June 13, 1922

ALBERTA LIBERAL CANDIDATES


On the Orders of the Day:


PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River):

I would like to ask the Government if its attention has been called to a despatch in the Morning Albertan, Calgary, of June 8, in which appears a report of the meeting by the unsuccessful Liberal candidates in the Alberta Dominion election. Criticism was levelled at this meeting by the Conservative press and it was stated, that it was held for the purpose of assisting in the distribution of patronage in that province. Subsequent to the meeting Mr. E. F. Ryan, defeated Liberal candidate in Calgary, gave an interview in the course of which he said:

"What the defeated Liberal candidates met for was to discuss redistribution in Alberta and to report to the Liberal Government. If the

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federal Liberal Government is not officially represented in Alberta it is up to the L/iberal candidates who were defeated to try and guide the Government in the coming redistribution.

I wish to ask the Government if they have had a report of that meeting, and whether or not they are in a position to state to the House the day upon which the question introduced by Mr. Shaw will be discussed.

Topic:   ALBERTA LIBERAL CANDIDATES
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister) :

The speech of my hon. friend calls the attention of the Government for the first time to the article to which he has referred. I had not seen the report he speaks of. I have had a communication from one of the Liberals of Alberta about a meeting which was held, but that communication did not refer in any way to the subject of redistribution, which, I think, is the point my hon. friend has just raised. In regard to redistribution, the Government will naturally welcome advice from every source.

Topic:   ALBERTA LIBERAL CANDIDATES
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PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River) :

Has the Government decided on the day on which redistribution will be discussed by this House?

Topic:   ALBERTA LIBERAL CANDIDATES
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

We have not decided on the day, but there will be a chance before the session is over.

Topic:   ALBERTA LIBERAL CANDIDATES
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NATIONAL RAILWAY BOARD


On the Orders of the Day:


CON

Thomas Langton Church

Conservative (1867-1942)

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

I desire to ask a question of the Government as to the appointment of directors to the National Railway Board. Will the Government consider the appointment on that board of representatives who are sympathetic with public ownership? Will they consider the views of the appointees on the question of public ownership?

Topic:   NATIONAL RAILWAY BOARD
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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

The Government will be glad to consider any names or representations an hon. member may wish to have considered.

Topic:   NATIONAL RAILWAY BOARD
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CANADIAN NATIONAL RAILWAYS


On the Orders of the Day:


CON

Thomas Langton Church

Conservative (1867-1942)

Mr. T. L. CHURCH:

I wish to ask another question. I notice a series of articles in the Montreal Herald. I will just read three lines as follows:

Mr. Hanna is not running the National Railways. Neither is the Government. The man who is running the Canadian National railways is not even a Canadian. He is a foreigner. His name is Mr. Carey. He lives in Indianapolis.

The Budget-Mr. A. K. Maclean

Topic:   CANADIAN NATIONAL RAILWAYS
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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

That question is not in order, on the Orders of the Day.

Topic:   CANADIAN NATIONAL RAILWAYS
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THE BUDGET

CONTINUATION OF THE DEBATE OP THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The House resumed from Monday, June 12, the debate on the motion of Hon. W. S. Fielding (Minister of Finance) that Mr. Speaker do now leave the Chair for the House to go into Committee of Ways and Means, and the proposed amendment thereto of Hon. Sir Henry Drayton.


LIB

Alexander Kenneth Maclean

Liberal

Hon. A. K. MACLEAN (Halifax) :

Mr. Speaker, I know it is a very doubtful adventure on the part of any hon. member to engage in the discussion of the budget at the present time. So much has been said concerning it, and so little has been left unsaid, that really it is difficult for one to justify himself in asking the attention of hon. members to a further consideration of that subject. However, I avail myself very gladly of the opportunity of presenting some remarks to the House this afternoon. I do not intend discussing the budget with any great particularity, I wish to address to the House some general observations regarding it. I desire to say a few words in connection with the changes in the taxation resolutions, as announced by the Minister of Finance (Mr. Fielding) last night. These taxation resolutions have been in force since May 23 or May 24, I believe. In the meanwhile, actual experience has demonstrated tha'. these taxation proposals were not in the interest of trade or of revenue, and the Minister of Finance, in his good judgment, has seen fit to vary them. I have no doubt that if, later on, he finds that experience does not justify the tax proposals in their amended form, he will exhibit that same good judgment in announcing to the country and to parliament his willingness to make ^further 'amendments if necessary, in the commercial interests of the country and of the public revenue. There is a lesson, perhaps, to be drawn from our experience of the operation of these tax proposals during the past two or three weeks. We see how quickly and markedly taxation affects trade. When taxation is carried beyond a certain point, not only does it diminish business and commerce, but also it does not bring into the treasury the revenue it was designed to bring. We see further, that the framing of taxation

schemes is not, after all, an easy matter; it is not as easy as some hon. gentlemen think. From the way in which taxation proposals are suggested in this country to-day by many people,-yes, and even in this Parliament-one would fancy that this question was accompanied with no difficulties or complexities whatever, that almost anybody could suggest a scheme of taxation that would be workable and practicable in Canada.

I do not wish to say anything in particular concerning the amended resolution in relation to the depreciated currency of European countries. I favour the widest trading between this country and the countries of Europe; but while giving my adhesion to that principle, I do not mean to say that, in certain circumstances due to disrupted international exchanges, certain results must not be corrected, as the Minister of Finance (Mr. Fielding) proposes correcting them by his amended resolution in relation to the depreciated currencies of Europe. The free trader likes fair trade. Fundamentally, he means that he believes in what we know as barter. But the depreciated currencies, of Europe to-day prevent what is or was usually heretofore known as barter. Not only are conditions abnormal in this respect; but they are unnatural, and however in theory we may view them, there is a practical side to these questions, they must be dealt with in a practical way. German exporters of goods are able to establish for themselves credits in foreign countries, and these credits are of great advantage to them in disposing of their productions. I am perfectly satisfied with the efforts of the Minister of Finance in seeking to control this in a practical way, and in some degree.

The statement of the Minister of Finance in his budget in reference to our debt and to our revenue necessities make very plain the serious financial obligations confronting us to-day. Our debt is alarmingly high; it cannot go very much higher without endangering everything in the country. Our actual revenue necessities are also very large; they may continue to grow higher, but I hope not. It will, however, be difficult, as the Minister of Finance has stated, to secure further revenues. We have reached almost the limit of taxation; we cannot proceed in this direction much further; and it is becoming more difficult day by day to discover new sources of revenue, or to ex-

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The Budget-Mr. A. K. Maclean

plore new avenues through and by which additional revenue may be secured. There is no ideal form of taxation known to us in Canada or to men in any other country. The income tax is regarded the world over, I think, generally speaking, as the fairest form of taxation; but it itself works many hardships. All revenues which come to the treasury of any country come only through taxation; all forms of taxation are more or less of a burden, and they come from earnings and savings of the people generally and from nowhere else. It has been remarked on two or three occasions by some hon. gentlemen that the British government have reduced their debt and that their income tax is declining. I think it was the leader of the Opposition (Mr. Meighen) who discussed this particular point, and, I think, with perfect accuracy. The reduction in the British income tax was not due to the fact that they were reducing their debt by taxation; because the truth is that the British debt has been reduced by war salvages and from no other source. The income tax was reduced in Great Britain because it was thought it was becoming a burden upon business, that it was destroying business initiative and enterprise. It was thought that in the end revenues would be encouraged and the economic security of Great Britain better maintained by a reduction of taxation. I refer to this only to impress this point upon hon. gentlemen, because we hear, too frequently I think, expression of the idea that there is no limit to the amount of taxation which this country can impose upon certain people and certain industries. We must all agree that it is morally wrong to impose excessive taxation upon people who cannot afford to pay any taxation whatever, upon poor people. In Great Britain, the idea behind the reduction of the income tax is that it is economically wrong to impose excessive taxation upon people who earn large incomes, and that we should not, in these days of confusion and problems, allow ourselves to be possessed of the idea that business can be indiscriminately taxed, or that men of a certain class can be excessively taxed. I agree with the general proposition that taxation must be imposed upon those who can best afford to pay it; but I wish to emphasize the idea that this can be carried too far, and by excessive taxation, we may destroy the very sources from which we obtain our revenues. Our debt is exceedingly high to-day; our [Mr. A. K. Maclean.)

revenue necessites are extremely burdensome upon the people, and the man who can devise a more suitable scheme of taxation than that which we have to-day will deserve the gratitude of the nation. The hon. member for East Calgary (Mr. Irvine) a few days ago presented to the House some scheme which I understood to mean that, if put into operation, it would, within a year or two, wipe out the public debt and would practically avoid the necessity of further taxation. If the hon. gentleman can produce such a scheme and make it practicable, I am sure there is nothing this country would not do for him. Personally, I would favour withdrawing from the British Empire altogether and establishing a new kingdom here, and I would consent that he be placed upon the throne and the crown placed upon his head.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE OP THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

Not a crown of gold.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE OP THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Alexander Kenneth Maclean

Liberal

Mr. MACLEAN (Halifax) :

As I have stated, we have, in my judgment, pretty nearly reached the limit of taxation in this country, and if so, what is to be our relief in the future? I think, as has already been stated by many hon. gentlemen, it should come from a reduction of public expenditure. I know that the ideal of economy is popular, but the practice of it is not so popular. The Minister of Finance intimated this when delivering his budget on the 23rd day of May. I think it is a fact that the people of this country are naturally extravagant; and we might naturally expect that of the people of a new country as compared with the people of older countries. At any rate, I believe that this charge may be fairly levelled against us. But a very radical change must come over us all in that respect. As the Minister of Finance said, we are willing to be economical in so far as the constituency of any other hon. gentleman is concerned, but each of us is not so particular in regard to the constituency we represent. I very modestly suggested the other night that we might suspend the operation of the Rideau canal, particularly what looks to me like the business operation at this end. At the moment I did not know that the town of Perth was situated on the Rideau canal; I was not aware that there were those beautiful Rideau lakes beyond us here. But I never intended to destroy the town of Perth nor to impair the beauties of the Rideau lakes. I merely suggested that certain sections of that canal, which were apparently or outwardly, conducted

The Budget-Mr. A. K. Maclean

as a commercial operation might well be done away with. However, my suggestion, which was well intended, was not very well received. The hon. gentleman who sits immediately to my left, the member for Cumberland (Mr. Logan), offered the suggestion the other night that the salaries of civil servants, members of Parliament and judges, and all that class of people generally, should be reduced by 15 per cent.

I do not know that the Minister of Finance has received any cheque, implementing this suggestion, from the class of people designated by the member for Cumberland; nor am I sure whether he himself has tendered a cheque on his own account.

The Minister of Finance expressed doubt as to the permanence of his popularity if he endeavoured to curtail public expenditure. I wish to assure him that, in my judgment, the members of this Parliament, irrespective of their party allegiance or alignment, and the people of the country, regardless of party considerations, will be behind him in his efforts to reduce the public expenditures. And it is my judgment, further, that the supporters of the Government would rather go down upholding the Government in a genuine effort towards the reduction of those expenditures than upon any other public issue which might remove them from office.

Now, the economic conditions in this country are not very agreeable to our people. We have our problems here just as they have them in every other country in the world; and those problems are many and serious. The idea, however, too commonly prevails that we can rehabilitate ourselves economically by restoratives and palliatives that we ourselves suggest individually and sectionally. Formulas are proposed by hon. gentlemen in the House and by people outside of the House based upon local or class considerations, by which they hope to rid the country of the tremendous problems that confront us. Being in economic distress, it is only natural that we should seek the nearest harbour, and we find all forms of suggestions as to the causes of the conditions that obtain to-day, many of which suggestions are erroneous and should never ibe presented, but which nevertheless must be considered. . For our economic conditions to-day it is very common to hear charges made against organized capital, against banks, against railways, against public policy, against farmers, against wage-earners; and in the end hardly any organized human activity escapes the accusation of being responsible for the commercial and economic state of the country. A gentleman residing in one of the western provinces suggested during the last campaign that all classes of the community should be organized independently; that is to say, that all sections of human activity engaged in any particular line of work should be politically organized -and I have not in mind the Progressive party. It is quite clear to me, from my observation of their work in the House this session, that they are not an occupational group. It is true they may very largely belong to the agricultural classes; it is true that they represent to a large extent the agricultural sections of the country, and when they speak they must speak largely for the interests of their people, which are agricultural interests. But I do not think that in any respect they can be termed an occupational party, or a farmers' class party. It is another thing, however, to have it suggested that the whole of this country should be organized into classes politically, in the hope, thereby, of solving the problems that face the nation to-day. That would simply accentuate the differences that exist between the various peoples of our country, differences which we should always seek to minimize if not to obliterate. Such a system of organization would compose no differences. Economically, I should regard it as the purest nonsence-a system which should receive no support from any section of the country, or any individual thereof. It would prevent clear thinking and would make impossible a correct visualization of our own situation, or of the problems of the world at large.

Again, we find it suggested that there should be restricted output on the part of industries in order to ensure more employment and better wages. This has been put forward on more than one occasion in this country, and possibly in this Parliament, although I cannot recall any instances of the kind in the House. But at least it is suggested as a means of correcting the economic condition of the country to-day. Well, it is unsound economically, for you cannot have output restricted without first hurting the man who is a party to that restriction. It means, in the first instance, lessened production, and, in the second place, higher prices and consequently lessened consumption; and this would react quickly and surely upon those very people who believe in the false economic theory that restriction of output is a good thing

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The Budget-Mr. A. K. Maclean

for them or their country. All these proposals are tendered as cures for the economic diseases of the world to-day.

Now, there is a tendency to forget one of the great events of human history, namely, the fact that a great world war prevailed from the years 1914 to 1918.

We are apt to forget that that war shook the world to its very foundation and that it still trembles, and will, for years to come, and that probably a century will pass be-' fore its effects will have wholly passed away. We know further, the effect of that war upon Europe. We cannot understand cur own economic position or that of the world to-day if we forget the consequences of that war. Canada cannot return to normal business conditions until Europe has recovered her normal economic position. We may of course, do some things to improve our position, but we should always keep in mind that many of the problems confronting us to-day are due to the fact that the war has left Europe in the position which she to-day occupies. And that should bring home to all of us-it does to me at least- something which I never understood in the past as clearly as I do to-day, namely, that continents are dependent upon continents, countries upon countries, nations upon nations, for a sound trading and commercial position. The world to-day is very small; modern transportation has made intercommunication convenient and rapid. As a result the social and commercial conditions of the world are more complex today than they ever were in our history, and we are so inter-dependent, countries upon countries, and peoples upon peoples, that we cannot recover our lost position until the world as a whole has recovered from the disturbing effects of the war. And our own commercial position will not be normal so long as the commercial position of other important countries is abnormal.

This brings me to the idea-and it is merely a restatement of that which I have already expressed-that we are interested in international trade. The opinion has been expressed very frequently during this debate that we in Canada can get along very well without international trade, and that our commercial position can be improved by our trading wholly within ourselves. That, I think, is an economic fallacy. The war again has shown in many practical ways of late how dependent we are one nation upon another. Take the position of Russia, where is being enacted to-day the greatest tragedy of all the ages. Russia was a great cotton consuming coun-

try, and when she collapsed financially and economically the United States lost a great market for its cotton goods; that loss immediately reacted upon the production of raw cotton in the southern States; which in turn reacted upon the whole of the United States, and finally we became affected.

Take another instance. Russia consumed about twenty-five per cent of the tea production of India. When Russia collapsed India lost that market, and her purchasing power to that extent was lessened. India was a great consumer of cotton goods manufactured in England. So the loss of her tea trade with Russia and her resultant restricted purchasing power meant that she bought less cotton goods from England, and that consequently less of these goods were manufactured; which in turn reacted upon Canada, because it lessened the purchasing power of the British people and they bought less of our products.

A further illustration of how utterly dependent one country is upon another is afforded by what occurred in England quite recently. Large importations of a certain kind of gloves were made from Germany into a certain town in the northern part of England. That town sent representatives to the British Board of Trade asking that these importations be prohibited or restricted. Immediately the workingmen of another town close by met together and protested against any such prohibition, pointing out that these gloves were made from wool which they themselves produced, and that consequently their work would be taken away if the manufactured gloves were not allowed to be imported. So after all, Mr. Speaker, it is very difficult in these days to follow cause and effect in trading transactions, but everything clearly indicates, if I may be permitted to repeat, that we are very much dependent upon and easily affected by the condition which prevails in the other countries of the world.

While I am talking about these matters which are outside Canada, and which perhaps are not interesting, may I refer to another matter? I have already said that we in this country are interested in international politics and international trade and have tried to give a few facts in support of that statement. We are interested in every country of the world, and we can never revert to a purely Canadian viewpoint of trade, except to our own disadvantage and detriment.

The Budget-Mr. A. K. Maclean

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE OP THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 13, 1922