June 8, 1922

CON
CON
CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

The Canadian Northern was financed and bonused by the government under the late Sir Wilfrid Laurier, and guaranteed by the provinces as well.

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LIB
CON
CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

When the Canadian

Northern was being built and the Grand Trunk Pacific was proposed, what happened in the party opposite? Its minister of railways deserted it. He would not follow the policy that was imposed upon him, and he left the party because he knew they were piling up on this country a burden that it would never be able to carry for many years to come.

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LIB

Lewis Herbert Martell

Liberal

Mr. MARTELL:

What did Mr. Bennett, the ex-Minister of Justice, say about the Canadian Northern?

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

The late Mr. Blair was Minister of Railways in the Liberal government at that time, and his judgment was that the building of the Transcontinental from Moncton to Winnipeg was a political crime, he left his party rather than consent to it, and in leaving them he said that the only reason the Grand Trunk Pacific was being built was that " Cox could not wait." I do not propose, while I am on my feet, to allow any man to try and persuade me that this party is responsible for the railway tangle in which we find ourselves to-day. If the National Transcontinental and the Grand Trunk Pacific had not been built, not only would there not be any railway deficits to-

The Budget-Mr. Hocken

day, but there would be a very substantial profit, because the Canadian Northern is the only section of the national railways that paid last year. It runs through the best territory in western Canada, as my friends here will admit.

My right hon. friend the Prime Minister would have liked to form a Progressive government, and he knew that Barkis was willing. Barkis, in fact, came down to the city of Ottawa, accompanied, I believe, by some of his colleagues, but between the day he left Winnipeg and the day he arrived in Ottawa something happened, and when he got here that excellent plan had to be called off.

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Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

It would pay the hon. member to keep awake. I go further and say that it would have been gratifying to all citizens of a progressive spirit to have seen my right hon. friend form the kind of government he wanted in the first place, and when I say all people of a progressive spirit, that would include practically all the supporters of the late government because, Sir, Canada was never given such progressive government as it had under this party. More progressive measures were put through by this party in ten or eleven years than by any other government we ever had in Canada. This is the real Progressive party. I do not feel at all aggrieved to find such a large party of Agrarians in this House. I think they may be a decidedly wholesome influence in the politics of Canada if they do one thing, and that is to maintaih the sincerity which they have so far exhibited, so far as I am able to judge. I know that their whole tendency is naturally to support a government which promises free trade. They have been taught to believe that their strongest political opponents are over here, but some day that sincerity which distinguishes them will convince them that they are mistaken in that, and that their natural alliance is with this corner.

An examination of the records of the hon. gentlemen who form the present Government will not disclose many progressive men. It is a government of the old guard, and the cabinet was built by a master mechanic who fitted in every piece of seasoned timber accurately and exactly. I have heard it said in Progressive circles

that there is a progressive faction and a reactionary faction or. the Government side, and I think that is true. Manifestly, also, the reactionary faction is the dominant faction. My right hon. friend, of course, selected as his right bower the chief reci-procitarian of Canada, and he has as his left bower the chief representative of big business and vested interests in this country. The left bower is a stronger man, physically-I shall not go any further- than his right bower, and then to show his sense of humour the right hon. gentleman threw the joker into the Militia Department. That hon. gentleman has been very quiet so far and his filled his place very well, but I am sure that progressive men on the other side of the House must feel disappointment at the selections which the Prime Minister felt compelled to make. Take the portfolio, for instance, of Marine and Fisheries. Tnere is a fine able mariner down at Lunenburg that might have been fitted into that place, and I think it was a disappointment in some circles that he was not fitted in. But, Mr. Speaker, whoever formed the Government, or whoever had the chief influence in forming it, seemed to prefer to follow the British example in filling the office of Minister of Marine and Fisheries. Because, Sir, it is the British principle to select such a man, and we find that principle put into poetry, not only put into poetry but set to music, because:

When he was a lad he served a term As office boy in an attorney's firm He cleaned t'he windows and swept the floor And polished up the handle of the bis front door.

He polished up the handle so carefully That now he's ruler of the King's navy.

So in following up the British principle the Government have given to us just about all that Gilbert and Sullivan embodied in this character in Pinafore.

Now, Mr. Speaker, I suppose there has never been such a strange spectacle in this Parliament as we have before us to-day- as we have before us day in and day out. There are all shades of political opinion gathered into one inharmonious group on the opposite side. Here is my hon. friend from Brome (Mr. McMaster) for free trade "as they have it in England"; and here is my hon. friend the Minister of Justice (Sir Lomer Gouin) as protectionist as Sir John A. Macdonald. Then there is my hon. friend the Solicitor General (Mr. McKenzie), who treated us yesterday to one of those long smooth-bore dissertations which at least, did not show any di*-

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The Budget-Mr. Hocken

position to cater to free trade. And it is not only on the question of the tariff that there is a lack of harmony; we also find it on the question of the nationalization of railroads. My hon. friend from St. Antoine (Mr. Mitchell) takes one side; my hon. friend from North Waterloo (Mr. Euler) takes another side. And so it is even when you come to the question of maintaining the militia. The hon. member for Quebec South (Mr. Power) says we can only vote so much for training the militia, and the Minister of Militia (Mr. Graham) says we must have the amount of money that was originally asked for, that it is the smallest amount that can be asked in order to secure the national safety. But the member for Quebec South says "It does not make any difference to the national safety; cut it out", and the Minister of Militia cuts it out. What I want to point out is that there is no harmony of view on the opposite side at all on some of the most important questions that concern this country.

I must say that the speeches made by the hon. member for St. Antoine, by the Minister of Justice, and by other members on that side, in relation to the nationai ownership of railways, must give concern to every man who believes in that principle. I do not know exactly what we will do with them. The Government could not give them away to any private interest that would assume the capital charges; that is a certainty. If we disposed of the National Railways to-day it would be on the understanding that for all time we would assume the capital charges of $33,000,000 a year. Now my view, Sir, is that it will not be very many years, perhaps only two or three years, when the operating deficit on the National Railways will be wiped out; and when we reach that point we will have secured everything that it is possible to get by handing them over to private capital. I do not know, of course, what the intention of the Government is in regard to the management of the road; but I know some of the executive staff and I venture to say there is amongst that executive as great enthusiasm to make the National System a success as there is even among the executive of the Canadian Pacific Railway. Those to whom I allude are fine, capable, experienced young men, and I believe they can repeat next year what they have done this year when they reduced the operating deficit by several millions. They will

[Mr. Hocken.}

reduce that deficit by six or ten million dollars this year, and within a very short time they will have the operating deficit removed entirely. From that time on there will be no talk about scrapping the National Railways or handing them over to private interests.

Sir, I thought that the speech made by the Minister of Justice to-day was about full value for the support which was given to him by the big business interests in Quebec during the last election. What the effect of it will be upon my hon. friend from Brome (Mr. McMaster) I do not know. I am surprised to see my hon. friend in his place to-night. I had thought that the statement of the Minister of Justice would have given my hon. friend such a shock it would have put him to bed.

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Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

My hon. friend seems

to have more vitality and physical strength, than I gave him credit for, because I cannot imagine anything giving him such a tremendous shock as to hear a speech of such a character from that side of the House. What my hon, friend is going to do with the Minister of Justice, or what the Minister of Justice is going to do with him, I really do not know.

Now, Mr. Speaker, I have just a word to say to my hon. friends who do not believe in protection. I suppose that if, for example, we took Prince Edward Island it would perhaps be a little to the advantage of that province, which is purely agricultural, if we had free trade in Canada; but I cannot imagine it being of any real value to any other province in the Dominion, and the point that always occurs to me is this: Are we, as Canadians, prepared to work together to build this into a great country? If we are, then we must work for the establishment and maintenance of diversified industries. It has been shown to-day by my hon. friend from Vancouver (Mr. Stevens) that the products of the farm- which of course are the most important of all products; we all concede that-are enhanced in value after they have gone through the factory by 100 per cent or more. Are we going to have these factories; are we going to be manufacturers as well as farmers; are we going to try to work together and each carry a little of the other's burden in order to make Canada a great and flourishing country? We in this part of the country are hearing our share of this burden for the West. I think my

The Budget

Mr. Hocken

hon. friends from the West will agree that a very much greater part of the deficit on the National Railways is borne by the taxpayers of eastern Canada.

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An hon. MEMBER:

It comes out of the taxes.

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

Well, where do the taxes come from? They come largely from eastern Canada. There is no complaint about that. I am not making any complaint.

I am satisfied that eastern Canada will do what it can to meet the burden to keep these railways in the hands of the people so that we can have a national system publicly owned and operated; and that is a service to the West that I hope will not be forgotten. And, Sir, we must have manufactures in the East if we are going to have resources sufficient to pay our debts; and I can tell my hon. friends that they will never get very much relief from the burdens they carry through tariff reduction. That is not the goal towards which they should direct their efforts in my judgment. Suppose the Government does make a few piffling reductions on agricultural implements, such as the Minister of Finance has introduced what does that amount to? And especially what does it amount to when you take the sales tax into account? While the Minister of Finance made that reduction, the addition to the sales tax left you just about where you were before. I am not complaining about high taxes, because this country has to raise a large revenue. We have to pay our debts, and crawl out of our difficulties the best way we can. I submit that Canadians are men who will and can crawl out of trouble. They have the perseverence, the blood and the breeding to overcome any difficulties and obstacles with which they are faced. We have potentially the greatest country in the world. We can maintain in greater comfort than we are living in to-day over 200,000,000 people. Some day, perhaps by the end of the century, we will have 100,000,000 people in Canada, and they will be a better 100,000,000 than you will find in any other country in the world, because they live and work in a climate that will make them strong mentally, physically and morally. That is the type of people we have to-day. Can we not get together and find some common [DOT]basis, fair and reasonable for both parties, that will bring prosperity to all parts of the country, and devise a policy to bring us into closer harmony than exists at the present time? Nobody can deplore more

than I do that there should be any feeling between the East and the West. I will go as far as I can, as an individual, and as far as I have any influence in removing any friction that may exist, but I appeal to my hon. friends to look over the situation, not with reference to the theoretical views of Cobden and Bright, but with reference to the situation as it stands to-day. We are confronted with a condition. We must not be carried away by theories, but we must meet the situation as it exists.

I want to reply to'an argument put forward by the hon. member from Marquette (Mr. Crerar) the other day. He said the farmers of Ontario were too poor to get married. Mr. Speaker, did any man ever refrain from getting married because he was too poor? That is the last thing a man thinks about when he has the mating instinct. He finds his mate and marries her. It is not poverty that keeps people from (being married, jbut it is an entirely different and less noble instinct. It is the instinct of selfishness that keeps people from marrying, and if that condition exists in any place in Canada to a greater extent than it exists in the rural districts of the province of Ontario, I am sorry for it. The statistics which my hon. friend from Peel (Mr. Charters) gave the other night go to prove that. Therefore, do not let us run away with the idea that the rural depopulation of Ontario is due to decreasing revenues and decreasing earnings by the farmer, because a good farmer in Ontario will do as well to-day as he ever did. Prices vary from one season to another, of course, but if the man is intelligent,-and all farmers are,

and industrious, he can make a better living in Ontario on the farm to-day than in the city. Pity the poor manufacturer. I know that does not sound exactly like what you hear in the school house, but if there is any class of people in the country to-day for whom we should express our pity it is the manufacturers. They are all in the hands of the bank, and do not know whether they will finish out this month, next month or the month after, and any man who makes a success as a manufacturer has worries to sleep with every night that absorb his thoughts in a way that the farmer does not know anything about. I admit there is lots of work on the farm. It has its isolations, but my view of government action is that about all a government can do is to remove

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that isolation by all those modern devices such as good roads, telephones, rural mail delivery and distribution of electric power, as we are having it in our farm houses now. These are things that will make life on the farm better and more profitable, and will tend to draw the people into the rural district. I submit my hon. friends to my left will find, as time goes on, that it is not there their natural alliance is, but here.

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LIB

Hance James Logan

Liberal

Mr. H. J. LOGAN (Cumberland):

I am sure this House enjoyed very much the speech of the hon. member from West Toronto (Mr. Hocken) who has wandered far afield, quoting from the Bible and Edward Blake down to Pinafore, and, finally, ending up with that same old flirtation with the Progressives-the hon. gentlemen across the way. I have been listening with much interest, during this debate, to this flirtation by these gentlemen angularly opposite. Do they think the hon. members are fools? Three-quarters of the speeches are not addressed to you, Mr. Speaker. They turn their backs to the Chair, face the Progressives, say to them, " Now, boys, you must forget your half-brothers across the way, and you must climb over the fence and come with us, although we have nothing in common with you." My hon. friends, the Progressives, are not, in my opinion, to be caught with any such false inducements as these people are trying to hold out to them.

I am more than ever convinced, after hearing the speech of my die-hard friend from West Toronto, that the members of the official Opposition are Bourbons. They can neither learn nor forget. They wonder why they are there. They are not the only people in Canada who wonder why they are there. The wonder is that there are as many of them as there are. The once great Conservative party of Sir John Macdonald, Sir Charles Tupper, Sir Leonard Tilley, and Sir George Etienne Cartier, which at one time filled all one side of the House and overflowed half of the other side, is now represented by a remnant that occupies four rows of seats in one corner, and yet they wonder why they are there. The hon. member has referred to the fact that men of divergent view*-have been taken into this Government. Of course, we have divergent views. Liberalism means independence of individual thought. If we were all of one mind over here, if we all believed exactly the same thing, we would be reactionaries, but we

do not and, therefore, we are Liberals serving under a Liberal Prime Minister.

In this debate, apart from the deceptive love-making of the Progressives that has been indulged in by my hon. friends angularly opposite and a great many excellent sermons on the theory of free trade, by members of the latter party, we have had the Dead March of despair and the mournful cry, " The country has gone to the dogs."- We are told we are hopelessly lost. We have tremendous railway deficits and burdens we cannot bear.

Would it not be better in the language of the Minister of Marine and Fisheries (Mr. Lapointe), to smile and compare our condition with what they might have been? Four years ago, on this day of June, we were anxiously listening at telegraph offices to learn by despatches coming across the Atlantic cable whether or not we were to pay tribute to Germany for the rest of our lives and to learn the goose step. That was only four years ago. Within a few months we won a glorious victory; we have since demobilized our soldiers; we have those men hack with us in this country in different avocations. Although we have a burden of debt, although we have a large taxation, we are by no means the most impoverished country in the world, and we have, what is better than all, the great asset of victory, which might not have been ours.

On this occasion we have an amendment to the budget, moved by the ex-Minister of Finance (Sir Henry Drayton), condemning the Government for not carrying into effect the exact language of a platform adopted in this city three years ago. What were conditions in 1919? Our factories throughout Canada were busy; there was practically no unemployment from the Atlantic to the Pacific; markets were good, and our farmers were happy. We floated a huge victory loan, running into hundreds of millions of dollars, which was over-subscribed, even though the rate of interest was low. Since then, we have spent hundreds of millions of dollars in demobilization; we have taken over a great railway system, known as the Grand Trunk Railway; railway deficits have mounted higher and higher, and a tremendous amount has been added to the public debt of Canada. Is this a time for us to bring down a slashing, radical tariff, when we do not know just what the effect would be upon this country? The Progressives preach free trade; it is a beautiful doctrine; we would all br free

The Budget-Mr. Logan

traders-if the rest of the world were free traders. They sing these theoretical rhapsodies; but unemployment is knocking at the door.

Public promises should be kept; but sometimes they must be varied according to conditions. The Minister of Militia in the late government of the leader of the Opposition put forward a solemn promise in the election campaign of 1917 that farmers' sons would not be conscripted to go to war. He went even further than that; he said that if they were conscripted, he would see that they were returned to their homes from whatever camps they might be. Did the late government keep their promise? No, they did not keep it. They gave the reason that there was such dire need for more men on the other side of the Atlantic, that they could not keep their promise. They did not apologise; they said that conditions had changed. I am not admitting that they were right; but that was the stand which they took at that time. So, we cannot do what, perhaps, we thought we could do in 1919, as conditions now are entirely different.

Personally, I believe the Minister of Finance would have been justified in not touching the customs tariff at all. Why? Because we have not yet had time under present chaotic conditions to know just what effect a reduction in the tariff may bring forth. This Government were only two months in office before Parliament opened. They were busy during those two months preparing for Parliament, and since Parliament has opened, they have been busy carrying on the business of the session. There has been no time for a tariff inquiry. For instance, I can think of factories employing large numbers of men and women in making boots and shoes. In 1919, I would have been in favour of reducing very materially the duty on boots and shoes because the industry was prosperous; but to-day, what are the facts? In the boot and shoe industry in Canada, there is distress. Over 25 leading Canadian boot and shoe manufacturers have gone to the wall; many others are being carried by the banks, and do not know just where to turn. Would it be wise, without any investigation whatever, for the Minister of Finance to come in at this session of Parliament and materially reduce the duty? We know that boots and shoes that come into Canada come principally from the United States of America. I submit he would not be justified in making a change, because we do not know present conditions.

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PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Edmonton):

I cannot understand the bon. gentleman's point with regard to the situation in the boot and shoe industry. Is bis point that that industry has not enough protection, or that the protection is of no use to prevent unemployment and hard conditions?

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LIB

Hance James Logan

Liberal

Mr. LOGAN:

The boot and shoe industry in Canada is carried on, in something over 100 different factories, which manufacture principally all the boots and shoes used in Canada. The competition between those concerns regulates the price. If you removed the tariff from that commodity and allowed this country to be overrun, even for a period of three or six months, with cheap American boots and shoes from factories that can make enough in two weeks to supply the whole needs of Canada for a year, what would be the result? You would drive out of existence seventy or eighty factories in this country; in a year's time up would go the price, and you would find yourself at the mercy of the American manufacturers of boots and shoes. The condition, however, of the boot and shoe industry is a matter to be investigated. I merely say that conditions have changed in that industry, and the question whether there should be a change in the duty on boots and shoes or not is a matter for investigation.

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Henry Elvins Spencer

Progressive

Mr. SPENCER:

Do the boot and shoe

manufacturers of Canada export any of their products to the United States?

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LIB

Hance James Logan

Liberal

Mr. LOGAN:

A most negligible quantity. But the boot and shoe manufacturers of Canada supply the Canadian trade, and it is at any rate one industry in which there has never been any proof that there has ever been any combine to fix prices.

We have before us the serious problem of unemployment. In the town where I happen to reside there are hundreds of idle men; but on the other hand we have a number of men at work in the factories there. Could I take the chance of voting to-day to reduce the duty upon goods manufactured in those factories when I would not be in a position to know whether it would mean the adding to the number of unemployed? Is it good policy by precipitate action to have battalions of unemployed in Canada where we now have only platoons?

The amendment of the right hon. leader of the Opposition (Mr. Meighen) condemns us because we do not do something in 1922 which it might be dangerous, to

The Budget-Mr. Logan

say the least, to attempt, because we happen to have had a platform in 1919 promising certain fiscal changes. I do not think this House or the country is going to take that amendment very seriously, because the chief matter of concern to the people to-day is: What are we going to do now?

I pass to the leader of the Progressive party. My hon. friend (Mr. Crerar) condemns the budget in that the proposed reductions are not sweeping; he also condemns the sales tax and the stamp tax. Well, how else are we going to get the money? Does the hon. leader of the Progressive party and his followers think we can get money off the trees or out of the sky? We are confronted with facts, not with theories, and the facts are that we need between $450,000,000 and $500,000,000 to carry on the affairs of this country during this fiscal year, and at least $100,000,000 of that sum is not even in sight. The sales tax is estimated to produce $100,000,000; the stamp tax will, no doubt produce many millions of revenue, although I have not heard any estimate of what it is expected to yield; the customs tariff will produce over $100,000,000. Money must be obtained. How are we going to pay our pensions and continue the re-establishment of soldiers if the treasury is empty? How are we going to pay the interest on our public debt if we have not some source of income to meet it? Provision must also be made for the greatest burden of all-our railway deficits. Even when we talk about the tariff and other matters, we must realize that the one great problem of this country today is transportation.

It is said that the income tax is already too high, and we hear complaints from ail parts of the Dominion that it is more oppressive than in other countries. But the Finance Minister estimates that this fax will produce $40,000,000 less this year than it did last. Again I ask where is the money coming from to meet our obligations? The platform of the party led by my hon. friend from Marquette calls for an inheritance tax and a tax on land. But he now tells us that we should not invade the taxation field of the provinces. Well, the provinces already impose an inheritance tax, and I know that my province has a tax on land as well.

There is no question before the House or the country of free trade or protection. We are confronted to-day with the need of

money-rather, I might say we are confronted with an emergency. What we require more than ever before is a revenue tariff which, of course, is bound to give incidental protection. A revenue tariff, to produce anything like the amount of money we require, will give substantial protection to our industries. I submit that while some of our tariff rates may be a little high, there are others that are" entirely too low. My hon. friends, the Progressives, condemn protection. Why do they not advocate, then, raising the duty on articles not produced in Canada? My hon. friend, the leader of the Progressives, a few weeks ago said in this House in the course of his speech in the debate on the address:

X recognize Chat it is and wilt be necessary for a considerable time to raise revenue by customs duties:

Of course, he admits it is necessary. Then why is he declaring that he and his party will oppose this budget, which, I submit, is not a protectionist budget such as in generally known, but is absolutely necessary to raise the revenues we require.

But if my hon. friends want to raise revenue without protection I will give them a few suggestions. Last year we imported five million tons of anthracite coal. This was not used by the poor down on the wharves of our seaports, nor by the struggling poverty-stricken denizens of our slums, but by the well-to-do people who can amply afford to pay for it. That coal was brought in free of duty, and its value is given in the customs returns at $40,000,000. A revenue tariff of 20 per cent upon that importation alone would mean an additional revenue of $8,000,000-much more than could be procured from an inheritance tax.

We hear a great deal of talk about the duty on bituminous coal, and it is somewhat annoying to us in the maritime provinces to be continually told that we have always the fear that this duty will be reduced. In fact to hear some people talk you would think there is actually a high protective duty on bituminous coal. But what are the facts? Years ago under the old tariff as fixed by my hon. friend the present Minister of Finance, a specific duty of 53 cents a ton was placed upon American bituminous coal. At that time the price was about $2.60 a ton. That duty of 53 cents a ton was equivalent to about 20 per cent of the value. To-day, when bituminous coal is worth from $5 to $6 a ton, it does not take anyone very long to

The Budget-Mr. Logan

figure out what percentage that specific duty is. The fact of the matter is that according to the customs returns for last year which I have under my hand, even although bituminous coal was valued for customs duty at what is really a very low price, namely about $4 a ton, the duty was less than 12 per cent. Is that a protective tariff? It is not even a revenue tariff.

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June 8, 1922