May 14, 1923

CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

No.

Mr. MACKENZIE KING moved the third reading of Bill No. 153, respecting a certain Trade Convention between his Majesty and the King of Italy.

Motion agreed to and bill read the third time.

Topic:   QUESTIONS
Subtopic:   ITALIAN TREATY
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COMBINES, MONOPOLIES, TRUSTS AND MERGERS


On motion of Right Hon. W. L. Mackenzie King (Prime Minister) Bill No. 54 to provide for the investigation of Combines, Monopolies, Trusts and Mergers, was read the third time and passed.


THE BUDGET


The House resumed from Friday May 11th, 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.


CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON (West York):

2704 COMMONS

The Budget-Sir Henry Drayton

only when sitting on the benches over there. I wonder if they have only caught it since they moved over there? It is a very familiar phrase that I have heard denounced and held up to ridicule. The minister continues:

We sympathize very warmly with the desire to have a larger development of the copper industry in the Dominion.

Then there is the matter of hemp. My hon. friend says:

There is another industry to which we are going to extend similar aid. We have been working together to encourage the cultivation of hemp, for which article we are assured the soil of parts of our country is particularly adapted. It is believed that with some encouragement a large manufacturing plant can be established in Manitoba, drawing its raw material from the crop to be raised in the immediate vicinity. Here again is a case where the helping hand ma$r only have to be extended at the beginning.

And so on. No start without the helping hand, and the aid now given. But, Mr. Speaker, if artificial silk is to be helped, why should not natural silk be helped? It is a proper thing to help industries which can be made and ought to be made indigenous to Canada. We believe that, and my hon. friend is perfectly right when he takes that stand in connection with this article of artificial silk-perfectly right. It is a comparatively new thing, and I think it Is going to be a very good thing. But although it is a pretty good thing it is a vefy small thing as compared with natural silk. Yet, if artificial silk is to be helped, why not natural silk? Why, Mr. Speaker, the other day I had occasion in connection with the Italian treaty to bring to my hon. friend's attention this fact, that while in the United States no silk whatever was grown-we all know where it comes from, and the same thing can be said of European countries, of France itself-nevertheless by a protective duty on natural silk they worked up an industry in the United States that during the year 1919 distributed in wages the tremendous sum of $108,000,000. Why not natural silk if artificial silk? Or is this altogether a sham idea and you want to get artificial things instead of real things? Or is it because the artificial is cheap and the natural expensive? Artificial silk to-day to a very large extent is the only kind of Silk that the poorer people can buy. Real silk costs money, and a good deal of it. Is it to be understood that the reason we have artificial silk and not natural silk here is because the one is really a luxury and the other a comparatively cheap thing, and that in consonance with what was done in the French treaty and other treaties we are to have cheap taxes on

LSir Henry Drayton.]

the more expensive things and heavy taxes on the cheap things? Because that is what this government has been doing. Perhaps that is the reason; I cannot think of any other.

Then again, if copper bars, why not brass works? Why, if we are doing this for labour -and the real justification for protection always is the employment of labour at work which is properly indigenous to a country, and to the greater extent and greater amount that labour enters into the cost of a business the greater the claims it ought to have for protection-well, there is much more labour in turning out brass works than in turning out copper bars. So why not brass works?

Again, if we are to have copper bars, why not glass? First-rate factories now in Canada are practically doing nothing. Why not glass? If copper bars why not steel plates? And if hemp why not flax? The farmer in Canada is interested in the growth of flax. Why is flax to be dropped and hemp helped? Why?-unless it be that there is a total absence of principle in connection with the consideration of any rate, and the consideration that is given rests upon the insistency of the demand upon the one hand or political advantage on the other. So much for these tariff provisions.

My hon. friend makes a change in the sales tax. I am inclined to think, Mr. Speaker, that here again he has yielded to importunity.

I can remember very well when

4 p.m. one of the great complaints made by hon. gentlemen opposite against the customs revenue was that the customs revenue being collected at the source formed part of the costs of the jobber, formed part of the costs of the retailer, and as it formed part of the costs of both, their profits in both cases were calculated upon it. There is an easy way and there is a hard way of handling the sales tax; I quite admit it. We chose the difficult way because we wanted to keep down the cost of living. We wanted to see to the fullest extent possible that every single cent that the consumer had to pay in sales tax went in taxes and was not made the basis of further and increased profits. I admit itwas hard, but we were getting along very

well with it.

There is another consideration in connection with that very self-same tax. If you make the tax small and spread it out wide enough you can get it so that it merely becomes a part of the overhead and is notpassed on. That, is what we did in our sales

tax of one-and-a-half and one-and-a-half. Ihe

The Budget-Sir Henry Drayton

other day I ran across the owner of a large departmental store and he said we had been a great nuisance to them. I said "What is the trouble?" "Well," he said "you had that infernal sales tax on, and it was so small that we did not feel like changing catalogues and the like and passing the tax on. We absorbed it. But we are all right now," he went on "with the increase of fifty per cent the sales tax became so large that we are passing it on." The increase he spoke of was made in the sales tax of last year, and 1 think in a good many cases the sales tax was being passed on I think there is no doubt of this, Mr. Speaker, that the real reason why prices stopped falling down with my hon. friend's last budget, and took an upward curve, just simply lay in the fact that these sales taxes were being passed on. I am afraid that my hon. friend while he is considering himself, his department-and I admit it will be easier for them- while he is considering the retailer, and the retailers all want it, while he is considering the wholesaler, and the wholesalers all want it, is forgetting entirely the position of the rate payer And I venture this prophecy, that the result of this tax will be to increase further the cost of living. It is an absolutely inescapable conclusion as I see it.

I would just like to show how these taxes work out. I am going to take S100 worth of goods. Under our tax of 14 per cent $100 worth of goods goes out from the manufacturer He has to pay a sales tax of $1.50. That amount of $101.50 goes to the jobber. I am going to assume for the purposes of this statement that the whole tax was passed on, ever, when it was small. I am going to assume that what that departmental store man told me was wrong and that everything was passed on; that is, put the case against our sales tax in the worst possible light, and do violence to the facts, for the sake of illustration. The jobber's cost then is $101.50. Now I will put the jobber's profit at-it does not matter what you put his profit at. His profit varies. It may be down as low as 5 per cent or up as high as 25 per cent. Suppose we say 15 per cent; the figure does not matter so long as you stick to the same percentage in all your illustrations. The jobber's profit of 15 per cent would amount to $15.22. Thar, is what he sells at, assuming he passes everything on, and on that he has to pay his sales tax-again 1J per cent. That is now increased to $1.75. That makes a total for which he sells of $118.47. Now, it does not make anv difference what percentage we take for ths retailer, as long as we stick to it. These gross profits vary tremendously. Take 35 per cent.

Thirty-five per cent profit would be $41.46. That would make the cost to the consumer, assuming everything had been passed on undo our tax, pressing it to the last possible extent, $159.93.

Let us take it under the proposed tax, which certainly has the great merit of simplicity, and direct action on the rate-payer, which has no merit. Take goods $100; sales tax $6, jobber's profit at 15 per cent, $15.90. Jobber's price, therefore, $121.90, retailers profit at 35 per cent $42.66, a total of $164.66, as against $159.93, a resultant increase in taxation to the ratepayer of 4 63 per cent. As I say, Mr. Speaker, the trade gets its way and makes more money. The ratepayers pay 4-63 per cent more. I notice that this is no secret, and I am going to read one of the many quotations which you can get as to who wanted this change. There is no secret about it. In this morning's paper I find the following:

Good budget for jobbers

Hamilton. Out., May 12.-Jobbers are particularly pleased with the budget especially in its treatment of the sales tax.

"It's a good budget for the jobbers," stated St. Clair Balfour, of Balfour Smye Limited, wholesale grocer.

"It gives us just what we have been after for a long time. Hitherto with a one per cent tax we had to absorb the sales tax."

They did that under our tax. The quotation proceeds:

"We could not avoid it. Now. however, this tax will be placed on at the point of manufacture and we will be relieved of this trouble."

Asked if this would not resuflt in pyramiding Mr. Balfour readily admitted that this would be the case.

"Oh, yes, certainly," he said, "if the article costs $100 and the manufacturer puts on the $0 sales tax we will collect our profit on the $106."

Why, Mr. Chairman, my hon. friend says that he is not bringing in new forms of taxation. Well, I assume he is not bringing in many new forms of taxation, but he is multiplying the results of taxation on the ratepayers by the method in which he deals with that sales tax. I hope that the government are going to get good returns and that the revenues will be largely increased. My hon. friend needs these returns. But I would be very much more hopeful if I saw some way in which the increased profits in the case of this taxation, which is going to the jobber and retailer, could be diverted into the treasury. I am afraid it will never get there.

The receipt tax, he says, is to stand. Well, Mr. Speaker, we have receipt taxes, we have cheque taxes and other things. We have got the niggling taxes that bother us and. bring in the main but comparatively small results,

2706 COMMONS

The Budget-Sir Henry Drayton

while we have been entirely overlooking taxation on those that can best afford it-the taxation on the consumers of luxuries. This receipt tax, my hon. friend says they have it in England. He is right. He says that no chancellor of the exchequer in England would think of dropping it. Again he is right. But no chancellor of the exchequer in England would ever have thought of permitting taxes on cheques as has been done here-never in the world. Even in the worst days of the war the very highest they went was tuppence on a cheque. There was no ascending scale. There was a recognition that there was no service given, a recognition that it was a nuisance to business, and a difficult tax to administer; and I am going to have something to say about that when we go into committee, but at present I will not detain the House. Now, the position in England and the position here are entirely different. The receipt tax here, on top of those drastic cheque taxes, ought not to be thought of. We are getting far more out of our cheque taxes than we ever get from receipt taxes. There would not be nearly the objection to giving receipts to-day, if the hon. minister would accept the English method, and have a flat rate on cheques and a flat rate on receipts, but while we have not got it, the minister says it has to stand. It is just another of those small things that I do not believe my hon. friend is going to get revenue from. He has not enlightened us as to what revenue he is going to get today. What I do know now is that the chief effect of this receipt tax is that you do not get receipts. You sign your cheque to-day and send it, if you are fortunate enough to be able to send it, and the man who receives it says "Oh well, that cheque will be a receipt for that fellow, I will save two cents;" and the government is out two cents on the receipt and thfee cents on the return postage. That is how it has worked out. I know that to-day you have to ask for receipts if you want to get them. Then again we have the cheque tax still to stay with us. I suppose that my hon. friend feels that he is absolutely consistent in what he does with the cheque tax. This government will not tax luxuries. It is a very luxurious thing to be able to write cheques exceeding 82,500. You need not pay anything more for it. That is getting up into the class of luxury. You need not worry about that. Just as long as you keep the tax down to the cheques of the denominations that most of us are able to write, you pay your little percentage every time and there is no help. This assistance is put at the wrong end altogether. There ought to have been something done with this cheque tax, I admit,

but the relief is given at the wrong end. The tax on cheques works in absolutely inverse ratio to the rate of taxation we pay in on incomes. The bigger income you have the more money you have to pay. It went up on an increasing scale, and went up heavily. You have super-charges going on all the time. But it works absolutely in the reverse way, so far as cheques are concerned. The remedy is at the wrong end. If the minister had said, "we are going to help small businesses, we are going to help people to-day that require help, and we will exempt all cheques under $500 from the operation of the tax, just leave it to the old rate of two cents, he would have done something. He would have given relief there where relief is far more required.

I think I have already dealt with the cigarette tax, but I wish to mention just one thing that was wrong in connection with it. My recollection was that my hon. friend counted upon an increased revenue of $5,000,000 in connection with his tobacco duties, and on looking the matter up in Hansard, I find that is correct. But instead of getting an increased revenue of $5,000,000, he has lost $1,200,000. He is not going to get that back to-day. You cannot bring down provisions and laws which directly affect business, which hurt business very materially, and say: "Oh, it does cot matter; I will take the tax off this year and you will be just as well off as you were before." You cannot do that. Businesses that are disturbed and disrupted do not come back in that way, and it will be some time, I am afraid, before my hon. friend is able to make good the cost of his error and to get back anything like the old return which this country got from the sale of cigarettes. My hon. friend again is quite right when he said that cigarette consumption did not stop. It did not. He is again quite right when he said that smuggling took place, and that any quantity of American cigarettes, which paid us absolutely nothing, was being consumed in place of our own.

My hon. friend said that there was no revenue from the tax on beetroot sugar. That is quite right. Of course there was no revenue, but I do not think that statement leaves on the House the impression that he would desire to be left. The rate was first brought down at 48 cents. After protests from the opposition, the rate was reduced to 24 cents, and then a further protest was made by the manufacturing company, the sugar refinery. They said: "We have our contracts made for the whole year; we never counted upon this cost; it is unfair to impose this tax." Well, the tax for the whole year was sus-

The Budget-Sir Henry Drayton

pended, as my hon. friend explain'd, last year, and there has been no opportunity to collect the tax this year. Yet my hon friend says there is no revenue from this tax. Of course there is no revenue because the tax was suspended. The real evil of that tax was not the reason that prompted its suspension last year. What prompted its suspension last year was the fact that manufacturers of beets into sugar would be out just that much money That is not the real evil. The real evil, the real reason why the tax ought never to have been imposed, was that it was a tax upon a first product of the country, of which product we were not getting enough. My hon. friend is perfectly justified in discarding the tax altogether.

I am pleased to see that my hon. friend has taken that niggling tax off soft drinks. He could not have got much money under it, I am sure he did not ; and if the cost of trying to collect it were taken into consideration, he would find his receipts were a vanishing quantity. There 1? just one suggestion I would make to my hon. friend in connection with that tax. He is taking it off now because he thinks it is wrong. If he thought it was right, he would not take it off. If it is wrong, it is just as wrong to-day as it will be on the 1st of next August. Nothing is going to occur between now and August to make that tax wroDg on the 1st of August and perfectly right now. But he does not take, it off until the 1st of August. If the tax is wrong-and it is wrong-it ought to be cancelled now. Further than that, in fairness to a trade that has been harassed a good deal by this tax, as they have to-day to prepare for their summer's trade and they cannot propel ly do that when they have this tax over their heads, if it be wrong, let us get the wrong righted at the earliest possible moment. I agree with my hon. friend that it is wrong and I see no reason why the repeal should not come into effect immediately just the same as our tariff resolutions have come into effect.

The next point that I want to say a few words upon is the resolution as to the United States. I do not know just what was operating in my hon. friend's mind. I am entirely disposed to believe, knowing him as I do, knowing his great ability, that he has absolutely no faith in his proposition; that he knows it is an idle gesture, and that it is meant merely for the purpose of pleasing my hon. friends to my left. No one believes at the present time that anything can be done with that resolution. Why, the Americans are men of business; they are much more concerned in trade and in furthering trade

than they are in reading over piously indicated and beautifully worded resolutions in our statutes. They know where they are just as well as they will know after the present resolutions are made law. We learned something about their acumen when we heard about the French treaty. We found that everything we could get only at such great cost, they got for nothing, and it was suggested that we should employ an American to make the next treaty with France for us. They are business people, and there is only one way of trading with business people, that is, by having something to trade with; and this resolution constitutes absolutely nothing to trade with. In the last few days hon. gentlemen have learned the soundness of that doctrine: If you want to trade have something to trade with. In carrying out that doctrine, they imposed a duty on currants and raisins. The hon. member for Victoria and Carleton (Mr. Caldwell), I think, has been helping them a little along the line of instructions. I do not know how he managed this; he certainly managed to get them to pick out the one item that would constitute the smallest reason in the world to move an American business man in the right direction. But, perhaps, the process of education will go on. He has got them to put a protective duty on potatoes when other countries maintain a duty against potatoes grown in Canada. I do not know why we should not eat Canadian potatoes. I always thought we should. I think Canadian potatoes are very good.

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

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

Since the hon. member has coupled my name with this, I should like to dissociate myself with it entirely. We want free entry of our potatoes into other markets.

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Wonderful! Is the attitude of this hon. gentleman not extraordinary? I am not going to debate the matter; but I am going to tell him one thing, that his attitude is just as helpful to the potato producers of New Brunswick as was his vote on the Crowsnest pass case. If he wants to make it impossible to do business, all right; but hon. gentlemen across the aisle were learning something, and they put this duty on potatoes. Let us suppose that this duty on potatoes was imposed for some good cause. If there be any good cause, the reason why potatoes should be picked out as a specific instance, must have regard to the American tariff.

The one potato scale I know of that is worrying Canada to-day is the American potato scale. We get some potatoes from the United

J?08 COMMONS

The Budget-Sir Henry Drayton

States, and lion gentlemen think that reciprocity in tariff, which they regard as something good, should begin with this article. They evidently wanted to find something to trade with, but it seems to me that they are very bad traders when they begin with such a small item as potatoes. I have not the trade returns fo. 1923, but I find according to the returns for 1922 that in that year the Americans sold us potatoes to the value of $423,113. That is one of the very smallest items, one of the most unimportant, that my hon. friends could begin with. Certainly it is a fine point to start with if they are serious in the desire to tackle the question like men of business. Undoubtedly it is a fine trading point as compared with the millions, the hundreds of millions, of values that come from the United States into Canada; it is small, for example, as compared with the millions which we get from them in silks, textiles, iron and steel products, etc. It is simply small and contemptible. Surely the amount of agricultural products which the United States sends into this agricultural country is of infinitely more value and importance than potatoes. I do not know how it is in the rest of the provinces, but I do know that in Ontario the commodity that is of immediate concern to every thrifty farmer's wife is eggs; and in the year that we import $423,000 worth of potatoes we buy $3,162,143 worth of eggs from the United States.

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

Robert Forke

Progressive

Mr. FORKE:

The Canadian hens went on strike that time.

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

I do not know anything about that; I cannot speak for Manitoba; but I certainly know that in Ontario this particular preserve of the farmer's wife is being very largely encroached upon, and I know that there is a real difference, in the Ontario farm at any rate, brought about by the conditions which these figures disclose. It may be that my hon friend is interested only in wheat, but in Ontario, I would have him know, we are greatly interested in all of the activities of agriculture and certainly do not exclude that very important item, the domestic hen and her eggs. Now, there is one way of handling this question, and that is, not by indulging in any pious and empty gestures, but by being somewhat manly about the situation. Just let us have a little faith in our own country and in ourselves; let us have a little bit of courage; let us realize that this country is the second largest buyer of American goods. Let us realize also that the Americans are interested in this market;

bearing in mind, of course, that they will do what is best for themselves and their people without any regard to us just so long as we have not enough pluck or courage or determination to do anything for ourselves. In that very year to which I have referred we made, of all our national purchases, 69 per cent from America, selling them only 39 per cent of our exports. If ever a country had arguments ready to hand to be moulded in a cause, we undoubtedly have them. Yet, with our trade blocked, American trade is allowed to come into the

country untrammelled and absolutely unchecked. Do we suppose that we shall get anywhere by merely uttering pious phrases? Is there any reason why, in regard to the things that we do not get from the British Empire or produce ourselves, we should not at least show our good friends to the south that we are determined to take a leaf from their book and be good Americans in this Scotland of the north, and adopt the American tariff in connection with these goods, at least to the extent of agricultural products? There is a way of meeting the situation; but; as I have said, it is not by means of pious and empty gestures. Now, I have dealt with artificial silk, and I think that something can be done in this direction if proper steps are taken.

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

Andrew Ross McMaster

Liberal

Mr. McMASTER:

The hon. member calls Canada the Scotland of the North American continent. Is he aware that about two hundred years ago the Scotch people talked in the same way about trade coming from England after the union?

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

A whole lot of

things have happened in that two hundred years.

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

Andrew Ross McMaster

Liberal

Mr. McMASTER:

Apparently not.

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

One thing that

happened only two years ago was the Fordney tariff. I wonder whether there is another thought behind my hon. friend's interruption. Scotland is a part of England.

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

Andrew Ross McMaster

Liberal

Mr. McMASTER:

No.

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

Ernest Lapointe (Minister of Marine and Fisheries)

Liberal

Mr. LAPOINTE:

Shame.

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

Robert Forke

Progressive

Mr. FORKE:

I object to that statement;

Scotland is not a part of England.

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Well then, I

should have said a part of Great Britain. Scotland is a part of Great Britain; but does my hon. friend think that there is any parallel between Scotland, as a part of Great Britain, and Canada, not a part of the United States?

The Budget-Sir Henry Drayton

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

Andrew Ross McMaster

Liberal

Mr. McMASTER:

The parallelism is between the thought of the hon. gentleman now and the thought of the Scotch protectionists of that day, who of course soon saw the error of their ways.

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

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

We have dealt

with the silk industry, and I want to congratulate my hon. friend on what he is doing for copper, because we ought to be able to make some use of our mines and keep some of our money in the country that is got out of their exploitation. I onlj' regret that the hon. gentleman has not gone further and seen to it that the languishing trades that use copper were looked after. Let me congratulate the minister also on bringing up the matter- of hemp. Every now and then countries get national opportunities, generally, unfortunately, at the expense of other nations. To-day we have a great opportunity to go into the hemp industry by reason of the unfortunate position of Russia. We can grow hemp to advantage in the Northwest. Experiments have been carried on over a very wide field and I have no doubt whatever that hemp can be made a very highly productive crop to the westetn farmers. If there is anything that we ought to do to-day, I think we should above everything else help agriculture where we can, and this is one real practical way of helping it. We at any rate are of that opinion. My right hon. leader (Mr. Meighen) had on the order paper a resolution dealing with this very matter. If there be any way of enlarging the profits of agriculture in Canada to-day it certainly ought to be taken. Not only will it help agriculture, but my hon. friend is right in saying that it will also help us materially. It will help the country as a whole materially, because I think it was last year that we imported some sixteen million dollars' worth of materials, and their place could be entirely taken by hemp grown in the prairie provinces. Therefore I congratulate my hon. friend.

But I do not congratulate him on the result, because I am convinced that this bounty will never be sufficient to get the hemp industry going. It is a five-year bounty, and then it stops. Just contrast the position as between copper bars on the one hand and hemp on the other. In the former case you have an industry already organized and functioning, with great works at the smelter. But in order to make the hemp industry a success the farmers in the districts where hemp can be grown must be instructed in the best methods of cultivation, which takes time-a long time. Copper is sure, it is not dependent upon drought, frost, vermin or anything else; it is there ready to be manufactured. On the other hand, the hemp industry must overcome the various troubles I have enumerated and an entirely new plant must be constructed. Therefore I hope my hon. friend will take into his serious consideration the advisability of greatly extending the length of time for payment of the bonus and the maximum amount. I think the farmers of the West absolutely require the utmost help we can give them, and if we can get hold of a crop which is really going to be a good paying crop-and it is said that this crop is worth from twenty-five to thirty dollars an acre net at the prices of hemp to-day-if we can render any help in this direction it is something which as many farmers as possible in the West ought to participate in. And there are great opportunities for such an industry. Not only our own domestic trade-which, as I have already pointed out, is large-but the possibilities in export trade are tremendous, and I sincerely hope my hon. friend will reconsider the terms of this bounty and make them more generous so that we may make sure of getting this primary industry well established for the benefit of Canada.

Now, Mr. Speaker, I desire to turn for a few minutes to the position of the country and to my hon. friend's plight in connection with his budget. I want to be as fair to him as I possibly can. I do not know exactly which figure he really adopts. He showed increases in customs, post office, Dominion lands, and inland revenue, aggregating $13,-

315,000, with decreases in excise, investments and other taxes to a total $34,598,000, with a net decrease of $21,283,000. At one point he mentioned that his surplus over ordinary and capital expenditure would be $14,100,000, and that the railways would require $74,500,000. These figures would result in a deficit of $60,400,000. Of course, my hon. friend stated that he hopes something will occur in the meantime, that economies may be effected and that trade will revive, but on the figures given that would be the deficit. On the next page, however, there is another set of figures in which he gives the main estimates, exclusive of railways, at $353,011,255, advances to railways $73,000,000, advances to merchant marine $1,500,000, supplementary estimates $15,900,000, making a total of $443,411,255; with an estimated revenue of $372,517,000; leaving an estimated deficit therefore of $70,889,255. There is a third calculation which may be made and which would increase this deficit, but I do not desire to make it; either set of figures is sufficiently grave-extremely so.

2710 COMMONS

The Budget-Sir Henry Drayton

It seems to me that if my hon. friend had delayed bringing down the French treaty until after his budget was out of the way, and he perforce had found how he stood, he never would have brought that treaty down. Why, Mr. Speaker, are the reductions being made which my hon. friend has enumerated? The French treaty. Why are luxuries to be more lightly taxed than the necessaries of life? The French treaty. Why is the tax on Canadian still wine reduced from thirty cents to seven-and-a-half cents at a time when we want every single nickel that we can get? The French treaty. Why is this tax on Canadian sparkling wine of three dollars reduced to one-and-a-half dollars? Again, the French treaty. Why is the reduction in the excise estimated at $5,600,000, unless it be the French treaty? I am confident that if my hon. friend had got out his figures first and had seen where ho stood he would not have asked the House to proceed with the French treaty. In a year when we have a deficit of $57,<)00,0u0, five-and-a-half years after the war is over, when the government is deliberately budgeting for a deficit next year of $60,000,000 or $70,000,000, depending on how it is figured, but an enormous sum anyway, is it not indeed tragic to think that this is the time chosen to take off taxes on luxuries? But that is what is done. And why? Well, there was the treaty, there were many political considerations to be taken into account appealing to sentiment here and the like-in a word, party politics. And perhaps party politics after all may be expected to figure largely in a budget which has been dictated mainly by political necessity. Of course, it is unpopular to tax or economize but, if there is a tax that can be justified it is the tax on the luxuries

brought into this country to the extent of millions and millions of dollars. But our friends had not learned their lesson; they went over with their tariffs as they were. I wish we could get this government imbued with the idea that the business of Canada and the necessities of Canada are greater than the necessity of staying in office or of getting jobs; if we could do that we would have a business budget, something not quite so political in its character. We used to hear statements about the independence of parliament, emanating from gentlemen opposite; how well do they themselves observe it? Let us see what has been taking place. Mr. Mc-Coig goes to the Senate. Mr. Boyer goes to the Senate. Mr. Turgeon goes to the Senate. Mr. Demers becomes a judge. Mr. Stein becomes a judge. Mr. Trahan becomes a judge. Mr. McKenzie becomes a judge.

And at this very minute there is an important judicial office held open, for the purpose, as it is generally supposed, of giving another hon. gentleman across the aisle a job. Besides that, Mr. Pacaud gets rewarded with a job in England-and all this in the short time since my hon. friends attained office. Then, we have had an Acting Minister for the Post Office. The government cannot make up its mind even as to a deputy for that department, so that there is no one really in charge. We have an Acting Minister of National Defence. We have no Auditor General; postmasters are holding office and being paid against the provisions of the law. We have no Solicitor General, no Chief Justice of the Exchequer Court. There has been activity in the appointment of commissions. We have Mr. Congdon's commission, which will enable him to have a very nice trip and to amuse himself -another ex-politician. We have the genial Mr. Pugsley, another very eminent Liberal ex-politician. We have that great and good man, Mr. Duncan Marshall, another commissioner. I will not go through all the rest, of them-we have the grain inquiry started and we have also the Great Lakes shipping inquiry, the purpose of which is to do something which other governments did without wasting time and before the loss actually occurred.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 14, 1923