June 8, 1922

PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

We have no such mills. I will qualify that lby saying that we did have one during the war. During the war there was a demand for this product but not at a price that would enable the factory to use table potatoes. So they took the culls, the small potatoes that were not saleable, and they made them into potato flour and sold it at a price that would pay them for the manufacturej However, even at that time of high prices the demand for potato flour would not warrant the use of table potatoes for the purpose; consequently, since the war, that factory has closed down. Even at fifty cents a barrel a profitable industry cannot be carried on to-day by taking table potatoes, converting them into potato flour, and selling the product at the price they could get.

I have here another clipping which states a certain firm in the United States is buying tracts of land in Nova Scotia, tracts of land such as the Nashwaak Pulp and Paper Company own, and by the way it is expected that the Nashwaak Pulp and Paper Company's mills will close down in New Brunswick in the very near future, and that the pulp wood cut on these lands will be shipped to their American mills. This will also result in the closing down of the mills in Nova Scotia because they can import these raw materials into the United States free of duty, while there is at the present time a bill 'before the United States Senate to impose an import duty on manu factured pulp and paper and this will be the means of helping to build up the industry in the country to the south instead of our own.

I want to say further, and I know the hon. member for Brome (Mr. McMaster) will agree with me in this. Some people have attributed the prosperity of the pro-

vince of Quebec to the fact that the sale of liquor is permitted there. I do not agree with that statement. I think it is more attributable to the fact that Quebec has encouraged the manufacture of pulp and paper in that province. I think I am well within the mark, Mr. Speaker, when I say that the province of Quebec to-day manufactures 70 per cent of all the chemical pulp and paper that is manufactured in the Dominion. I think that is correct, but I am

speaking from memory, and, of course, subject to correction. Due to that fact Quebec has become prosperous; because possibly there is no industry in Canada so profitable, or has been in the last ten years, than the manufacture of raw pulp into paper.

I want to give more reasons why this should be done, not as an act of retaliation against the United States, but as an act of commonsense for Canada. To-day we have a pest called the spruce bud moth, which is killing the forests of Canada quite rapidly-and I am glad to say I believe it is diminishing very much;-due to the fact that United States corporations are allowed to come in and buy large tracts of land. They are not interested in the conservation of our forests, nor in the condition of the country after the forests are cut, as our own citizens are. They are simply stripping the forests of Canada, and reaping the benefit in their manufactures in the United States. The different provinces of Canada a few years ago pretended to take some action in this matter. However, they have not jurisdiction in international trade, but have jurisdiction over their own Crown lands in the eastern provinces, where these forests are located. They passed an act containing a provision such as this:

That no pulpwood cut on Crown lands shall be exported from Canada.

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LIB

Joseph Archambault

Liberal

Mr. ARCHAMBAULT:

What is the

difference to the consumer between an import duty and an export duty? Is it not a fact that those duties are paid on the principle of protection?

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

I am glad the hon. member asks the question. An import duty is paid by the party in this country who consumes the article imported. The same applies to an export duty. It applies to the people who consume that product in the United States. The citizens of the United States will pay the export duty. I observe

The Budget-Mr. Caldwell

that the hon. member from Brome (Mr. McMaster) shakes his head.

Mr. MeMASTER: Is my hon. friend not aware that one of the almost inevitable results of the export duty is to decrease the price which the manufacturer will pay to the producer of the raw material, the market of the producer of the raw material being decreased by the fact that he cannot really export what he has to sell.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

I am glad the hon. member asked that question. I think, possibly, I would have forgotten that point had he not brought it up by his question. What the hon. member for Brome (Mr. McMaster) states is absolutely correct providing there are unlimited supplies of this commodity that the country that wishes to use the commodity can draw on. That is not the case here. Outside of Canada, I think today, the only country in the world which has an exportable surplus of lumber is Russia.

Mr. MeMASTER: Sweden.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

I think the hon.

member will find that Sweden is considering the conservation of her forests. She is at the present time carrying on reafforestation work, something which Canada must come to in the near future. That is an indication that they realize that the end is in sight, as far as the supply is concerned. We have a monopoly of the supply of pulpwood on this continent. There is no question about that.

Mr. MeMASTER: Newfoundland has a quantity of lumber.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

How long would they supply the United States? I have an estimate of it, but I do not wish to weary the House with it. The provincial government of New Brunswick passed an order, providing that pulpwood cut on Crown lands should not be exported. That means pulpwood cut into four foot lengths. Then what happened? At that time the size of the saw log was 10 inches, I think. Immediately after this our provincial government reduced the size of the saw log to 6 inches, and, in fact, I think, you will find lots of them go below that. The United States' pulp manufacturer goes upon Crown lands, cuts logs into 16 foot lengths, puts them on the train, ships them into the United States, cuts them into different lengths and grinds them into pulpwood. So that the provision of the provincial government is a joke. However,

an export duty would control the situation. For fear condemnation will be meted out to members who speak at too great length,

I will leave that point although I would like to elucidate it further.

I have given the House my criticism of the budget and my suggestion as to a good source of revenue, which would also develop the manufacturing industries of Canada, and would be more beneficial than any other method, because it means manufacturing our own raw materials into the finished product by our own people.

I come to the consideration of the amendment offered by the official Opposition. That amendment is rather peculiar, in view of the arguments put forth in support of it. The amendment declares one thing, and the argument in support of it exactly the opposite. In the argument they condemn the Government because they have made a few reductions in the tariff, and in the amendment they condemn them because they have not made more reductions in the tariff, and state that this failure will result in a lowering of the public morality of Canada, because it is the breaking of a promise. I think, as far as that goes, I will have to agree with the official Opposition, that the breaking of promises, in any case, is a lowering of political or personal morality. However, as this amendment is not moved by a party who have never broken any promises, is it not the case of the pot calling the kettle black, and the pot being blacker than the kettle?

Then take the argument in regard to the tariff. In 1919 Sir Thomas White said there should be a revision of the tariff. The government were very careful not to say whether they would revise it up or down, but said it was long overdue. I have no doubt they received some support by making that statement at the time- western as well as eastern support. We are just as anxious in the East for a reduction in the tariff as they are in the West, and I do not want that fact to escape the attention of the House. In 1920 when the present ex-Finance Minister (Sir Henry Drayton) delivered his budget speech, you will find at page 2491 of Hansard of 1920 that he said:

Our policy calls for a thorough revision of the tariff.

And he said further.

The tariff investigation has commenced and public sittings will be held throughout Canada after prorogation.

The investigation was carried on. When the House met in 1921 the Speech

The Budget-Mr. Casgrain

from the Throne stated that this investigation had been held and information had been collected to enable the government to intelligently revise the tariff, and that the result would be put before the House at that session. At least, I take it that the Speech from the Throne indicated that legislation would be put before the House. The Speech used the words "Will be put before you in due time" which, I take it, meant during that session. That was not carried out. Here we have promise after promise in regard to the tariff broken by the last government. Therefore, I do not see how a man is going to make a choice between the two parties. I think both have lowered the public morality of the country by breaking promises.

Further, Mr. Speaker, I do not consider the present official Opposition have added much to their political morality by some of the late additions to that party. I want to explain what I mean and I desire to be fairly definite. The late addition, that I refer to consist of men who were read out of the old Conservative party by Sir Robert Borden, because they secured war contracts under very suspicious circumstances. It also contains men who were the remnants of provincial governments, who were notorious for having received rake-offs on railway contracts, on timber lands, and, even, on patriotic gifts to the mother country in time of war. I do not propose to let an aggregation like that use me as a whip or scourge to scourge anybody. I am speaking for myself when I say this, Mr. Speaker. I presume I can find a way of chastising the Government or of reasoning with them, without being made a tool of by anybody. I will be just as unready to be made a tool of by the present Government to scourge the present Opposition. I take that independent stand which I have always taken in this House to judge every question on its merits.

I do not want anybody to think they can pull the wool over my eyes and make me believe black is white.

Mr. PIERRE F. CASGRAIN (Charle-voix-Montmorency) (Translation) : Mr. Speaker. Before submitting to this House, the few remarks which I intend to make on the budget, allow me to offer to the Prime Minister who so ably presides, ever since last December, over the destinies of this country, my most sincere congratulations for the great honour which was bestowed on him by His Majesty the King in granting him the title of an Imperial Privy

TMr. Caldwell.]

Councillor and, by that acknowledgment, placing him in the rank of all the great statesmen who have presided over the destinies of this country. I wish to offer him my respects and sincere congratulations, together with those of the people of Charlevoix-Montmorency, whom he has had the pleasure of meeting and whom I have the honour to represent in this House.

Mr Speaker, if the hon. members will grant me a few more minutes, I shall take the liberty of joining those who in the course of the debate on the address, sincerely congratulated you on the occasion of your elevation to the speakership of this House. Well deserved praise was then showered upon you. I should have liked to have raised my voice in such a chorus, but I was not perhaps so well qualified as others to do so. I shall content myself with endorsing all that was said on that occasion and tell you that you deserved them all. For many reasons do I wish to endorse the sentiments expressed by those hon. gentlemen; first, because on certain occasions, you were like a mentor to me in my first political efforts which I made in our province, later I might even add that you acted as sponsor to my political baptism. Another good reason, is that you are somewhat one of us, considering that the people of Charlevoix have the signal honour, the great favour and the pleasure of counting you amongst them during the beautiful summer season, when you come down to Murray Bay and take up your residence at Pointe-au-Pic, in the county of Charlevoix, the most picturesque of the Province of Quebec.

Mr. Speaker, when we examine the budget which was brought down by the hon. Minister of Finance (Mr. Fielding), whom everybody honours and respects and who was the right arm of Sir Wilfrid Laurier and had the overseeing of his fiscal policy during the fifteen years, which gave this country its greatest prosperity, we are well aware that the conditions, under which the hon. minister had to labour, were most abnormal. If we consider the economic state of our country, together with all the causes which brought on this state, I think that all unprejudiced public men must admit that the hon. Minister of Finance accomplished a gigantic task when he prepared his budget, which, I frankly admit without being absolutely perfect, without being very satisfactory to the members who sit nearest to your left, Sir, nor to their neighbours, without pleasing everybody,

The Biidget-Mr. Casgrain

nevertheless solves sufficiently, and very well indeed owing to the circumstances, the complex economic problems of our country. I understand that the minister tried by all possible means to spread in the most equitable manner the obligations which will have to be met by the ratepayers of the country through the great crisis we are undergoing.

The official Opposition, through the former Minister of Finance (Sir Henry Drayton) acting as their mouthpiece, simply contend that the Liberal party has cast aside the principles enunciated at its great convention, in 1919. A good friend of mine whispers to me that there are only fools that never change their mind. I do not wish to say we should apply that sentence or proverb to those who make us such reproaches to-day. Let me only say that if the Government does not carry out immediately all those reforms which we advocated in the great convention of 1919, it is because circumstances do not lend themselves perhaps as much now as they might have done at the time and it is also perhaps on account of the Fordney tariff, a new wall which prevents us from communicating, from trading and from doing business with the United States as easily as we might have been able to do. However, Sir, there is one thing which we must not lose sight of, when the official Opposition reproach us with not putting into practice the platform of the convention of 1919. It is one of the weakest reproaches that I have ever heard for, as the press of the whole country has testified, if we carried out immediately the changes which we are reproached for withholding, these same gentlemen would be the first to tell us that we are going too far and that we are bringing ruin and desolation upon the country. This we must avoid. The amendment moved by the official Opposition must not be taken very seriously It is simply an amendment moved by gentlemen who have no other to bring down and who cannot offer to this House or to the country a progressive policy which might tend to enlighten the Minister of Finance and guide the Government in a better path. I have always heard that the Opposition should not always think of finding fault, but should moreover try to find solutions to all the difficult problems and serious dilemmas in which the country and Government of the day might find themselves. That is what we endeavoured to do while in opposition. We moved, in 1918, thanks to the

hon. member from Brome (Mr. McMaster), certain resolutions; and in the years which followed our convention, in 1920 and in 1921, all the amendments which were prepared by the financial critic of the Opposition of the time, always aimed at giving the best advice which we thought in good faith might help to bring relief to the people of this country. All these subterfuges which the official Opposition is resorting to to-day cannot have any other result but to maintain them in the position they are at present that is to say, in the most unfavourable position which has ever been the lot of a party to occupy in this country. We have taken note, from the outset of the session, of the small number of votes which have been registered in favour of the motions and resolutions of the Opposition, so called official, and I am thoroughly convinced that the amendment of the former Minister of Finance, will have the same fate.

When we examine the budget as it is framed to-day, when we take into account the amendment moved by the official Opposition, and when we consider, on the other hand, the stand which the new Progressive party takes, we are apt to ask ourselves which side we should take.

If we consider the speeches delivered by the leader of the official Opposition and his lieutenants, who were in power but a few months ago; if we consider also the speeches made by the leader of the new party who sits opposite to me (Mr. Crerar), and a number of his lieutenants, we cannot help concluding, that in both cases, the leaders of those two parties as well as their lieutenants, including their supporters, go too far. For my part, I cannot accept all the theories, all the arguments and the whole programme of the hon. members who are directly opposite me. On the other hand, I can no more agree to all that is contained in the programme of the official Opposition, who are to your left, Mr. Speaker. In such a circumstance, what is the wisest and best policy, the one which any person with common sense should adopt? I conclude, Sir, that it is the one which the Liberal party has always followed; the policy found in the golden mean, which was so well defined by the hon. member for Quebec East (Mr. Lapointe), in a famous speech which he made in this House last year. He then said: "In my opinion, the best policy is the one which consists in a moderate protection, a policy which does not lean too

The Budget-Mr. Casgrain

much towards free trade, but which, on the other hand, is not entirely protectionist."

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LIB
LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN (Translation) :

As my hon. friend, the member for Chambly-Vercheres has just expressed it, " In medio stat virtus." Sir, all these arguments, these subterfuges of the official Opposition, embodied in the amendment which is at present under consideration of this House, must not be taken seriously by an intelligent person. Moreover, if we consider that since 1911 those who moved this amendment, are those same gentlemen who, through their want of foresight and extravagance, have been the cause of the deplorable state of the finances in which our country finds itself at the present time, we might take them more seriously if they endeavoured to propose to this House some means so as to show us how we might possibly reduce the enormous debt which weighs on us and re-establish equilibrium in our finances. If we take into account all the millions which went to fill the pockets of friends of the Unionist-Tory government, it is not astonishing that in order to meet the situation, the hon. Minister of Finance was obliged to somewhat revise the tariff in such a way as to increase the duty on certain articles and to impose certain taxes and that he was unable to cut down the tariff as much as my good friends the Progressives would have desired.

One of the provisions which gives rise especially to criticism by our opponents, is the increase on the sales tax. Well, Sir, I believe it would be preferable if this tax were increased a little more and if the law regulating the income tax were wiped out from our statutes, because it is the one which is the most liable to be transgressed. It is a well known fact that a great number of business men and financiers do not give the state a just proportion of their income and the consequence is that the greatest portion of the burden- if not the whole-is borne by the small wage-earners who are the least able to carry such a load. While on this subject, let me say that, in my humble opinion, the income tax should be modified and revised in such a way as to make it more simple, so that everybody can understand it and can prepare his return yearly, without being obliged to have an accountant or an expert, and thus deposit in the treasury

the money which is due to it or to the country. There is on this subject another point to which I want to draw the Government's attention. It seems to me that it would be an easy thing to alter somewhat the income tax so as to increase the tax of those who are drawing annually an income of ten to fifteen thousand dollars and who have no children, or are bachelors. An hon. member of this House, I believe it is the hon. member for Labelle (Mr. Fortier), asked that the father of eight children or more pay no income tax if his income does not reach $10,000 per year. Many newspapers throughout the country endorsed that part of the speech of the hon. member for Labelle, amongst others Le Bien Public, of Three Rivers.

Good things and good men often come from Three Rivers. For instance, that city gave the King Cabinet one of its most distinguished members in the person of the Minister of Customs (Mr. Bureau). Le Bien Public approves the suggestion, but at the same time offers another which it considers better and which I shall submit to this House: "The suggestion would still be more acceptable if the exemption of the tax applied without any restriction to all the heads of families with children and whose revenue is not over $5,000. In

reality, this year the hon. Minister of Finance (Mr. Fielding) with his new taxes, especially the collection of 50 per cent on the sales tax, increased in an indirect way the burden of heads of large families; and that amounts to an increase on the income tax, since the exemption of $200 per child shall have a smaller value than in the past; because with this new sales tax, in truth, this amount of $200 will have a purchasing power less than it had in the past.

I believe, Mr. Speaker, that it would be worth while taking into consideration these facts, and when the hon. Minister of Finance comes before the House in Committee of the Whole, we might make some amendments on the income tax so as to alleviate the burden of heads of large families who draw small incomes, have little money to set aside and must pay taxes to the Government. Mr. Speaker, if we examine in details the budget we note that there are certain products exempted from the sales tax, and on this score I congratulate the Minister of Finance. For instance, we find rolled oats, buckwheat flour, pea flour, alfalfa flour, salt, radium, hemp fiber, which is utilized to manufacture ropes which do not exceed li inches in circum-

The Budget-Mr. Casgrain

ference; furthermore, we come across items for the fisheries, fishing boats, supplies and material which enter in the construction of fishing boats for personal use, fiber for binding twine, material used for job-printing, sold to establishments not exceeding in value $3,000; besides substances entering into the manufacture of oleomargarine, we have added the material used in the manufacture of hooks and other fishing accessories.

There is another government tax which is at present much discussed and in regard to which many manufacturers, important financiers and representatives of large business houses have made objections. 1 am speaking of the stamp tax, the two cent stamp which one will be obliged to stick on each cheque for every fifty dollars. Sir, two years ago, I believe, in this House, but under a different administration, when there was question of a very similar tax on promissory notes and Bills of exchanges and the tax was increased, I am not aware that there was then so much objection as we find to-day. I ask, Sir, is it equitable not to require more for a cheque of $1,000 or $2,000 than for a cheque of $50, the amount which is in current use by all the small traders and by all those whose accounts are more or less restricted? It is but just, in my opinion, that the large merchants and financiers who deal in larger transactions, and who earn more money be taxed in proportion to their amount of business and means.

A suggestion which should be made when these resolutions come up for discussion by the committee, is to find an easier way as to how these stamps should be placed on cheques. I might suggest that it would not be a bad idea if the banks did this work, because they are in a better position to do so than are the merchants and traders and no time would be lost. I remember having forgotten, in one instance, to stick the stamp which has become traditional these last years; the bank simply stuck a stamp on and charged it up to my account. We might, if need be, pay the banks a certain amount extra for the work.

An hon. MEMBER (Translation) : Who would pay this amount?

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN (Translation) :

It would be the person who made out the cheque. With the present system of collecting this tax, it appears difficult to have it paid by the client and this is what at present the financiers, brokers and merchants

object to. I believe if we adopted my suggestion that it would have for effect to do away with this nuisance.

We have rightly increased the tax on cigarettes and choice cigars for, in mv opinion, although I am a moderate smoker of cigars and cigarettes, I believe it is a luxury and that under these circumstances. the Government must not be blamed for having taxed these articles. We may also congratulate the hon. Minister of Finance for not having taxed leaf tobacco which is used both in the manufacture of domestic cigars and cut tobaccos.

Numerous decreases in the tariff promote the importation of agricultural machinery gasoline tractors worth $1,400 admitted free as well as linen thread used in the manufacture of Holland cloth. There is also a lower duty on wools, cottons, alcohol used in the manufacture of pharmaceutic products, patent medicines and a great number of other articles too numerous to mention. On the other hand articles of luxury, such as foreign manufactured cars are taxed. I believe, Sir, it is a good policy and the Government has acted wisely. I think the Minister of Justice (Sir Lomer oum) had something to say in this matter-he now forms part of the cabinet-because the policy of the Liberal party in Ouebec has always been to spread the taxes justly and to collect them from those who could mostly afford to pay them; now, I note that the Government in increasing the tax on motor cars, reach those who can afford such luxuries, and this is good policy.

Mr. Speaker, without entering into further details in regard to what the budget contains, I consider that, owing to the difficulties which the Government had to overcome so as to restore economic conditions to a more healthy state, I may give my assurance that all the electors who gave me their trust in the last general election by returning me with such a large majority, will approve the budget submitted by the hon Minister of Finance and that they will also approve me, if I vote, as it is my intention to do, to support the Government and its budget. I may conscientiously and sincerely say that all my electors, whoever they may be, will bravely bear up with the consequences and effects, the more so that, as I represent a county to a large extent made up of farmers, navigators and fishermen, my constituents will acknowledge thankfully the few concessions that the Government has granted them. I may therefore, on their behalf, offer the Minister of Finance as well as the Government

The Budget-Mr. Casgrain

sincere congratulations for the ability and good sense shown in solving the complex problem of the reconstruction of our economic system. If our opponents, especially those who form part of the socalled official Opposition, want to examine their conscience-

An hon. MEMBER (Translation) : They have none.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN (Translation) :

They tell me that they have none; I regret it very much-they will perceive that the financial state through which the country is struggling to-day is due to the pillaging of the public funds, the manipulating of the railways which occasioned heavy losses and the depreciation of these ways of communication, which is the cause of the confusion in which the country is thrown to-day. The whole blame can be put down to the very poor policy which the Borden government and the Meighen government inaugurated between the years 1911 and 1921.

While on this subject, Mr. Speaker, let me point out certain things to the Government. When we were in the Opposition, on many occasions your humble servant and all my colleagues, including the hon. member for St. James (Mr. Rinfret) who is now at my side, have fought the railway policy of the then government. Many a time I asked that the board of directors of the Canadian National Railway which was managing these railways and to which I had taken exception when that company was incorporated, I asked that this board of directors be changed and replaced by competent persons and experts who would be able to place our railways on a businesslike, economic basis so as to make it pay or at least to prevent the large deficits which we have had from year to year. I am aware that this year the same persons who were managing our railways then, are still on the board of directors. I am willing to admit that the Government is doing all it possibly can under the circumstances, but I also wish to be faithful to the promise which we gave at that time and the policy which we followed, we that have always believed, especially those who hail from the province of Quebec, that the policy of nationalizing our railways was not the best under the circumstances, and that, if we were obliged to accept the fact as accomplished, we should endeavour to manage these railways very economically and to get rid of them as soon as possible.

I hope, Mr. Speaker, that ,the board of direction will soon change and that at the next session we shall listen to a new policy on the part of the Minister of Railways, a policy which will give us hope and let the country see that we have made some progress and that the enormous deficits which the Government and the country have to bear up with, may be avoided. What I have just said in regard to the management of railways may equally be said of the Government Merchant Marine.

While in the Opposition we took strong exception to this merchant marine. We even kept up the fight for a whole day and night, and up to the present I do not know what is taking place, for we have not yet heard the budget on the merchant marine; but if we listen to the rumours published in the newspapers we can expect deficits as large as those of last year. I trust that the Minister of Finance and the Minister of Railways will bring in a wise policy and put a stop to these deficits and place the country's business on a better footing, so as to alleviate the burden of the ratepayers.

There is a part in the speech on the budget which I agree with, but nevertheless to which I wish to refer. The hon. Minister of Finance and many of those who will approve his budget say that we must absolutely reduce our debts, and that the most strict economy must be practised. I agree. It is exactly what we were told in the past so as to pay off our war debt and re-establish equilibrium in our finances. If we wish to practise economy, it seems to me that we should do so on a larger scale and begin where we can effect the greatest savings. When we were in the Opposition we energetically opposed the creation of the Purchasing Commission which was imposed on the people of this country, not through legislation but by an Order in Council, after prorogation of Parliament, in 1920. This commission costs the country a great deal of money, and it has not yet been shown in this House, that it has given satisfactory results, such as would excuse us in continuing it, I therefore suggest to the Minister of Finance to abolish the commission. The money which might be saved from this source might be usefully expended elsewhere. There is another such commission which I would gladly see disappear, changed or modified. It is the Civil Service Commission, especially in regard to the outside service. The salaries of the commissioners, the secretary, and

The Budgt^-Mr. Casgrain

predecessor did ask for works which the

the other employees of this commission are considerable, and I do not know that this commission, up to the present, has given good results in the administration of the outside service. If it was not that I do not wish to overtax your patience, Mr. Speaker, I could bring out certain details which would satisfy you as well as all the other members of this House, even those on the Opposition side who are the hardest to convince, and I feel certain that everybody would approve of such motion. I certainly believe that those two commissions should be abolished. In my opinion also, we should equally reduce the number of employees in a number of departments. At present, what do we find in certain services? We find two, three, or four lawyers, a fairly large number of architects or engineers, and these branches form really small departments within large ones. In this way, I believe we could economize a sufficient amount to enable us to perform absolutely necessary works which are needed all over the country and which unfortunately cannot be undertaken owing to our present financial condition and because we are not following out the strict economy which is recommended.

Mr. Speaker, ever since I have had the honour to represent, in this House, the county of Charlevoix-Montmorency, I have asked the Government on many occasions, to carry out in that county certain public works which are urgent and very necessary. The answer which I always received was that they had no money for 'such works-and when I was in the opposition, I believe that the reason which was always given me was due to the fact that I criticized too much the government which for that reason was very little disposed to grant my requests. I must state that as long as I occupy a seat in this House, either on the Government side or on the Opposition benches, I shall never cease to ask on behalf of my constituents, for those who have entrusted me with the mandate to represent them here, the necessary work and ameliorations needed in that part of the province.

During past years, I asked for improvements to be carried out in my constituency at places called Baie des Roehers, St. Simeon, .St. Fidele, Murray Bay, St. Irenee, Eboulements, Baie St. Paul, lie aux Coudres, Riviere St. Franqois and St. Anne de Beau-pre. Mr. Speaker, those localities, I know, are familiar to you, since you go there every year to spend your holidays. My

Liberal government had recommended before the overthrow of the Liberal party in 1911. I would like the Government to take into serious consideration every request I placed before the several departments with respect to wharves, post offices, public buildings and other improvements; and I trust those undertakings shall be carried out as soon as possible. We are asked to practice economy. I am willing to do so, provided that the Government follow suit to a certain extent, so that we may do justice to those who have elected us to represent them in this House.

Mr. Speaker, I may have spoken too long and I crave your indulgence in case I have somewhat protracted this discussion.

I have confidence in the new administration. The few remarks I have just made were made in earnest and the Government, no doubt, will take them into serious consideration. I rely upon the ability and wise policy of the leader of the Administration, and his colleagues; I view the future with calm and I am convinced that prosperity shall be restored in Canada, a prosperity similar to that which our country enjoyed during the fifteen years of the Liberal administration from 1896 until 1911, a prosperity which our late lamented leader, Sir Wilfrid Laurier, had known how to bestow on the country; and thus relying upon the leader of the Government, the ministers representing the districts of Quebec and Montreal and their distinguished colleagues, I invite my friends in the House to vote for the budget proposals; that invitation extends not only to good Liberals sitting on the Government side, but also to the other members who were Liberals formerly-who now wish to move too quickly. I ask that they be willing under these circumstances to join hands with us so that the budget may carry with a good majority.

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. H. C. HOCKEN (West Toronto):

Mr. Speaker, we have .the promise of the Prime Minister (Mr. Mackenzie King) this afternoon that there will ibe certain modifications in the budget that has been brought down, and I want to express the opinion that there is plenty of room for such modifications. The practice of this Government has been to bring down measures and then to amend them before they get very far, so that the Minister of Finance (Mr. Fielding) is quite in line with the practice that has prevailed with the Minister of Militia (Mr. Graham) and with

The Budget-Mr. Hoeken

regard to other questions that have been brought before the House. I trust that the Minister of Finance will make these modifications somewhat comprehensive. I think he might, with advantage to the country, modify his stamp tax, because that tax is going to be a very great burden especially upon those who have large financial transactions, and it is going to work very grave injustice Every municipality issuing bonds, collecting taxes, dealing with large financial transactions, is going to be required to pay three or four times on the same money, and I hope the Minister of Finance will be able to modify that provision.

I hope too that he will give some consideration to the complaints of confectioners who have been singled out for a special tax that is not imposed on any other class of merchants or manufacturers. Under modern conditions of living, confectioners play a very large part in the life of the people. At the present time, especially in cities and large towns, there are many living in apartment houses who find the services of men in that business of particular value, and why they should be penalized above all other businesses is something that I do not understand, and something which, I venture to say, the Minister of Finance cannot justify on any reasonable grounds.

I might say the same thing with regard to the prohibitive tax that the Minister of Finance has placed upon imported cigars. I am not speaking for any personal reason because, when I smoke cigars, I smoke domestic ones; but my point of objection to this tax is that he has put such a tax on imported cigars that there will be no revenue at all from that source. The tax is made prohibitive so that, instead of adding anything to the revenue, it will decrease the revenue. In these particulars and in others that might be mentioned, I think modifications are quite in order.

Undoubtedly, this budget is adding very seriously to the burdens of the people of this country. We have been told, for two sessions at least, perhaps longer, about the increasing cost of living; but the 50 per cent increase in the sales tax is going to place upon the people a heavier burden than they have so far borne, and I trust the Minister of Finance will modify that somewhat. The sales tax, as imposed by the ex-Minister of Finance (Sir Henry Drayton) who represented this party, is a very wise measure; but any measure which is wise within reason, can be made very un-

wise when it is exaggerated, and that is what I think the Minister of Finance has done in this case.

I was not surprised that the members of the Agrarian party were dissatisfied with the budget. They listened to speeches that were made in this House last session and the session before; I have no doubt they took those speeches as expressions of sincerity, and they expected and had a right to expect larger reductions, especially on agricultural implements. Mark you, Mr. Speaker, I do not think there should be any reduction on agricultural implements; but this touches the point of the amendment introduced by the ex-Minister of Finance. I think a party that makes pledges when it is in opposition, puts them into its platform, and into its campaign literature, and then brings down such a budget as the one which the Minister of Finance has brought down, is to be condemned in the terms of the amendment presented to the House. I think my hon. friends to the left have very substantial grounds for complaint as regards the tariff proposals contained in the budget. But those members of the Agrarian party who have followed the course of events with regard to the Liberal party and who have had anything like accurate knowledge of their methods and their record, would not have any ground for being astonished at all, because it has been a feature of the Liberal party, ever since the death of George Brown and the deposition of Alexander Mackenzie as leader of that party, to make promises and not to fulfil them, especially with regard to the tariff. As long as the late George Brown was alive, he kept the Liberal party a free-trade party. As long as Hon. Alexander Mackenzie's voice was to be heard in this House, he argued for a 17i per cent tariff which, while not free trade, was approximating that. But when those two honest and sincere statesmen disappeared from the scene, the Liberal party shifted its ground, and from that day to the present time, there has been no sign or evidence of sincerity in its pledges or promises with regard to the tariff. Those of us who know that and who have followed its record, are not surprised that it has not implemented its pledges. Some of my hon. friends to the left have not, perhaps, followed the course of the Liberal party so closely, and to them this may be a matter of astonishment. We used to be told that we were going to get free trade as it is in England.

The Budget-Mr. Hocken

That was the phrase used in the party literature. That is what the late member for Red Deer used to expatiate on so loudly and eloquently in this House; but nobody can expect that; indeed, nobody can expect any particular reductions in the tariff. Personally, I am satisfied that the tariff is not too high. I object to the 2| per cent reduction on agricultural implements, although my attitude may give a shock to my hon. friends to the left.

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Some hon. MEMBERS:

No shock at all.

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

But I believe in maintaining our industrial concerns, and I believe in the principle of protection. I say that frankly as this party says it. I would invite my hon. friends of the Agrarian party to consider what a remarkable difference there is between this body and that body sitting opposite on the point of sincerity, and if sincerity is of any value in public life, it ought to be considered. Whatever faults may be charged against this party, it has stood since 1878 four-square for the protective principle. We have not tried to hedge on that at all. Every man in Canada knows what the trade policy of the Conservative party is and has been for over forty years; but no man in Canada can tell from one year to another what the policy of the Liberal party is with regard to the tariff. On that side of the House, there is such a hodge-podge of opinion, that I doubt whether anybody now can tell what their policy is on the question of protection or free trade. They have both classes on that side, not only on that, but on many other questions. The Minister of Justice (Sir Lomer Gouin) to-day endeavoured to prove that the Liberal party had been consistent in its trade policy, and he went back to the late Hon. Mr. Blake to quote him. I think the Minister of Justice was somewhat unfortunate in his selection. He quoted the late Hon. Edward Blake in his Malvern speech to prove that the Liberal party had been a reasonably protective party; or that they had a tariff policy which, perhaps, they did not claim to be protective in its character, but which was substantially so. I can tell the House that the Hon. Edward Blake, that great statesman, one of the most brilliant men the Liberal party has produced, if not the most brilliant man in all its history, was deposed from the leadership of the Liberal party because he held those views as quoted by the Minister of Justice. When

170J

he spoke at Malvern, he created a schism in his party, because his party was for unrestricted reciprocity. That was the issue of the election which followed his resignation. It was because he would not adopt that principle and that policy of unrestricted reciprocity that he felt compelled to resign the leadership of the Liberal party and to retire from Canadian politics. In fact, he was driven out of Canadian politics because he announced a policy somewhat similar to that which has since been carried out by this party.

I am going to quote what he said, Mr. Speaker, in this celebrated letter to his electors in West Durham, dated 5th March, 1891. It is a long document and therefore I shall not read it all. Among other things he said:

The issue which the party has thought fit to tender for the judgment of the electorate is that of unrestricted reciprocity or absolute free trade with the States; an issue which has been maintained as the sole party plank ever since it was put forward in 1887.

Being at that time in Europe, I wrote, and after my return fully stated to leading men my views on this head.

It was agreed that unless the conditions should change, it would clearly be my duty, when called on to address the Constituency, to make known those views; but the desire was expressed, in tlie party interest, that they should not be then published.

Having decided to yield to every wish of my friends, compatible with honour, and hoping against hope that some turn of events might ameliorate a situation to me most painful, I yielded to this wish.

Lately, when a provincial convention was summoned, and our fifth session was approaching, 1 though it right to convey to the riding association, as a basis for discussion, some brief intimation of my opinions.

But, on the statement of prominent men thalt its publication would, even then, be detrimental to party interests, my letter was held back for a few days.

Pending discussions on the matter, the dissolution has been precipitated ; we are now in the throes of the election; and I feel bound to limit my confidence to you alone to-day.

The hon. Minister of Justice (Sir Lomer Gouin) quoted the late Hon. Edward Blake to prove that what he said at Malvern was the policy of the Liberal party; but it was exactly contrary to the policy of his party, and because of the statements he made there he had to retire-to him a very painful thing. And he not only retired from the leadership of his party, but he retired for good from Canadian politics.

I am going to read two or three more paragraphs of that historic letter to show what was the policy of the Liberal party at that time. He said in paragraph 16:

The Budget-Mr. Hocken

Since any practicable arrangement does substantially involve, not only differential duties, but a common tariff, unrestricted reciprocity becomes, in these its redeeming features, difficult to distinguish from commercial union.

His interpretation of commercial union is given in paragraph 21:

The tendency in Canada of unrestricted free trade with the States,-

Remember, he was discussing the policy of the Liberal party.

-high duties being maintained against the United Kingdom, would be towards political union; and the more successful the plan the stronger the tendency, both by reason of the community of interests, the intermingling of populations, the more intimate business and social connections, and the trade and fiscal relations, amounting to dependency, which it would create with the States; and of the greater isolation and divergency from Britain which it would produce; and also, and especially, through inconveniences experienced in the maintenance, and apprehensions entertained as to the termination of the treaty.

Let me give you another extract, Mr. Speaker:

Assuming that absolute free trade with the States, best described as commercial union, may and ought to come, I believe that it can and should come only as an incident, or at any rate as a well-understood precursor of political union.

That was the policy of the Liberal party at that time, and that is how the Hon. Edward Blake interpreted it. And he did a most remarkable thing, Mr. Speaker, for a man of his standing and responsibility. Holding such views, so strongly divergent from those held and advocated by his party, he was so loyal to his party and so disloyal to his country that he declined to make his views known until after the election had been held. He did that at the request of certain of his political friends, because he said:

Without being so presumptuous as to imagine that my judgment is entitled to weight when unconfirmed by that of my political friends, I yet recognize the extensive and effective use, too commonly made by the adversary, of the slightest divergent expression of opinion from the humblest member of an opposing organization.

My late relation to the party emphasizes the present application of this remark.

And I have come to the conclusion, confirmed by the judgment of leading men, that the publication of these opinions would inflict much more damage on my friends than the slight injury which may result from my silent withdrawal.

Here was a public man who because of a mistaken sense of loyalty to his party concealed his views on an issue that was dividing the country-something that has

been characteristic of the leaders of that party. I submit that holding the views he did he owed it to the country to state those views before the electors were invited to go to the poll.

But, as I said, that is characteristic of the leaders of the Liberal party, even to the present day, for only this week we have the Minister of Finance (Mr. Fielding) saying:

X have never voted for the tariff items of the Liberal platform, and never concealed the fact that I did not approve of the platform in that respect.

So my hon. friend has run true to form -he did not let anyone know until Monday that he did not believe in the platform of his party. I submit that it is not an act of sincerity for a public man holding views on an important national question to conceal those views. He may justify that concealment, of course, by some method of reasoning which I do not understand, but I do not think his action can be defended upon any high moral ground.

The Globe said at the time the Hon. Edward Blake wrote his letter that they did not know what its effect would be on the party. Well, we have discovered since what the effect was. It led the Liberal party to drop unrestricted reciprocity, commercial union, free trade and that kind of thing, and when returned to power in 1896 to adopt the tariff policy of the late Sir John A. Macdonald, maintaining that policy down to 1911, when by some peculiar aberration of mind the party went back to the old reciprocity idea. Well, the people told the Liberal party what they thought about reciprocity, and I fancy that the second lesson-the first they got in 1891- ought to be sufficient to convince them for all time that reciprocity or free trade, or commercial union or free trade as we have it in England, will not go in the Dominion. As a matter of fact we have the protective policy to-day, and I may say to my hon. friend that I believe we are likely to have it for many years to come. But what could my hon. friends from the prairies expect from a government created by the big interests of this ucontry? I see that causes a smile. It causes a smile, Mr. Speaker, because over the length and breadth of Canada this party of ours has been called the party of the big interests. It is not under the influence of the big interests; the course that the big money power of this country followed in the last election is sufficient proof of that fact. Big business

The Budget-Mr. Hoeken

not only refused to support the leader of this party, but turned all its resources not behind the leader of the other party, but behind the Minister of Justice, whom big business regards as the leader of that party. Do my hon. friends take my word for that?

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An hon. MEMBER:

No.

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

Well, if they will not, I am going to give them some evidence which perhaps they will take. I have here a copy of the official organ of the U.F.O., and I am sure that the third party will accept that as evidence that is substantial and good. I find this, Sir, on November 26, just before the election:

Meighen beaten to a frazzle, say Montreal magnates. Vested interests in Montreal say Meighen will only get forty or fifty seats.

They had them pretty well counted.

They have left him and have swung in behind Sir Lomer Gouin and the anti-public ownership, high protectionist Liberals of Quebec province. Say King does not count. Vested interests now support Liberals. Montreal's big business men forced Meighen to country in first place, backed him until he became a "forlorn hope," and now give their allegiance to Liberal protectionist group. Want Gouin as premier.

And it goes on in quite an interesting way, Mr. Speaker. The gentleiman w*ho wrote this was at one time a journalistic colleague of my hon. friend the Minister of Finance; he lived in Montreal, and knows the situation there very well. He says:

This week a Sun representative-

Which was himself.

-visited Montreal and is able to state that the big business men of the commercial metropolis regard Premier Meighen as a beaten man. They have turned away from him and have picked Sir Lomer Gouin and the Hon. Walter Mitchell as the only men to whom they can turn in their hour of need. The hon. Mackenzie King is eliminated by the Montreal interests. They expect him to be defeated in North York, but even if he is not defeated, they declare that the real men in the Liberal party consist of the high protectionist anti-public ownership element as represented by Quebec. It is undoubtedly true that big railway corporations, big shipping concerns, wholesale and distributing houses, manufacturing establishments, banks and other kinds of big business, have their fingers pretty close to the pulse of the people.

Aye, they are the doctors in some oases.

They get reports from all parts of the country and it is the summarized viewpoint of all these from the various provinces that have convinced them that Meighen is worse than a forlorn hope. They have put him down at the bottom of the list with not more than forty to fifty seats. In fact some declare that the Conservatives as such will be wiped out at the coming election and that the only hope of the vested interests is

in getting behind Sir Lomer Gouin and his associates. For a variety of reasons, the vested interests of Montreal do not like Mackenzie King. He is disliked because of his Ontario attitude on the tariff, on the railway problem, and in regard to public ownership in general. In addition to all that, Quebec has a friendly spot in its heart for Sir Lomer Gouin, not that he appeals to them as Sir Wilfrid Laurier appealed, but because of what he has done for big business. At a time when Ontario was going in for public ownership, Quebec was offering every possible inducement to private capital to invest in her timber lands, her water-powers, her mines, pulp areas, etc. Sir Lomer himself quit his government, after some fifteen years in office, to become a director of several big corporations. To-day he is a director of the Bank of Montreal, a director of the Royal Trust Company, director of the Laurentide Pulp Company, and of various other concerns. As a director of the Bank of Montreal he is persona grata with the C.P.R.-the two directorates .being almost identical. In the Quebec Legislature, Sir Lomer Gouin was a czar. No dictator or autocrat ever wielded the sceptre with more disregard for his opponents. He brooked no opposition. His will was law, and that will was to give every possible consideration to what is known as big business. In view7 of that fact it is not very surprising to find the vested interests in Montreal swinging in behind the little Napoleon of French Canada. Sir Lomer will be backed up by his former provincial treasurer, Hon. Walter Mitchell, who is a protege of the ex-premier. In fact some go so far as to openly proclaim that .Sir Lomer Gouin will be the next Premier of Canada, and that the Hon. Walter Mitchell will be his Minister of Finance.

I gather that the hon. gentleman may fairly be described as the A.D.C. in waiting for the Minister of Finance.

All practically agree that if the Liberals are returned to power, even with Mackenzie King as their head, he will be head only in name, and that the real power behind the throne will centre in this little group of Quebec Liberals- Liberal in name, but Conservative at heart.

And it sounded very much like that this afternoon. The speech we heard today from the Minister of Justice reminded me in a very striking way of the eloquent addresses we used to hear from Mr. Cockshutt of the Cockshutt Plow Company. The story proceeds:

.Some even go so far as to predict that Sir Lomer and his high protectionist big interests associates will absorb the remnants of the Conservative party-

Well, there are one or two little remnants that I do not think he will absorb.

-but agree that if this is done a section of the French-Canadian low-tariff Liberals, representing rural constituencies, will break away and follow the Hon. T. A. Crerar. These would be led by Ernest Lapointe of Quebec, regarded by many as Laurier's successor. It is openly predicted that after the election on December 6 the Quebec "block" will split right down the middle-

The Budget-Mr. Hocken

Well, they are splitting, a little further each day.

-one section under Sir Lomer Gouin, allying themselves more or less with the remnants of the Conservative party, and the other joining up with the agrarian group under the Hon. T. A. Crerar. The outstanding impression gathered by conversation with Montreal big business men, was that they had given up every hope of Arthur Meighen being a factor in the forthcoming Parliament. He is beaten to a frazzle, and like rats leaving a sinking ship they have turned to Sir Homer Gouin.

As for my right hon. friend the leader of the Opposition not being a factor in this Parliament, they have certainly made a miscalculation there, for the facility with which the Government has changed its policy at his direction has been the outstanding feature of this session.

Now, when my right hon. friend (Mr. Mackenzie King), whom I congratulate upon being elevated to the dig-

10 p.m. nity of a Privy Councillor, found himself after the election, to his surprise, at the head of the largest group, I firmly believe, not only from his actions at the time but from what I know of the character of the man, that he pledged himself to form a real, progressive government. I think that was his desire. In fact, he began immediately to negotiate to that end, and his friend, Mr. Haydon, made some visits to the West. I do not know whether my hon. friends know all that happened there, but the net result was that five of them were to come into a coalition government. That is the way the leader of the Agrarian party understood the negotiations. I regret very much that that coalition was not formed. It is true it might have resulted in some reductions in the tariff-it could not have resulted in many-but other Progressive policies would have had a much better chance of success if five of them had entered the cabinet. I refer particularly to the National Railways. My hon. friends to my left believe in the public ownership of railways, and I believe their view is perfectly sound. I believe that if we have the courage to persevere, the National Railways will be a wonderful asset to this country, but you cannot build from five to ten thousand miles of railway in excess of the country's requirements and expect the system to pay until the country is more densely populated. That was the mistake that was made, not the mistake that we made, but the mistake that bon. gentlemen opposite made who built all these railways.

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LIB
CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

Who built the Grand

Trunk Pacific? Was it the Liberal party or this party? Who built the Transcontinental?

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LIB
CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

Hon. gentlemen opposite built thousands of miles of railway that was not required at all, and that is what is causing the deficits on our National railways to-day.

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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

Was not the extension of the Canadian Northern through the West largely brought about under the aegis of the Conservative party?

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June 8, 1922