June 8, 1922

CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Would my hon. friend

permit me a question? I ask it only as a matter of information, because the expression "revenue tariff" is used continually. Would he mind offering to the House his explanation of where a protective tariff ceases and a revenue tariff begins?

Topic:   REVENUE.
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LIB

Hance James Logan

Liberal

Mr. LOGAN:

I will put it the other

way: a revenue tariff ceases when it is made so high that manufacturers can get in behind it and rob the people by combines, the competition of the manufacturer outside being eliminated. A tariff remains a revenue tariff, though it does give incidental protection, if it does not allow the manufacturers to get behind it and form combines to bleed the people by extravagant prices.

Let me return to this question of coal. I have said that according to the customs returns the duty on coal last year was less than 12 per cent. Now, my good friends the Progressives advocate the development of our natural industries; that is one of the chief things they talk about. They say: Never mind the exotics; let

us develop the natural resources and industries. Is there any more natural industry in Canada than the coal industry? Do you know, Mr. Speaker, that 150,000 Canadians depend upon the coal industry, either directly or indirectly? Besides, provincial governments depend upon it for a large part of their income which they devote to education, roads and bridges, and the works which they carry on throughout the provinces. Yet last year there were imported into Canada 15,000,000 tons of bituminous coal, while the industry in eastern Canada languishes; coal miners are working two and three days a week, many not working at all. I assume the same condition exists in the West. I advocate for another budget the imposition of a duty of at least 20 per cent upon bituminous coal. Twenty per cent cannot be called protective duty; I estimate that it would not increase the price of coal to the consumer in this country according to the

value placed by the customs more than 27 cents a ton. If we can give employment to thousands of men who to-day are walking the streets of our mining towns; if we can revive this great industry in Canada, we shall be doing one of the most blessed things that can be done, one of the things best calculated to restore prosperity throughout the land.

I wish to offer some suggestions in reference to the application of the tariff so far as values are concerned. The budget provides that the duty shall be applied on the price of the article at point of purchase, that is, the price at which similar goods are sold at the point of purchase. Let me call attention to the manner in which the tariffs of some other countries are applied. The customs tariff of the United Kingdom provides as follows:

The value of any article for the purpose of ad valorem duty shall be taken to be the price which an importer would give for the article if the article were delivered, freight and insurance paid, in bond at the port of importation, and duty shall be paid on that value as fixed by the commissioners of customs and excise.

In Prance duties are levied in some cases according to the gross or the semi-gross or the net weight of the article. The Australian act provides:

When any duty is imposed according to value, the value shall be taken to be the fair market value of the goods in the principal markets of the country whence the same were exported in the usual and ordinary commercial acceptation of the term and free on board at the date of the invoice relating to such goods, and a further addition of 10 per cent on such market value.

In assessing free on board value of goods subject to ad valorem duty in terms of the above-quoted section of the Customs Act of Australia, 1901, the following ' charges are included: inland freight

charges, coastal freight, canal dues, insurance, cost of labour and material in packing, royalties, etc. For instance, if the Massey-Harris Company ship goods

from Toronto to Australia the

II p.m. duty is levied not only upon the

cost of the goods in Toronto, but also upon the freight from Toronto to Vancouver, insurance, etc., plus 10 per cent on the total cost of the goods landed at Vancouver. If the United Kingdom system of taxation were applied in Canada it would be a great benefit not only to Canadian ports but to Canadian railways. British goods bought by a Vancouver importer would pay duty at a port in Canada; naturally to save duty on freight charges the port would be

The Budget-Mr. Logan

on the eastern coast of Canada and the Canadian railways would secure the haulage and the freight upon those goods to the point of destination. Or if goods were imported from the United States the customs duty would apply to the point in Canada at which the goods were brought in, and again the Canadian railways would receive the benefit.

This application of the tariff on the cost of goods, freight, etc., at the port of entry should certainly apply to goods brought into Canada under the British preference. Earlier in the session I devoted some time ir this House to a discussion of the desirability of confining the British preference to goods entering Canada by Canadian sea ports, a policy which I think should have received the unanimous approval of the House. I have looked at the United States tariff within the last few days and I find it in the following provision in reference to the Philippine Islands:

Provided further, that the free admission, herein provided, of such articles, the growth, product or manufacture of the United States, into the Philippine Islands, or of the growth, product or manufacture as hereinbefore defined of the Philippine Islands into the United States, shall he conditioned upon the direct shipment thereof, under a through hill of lading, from the country of origin to the country of destination.

That, Mr. Speaker, is the policy of the United States. I am not going to dwell upon it, but I submit once more that that is the proper policy for this country. The time will come, and I hope it is not far distant, when we will be Canadian enough to look after Canadian interests first, last and all the time.

_ The transportation question, Mr. Speaker, 'is to us in the maritime provinces the greatest of all questions. The leader of the Opposition referred the other day to the maritime provinces in connection with protection. I do not deny-and I say it to my right hon. friend as well as to the Progressives-that it was a sad day for the maritime provinces when protection was adopted. There is no doubt about it, had we been left as we were at Confederation, with the low tariff that we had at that time, we would have been a much more prosperous country than we are to-day. But we are confronted now with a condition under which about the chief markets we have left are the markets which are produced as a result of the operation of the factories in the towns in the maritime provinces and the coal mining centres. As to reducing any duty affecting

those factories which give a market to our farmers and all the people of our country, I want to see a thorough investigation made to decide whether such a reduction would be in the best interests of the country. We are shut out from the United States by a high tariff wall. We are shut out from the rest of Canada to which we were promised access by the fathers of Confederation, by a prohibitive freight tariff. Realizing the conditions that exist, I would hesitate, before voting to reduce seriously the tariff upon goods which are being manufactured in those towns, where as I said before, the farmers in the maritime provinces have lost their best market.

But the question of transportation is, after all, the all-important problem. We knew it at Confederation, and our statesmen told the delegates that came down to Charlottetown: We can never become a part of Confederation because the .markets of Canada are too far away. Our natural market was with the United States of America. Joseph Howe, the greatest tribune of our province, and our greatest orator of his or any other time, said on one occasion: "You could throw a grindstone into the water at any Nova Scotia port, and it would float into Boston harbour." The New England states have been our natural market, but we are shut out from that market to-day, and by reason of the high freight rates we are also shut out from the markets of Quebec and Ontario. Do you realize, Mr. Speaker, that nearly one-eighth of the people of Canada live on the island of Montreal? But we cannot reach that market because the freight rates are prohibitive. Therefore, transportation and the reduction of freight rates are the greatest of all problems in the maritime provinces.

May I just for a moment refer to a provision made in the statutes of South Africa which, it seems to me, might be worked out in this country not only in reference to the maritime provinces but other parts of Canada as well, particularly western Canada, where there might be need from the national standpoint for the operation of a railway, but no reasons from a commercial standpoint. In the Imperial statutes of 1909, Chapter 9, will be found this provision relating to South African railways:

The total earnings of the railways shall be not more than are sufficient to meet the necessary outlays for working, maintenance, etc. and the -payment of interest on capital.

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Section 131, which is the one to which 1 wish to draw particular attention, reads as follows:

If the board shall be required by the Governor General in Council or under any act of Parliament or resolution of both Houses of Plarliament to provide any services or facilities either gratuitously or at a rate of charge which is insufficient to meet the cost involved in the provision of such services or facilities, the board shall at the end of each financial year present to Parliament an account approved by the Comptroller and Auditor General, showing as nearly as can be ascertained, the amount of the loss incurred by reason of the provision of such services and facilities, and such amount shall be paid out of the Consolidated Revenue Fund to the Railway and Harbour Fund.

I read that as it is interesting, I think, in view of the railway question which we shall have to discuss in this country, and to which we ishould give our very best thought and attention,

I do not intend to-night to go over the arguments about the Intercolonial Railway. They are as old as Confederation, but the other day when reading a report of the Supreme Court of Canada I caime across judicial recognition of the fact that the Intercolonial was never built for any commercial purpose. Chief Justice Ritchie, in Regina v. McLeod, Vol. 8 of the Supreme Court of Canada reports, page 23, says:

As to the Intercolonial Railway, it was in no sense in the nature of a private undertaking, constructed for reasons influencing private promoters of similar works, or in the nature of a mercantile speculation. It was constructed as a great public undertaking, essential to the consolidation of the union of British North America, and in fulfillment of a duty imposed on the Government and Parliament of Canada by the British North America Act.

In a few weeks, I hope not more than a few weeks, when the new management will be constituted for the Canadian Government Railways and we shall have to consider once more the question of freight rates, I hope the people of this country will realize the position of the maritime provinces and the difficulties under which we labour owing to the present lack of transportaion facilities at reasonable rates.

I intended when I commenced this address to refer at some length to the sales tax provisions of the budget. I wish to say first, that there is no connection between the sales tax and the customs tax. You hear people say that the Minister of Finance is giving something with one hand and taking it away with the other. The facts are the sales tax would have been here if the tariff had never been touched. The sales tax has nothing whatever to do

with the customs tariff of this country. To some extent there is a change made in the sales tax by the tariff. For instance, there is a change in reference to importation of goods from countries where there is a depreciated currency. I had a statement here illustrating how that would work out, but I cannot lay my hands on it at the moment, so I will have to give it from memory. A few months ago, under the old customs and sales tax regulations, a certain educational institution in this country imported from Germany certain scientific books. They were free of duty, so therefore the question of duty did not enter at all. The price of these books in Germany, if the mark had been at par, would have been something over $6,000. As a matter of fact, in Canadian currency it was $210, but when the institution secured the books they had to pay a sales tax of $274 on these books that only cost them $210. Under the present sales tax proposals the sales tax upon these books would amount to something like $12 only, so a great change has been made in that regard.

The sales tax itself has been broadened very materially. There has been an increase in the rate charged, but at the same time there has been a large increase in the list of exemptions. I do not think we realize just how many exemptions there are from the sales tax. Let me give a few. The sales tax does not apply to sales or importations of:

Bread; flour, oatmeal, rolled oats and corn-meal ; rolled wheat, buckwheat meal and pea meal; animals living; live poultry; meats and poultry, fresh; milk, including buttermilk, margarine, butterine or other substitutes for butter; lard, lard compound and similar substances, made from animal or vegetable stearine or oils; eggs; vegetables, fruits, grains and seeds in their natural state ; bran, shorts, middlings, alfalfa meal; oil cake, oil vake meal; grains mixed or orushed for cattle or poultry feed ; hay ; straw hops ; nursery stock ; chicory, raw or green ; bees ; honey ; sugar ; molasses ; salt; other farm produce sold by the individual farmer of his own production; ice; fish and products thereof not canned or melioated ; ores of metals of all kinds ; fuel of all kinds; gold and silver in ingots, blocks, bans, drops, sheets or plate unmanufactured; logs and round unmanufactured timber; fence posts, railroad ties, pulpwood, tan bark, and other articlesthe product of the forest when produced and sold by the individual settler or farmer; newspapers and quarterly, monthly and semi-monthly magazines and weekly literary papers unbound ; materials for use only in the construction, equipment and repair of ships; ships livensed to engage in the Canadian coasting trade; calcium carbide ; radium ; electricity; gas manufactured from coal, calcium carbide or oil for olluminating or heating purposes; artificial

The Budget-Mr. Logan

limbs and parts thereof; donations of clothing and books for chartiiahle purposes; settlers' effects; War Veterans' badges; memorials or monuments erected in memory of soldiers who fell in the great War; Bibles, prayer-books, psalms and hymn-books, religious tracts, and Sunday school lesson pictures; articles admitted to free entry under Customs Tariff item 682 ; manilla fibre for use only in the manufacture of rope not exceeding one and one-half inches in circumference for the fisheries; boats bona fide purchased by individuas fishermen for their own personal use ini the fisheries; fibre for use only in the manufacture of binder twine ; job printed matter produced and sold by printers or firms, whose seal of job printing do not exceed three thousand dollars per annum, and so on ; and the sales tax shall not be payable on goods exported, or on sales of goods made to theorder of each individual customer by a business which sells exclusively by retail. It is further provided that the Governor in Council has the power to add to the foregoing list of articles exempted, as may be deemed expedient or necessary to execpt from the said sales tax.

To show the importance of the exemptions under Tariff Item 682, let me read that item as it apears in the tariff itself. The section reads as follows:

Fish hooks, for deep-sea or lake fishing, not smaller in size than number 2.0; bank, cod, pollock, and mackerel fish-lines; and mackerel, herring, salmon, seal, seine, mullet, net and trawl twine in hanks or coil, barked or not,- in variety of sizes and threads,-including silling thread In balls, and head ropes for fishing nets; manilla rope, not exceeding one and one-half inches in circumference, for holding traps in the lobster fishery; harked marline, and net norsels of cotton, hemp, or flax; and fishing nets or seines, when used exclusively for the fisheries, not to include hooks, lines or nets commonly used for sportsmen's purposes.

That is a most important exemption to the fishermen of the maritime province, and to fishermen in all parts of Canada whenever they may be engaged in that important occupation.

The sales tax has been attacked here. It is said to be an objectionable tax but, every tax is objectionable. The school tax is objectionable; the poor tax is objectionable; every tax we have to pay is objectionable. It seems to me that the sales tax is about the least objectionable of any tax which we are called upon to pay-for one reason we do not know when we are paying it, which sometimes is a very pleasant condition of affairs.

Now, Mr. Speaker, we, as members of Parliament, should give the people of this country a lead. There is one thing we must have and that is economy; I am afraid we have not got it to-day. Look at the estimates brought down for the Inside and Outside service this year. See the tremendous increase over the estimates of ten

years ago. Note also the increase of expenditure for services throughout the country. Go into your own towns and you will find that where three or four people carried on certain work for the Government ten years ago it now takes often double that number to do that work and the pay roll has been largely increased. We should have economy. Are we giving a right lead in this matter? Let us be honest with ourselves. I beg to suggest, to show we are in earnest in this matter, that we agree to a reduction in our indemnity as members, provided that reductions applies pro rata to every salaried official of the Government of Canada. Let it apply to the big officials as well as the smiall ones with the exception of the small salaried people who only have a living wage. Take the man who is getting probably $100 a month. When you propose to cut his salary or cut his bonus what is his natural reply? He says "It is all very well for those members cf Parliament up on Parliament Hill to reduce the salary that I need for the support of my wife and little children, but what about their indemnity? With them the cost of living is coming down but their salaries are not coming down in proportion."

Take the man who is working on the government railways of this country as a maintenance of way man, on a hot summer day working to protect the lives of travellers. When he is asked to accept a reduction of wages, he fails to see the justice of it, when the head of the system which employs him who is earning more in one day than he is earning in a month is not reduced in salary. What we need in this country is to disabuse the people of the idea that is abroad that everybody is trying to do someone else. Let us try and make the people realize that there is an equality of sacrifice in Canada; and if we wish to be frank in this matter let us be honest with ourselves and let us agree that there shall be a reduction in our own indemnities. I need the money I get as a member of Parliament, but I would like to be able to be consistent with the people of this country, and try to demonstrate that the man engaged upon the lowest possible job is getting an equal show with me. It is our duty, as members of Parliament, to try and remove the chaotic conditions which prevail and, at any rate, to set an example. For my part I think it is important that the proposition I

The Budget-Mr. Logdn

have made should be very seriously considered by this House-not perhaps for the matter of the loss of the dollars that would be involved; that is not the question. It should be a matter of principle to try to bring back the confidence of the man in the street in those in authority.

Now, Mr. Speaker, I am only going to take up your attention for a few moments longer. There are several matters I would like to discuss, but I see we are now approaching the midnight hour, There is an amendment before the House which everybody knows will be voted down; all the votes that amendment will receive will be confined to one corner of this chamber. But we have the declaration of the leaders of the two political parties opposite that they are going to vote against this budget. The leader of the Opposition is going to vote in favour of the amendment of the ex-Mmister of Finance whlich, of course, he has a perfect right to do. He can make an argument in favour of that amendment; but when he says that the tariff we are considering is a protective tariff and that it is only reducing the taxation of the country by a fraction of a fraction, I say to him that he cannot vote against that tariff and be honest with his own convictions. Protection is his gospel, the gospel of his life; it has been so always except for one occasion when he was in opposition and moved a resolution attacking the protection on agricultural implements. If as he claims it is a protective tariff, he is bound in honour to vote for it.

Topic:   REVENUE.
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CON
LIB
CON
LIB

Hance James Logan

Liberal

Mr. LOGAN:

When it comes to the resolution, the hon. member can speak and vote against it. This discussion is on the general principle of the tariff. Why does the leader of the Opposition not vote for it? Is it because it is brought down by one who is not a protectionist? Why, I would almost suspect in that case he would not vote for it if it were brought down by the late member for Portage la Prairie, (Mr. Meighen) who once moved a resolution condemning protection. The position being taken by my hon. friend, is inconsistent. I do not agree that he is

right in his view, and I do not agree that this is a protective tariff.

In conclusion, let me say to my hon. friends opposite me, the Progressives, that we cannot, in this country, get all our own way in reference to tariff legislation, or any other legislation, owing to our geographical position. Canada must be a country of continuous compromise. There are many things in the maritime provinces which we firmly believe we are entitled to, but we know we cannot get all we would like to have, because other parts of Canada have difficulties of their own. In 1911 there was a great problem in this country in reference to the tariff. It was a matter of reciprocity, which was proposed for the particular benefit of our friends, the Progressives. I ran an election in a county that was largely industrial. I went down to defeat at that time fighting to assist these gentlemen, and to place western Canada in a better position. The last opportunity the farmers had to vote in favour of the Minister of Finance (Mr. Fielding) was in 1911, when he was fighting their battles, and he went down to defeat. Am I to understand that the Progressive, or Farmers party, is going to forget the men who tried to save them in 1911, join forces with the men who tried to injure them in that same year, and yield to the blandishments of the party across the way. I do not believe, when it comes to a vote, that these gentlemen will assume such an attitude.

We, on this side of the House, have made a start in the right direction, as was said last night by the Prime Minister (Mr. Mackenzie King). We are travelling the right road. This Government has been in power only a few months, and has not had time to investigate the affairs of the country. There is danger in touching the tariff when unemployment stalks abroad, and surely, the Government should be given time and opportunity to look into the condition of affairs so that, when it comes to another session of Parliament, we may be able to deal with this matter with more experience, knowing better than we know now the real and actual conditions of the country.

We cannot have a divided Canada. We must have a united Canada or no Canada at all. We have interests ir eastern Canada which are distinct from the interests of the prairie provinces. They have difficulties there which we have not in the East. Let us realize what those

The Budget-Mr. Logan

difficulties mean, and those of us who have lived in that country, or travelled through it, know something of the difficulties in the vast prairie for the men who are trying to make a living there. But they must remember there is an East as well as a West. All we ask them at this time is to adopt the sentiment of that old poem written by an obscure poet in New Brunswick, who said:

Though we're strangers,

We'll be brothers

Having naught, but duty's call.

Bear in mind what'er betides us,

We're Canadians one and all.

On motion of Mr. Brethen the debate was adjourned.

On the motion of Mr. Fielding the House adjourned at 11.30 p.m.

Friday, June 9, 1922

Topic:   REVENUE.
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June 8, 1922