and Commerce, the Hon. Sir George Poster, that what Canada is guilty of is importing muscle and exporting brain. We have in Canada a very highly developed educational system. The average Canadian wants his children to be educated, and it is only natural that a large percentage, or some percentage at least, of the students of our Canadian schools will turn to occupations more or less suitable to their individual tastes, and if they cannot find that occupation in professional, business or industrial life in this country, they will naturally migrate to the country where that opportunity can be found. I do not think you will find very much Canadian labour in the United States, but I believe the House will agree with me that one cannot but be impressed by the great number of very prominent and very clever men and women in the United States who were born in Canadian homes, and who for lack of opportunity in their chosen calling in their own country had to seek employment elsewhere.

Therefore, I think that the making of farm life more profitable and attractive will not altogether solve the problem that the Canadian farmer has to face, of keeping the people on the land and to which the hon. member for Southeast Grey (Miss Macphail) has referred. In so far as legislation can be passed making the condition of the farmer more prosperous, I am very willing to support it, because I feel that on the prosperity of the farmer depends to a very great extent the prosperity of the whole Dominion. But there is a fact which I want to point out to my Agrarian friends. The country which has the most diversified occupations, which has a highly developed industrial and business life working in conjunction with the fine agrarian life, is the country, that is the most independent. It is self-contained, able to absorb within itself practically all its sons and daughters, and for that reason I feel that to the Canadian farmer the industrial life is a very important factor from the standpoint of his home, and I would point out that not many hon. gentlemen in this House, in my opinion, are more than one or two generations at least removed from farm life.

Much has been said in the House as to the problems of the producer in the prairie

provinces. The hon. member for Last Mountain (Mr. Johnston) has referred to the one great need, the need of a better market. He says that better markets are essential if farming is to be successful. Is not that also the very need of eastern industry-a better market? We have heard a great deal about the deplorable condition of the western farmer, and I know that it is practically all true, and that half has not been said. We can use the same language practically in describing the position of the mechanic and of industry in the East during the past winter. Their problems are indentical in the sense that a broader market is the one thing they both need. Therefore, we can attack their problem with a feeling that what we do for the one will be of benefit to the other.

There is a matter before a special committee of this House, and I do not care to discuss it for that reason, and that is the question of lower transportation costs. I agree with the hon. members for Toronto that the greatest blessing that will ever befall the western provinces in the matter of transportation is when they are able to load ocean steamers at the head of lake Superior, but so far as our agrarian friends are concerned I think that probably the solution of the problem as presented by the hon. member for Last Mountain (Mr. Johnston) would give them the greatest amount of relief. The Minister of Finance (Mr. Fielding) has given to them that degree of relief which he feels they are entitled to and he has not hesitated to ask them to share their burdens along with other parts of the Dominion in paying direct taxation on sales, on cheques, and so forth, and if broader markets are as important a factor as our agrarian friends think, they could not possibly have any one in charge of the fiscal .policy of this country to whom a broad market is as much an ideal as the present Minister of Finance. So if that is their solution, I feel they are perfectly safe in leaving that matter in his hands.

In closing, I only want to repeat my remarks on rising, that Canada is an extremely difficult country to govern, and so far as her fiscal policy is concerned, no matter whether it be a Conservative, Liberal or Progressive government that is in power, it will have to formulate a policy which will be expedient unto the day. It will have to raise the revenue by direct and indirect taxation, and it behooves the individual members of this House, no matter what their particular calling or geographi-

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cal location may be, to expect something, and to expect to concede something. I think there has been a very fine spirit shown by the majority of the members of this House in dealing with the fiscal policy, and I want to congratulate the minister not only on his budget but on having such a considerate House behind him as will give him a fair chance to finance this Dominion in these trying times.

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

Thomas Langton Church

Conservative (1867-1942)

Mr. T. L. CHURCH (North Toronto):

Mr. Speaker, judging by the attendance in the Chamber it seems to me that the races at Connaught Park are proving a greater attraction than the budget debate and yet there is somewhat of a resemblance between the two; like the budget the races take all the money that one has, leaving scarcely sufficient to buy cigarettes and soft drinks.

The tariff should not be a political question at all in my opinion. I agree with my hon. friend from Port William and Rainy River (Mr. Manion) that an authority should be set up that could act in an advisory capacity to the government in relation to this particular problem. The tariff should not be made a political football by one party or the other. It is not a political question; it is a business question, and a great economic question; it is a great national and patriotic question that concerns the welfare and the comfort of every man, woman and child in the community. As to my attitude on this question I have no apologies to make. I am a Tory, a Tory of the old school. I am proud of being a Tory because, after all is said and done, a Tory is a man of his word. A Tory is a protectionist, but all protectionists are not Tories. To-day political names do not mean what they meant twenty-five years ago. They called Sir Adam Beck and the late Sir James Whitney Tories in the province of Ontario, yet they were two of the greatest radicals the province ever produced; they are two men who did more for the province than any other men that I know of. I see some hon. members opposite me that probably would not like to be called Tories; but I brand a number of them as the biggest Tories that have ever been seen in this country. My hon. friends may not agree with me, but everybody is entitled to his opinion and I am giving mine; in expressing that opinion I speak for no one but myself.

I repeat that I am proud of the Tory party. They have always been consistent protectionists from the days of Sir John Macdonald down. Every Conservative gov-

ernment we have had since then has been protectionist; it has preached the same gospel down in the maritime provinces as in the West. In the late election the then leader of the government, the Right Hon. Arthur Meighen, preached the same gospel in Prince Edward Island that he did in Nova Scotia, that he did in Ontario and Quebec, and that he did in the western provinces. That gospel was the gospel of protection-moderate protection, adequate protection for the industries of this country. After all it was not any political party that made Canada a nation. The people themselves had something to do with making this Dominion a nation as well as the governments, but in my opinion it was the National Policy that made this country the nation it is to-day. You may criticise the National Policy as you like, you may criticise the principle *of protection, but we never had any-anything else but protection in this country so far as I know. I have placed the tariffs of the respective governments in Canada in parallel columns and compared them; and I doubt whether anybody could call the tariff that has been in operation from 1896 down until to-day anything but a protective tariff. I think that any economic writer would certainly consider that the tariffs for which my hon. friend the Minister of Finance is responsible were protective.

I was very much surprised to hear the remarks of some of the Progressives here to-night, as well as the remarks of some of the Government supporters. If there are two counties in the province of Ontario that owe something to protection they are the two counties of Huron and Grey. Eighty-five per cent of the crops produced in the county of Grey have a home market in the near cities and towns-at the highest price that can be got in open competition in the world to-day. That home market is a steady market. It is to be found in the cities and towns that surround both the two very fine agricultural counties that I have named. I have been in some election campaigns in those counties and I do not think the farmers there believe in free trade. If it were not for protection, in view of the hostile tariff in the United States these farmers would be one hundred per cent worse off than they are to-day, and I believe that remark applies to eastern Canada generally.

The late Hon. J. Israel Tarte once said- that platforms were made to get in on

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but not to stand on. We have also heard to-day a lot about political nomenclature. Hon. members to my left call themselves Progressives. I do not know who gave them the right to use that title; probably they adopted the name themselves. The fact that they call themselves progressive does not make them Progressives. The fact that I call myself a millionaire does not make me a millionaire. I have been sitting here for some weeks and I have yet to learn of one progressive measure which hon. members to my left have brought forward, by resolution or otherwise, to remedy the economic problems of this country or to improve the condition of the people of Canada.

Why do these hon. gentlemen not seek to carry out here the platform upon which they went to the country-the United Farmers' platform? When the amendment at present before the House has been disposed of, let my hon. friends the Progressives move another amendment, or take other steps, to give effect to the planks laid down in their platform. Liberal members should also follow that course. But no, the Liberal party go back on their policy of free trade as laid down in the platform of 1919. I heard the present leader of the Government preach this doctrine in the province of Ontario; but it would appear that he enunciated a different doctrine in every county that he went to. And the hon. member from Brantford (Mr. Raymond) who spoke this afternoon, during the election, preached high protection, and added protection, for the industries of this country especially those in his own city.

The industries there were built up under protection; and what is true of Brantford, is equally true of Toronto, Hamilton, Montreal and all our other large cities-they have been built up by the National Policy. Take the city of Toronto which I represent. In 1878 soup kitchens had to be established there to meet the wants of the large number of men who were out of employment. Vacant houses and stores were many; and there were evidences of distress on every hand. But the policy of protection was adopted and it stimulated the growth of our city in many ways. The trade and commerce of Toronto greatly increased; the population doubled almost every ten years; the receipts from customs, post office, to say nothing of the bank clearings grew prodigiously, and Toronto is only cine of the many cities of Canada that has made tremendous strides as the result of protection.

Now, geography has taught the people of Canada a lesson in more ways than one. It has taught them not to leave themselves at the mercy of a foreign country in regard to their fiscal affairs, especially when that country is one of the most wealthy, powerful, prosperous and ambitious in the world. I refer to the United States. Every country in the world including the United States is increasing its tariff. Not only the various countries in Europe and the United States but Australia, New Zealand, and the countries of South America are all increasing their protective tariffs. Is it to be argued that these countries are all wrong and that the Progressives of Canada are all right? I say no. I maintain that as a result of the Great War more protection will be required to meet the changing conditions that arise as the years go by.

I once heard Sir Richard Cartwright and Sir Oliver Mowat say that if the Liberals were returned to office in 1896 they would remove the last vestige of protection, but they did not do so. Examine the sixteen budgets of the present Finance Minister and what do we find? We find that each and every one is protection. What have we before the House to-night in this budget in the various resolutions? It is all protection. The hon. Prime Minister (Mr. Mackenzie King) said he would reduce the tariff. He took approximately from the tariff $1,000,000, and then increased the sales tax from $60,000,000 to $90,000,000. It will run up to $95,000,000 before they are through and I venture to predict it will go over a hundred million by the end of the fiscal year.

There will be thirty or forty million dollars added to the sales tax which the consumers of Canada will have to pay. The poor man, the middle man and the rich man will have to pay these taxes. The budget presented to us does not reduce but increases the taxes to the consumer.

Speaking about the group system of government the hon. member for Southeast Grey (Miss Macphail) spoke the other night in Montreal to the Women's Club of Notre Dame de Grace, and the report of her speech in the Ottawa Evening Journal of May 21st reads:

She declared that the farmers had been forced by combinations of other interests to get to getlher to protect their own requirements, and she remarked that if any of the Progressives in Parliament wished to say they were not there in the special interests of the farmers, she wondered what they were there for at all. The farmers had been driven to concrete political effort, and she hoped the movement would continue.

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Miss Macpfaa.il spoke strongly in favor of a general reduction in the tariff, especially as it would assist farmers in buying what they needed. She further criticized what she described as a combination of the transportation and hanking interests with the Canadian Manufacturers' Association, with a view to securing all the protection and benefits they needed.

Well, why do not the Progressives go after these hig interests, then? If there is such a combine and such restraint of trade, why do they not break these combines up instead of talk? The farmers are highly organized and it is about time also the consumers and the town and city man got organized to protect his interests and not be made the target for all kinds of taxation. The producer is highly organized; and it is about time for the consumer to do likewise.

You have here the big interests. Why do the Progressives not bring some measure before the House to protect the consumers and go after these big interests and the combines if they exist as they say? They [DOT] are a group organized in the farmers' interests, but they are not doing anything. Who pays most of the taxes? The bulk of the new taxes have now been put on the city and town man, and the town people and consumers are soaked all the time. The small wage earners are especially hit by the tariff. The man with a small income has to pay a municipal income tax and an income tax to this Government. I contend the federal authorities and the municipal authorities should get together and co-ordinate that income tax, so that the small man and the middle man would not have to pay double income taxes as they are doing to-day. They will be driven to the wall, if the present condition continues.

This remark applies to other forms of taxation such as those on cigarettes and tobacco. Eight years ago you could buy a package of Players cigarettes, which the soldiers smoke largely, for 10 cents a dozen. When the war came on the price was raised to 15 cents. Then the price was 17i cents, and now the price is 10 for 22 cents. So that they are going to make the smoking of cigarettes a luxury. It is not a luxury, but a modern necessity for the soldiers, the working classes and everybody else, and should not be taxed in this way. It is double the tax imposed in Great Britain. I think the tax in Canada is $10.50 a thousand. In the United States it is $3, and in England $5.20 per thousand. That is altogether too much. These other countries have larger war debts than Canada. It was said by the medical officers in the

war that cigarettes were a necessity, and it was so held by the army surgeons. The placing of a tax on cigarettes and soft drinks is going to cause more unrest among the working classes. We should do something to put it down, and, in that way, we would perhaps prevent unrest. We should not tax articles which are more or less of a necessity, and not a luxury. If they are a luxury, they are the only luxury the poorer classes enjoy to-day, about the only thing left to them, and they are taxed heavily-too heavily for them already. You will kill the consumption of cigarettes.

In view of the Fordney bill I do not see what the farmer is going to do. He is shut out of the United States, but he has a home market, the best market I know of, which will take care of 80 to 85 per cent of his crop-in the East. If the Government can solve the railway problem, and bring the railway rates down, a great step will have been taken. Mr. E. W. Beatty, K.C., was here a few days ago and was very polite, addressed everybody from Mr. Speaker and the members to the pages as " Sir." He is pretty smooth and is well liked by every one. The Canadian Pacific Railway boasts of half a million active and inactive surplus. The Canadian Pacific Railway Company should be told to carry out the Crows-nest pass agreement, and if they did the farmer would be benefitted. The Canadian Pacific Railway are just stalling and bluffing and should not be allowed to break their agreements as scraps of paper. The hon. members opposite are responsible for the Crowsnest pass agreement, which has cost the people of this country from $400,000 to $500,000. This House should insist on finding out who is the boss in this country. Is it this Parliament, or is it the Canadian Pacific Railway with headquarters in Montreal? I think the Government should stand by the Crowsnest pass agreeement and notify Mr. Beatty that it must be carried out to the letter and at once. If this House passes legislation to solve transportation questions, lessen freight and passenger rates, and get a live and up-to-date railway commission properly regulating railways in this country, I think it will be accomplishing more to relieve the farmer out West than could be accomplished in any other way.

I am opposed to the principle of opening up trade with Germany. It is too soon after the war. As the hon. member from Fort William (Mr. Manion) said, the budget means free trade with Germany. In

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many cities and towns in this country the returned soldiers and their wives have started little toy and smallware stores and factories. They have opened up, without much capital or money, and have built up a trade in a small way in toys, small wares and fancy goods. Will Parliament take away from them the little protection they now have, simply for the benefit of Germany? I think trade should follow the flag and we should deal with our allies and only with those countries that were loyal to the Allies during the war, for a few years at least. It is too bad that we should take away from the small dealers, who are principally the returned soldiers, the small protection which they have in the sale of their toys.

In looking over the proposed resolutions, I am surprised to find that there is no mention of the trusts, combines and the war profiteers at all, but there is mention of the small man. I asked the question as to how many combines had been proceeded against in this country. We heard the Minister of Labour say what he was going to do to fight the combines and lower the cost of living if he was returned to power but he has done nothing. Many of these combines and companies are interlocked and do not pay much in taxes. We had an illustration of that in the case of a jobbing concern in Toronto, who made a return for a five thousand dollar income, and paid the business tax on $5,000, but they charged up about $280,000 in bonuses, and thus escaped a great deal of their federal taxes on a technicality. Then we have the war profiteeers and we have some corporations which, by means of technicalities in the law are able to evade the tax.

I should like the Finance Minister to look into the system of taxation by the government of the province of Ontario. A lot of revenue has been taken from this Government by acts which are ultra vires of the province. Take the Wartime Amusement Act which was passed. Under section 91 of the British North America Act militia and defence is a matter for the Parliament of Canada, but the Ontario legislature in my opinion illegally collect a wartime amusement tax-illegally tax both the municipalities and the individual. I contend their action is illegal and I hope the minister will look into some of these matters. The province of Ontario has a very extravagant and spendthrift government which receives a federal subsidy to maintain provincial institutions and spends the money otherwise, making up the deficiencies

by innumerable and questionable forms of direct taxation more or less illegal. That government is imposing additional taxes on the working classes of Ontario.

There are many other sources of revenue of which I might speak, and I want to refer briefly to-night to this additional tax on cheques. Let me refer to a letter written to the Minister of Finance by the commissioner of finance of the city of Toronto, acting for Toronto and other municipalities. In this letter he goes on to refer to the great loss that this tax is going to impose upon the city and municipality, including the board of education and other similar boards. During the last two weeks, they have taken in $15,000,000 worth of taxes, and the bank opens at 7.30 a.m. to take in the money which continues to come in all day. They will, on this $15,000,000, have to pay twice under this tax; they will have to pay when they deposit the money in one bank, an amount of $6,000; and if they transfer this money to other branches, for the school board, the hydro board, and the library board, they will have to pay an additional tax on the aliquot part of the cheques to the sub-boards, thereby paying a double tax. This commissioner of finance is acting as well for municipalities out West, because he has telegrams from them asking him to act for them. He gives the cost of education in Toronto this year as $8,000,000, and it will be his duty to pay this amount over to the board of education-This will call for stamps to the extent of $3,200, and the sub-board will have to pay an additional tax of $3,200. He refers also to $6,000,000 worth of sterling and New York exchange which was purchased, in 1921, and he says:

You will appreciate the fact in making such large purchases, considerable transferring of bank balances was necessary. Had your proposed stamp tax been in force, we would in many cases have had to pay the charge three times. As I understand it, we would have to pay the charge at least twice, that is for stamps on the bill of exchange and stamps on the cheque issued to pay for the bill of exchange.

Another illustration is in connection with $10,000,000 worth of bonds sold for the betterments of the Toronto Railway Company. The brokers in bidding for those bonds, could take into consideration the fact that they would have to pay this additional tax on the cheques. This figures out at one-twenty-fifth of one per cent which will undoubtedly be deducted from the amount to be paid to the city; so that the city and municipality will have

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to pay the charges on this loan. On that, they would have to pay three-twenty-fifths of one per cent, or $12,000. Other municipalities are affected to a lesser extent; but this tax is going to cause a great deal of trouble in trade and commerce. Collections are going to be hard to get. Any mercantile agency will tell the minister that this tax is going to make collections more difficult, and collections are bad enough now, especially for the retail man.

I do not think this tax is in the interest of trade and commerce. It is not supported by any business concern. The business man is soaked in many ways for taxes, by this Parliament, by the provincial legislature, and by the municipalities, and he cannot stand this much longer. I do not know who advised this cheque tax proposition; I do not know why we should copy every piece of legislation passed by the United States in order to raise taxation, because our circumstances are different. This additional stamp tax is being opposed by municipalities, by business men, by boards of trade, and by bond dealers and brokers, who advise that it is going to tie things up more or less and to make business much more difficult. Dear knows, there are enough stumbling blocks in the way of trade and commerce and business men now without our adding any more to them.

In my opinion, posterity ought to pay some of these war bills and taxes, and altogether too much effort is made to make the men of to-day pay them. This generation has suffered in flesh and blood for the amount of debt added by this war, and we should not adopt a policy of pay as you go, and make them pay now for the war also. Posterity should be called upon to pay some of the national war debt. .

The farmers of this country are no more entitled to a wheat board than the people of the cities and towns are entitled to a coal board, or a rent board, or a food board, or an ice board, and so all the way along. It is contended that the wheat board is necessary, probably because agriculture is a basic industry. There may be some argument in that; but there is an argument on the other side, and I contend that all these commodities should be left as far as possible to supply and demand. I believe a wheat board will not do very much good, as the farmers may find out later on. If the producer is to have a board to protect him why should not the

consumer also have a board? Better leave things alone.

During the election we heard a great deal from the Minister of Labour (Mr Murdock) about the high cost of living What does the Government propose to do for the working classes of this country along that line? On several occasions, I have asked the Minister of Labour in regard to that; but he has not been able to tell me anything yet, nowithstanding the fact that he has a large department and a large staff. During the election, he went through many Ontario constituencies denouncing the late government as being the representative of the special interests and as having done nothing to lower the high cost of living. What is he doing to prosecute the special interests and combines in this country? How many prosecutions has he started? I asked him the question the other day, and there has not been one prosecution. Let him be up and doing to bring down the cost of living.

In conclusion, I want to refer to three or four other matters, which I think should be mentioned in this debate, because this is the only opportunity we have of doing so under the rules of the House. If there ever was in this country an act that needed overhauling, it is the much heralded Bank Act. Some newspapers are beginning to wonder whether there is to be one law for the rich and another for the poor in this country. I have read, in some very reputable newspapers, in Canada, articles referring to some people who stole $8,000 out of a bank, and some other poor fellow who took $1.25 out of a postal envelope. The people who stole $8,000 got a life sentence because they robbed the bank with violence; the poor postman, on a small salary without a bonus, who took $1.25 out of an envelope, was sent down. This matter of the Merchants Bank should not be left to any superior or high court judge of the province of Quebec; or the Appellate division either; there should be an independent enquiry by the High Court of Parliament and no whitewash. We should find out whether we have a Bank Act, whether it is a mere scrap of paper or not, and whether the monthly returns made by the bank to the minister are scraps of paper or not. I believe the losses will run to twelve or thirteen million dollars before they get through. What protection has (the investor, the stockholder? I know one man in my city who has started to sell out every dollar's worth of stock he has in

The Budget-Mr. Church

some small banks. When I asked him the reason, he said that he was very doubtful if, in some of the smaller banks, the shareholders have the protection which they should have. This Parliament should be big enough to go into the whole question of the Merchants Bank. The banks have been allowed to increase their note circulation; they have been given many special privileges, and a thorough enquiry should be made into the whole matter. The House and the country expect us to do our duty in this matter. Where do the Progressives stand upon it?

The other night, I referred to judges serving on political commissions, and I have had no opportunity of bringing this matter up before. I hope something will be done to stop this practice, because the public are utterly disgusted with the way in which some judges of the High Court in Ontario were allowed to leave their judicial duties for months in order to serve on these political commissions. I hope the Government, will see to it that this practice is abolished in the country, so that the public will have, for the judiciary, the respect which they have had in the past.

I am sorry that somethin*, is not being done by this Parliament in regard to prison reform. I see in this morning's paper, that there are 879 people in Kingston penitentiary; that the authorities have had to have double cells; that the place is crowded, and that they have no more accommodation. As I said in this House the other night, if there was one thing we learned in the war, it was from the Red Cross. The Red Cross restored to society about 79 per cent of those who were wounded in the war, and that was a great work. We should try to do something in this country to restore to good society that class of the people which I have mentioned. In the United States and other countries rapid headway has been made in this regard. Prison reform is absolutely necessary. It has been too long delayed in Canada and conditions in these places are deplorable. There is practically no inspection of them. The provincial reformatories are inspected by the grand jury, but there is no inspection of these prisons except by officials.

The minister (Sir Lomer Gouin) said the other day in answer to a question that the matter is being looked into, and I trust that proper steps will be taken to remedy the present state of affairs. There are about 120 children between the ages of 16 and 17 in these institutions, and these

are not circumstances under which the rising generation should be brought up. I referred the other day to the fact that a child had broken into one of the Canadian Pacific Railway box cars and stolen some fruit and is now in one of these institutions. I fancy that if the Grand Jury had an opportunity of going through some of these federal institutions I have named we should have some real reform. The people in charge of them know when the inspectors are due and the result is that there is practically no real inspection at all. Where does the public come in, anyhow? Are they not entitled to know what is going on in these places? And are we going to stand still while the same condition of things that existed 25 years ago is perpetuated? A royal commission was appointed a year ago and made certain recommendations, and I think that it would be a work not only of good government to check this economic waste but also one of religion if the Government would take such action as would restore the confidence of the people in this branch of the public service and stop this economic waste in our population.

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CON

Charles-Philippe Beaubien

Conservative (1867-1942)

Mr. BEAUBIEN:

The hon. member said a little while ago that the Farmers were not entitled to the Wheat Board. Why, then, did his party give them the Wheat Board in 1919 when the prices were going up?

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CON

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

Probably the former

ministers can tell you that better than I can.

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?

Some hon. MEMBERS:

Oh, oh.

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CON

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

I do not believe in such a board. It would take me too long to go into an explanation of that to-night, and I know that the hon. member would like to go to the races to-morrow. Now, I was very much surprised to hear the remarks of the hon. member for Sherbrooke (Mr. McCrea) in regard to the Civil Service. I have the greatest respect for the Civil Service. We have, I believe, on the whole a highly courteous and capable body of employees. From deputy ministers right down they are all highly efficient, and very many of the civil servants receive a small salary that is inadequate to meet the cost of living. I doubt whether some of the better paid civil servants can meet expenses. I say that we have a high type of civil servants in this country and they are entitled to respect. From what I have seen of the Civil Service since coming to Ottawa I have come to the conclusion that

The Budget-Mr. Church

the civil servants attend to their duties thoroughly, and I know that they are polite and courteous. We have a very efficient public service and I hope that the Government will now come across with the bonus that is so badly needed. After all is said and done, I do not believe that the cost of living has declined very much for the small wage earner, for the two main items in the household budget, coal and rent, are still very high. Soft coal is produced at $1 a ton, and hard coal at about $5, at the Pennsylvania and Virginia mines, and by the time transportation is paid the latter costs over $15 a ton. Some people are of the opinion that it will be still higher this winter. The same thing applies to rent, which in Ottawa is a considerable item. I was reading recently that in Montreal, owing to the increase in rents, very many people were obliged to move on May 1st who did not know where to get houses within their means. I do not think the time has yet come when the Government should cut out the small bonus which the civil servants have been receiving. They earn it and are entitled to it, especially the men of the customs and post office services.

I was greatly surprised to learn of the attitude of the Government in regard to the St. Lawrence deep waterway. I hope that the reply they have made to the United States government is not definite and final. This is a big question, it should be discussed in a big way, and I hope that in the recess the Government will again take the matter up, because sooner or later the work will have to be done. There has been a lot of loose talk about the cost of this undertaking by people who do not know anything about the subject. The only basis upon which we can go in regard to the cost is the estimates of $250,000,000 made by the International Joint Commission, which made a thorough investigation into the question from the engineering, financial, business, water power, and traffic standpoints, and from all these various angles they found the project feasible and recommended it. An adverseopinion has been expressed by a senator and by an engineer of

Three Rivers who never made a survey of the St. Lawrence. But the report of the International Joint Commission, which is backed up by the Hydro Electric Commission of Ontario, is that sooner or later the work will have to be gone on with. It is true that at the present moment our financial condition is rather straightened, but in two or three years the work ought

to be undertaken; when prices will have reduced and in the interval additional surveys should be made. In answer to one Progressive member who spoke the other day I would say that the work would amply pay for itself and cost the country hardly a cent. For these various reasons, Mr. Speaker, I shall support the amendment that has been moved, and which I know commends itself to the wisdom and judgment of the country.

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LIB

Henri-Edgar Lavigueur

Liberal

Mr. H. E. LAVIGUEUR (Quebee County) :

I endorse all that has been said by my hon. friends on this side of the House complimentary of the hon. the Minister of Finance (Mr. Fielding) in regard to the admirable budget that he has submitted to the House. I am sure that the budget this year will meet with the approval of the great majority of the people. The minister had a hard task before him in preparing it, and he has certainly performed it well. When the Liberal party took over the reins of administration on December 6th last they realized the enormity of the burden they were assuming. The situation that faced them, was no doubt largely due to the war; but at the same time it was due in a great measure to the. bad administration of the late government. Since 1911 there has been great extravagance, and millions of dollars have been wasted in all parts of the country on all kinds of public works and war contracts. The debt of the country, which was $350,000,000 in 1911, is to-day $2,500,000,000, and the country is faced with an enormous deficit in connection with the National Railways. Although hundreds of millions of dollars have been expended since the Conservative party came into power in 1911, the province of Quebec, and especially the city of Quebec, to which I belong, has been refused the most urgent public works. The government was always very free with its promises, but when we called on the late Prime Minister the answer we invariably received was: There is no money available for public works. But there was always money to spare for public works in the other provinces.

The citizens of the city of Quebec and district have always borne their

10 p.m. share of the burden of taxation, and they are quite willing to shoulder their part of our national obligations to-day, but they deserve better treatment than they have received since

The Budget-Mr. Lavigueur

1911. I referred a few minutes ago to our railway deficits having very seriously added to our financial burden. I have not objected to the decision of the present Government to give public ownership and operation of our National Railways a fail-trial, hut I wish to state here that I think that trial should be of short duration, because, speaking for myself and for a great many citizens of our province, I must say that we have no confidence in public ownership and operation. And I think that any business man after investigating the administration of our National Railways in the province of Quebec, and especially in the city of Quebec, would share our opinion.

Before 1911 plans were agreed upon for the construction of a large station on Champlain Market in Quebec city to accommodate the business of the Transcontinental Railway, the city having entered into an agreement with the late government to transfer property worth over $2,000,000 on the specific condition that the government would spend $2,000,000 on a new railway station, and also provide a grain elevator and other public works. But after the election of 1911 everything was cancelled, and instead of building a $2,000,000 station the government erected on the Champlain Market site a building at a cost of about $30,000 which is a disgrace to those responsible for its erection and a disappointment to the city. The city never consented to the cancellation. The government also made an arrangement with the Canadian Pacific Railway Company for the joint use of the latter company's station at a very heavy rental. So now we have our Canadian National Railway using that station with its competitor,-the Canadian Pacific Railway ticket office on one side, and the Canadian National ticket office on the other side of the building.

But what prospect has our Canadian National Railway of securing a fair share of passenger traffic in competition with the Canadian Pacific Railway, when its competitor's train takes only five hours on the run to Montreal against six or seven hours required by its own trains to reach the same point. It may be asked why there is that great disparity in time between the two routes. It is simply because of the change made by the government in the plans which were prepared by the late hon. Mr. Parent, who was the first

chairman of the Transcontinental Railway Commission, who was for many years mayor of the city of Quebec and prime minister of his province-a man who knew exactly the requirements of the city and district of Quebec.

The contract that had been given for the construction of the Champlain Market station was cancelled and arrangements were made instead with the Canadian Pacific Railway. No citizen of Quebec can understand why the National railways should have chosen this way of coming into the city from the bridge. It is only four and a half miles from the bridge to the Champlain Market station, but instead of that the trains are going around eleven or twelve miles to get into the city. Furthermore, at the Canadian Pacific Railway station there is just a few thousand feet of yardage and the trains block the busiest street in the city of Quebec. No such difficulty would have arisen if the Champlain Market plans had been adhered to, for they would have given first-class accommodation and there would have been no congestion as there is now. The citizens of Quebec, the Board of Trade, and other public bodies in the city have called the attention of the Government and of the railway officials to this matter, but our demands were always met with the answer that there was no money on account of the war.

Plans were made for the construction of repair and construction shops for the railways to be erected in the city of Quebec. The most important shop in the East was to be built in Quebec city. It is only after three years of repeated endeavours that the citizens of Quebec have succeeded in getting these shops erected. In the meantime cars that should have been repaired in Quebec city have been hauled five or six or eight hundred miles, and sometimes as far as Winnipeg to be repaired. The St. Malo shops have been built at Quebec, but the main building which the government agreed to build for the construction of engines and cars has never been built. The shops that are there now have cost this country $2,000,000, and one would think after spending so much on them, these shops would be utilized. To-day there are employed in the St. Malo shops three or four hundred persons, where there should be three or four thousand, and that was the promise given. In the district of Quebec there are now five or six hundred disabled cars waiting to be repaired, and

The Budget-Mr. Lavigueur

these cars were lying there idle when the merchants and shippers were urging the Railway Commission to provide them with ears for the shipment of their goods, and they could not get a car. We have the proper equipment for repairing these cars at Quebec, but the cars lie there idle and no repairs are made.

Another very important enterprise was started by the government before 1911, and that was the St. Charles river improvements in Quebec. The government had proceeded with these works a certain way and had expended, if the figures given by the ex-Minister of Public Works are correct, over $1,600,000. During the war that work was stopped, and although the citizens of Quebec have repeatedly urged that it be continued, and have pointed out that the work already done will be completely wasted if it is not carried to completion, the answer has always been that there was no money available. That is the situation to-day generally in the city and district of Quebec with regard to any requests that are made. We have a great many urgent demands for public works and necessary improvements, and the maintenance of different works throughout the district of Quebec, but we are told there is no money available at the present time for public works.

I wish to put on record here a demand I have made of the hon. Minister of Public Works. I hope that the Minister of Public Works will see fit to put a reasonable amount in the Supplementary Estimates to provide for the expropriation of a wharf property at Ste. Petronille. There is another demand which I have made of the hon. Minister of Public Works for repairs to a wharf at St. Gregoire de Montmorency which was destroyed by the high tides in 1918. I hope the minister will provide an amount for this work in the Supplementary Estimates. There are lots of other improvements and works that are very necessary, but of which the city and district of Quebec is now being deprived. For many years now the citizens of Quebec have not enjoyed the favours of the government of the day, and it seems harder at this time that these works should not be gone on with. We are paying our share of the taxes and it is always hard for a citizen to pay taxes. Those in affluent circumstances find no difficulty in paying the taxation that is levied; it is far different with people of the lower classes. It is gratifying to the citizens of Canada to realize that the pres-

ent Government is taking adequate steps to meet the existing situation and to improve the conditions with which we are faced. One of the most effective means of doing that is by the exercise of economy. Already we have seen a great cutting down of expenditure in connection with the military and naval departments. The two ministers responsible for these reductions deserve well of the people for their courageous action. I hope that similar steps will be taken in other public departments so that ere long the public expenditure will be down to something like normal figures. From the budget speech of the Minister of Finance we have had the opportunity of learning the true situation of the country to-day. Every hon. member, and every citizen that desired enlightenment in this respect has had his wishes gratified. Measures of a practical nature will be adopted to meet the obligations of the country. Although from some of the budget proposals a diminution of revenue may result, on the other hand from other sources the receipts will be augmented. So that we have every reason to be satisfied that the affairs of the country are in such competent hands as they are to-day.

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PRO

William John Ward

Progressive

Mr. W. J. WARD (Dauphin) :

Mr. Speaker, I listened with a great deal of interest, some surprise, and considerable disappointment to the 1922 budget; but before commencing my remarks I would like to associate myself with those who have preceded me in congratulating the Minister of Finance upon his health and upon the vigour with which he introduced that budget to this House, because, I am sure it must have taken a good deal of nerve to present such a financial statement. I used to read with some pride the free trade and progressive speeches of the Finance Minister, and I had hoped that on returning to his old job as budgeteer he would implement some of those good old convictions into this year's budget. Alas, my disappointment, as I listened to him unravel that reactionary and mysterious budget! I use the term "reactionary" because I believe that any government that would introduce a fiscal policy imposing a tax upon thrift and industry and allowing the real wealth of the country to go practically scot free can only be termed reactionary. This budget represents the fiscal policy that will be applied to the commerce of Canada for the coming year. Immediately we mention the tariff we associate ourselves with taxation, and as I

The Budget-Mr. Ward

believe that taxation is the paramount question in the country to-day. I will therefore deal first with that phase of the budget. The budget we are now discussing is, in my judgment, the champion of high protection and of the indirect method of taxation. Personally I am opposed to the principle of protection and the indirect method of raising revenue. I believe that by the adoption of a more direct method of taxation we would at least exercise greater scrutiny as to where the public money was being spent. I believe that if we had raised all our taxes by a more direct method we would have at least seen that the late government did not spend $73,000,000 on a merchant marine that is practically tied up to-day and that is virtually worthless to Canada. I think we would have at least seen that the late government did not let a four or five million dollar contract to build a dry dock on Vancouver island in order to elect a minister of the Crown, when three months previously the last dry dock constructed on the Pacific coast went into the hands of a receiver.

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

Does my hon. friend suggest that a dry dock on the Pacific coast in the neighbourhood of Vancouver and Victoria is not required as an actual business necessity? Is he founding his remarks upon facts within his own knowledge?

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June 1, 1922