June 1, 1922

LIB

Ernest Lapointe (Minister of Marine and Fisheries)

Liberal

Mr. LAPOINTE :

Perhaps one, not two.

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PRO

William John Ward

Progressive

Mr. WARD:

I am founding my remarks on this; that three months previous to the letting of that contract the dry dock at Prince Rupert went into the hands of a receiver.

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CON

Leon Johnson Ladner

Conservative (1867-1942)

Mr. LADNER:

That is 700 miles away.

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PRO

William John Ward

Progressive

Mr. WARD:

Does the hon. member not know that the Vancouver dock was also in the hands of a receiver? I repeat that if we paid our taxes in a more direct way we would at least exercise greater scrutiny as to where the public money is being spent.

Now, let us examine for a moment, if you will, the purpose or the principle of protection. Is it not for the purpose of permitting the Canadian manufacturer to charge a higher price than he otherwise would? I am quite sure that when protection was introduced into the fiscal policy of Canada in 1878 it was not the intention of the government of that day that it should continue longer than was necessary to establish the Canadian manufacturer, so that he would be able to get on his feet,

so to speak. I am sure it was not the intention that it should be carried down to this date. With the immense natural resources of this country, and with the natural opportunities that exist for manufacturing, and after forty-five years of protection, if our Canadian manufacturers are not able to compete in the markets of the world, I say, for God's sake, let them get out of the way and make room for someone else who can.

The present Prime Minister (Mr. Mackenzie King) when leader of the Opposition, had a good deal to say, on his western trip, about the "invisible government" in Canada. He had a great deal to say about how that invisible government had fastened its fangs upon the late government, and with that I think his hearers all agreed. I do not think it takes a very far-sighted man to see the hand of that invisible government upon the budget that was introduced in this House a few days ago. The Canadian manufacturer is utterly Bourbon. He never forgets and never remembers anything, and his only conception of national prosperity is the gold he brings to his own chest. I think it was the hon. member for New Westminster (Mr. Mc-Quarrie) who asked what would happen to the Canadian manufacturer if we had free trade. In reply I would say that the Canadian manufacturer has always enjoyed a very large measure of free trade upon everything he had to buy, but he has constantly refused to extend that privilege to others, and I would like to remind the committee that the Canadian manufacturers have been able to very successfully compete in the markets of the world. Of that I am very proud, but I have noticed quite frequently that the Canadian manufacturer sells to the foreigners cheaper than he sells to the Canadian people. The Canadian manufacturer contends that he must be able to purchase his raw material in a free market, in order to carry on his business successfully.

I contend, Mr. Speaker, there is no such material as raw material. We go to mother earth, and take the ore from the mine, which is the finished product of the mine. It is the raw material of the smelter, and the pig iron is the finished product. The pig iron is the raw material of the steel refiner, and the steel is the finished product. The steel is the raw material of the manufacturer and the plough is his finished product. The plough is the raw material of the farmer, and wheat is his finished product. The wheat is the raw

The Budget-Mr. Ward

material of the miller and the flour is the finished product. The flour is the raw material of the baker and his bread is his finished product. The bread is the raw material of the working man who goes out to perform all these duties. The only raw materials we have are the earth, the water and the air we breathe, placed here by the Almighty for the use of mankind.

I contend that the moment we extend privileges to, or subsidize, one industry we must, of necessity, take that much from another industry. The business of Canada is what we might term one great universal, commercial intricacy, of which we are one large family. In looking over the Dominion, I do not see one single industry we do not need. I am proud of them all, I am proud to be a Canadian and proud of our Canadian institutions, but I think it is time that some of our Canadian industries got off the backs of the Canadian people, and stood on their own feet. If we ever expect this Canada of ours to be the prosperous country we would all like it to be, we must extend to others the privileges we would like to enjoy ourselves. We are all in a great family here on Canadian soil, and if we ever hope to make Canada that great country that we all look forward to, we must develop on Canadian soil a moral and a prosperous people, and we cannot develop that class of citizens in the presence of a privileged class, or with a fiscal policy that permits the massing of immense wealth on the one hand and dire need on the other.

I would like to point out the effect of the fiscal policy, or this indirect system of taxation. It is a sort of camouflage or a painless-extraction way of getting money. In looking over the budget I find that, according to the figures, we will extract by this painless extraction method in the year 1922 about $110 per family in Canada, while the average farmer will pay about $220. I shall deal with it in the broader sense, so that I will take $110 as the amount which the average family in Canada will have to pay under this budget. If that $110 were all they had to pay it would not seem so bad, hut the impost continues to grow and the farther it goes the bigger it gets. That $110, when it reaches the ultimate consumer, or in the final analysis in many cases, amounts to fully $200. The tariff is of a snowball nature; the further you roll it the bigger it gets.

I became somewhat curious and I thought I would like to learn the origin of this indirect method of taxation. I discovered

that its origin was about the time of the Napoleonic wars. The people had been taxed so insistently through the direct method that they rebelled and refused to pay any longer, but along came some evil genius with this new idea of taxation and it worked so well that it has been carried on to the present day. However, going back to the snowball nature of this tariff, we will go across the border into the United States, or anywhere and we will purchase $100 worth of woollen goods. Those woollen goods are subject to a tariff of 35 per cent. When the goods reach the border the importer must pay the duty. I put the profit of the importer at 10 per cent, which I think reasonable.

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Subtopic:   THE BUDGET
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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL:

I think you are giving an illustration of woollen goods and saying if you bought them in the United States for $100 you would pay 35 per cent duty. Are you aware, as a matter of fact, that all the woollen goods that come into this country come from England?

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PRO

William John Ward

Progressive

Mr. WARD:

I will accept my hon. friend's statement that goods from England are bearing a tariff of 27J per cent under the new tariff proposals.

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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL:

No, 17J per cent.

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PRO

William John Ward

Progressive

Mr. WARD:

I looked this up only today and, according to the new schedule, I think the duty is 27i per cent. Possibly I did not read the figures aright. I am, however, merely using woollen goods as an illustration. I do not wish to infer that we buy all our woollen goods in the United States. I only wish to make a comparison, because I have a long list of goods, many of which come from the United States or other foreign countries and which bear, on an average, a duty of 30 per cent. The list is:

Glass, 25 per cent; leather goods, 30 per cent; furniture, 30 per cent; stoves, 25 per cent; electrical goods, 21 i per cent; coffins, 25 per cent; tombstones, 35 per cent; screen doors, 30 per cent.

You cannot avoid this tax; indeed, it follows one from the cradle to the grave.

Medical goods, 30 per cent; cottons, 32J per cent; woollens, 35 per cent; soap, laundry, 1 cent per pound; castile soap 2 cents per pound ; all other soaps, 32J per cent.

So that the average tariff is about 30 per cent. The point I wish to make is this: If we buy $100 worth of goods outside of this country, when they reach the borders of Canada, the importer must pay, say 30 per cent, which amounts to $30. He passes the goods on to the wholesaler,

The Budget-Mr. Ward

and I put his profit at 20 per cent, which, I think, is very reasonable. The goods have now cost $139.60. He passes those goods on the retailer, who is possibly your merchant in Ottawa, and the tariff charges which were $30 have now become $51.48. I have taken the shortest possible route. There are, however, many cases Where goods that the good housewife buys every day, pass through five or six middlemen's hands, and the tariff reaches, in some cases, 100 per cent before the goods arrive at the home., This is the evil of the present system of taxation, namely, that there is no end to it, and the ultimate consumers, who, in a large measure, are the agricultural people of this country, have their backs against the wall. When the tax reaches them, it can be passed on no further. This tax is the one that we are positively opposed to, and we must consider that the average family in Canada have, in addition to their $110 of federal indirect tax, other federal taxes and municipal and provincial taxes, the total amounting to tb's enormous sum of $507 per capita or $2,850 per family. I would like to ask the House and the people of Canada if they think that the families in our small towns and villages and in the rural districts of this country can bear a public burden of $2,850 in addition to their own financial burdens.

It has been my privilege in the last couple of years to visit many rural homes in western Canada, and as one hon. member remarked to-night, the story has not been half told of conditions in that part of the country. No one is more desirous than I am of seeing the whole of Canada go hand in hand and the whole country developing; but if agricultural conditions remain as they are, it is impossible for Canada to prosper. Agriculture to-day in western Canada is on the brink of a precipice; and I want to ask the business men of this country what they are going to do about it. Are they going to let it go over the precipice, or are they going to bring it back and place it on a -sound, satisfactory and remunerative basis? The debt of this country will never be paid, and it will be humanly impossible to meet our obligations unless agriculture is placed on a sounder and more satisfactory basis. It is from the top six inches of the tillable soil of this country that the large measure of our debts must be paid.

I have visited not one but almost thousands of homes in western Canada; I have slept in many of those homes, and I have seen where a mother has raised a family

of six, eight and even as many as ten children in a little log shack. The parents have been there in many cases for twenty years or longer, they have produced tens of thousands of dollars worth of wealth; but the system of taxation does not permit them to retain enough of that wealth to put in even the commonest kind of furniture into their homes. In many of these homes the mother is still scrubbing a rough board floor, home-made furniture, and there i's not even a blind on the window. When such is the case, how can we expect the boys and girls to remain on these farms or in such homes, of which we have thousands in western Canada?

In my district, that of Dauphin, which, without any boasting, is, I think, the richest municipality in Manitoba, let me take the farmers or the class in that municipality who have been there for twenty years or longer. I will not take the others, because they may have bought their farms at enhanced values and all that sort of thing, and they may have met difficulties that may be almost insurmountable. I will take the men who have been in the district for a longer time and who have secured their farms at a low figure or have homesteaded them. If you go to any of those farmers to-morrow morning and ask them to liquidate, 75 per cent of them cannot liquidate with enough to pay their debts. How much longer can this state of affairs continue?

A couple of weeks ago I made a visit into south Huron, and in driving along one line, I noticed five beautiful farms in succession, with brick houses, and nice barns, well fenced, but no one living on those farms. We counted, through that district, many farms with no one living on them. What is the reason? Out in Ottawa -South where I live, a new home has been born nearly every day since I moved out there last February. I noticed, in looking up the census records, that in 1870, 83 per cent of the population was engaged in the industry of agriculture in Canada. I see to-day that about 50 per cent is engaged in agriculture, 'and I think, if a close analysis were made, we would find that the percentage was nearer 45. I venture the prediction that, unless the fiscal policy of this country is changed so as to place the burden of taxation more equitably upon our people, the influx from the rural parts of this country to our cities will be very much greater in the next few years than it has been in the

The Budget-Mr. Ward

past. I do not attribute all these troubles to the fiscal policy of this country, although I think it has a great deal to do in creating these conditions. There are many other natural and unnatural problems surrounding agriculture that make farm life almost impossible in these times. I believe, if we took the $220 a year that the average farmer pays in tariff taxes' and placed that ulpon {the natural wealth of this country, it would go a long way in relieving the apprehension that now exists.

I should like to deal for a few minutes with the railway situation. We speak about the railway problem as being the great problem of this country. It is a great problem, but I think that problem could be solved very quickly if we set about it in a proper manner. Some twenty or twenty-one years ago I spent a summer in Saskatchewan in search of a homestead, and after spending some months travelling through part of Saskatchewan, I came back to Dauphin without a homestead. You might ask why. I travelled over what represented millions of acres of good arable land, but there was none of it to be homesteaded; it was all bought up by speculators. The government of that day had a flat rate of selling land at a dollar an acre, and they sold millions of acres at that price. I know one company who bought 3,000,000 acres, in what was then called the Northwest Territories at one dollar an acre. The average selling price of raw land in that province according to statistics, is about $21 an acre, so that those land speculators have taken out of the province of Saskatchewan, and other western provinces, an unearned increment of about $21 an acre. This is what happened. The legitimate settler when he came to settle was forced to go away back, 30, 40 and 60 miles from the railway in order to get cheaper land or a homestead. They developed settlement and then demanded railways, and the railway companies, or the government, as the case might be, eventually came to their relief. But in order to do so they had to build long stretches of railway over unproductive, speculative territory which in many cases is still lying idle waiting for a higher price. Now, if the Government really wants to usher in- prosperity let them be willing to give land free to all those who are willing to give time and energy to the production of wealth and give the set-

tier an outfit to work the land at 4 per cent interest.

It is humanly impossible for a man to buy a farm to-day, and pay 7 or 8 per cent interest on the farm and 7 or 8 per cent interest on the outfit to work it. I know this to be the case, because farmers in my own district, who have been there for 30 years, find themselves bankrupt aftei producing tens of thousands of dollars of wealth. I do not wish to be misunderstood when I refer to these matters. I dc not wish to be pessimistic. But I think the East should compromise with the West. I told my constituents before coming here that any representative coming from western Canada to this Parliament would have to bear in mind that it was necessary that he should show a spirit of compromise. I told them that so long as the seat of government was situated in Ottawa-and I hope it always will be here-we should always have to come here in that spirit. And I say so still. But I do not think that eastern Canada recognizes the conditions that exist in western Canada today. The hon. member for Brantford (Mr. Raymond) this afternoon complained of the assistance that this Government was giving to agriculture. Well, in the year 1920, according to our trade returns, we consumed in Canada some $600,000,000 worth of goods, three-quarters of which were manufactured within the borders of this country, the other quarter having been imported. We paid an average tariff of about 30 per cent on these goods. Now, the tariff is there for a purpose, and our experience shows that the Canadian manufacturers simply raise the selling price of their articles to the amount of the tariff. If that be true and we imported only one quarter of the goods consumed that year, on which the Canadian government collected $156,000,000 revenue, then we paid into the pockets of the Canadian manufacturers $450,000,000. And yet an hon. member can get up in this House and criticise the Government for spending $6,000,000 on agriculture, which furnishes from 45 to 65 per cent of the exports of this country. After all we must admit that the only source of wealth is in our exports, whether they be agricultural or manufactured products.

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

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL:

What is the hon. member's view as to gold, silver and iron mines? Are they sources of wealth?

The Budget-Mr. Ward

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PRO

William John Ward

Progressive

Mr. WARD:

Absolutely. Professor Ely,

in his book on taxation in the states of the American Union, made a statement in regard to this question. He is one of the recognized authorities on this subject in the United States, and he says that taxes might be so levied by a skilful hand as to give free scope to every opportunity and promote industry to the highest degree. He referred to this as the taxation of natural resources. On the other hand, he says, taxes may be so levied by ignoramuses as to place a dead weight about the neck of the community. These are his words, not mine. Not long ago a piece of property, a waterfront, was sold at Fort William for $1,600,000. Now, to whom did that $1,600,000 really belong? Did it belong to some land speculator that happened to buy a piece of land up the river, and then sit tight until the people built railroads, and the grain producers caused elevators to be built, when he found the opportunity propitious for the sale of this land?

The national debt of the country is enormous, but it is a mere bagatelle compared to the vicious and inefficient system of taxation that has governed this country for the last thirty or forty years and which has permitted speculators to carry away, in the form of unearned increment, billions of dollars from this country. We are told by economists that there are over 200,000,000 acres of land held by the speculators between the Great Lakes and the Rocky mountains. Well, let us get some of the revenue that we ought to derive from these lands instead of taxing the children ef the country. It is little short of a crime that in a country where we have six or seven months of winter we should tax the food and clothing of the poor people. While the great natural wealth of this country is passed up. Every time a babe is born the first thing the mother gets is a slap in the face to the extent of 30 per cent when she goes to buy woollen goods to wrap that infant in. And the tariff follows us all the way to the grave. Professor Drummond makes this observation that in our big cities to-day we find that the families are all becoming triangles, pa ma and Mabel; the only place where we come across the old fashioned family is in the little town, and village or the rural district.

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Subtopic:   THE BUDGET
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CON

Richard Burpee Hanson

Conservative (1867-1942)

Mr. HANSON:

Is that due to the tariff?

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PRO

William John Ward

Progressive

Mr. WARD:

I say that we are simply

penalizing every mother who brings forth

i53a

a child, arid it is a crime that the government of a country like this should have to resort to these forms of taxation, when the land which is affording the speculators such opportunities to make money could be so easily taxed. Of all the countries that Went into the war, Canada had the best opportunity to emerge without a debt. There was no other country that participated in the war that had the natural resources that we had. And what did Canada do? She paid on her war account, by direct taxation while the war was on, only 6 per cent, while Great Britain, with her resources all gone years ago, was able to pay 86 per cent, and the United States 82 per cent.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Where did the hon.

member get the 6 per cent? Is he aware that Canada paid, out of revenue, war expenditures to the extent of $553,000,000? That is certainly more than 6 per cent of the total expenditure for war purposes.

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PRO

William John Ward

Progressive

Mr. WARD:

I was referring to direct

taxation. All that Canada raised by direct taxation was 6 per cent.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

There is no record

that the hon. member can quote to substantiate that statement. I have not the exact figures before me but they are certainly very much in excess of the figure my hon. friend has given. He is utterly unable to quote anything to substantiate his statement.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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PRO

William John Ward

Progressive

Mr. WARD:

I have my figures from

the Grain Growers' Guide.

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?

Some hon. MEMBERS:

Oh, oh.

Topic:   QUESTIONS
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PRO

William John Ward

Progressive

Mr. WARD:

Hon. gentlemen may smile, but the Grain Growers' Guide is a reputable journal, and if it or any other journal made a false statement hon. members to my right would be the first to call them to order.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I do not undertake to

call them to order, but I have pointed out on frequent occasions the absolute fallacy of their statements and have given the official figures to prove it. Unfortunately I have not those figures by me to-night.

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PRO

William John Ward

Progressive

Mr. WARD:

I do not wish to pursue that point with the hon. member. However I should like to answer another statement that the hon. member for Brantford made this afternoon in dealing with the binder twine situation. I do not know whether he deliberately attempted to mislead the House, but he certainly left a wrong im-

The Budget-Mr. Ward

pression. He gave as the reason the binder twine industry was in its present unsatisfactory condition was because binder twine was on the free list. That is not the reason at all, and I am sure the hon. member must surely know the facts. Some years ago the International Harvester Company cornered practically all the land in Yucatan where sisal is grown, and they still retain control. Therefore it does not make any difference whether we have one or twenty binder twine factories in Canada the price of the product would go up.

In conclusion, Mr. Speaker, I would again appeal to this House to give favourable consideration to the industry upon which all our other industries must depend. I look upon our industries as one great tree, with agriculture representing the roots, and it seems to me that any fiscal policy based on protection endeavours to develop the branches without taking care of the roots. If we develop our basic industries there is no question about the position of our manufactures. In my judgment we need more manufactures in Canada to-day. If we have freer trade we shall have an expansion of all our industries. I am not a free trader in the sense that some hon. members have branded the Progressive party. I do not believe we should move one whit faster than it is possible for the manufacturer to adjust himself to changing conditions, but I do say that in view of the intricacies of our business we will never develop that sound economic stability so essential to our national progress unless our manufacturers are willing to compromise with our agriculturalists.

On motion of Mr. Bristol the debate was adjourned.

On the motion of Mr. Mackenzie King the House adjourned at 10.55 p.m.

Friday, June 2, 1922.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
Sub-subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 1, 1922