May 17, 1923

NEW MEMBER INTRODUCED

LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I have the honour to inform the House that the Clerk of the House has received from the Chief Electoral officer a certificate of the election and return of Joseph Felix Descoteaux, Esquire, for the Electoral District of Nicolet.

Joseph Felix Descoteaux, Esquire, member for the electoral district of Nicolet, introduced by Hon. Jacques Bureau and Hon. Ernest Lapointe.

Sixth report of the Committee on Miscellaneous Private Bills.-Mr. McGiverin.

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JAPANESE IMMIGRATION

CON

William Garland McQuarrie

Conservative (1867-1942)

Mr. W. G. McQUARRIE (New Westminster) :

May I be permitted, Mr. Speaker, to present a petition, signed by W. J. Bartlett and 1,436 other residents of the lower mainland of British Columbia and Vancouver Island,. asking that no further naturalization certificates be granted to Japanese, and also that such changes be made in the immigration laws as will prevent a further influx of Japanese to Canada.

Topic:   JAPANESE IMMIGRATION
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THE BUDGET

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


The House resumed from Wednesday, May 16, 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 Mr. Robert Forke.


CON

Robert King Anderson

Conservative (1867-1942)

Mr. R. K. ANDERSON (Hal ton):

Mr. Speaker, I find the most difficult part of making a speech in this House is to get started; and I notice that some members find it equally difficult to stop. The budget speech may be described as the chief event of the session. A great deal of interest is always taken in it not only by hon. members but by the people generally, for it deals with taxation and debt. Once you touch the pockets of the people you instantly arouse a good deal of criticism and opposition, and I do not think that any man in this House or outside knows more about that feature of a budget than the hon. Minister of Finance (Mr. Fielding).

The present budget appears to me to be drafted not so much for the purpose of meeting the exigencies of the national situation as for its political effect. It is a colourless and featureless budget devoid of any outstanding characteristics. The hon. Minister of Finance last week presented his seventeenth budget, a record in our parliamentary history, and I compliment him on his long and useful service to the country. The hon. gentleman, previous to the election of 1896 was an

The Budget-Mr. Anderson

advocate of free trade or tariff for revenue, but during the following fifteen years while in power, he made no effort to implement his promises, and the people watched in vain for some signs that he remembered his promises. In 1911 he asked the approval of the country of a reciprocity pact with the United States, but the people would have none of it. That is a matter of history. But now, in 1923, after the country had spoken so emphatically on that question in 1911, he comes back with a resolution for the same purpose.

The hon. gentleman has been either a free trader or an advocate of a tariff for revenue all the time he was in opposition, but in power he has always been a protectionist. It would be interesting, Mr. Speaker, to know what are the reasons that cause this sudden change of front when he succeeds to office. What caused his change of front in 1896, and again in 1921? Are we to believe that the hon. Minister of Finance was not sincere in his demands for a tariff for revenue when he was in oppostiion? Was his change of front due to a fear on his part that such a policy would not be in the best interests of the country? Did he fear that such a policy would not be in the best interests of the party in which he occupies such a prominent position? During the Liberal regime of 1896 to 1911, a period of 15 years, the Liberal government reduced the average rate of tariff duties by the small amount of 79/100 of one per cent. That statement was made in this House a few years ago by the then member for Red Deer Dr. Clark. Dr. Clark evidently knew what he was talking about when he made that statement, because he was a member of the Liberal party. That was the full extent to which the Liberal party ventured into the charmed field of free trade. Evidently when they get into office it does not present a pleasing view to them; and it is less pleasing now, for since they came into office, instead of reducing the average tariff duties they increased them in the year 192223 by 74/100 of one per cent over what they were in 1921. This is a peculiar way to lower tariff duties, to get down to a tariff for revenue purposes only or to a free trade policy. I cannot say that I blame the Finance Minister for this. I believe in the principle of protection-a moderate protection, not a high protection-and believing in that I cannot blame the minister for not reducing the tariff duties. The figures upon which I base this statement are the following: In the first eleven months of 1921-22, ending February 28, 1922-I am taking the eleven months be-

IMt. Anderson.]

cause' at the time I made the calculation the figures for the whole year were not available -the amount of dutiable goods imported for home consumption was $422,309,490. The duty collected was $107,186,255, making an average rate of duty on all dutiable articles of 24-23 per cent. In the first eleven months of 1922-23, ending February 28, 1923, the amount of dutiable goods imported for home consumption was $475,583,587, on which the duty collected was $118,872,102, making an average duty of 24-97 per cent and showing an increase over 1921-22 of -74 per cent. The total merchandise dutiable and free imported in the same period-and I am making the calculation on the basis of all articles imported, whether there was duty collected on them or not-amounted to $668,425,606 on which was collected for duty purposes $107,186,255, the amount which I have already mentioned, showing an average rate of duty on all goods of 16 -34 per cent. For the eleven months period in 1922-23 there were imported $710,583,616 worth of goods dutiable and free, on which was collected $118,872,102, showing an average duty of 16-81 per cent, or *34 per cent higher than it was in 1921. I am just bringing these facts to the attention of the House to show how far the Minister of Finance and the Liberal party have kept their promises to the people to reduce the duties on imported goods. Instead of reducing them, on the average they have raised them. I could give the figures for the whole year, having received them subsequent to making these calculations, but I think it is unnecessary to do so.

I may say that the Minister of Finance is now firmly entrenched in the National Policy of Sir John A. Macdonald. After seventeen years during which the Finance Minister was pledged to a tariff for revenue he comes down this year with the statement that he believes in the principle of protection and that the tariff of Sir John A. Macdonald of 1878 is good enough for him. In making the statement that he could not further reduce the tariff duties he practically accepted the principle of pro tection. The principle of protection is the real essence of the National Policy of 1878. That National Policy was introduced not with the idea of its standing always as a moderate or a high protective policy; It was introduced a:' a protective policy, and when the hon. Minister of Finance accepts that policy to-day he accepts in his financial affairs the principle of protection. Having posed all these years as being in favour of a tariff for revenue, in 1923 he changes by one touch of his magic

The Budget-Mr. Anderson

hand the high protective policy of Sir John A. Macdonald into a moderate tariff policy a policy which hon. gentlemen now on the government benches designated as a high protective tariff while in opposition. A tariff "in favour of the big interests," a tariff that "imposed intolerable burdens on the people," a tariff which he pledged himself and his party to do away with when elected to office, has been changed over night by his magic touch into a tariff for revenue.

The hon. Minister of Finance is not the only convert to the principle of protection I must compliment the right hon. leader of the Opposition on the efficiency he has shown in making converts, because it is largely due to him that these conversions have been taking place. The hon. Minister of Agriculture (Mr. Motherwell) only a few days ago in his statement expressed the opinion that the protective principle was all right. I understood him to say that a tariff for revenue was impossible without a certain measure of protection, that is, that there is an incidental measure of protection, in any tariff for revenue purposes. The hon. Minister of Agriculture has not thoroughly studied the question or he would not have made such a statement. It is not in accordance with the facts and with experience. The British Government only a couple of years ago collected over 8600,000,000 in duties without giving any incidental protection. Those duties were placed upon articles which they did not produce at home.

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LIB

William Richard Motherwell (Minister of Agriculture)

Liberal

Mr. MOTHERWELL:

That is understood always.

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CON

Robert King Anderson

Conservative (1867-1942)

Mr. ANDERSON:

The hon. minister did

not make that statement in his speech the other day.

Topic:   THE BUDGET
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LIB

William Richard Motherwell (Minister of Agriculture)

Liberal

Mr. MOTHERWELL:

Later in my remarks I did.

Topic:   THE BUDGET
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CON

Robert King Anderson

Conservative (1867-1942)

Mr. ANDERSON:

There was nobody to

protect. Nobody was producing the article, consequently no measure of incidental protection was given to the English people. Perhaps what the minister meant when he made that statement was that he could get away from the protective principle by having an excise duty on the articles which we produce. He could offset the protective principle in the tariff by putting on an excise duty equal to the import duty on the article in question, but I cannot see where or in what way that would reduce the cost of living to any people. The Minister of Finance in his budget speech last year said that he intended to make such adjustments in the tariff itself as would so far as possible reduce the cost of living, and he did last year make an attempt at

that by reducing the protective duty on farm implements by two and one-half per cent. But in lieu of that he added a two per cent excise tax. The result was that the cost of the imported article remained practically the same and the home-made article was raised by two per cent. The farmer got absolutely no advantage from it. You cannot reduce the cost of living by an excise tax.

The hon. Minister of Immigration and Colonization (Mr. Stewart) would appear to me to be a convert to the principle of protection. He said in his speech yesterday:

I do not believe, and I have had nothing to convince me, that so heavy a rate of protection is required as is given to many of the industries existent in this country to-day.

The minister does not oppose the principle of protection; he is simply opposed to high protection, and thus protection is being kept in force apparently with the connivance of the Minister of Immigration and Colonization. The Minister of Finance in his want of confidence motion on the budget of 1921 made this statement:

The tariff is a tax, and the aim of legislation should be to make taxation as light as circumstances will permit.

I do not dispute that statement. I think it should be the object of legislation to make the cost of living as light as possible. The Minister of Finance implemented that by stating he would make an effort to reduce the cost of living. Now, Mr. Speaker, the tariff is certainly a tax, and a tax on somebody; there may be some dispute at times as to who pays the tariff tax, but certainly there can be no dispute as to who pays an excise tax. An excise tax is a home tax. It is placed on the commodities in the country itself. There is nobody but the Canadian people to pay it. But when an article is imported into this country there may be cases in which the exporter of the article, that is the producer in a foreign country may pay all or part of the duty. Who pays the tax on articles that are dumped into this country at prices lower than the cost of production in the country of origin? It may not be the consumer in this country. Possibly it is the manufacturer or producer of the article in the foreign country. There may be some question about that, but there can be no question about who pays an excise tax.

With regard to the sales tax, no matter what can be said in regard to its being a means of increasing the revenue, it directly and immediately is reflected in an increased cost to the Canadian people of the articles on which the duty is placed. It has an im-

The Budget-Mr. Anderson

mediate effect. It does increase the price of that article. A larger amount of revenue is collected from the people, and the manufacturer or the dealer passes on the tax to the consumer. If he has a narrow margin of profit he must do that or go out of business. The sales tax can have no other effect but to increase the cost of living to every Canadian. So long as the need of taxation exists, so long as a large revenue is necessary to earn- on the business of this country, a sales tax judiciously applied is a very efficient tax. I consider that it is a just tax because the average individual will pay the tax in proportion to his ability to purchase. The more wealthy he is the more he will purchase and the more taxation he will pay. I can have no objection to that tax.

There is, however, one feature about the present increase in the tax to six per cent to which I would refer. I would think that a tax at the fountain source is perhaps the best way of collecting it, and I commend the Minister of Finance for making the change. Last year instead of changing the application of the tax he increased it by fifty per cent. I want to show by some figures I have that that was immediately reflected in the returns of the Excise department, and in connection with these returns I want to emphasize the fact that as the tax was collected entirely from the Canadian people it must and did result in an increased cost of living. I remind the House that this tax came into force on the 23rd of May, 1922. The revenue from the sales tax for April, 1922, was $2,072,000. The average amount collected for the previous four months-I did not think it was fair to take only April, because it may have been smaller than the other months, so I took the average collections from the domestic sales tax for the months of January, February, March and April, 1922-was $3,-

126,000. Hon. gentlemen will notice that in May-and remember, the tax only came into force on the 23rd of May-there was a decided increase, in sales tax collections. Here are the figures:

Sales Tax Collections, Domestic Goods, May-December,

1922 Increase over

average

Month- Collections Jan.-AprilMay . *3,829.000 $ 700,000June . 3.900.000 800.000July . 5.072,000 1,900,000August . 5,558,000 2,400,000September . 6,314,000 3.200.000October . 6.692.000 3,500.000November . 6.213.000 3,100,000December . 6,113,000 3,000,000Total *18,700,000

During those eight months the Finance Minister by his increase in the sales tax took from the pockets of the Canadian people $18,700,000 more than would have been taken by the old rate of duties, that is, if the average rate of $3,126,000 for the first four months of the year had been maintained. That is only from the domestic tax. But the sales tax was also placed on imported articles. The average return from the sales tax on imported articles for the first four months of 1922 was $1,485,000. This tax also went into force on the 23rd of May, 1922, and the increase in the months following were:

Sales Tax Collections, Imported Goods, May-December,

1922 Increase over

average

Month- Collections Jan.-AprilMay .. $1,771,000 $ 300.000June .. 2,376,000 900,000July .. 2,338,000 900.000August .. 2,634.000 1,200,000September .. 2.387,000 900.000October

, .. 2.533,000 1,100,000November .. 2.663,000 1.200.000December .. 2,471,000 1,000,000Total *7,500.000

So we have increase of sales tax on domestic goods $18,700,000; increase of sales tax on imported goods $7,500,000, or a total of $26,-

200,000. This amount was taken from the people in excess of what they might have paid. The revenue was necessary; I am in no way criticizing the Minister of Finance for having asked the people to contribute it. I am only saying, that by increasing the sales tax in order to add to the revenue he was not adopting the most satisfactory way of reducing the cost of living. It had not the effect which he intended; as a matter of fact, the result was the opposite. The decision to levy the sales tax of 6 per cent at the source of production of the article is wise, I believe. There may be some difficulty in deciding just where is the fountain source of the finished articles, for what is the finished article to one manufacturer may be the raw material to another. I believe the Minister of Finance will experience considerable difficulty in coming to a conclusion as to where the tax should be levied. No doubt a committee will be appointed, or possibly the department will itself undertake to settle this matter, and I presume that regulations will be made to ensure that the tax shall not be collected more than once. That was the fault in connection with the previous tax of \\ per cent, for I believe that in many instances it was collected several times, probably three or four times

The Budget-Mr. Anderson

over; at any rate, in certain instances it was as high as 15 or 20 per cent of the cost of the article. I hope that the minister will devise some means of preventing this repetition of payment in connection with the present 0 per cent tax. .

In regard to the question of deciding upon the origin of a finished article, in the manner of clothing or of a cloth, for example, I do not know how the minister will settle the point as to who is the manufacturer. Will it be the tailor, the retail man who makes the clothes, or will it be the manufacturer who produces the cloth? These are difficulties which I have no doubt can be overcome, but I have certain criticism of the question.

Many manufacturers as well as men of business have stated that a turnover tax would be more satisfactory than the sales tax. It is possible that a turnover tax might be more advantageous, because the man who had large profits would pay a greater proportion of it. He would not be so apt to pass it on to the consumer; he could absorb it into his business. I think that this suggestion in regard to a turnover tax might well receive the consideration of the Minister of Finance in the future.

There is one particular article on which the sales tax was placed last year in regard to w'hich some modification would be advisable. As I have previously stated, I am not a high protectionist, and I think there are some industries in this country which possibly are too highly protected. One of these, I think, is the automobile industry. This industry is making rapid strides in Canada and in the last year this country, a country of nine million people, exported half as many automobiles as did the United States, with a population of 110,000,000. This shows that the industry is flourishing in this country. There is a duty of 35 per cent on the imported car, and to that was added last year a sales tax of 10 per cent. I did not understand from the Minister of Finance whether he intended to abolish that tax or not; I think it has been reduced to 6 per cent; that at least is my understanding of the matter. When an automobile is introduced into this country a 5 per cent charge is made on it over the sales price in the United States; to that there is added 35 per cent of a duty collected in Canada; and on top of that was the 10 per cent sales tax, making something like 52 per cent of the cost price on the American side which was charged to the purchaser here. That is too great protection, and I think that the minister might have left off the 10

per cent sales tax on the imported car and brought the protection down to 25 per cent.

Now, the Minister of Finance has not only come over as a convert, to the protective principle in our policy, but he has repudiated the whole Liberal platform of 1919. In his speech in the by-election at Windsor on February 27, he made this statement, speaking on the subject of the Liberal platform of 1919:

That is not the policy on which I appealed to the country.

I only wish the Minister of Finance were in his place; I would ask him why he used the pronoun "I." I do not know whether he meant to imply that his personal policy was different from that of the Liberal party. However, he went on to say:

And that policy was never endorsed by the Liberal party after it got into power.

Well, we know that it was not; that was undoubtedly a truism. The Liberal party never endorsed their policy after they got into power; they used it mereW for the purpose of getting into power, and it was a dead letter after they assumed office. Now the Minister of Finance repudiates it altogether. He said that he never at any time promised to endorse it.

Now I come to the question of the finality of the minister's budget, regarding the tariff. There is some doubt as to whether the minister really intimated that we had reached bottom in the reductions in the tariff. Evidently the Minister of Agriculture (Mr. Motherwell) does not believe that we have, because in the course of his speech in this House the other day he made a very significant remark. I will quote his words:

Who said this was the last word?-

Meaning the statement of the Minister of Finance that he had reached the final decision with regard to the reductions in the tariff.

Who said this was the last word?. . . . Nobody said it was the last word. The Minister of Finance said distinctly there was no finality, that what parliament did to-day it might undo to-morrow.

Did the Minister of Finance leave a way for retreat from the position he has taken? Is the Minister of Agriculture right in his supposition that his colleague did not mean what he said? The words that the Minister of Finance used in his speech were these:

Speaking broadly, it is possible to give the country a reasonable assurance of stability of tariff.

Now, I believe that the country has a right to accept that statement from the Minister of Finance and to assume that the question of tariff reductions has been settled. It has gone

The Budget-Mr. Anderson

out to the people of the country, particularly those encaged in industry, that the matter has been decided, and the effect of this assurance is to dispose these people to extend their plants and to go further into manufacturing industries.

Coming now to other phases of the budget, let us consider the statement of the Minister of Finance with reft-;trice to the necessity for economy. I think that economy in the government is absolutely necessary. The time has arrived, I think, when revenue might very easily meet expenditure. We should balance our budget and endeavour in addition to have a small surplus with which to start a sinking fund for the purpose of paying off the national debt. If we go on adding to the debt each year the interest charges will increase so that it will become an intolerable burden to the people. Why should we pass that burden on to future generations? We should stand up to our responsibilities and make every effort to meet them as we go along. But the Minister of Finance makes no effort to do this in the present budget ; in fact, he gives us a statement to the very opposite effect, that next year it is possible the revenue will not meet current expenditure and that there will consequently be a further addition to the national debt. I have looked up the national debt of Canada for some years back and I find that in 1867 it was $75,000,000; in 1914, $335,000,000; in 1918, $1,191,000,000; in 1922, $2,422,000,000; in 1923, $2,471,000,000. That is the net debt of the Dominion, and it is still increasing; last year the Minister of Finance added $49,000,000 to it. I had the curosity to look into the current expenditures of previous years; I mean the ordinary expenditures of government, not capital expenditure. I think it is reasonable to take from the expenditures of the present year the amount that is paid in interest on the national debt, increase due to the war. that is, the debt incurred by the war, and that includes the amount paid for pensions and other expenditures in connection with the war.

I have compiled the figures, putting the year 1923 on the same basis as 1913, when there was no war and had not been for some time. The war is now five years behind us. It is that far back in history, and it is time we were getting down to a pre-war level. Removing, as I have said, from the expenditure of 1923 the amount spent in pensions and the interest on the war debt, we find that the expenditures were as follows:

1913 $112,059,000

1914 127,384,000

1916 $130,350,000

I Mr. Anderson.]

Hon. members will observe that these were pre-war years. Then take the following years:

1918 $178,284,000

1920 303,843,000

1923 331,780,009

Taken on the basis which I have suggested -deduction pf interest on war debt and pensions-hon. members will find

that in 1913 the expenditure was $112,-

059,000. Taking from the expenditure of 1922 the $158,928,000 paid in interest on the war debt, and pensions, we have left an expenditure of $76,000,000 in excess of the expenditures for 1913, for ordinary expenses of government; and over 1914 it was $61,669,000. While we spent in 1923, $61,089,000 more than in 1913-that is, the ordinary expenditures of government, without taking into consideration expenditure on capital account or for war, the expenditure of 1923 exceeds that of the war years by many millions. As follows:

Exceeding 1916 by $51,000,000.

Exceeding 1917 by $47,000,000.

Exceeding 1918 by $29,000,000.

We are not getting back to pre-war conditions as fast as we might. During the war there were many activities which are not in existence, now. There were many civil servants in the Militia department and other departments that are not needed now. Their services have been dispensed with, and if they had not been dispensed with there would have been a very much greater balance against the present day expenditure. It is all very well for the minister-and I commend him for it-to call upon the people to economize in their private affairs, to get down to practical business by producing more, but the trouble is that the Finance Minister is not setting a good example. He preaches a good doctrine but does not practice it. I think that economy is vitally necessary at the present time in the conduct of affairs by the government. We should endeavour to make ends meet, and establish a sinking fund in order to reduce our debt. We should make an effort to reduce the interest charges year by year. We do not desire large surpluses, Mr. Speaker, but we ought to make the budget balance and provide a few millions for a sinking fund. I think that leadership is needed in the matter of economy, and the present Finance Minister is not giving us that leadership.

The budget speech embodies a resolution offering reciprocity to the United States. Now, we had a reciprocity pact with the United States once before-from 1854 to 1864. Immediately at the end of that period the

The Budget-Mr. Anderson

United States gave notice that they would abrogate that treaty. The treaty was made for a period of ten years, renewable if the contracting parties were agreeable. They abrogated the treaty immediately after the United States Civil War, giving as their reason that they needed a greater revenue, that they needed to restrict imports in order to bring their dollar up to par value, and also that they desired to cultivate industries in their own country and give employment to their own people. At that time, Mr. Speaker, we had made arrangements by which our transportation companies were running north and south in order to take care of the trade which went in those directions. Transportation will follow commerce and possibly commerce will follow transportation, but at any rate we had placed ourselves in such a position that we imported from the United States most of our manufactured commodities, and we looked to the United States for a market for the produce of our farms. The result was that after the Civil war the United States put up a tariff duty against us. We had no tariff duty against the United States, and the consequence was that after 1865 we had the greatest and most serious depression in trade this country has ever experienced. In 1876 it was so serious that parliament appointed a commission to mquire into the problem. And, looking up the history of that time, it seemed peculiar to me that the committee inquiring into those conditions went over to. New York city, and sat there for a considerable time inquiring into the depression in trade conditions in the Dominion of Canada. At that time the treaty was abrogated, and a duty was placed against Canada largely at the instance of the agricultural interests of the United States. History is repeating itself. Although the United States was not interested in the Great War to the extent that we were, immediately after that war the agricultural interests of the United States demanded that, they should have an increased tariff against the imports from the Dominion of Canada. That was acceded to by the United States government, and we have to-day as a result the Fordney Bill which practically prohibits many articles from this country going into the United States. The same conditions prevail now as existed then. The United States, if they were willing to listen to us in 1911 with regard to reciprocity, are not likely to listen to us at the present time, because there is that restraint upon the government, and the agriculturists of that country do not desire reciprocity with Canada. Even if we had a reciprocity agreement at the present time, what would

be the result? Trade undoubtedly would begin to flow to the United States. Our transportation facilities might not be equal to the flow of that trade, and the consequence would be that we would have to change our present transportation system. For a number of years we have had no reciprocity treaty with the United States, and we have our transportation system travelling east and west. We have cultivated an interprovincial trade and also a world trade. I believe that the world market is the one to which we should look to-day, and that we should not confine ourselves entirely to the United States market. It is all right to trade with our neighbours. We are trading more with them than with any other part of the world. I wish to place on Hansard a few figures in connection with that matter. At the present time over 75 per cent of the trade of this country is done with the British Empire and the United States, and not quite 25 per cent of it done with the rest of the world. I have the figures of the imports for the years 1921, 1922, and 1923. They are as follows:

Percentage of Imports from

British Empire United States Other Countries 1921.. .. 21.45 1921.. .. 69.04 1921.. .. 9.51 1922.. .. 19.94 1922.. .. 68.6 1922.. .. 121923.. .. 22.3 1923.. .. 67.3 1923.. .. 10.4

This shows that of imports coming into Canada from these various sources, something over 60 per cent comes from the United States and only 10 per cent from foreign countries, exclusive of the British Empire, by which I mean England and her colonies. Of our total exports, our exports are as follows:

Percentage of export to

British Empire United States Other Countries

1921.. .. 32.77

1922.. .. 46.7

1923.. .. 47.2

1921.. .. 43.38

1922.. .. 39.1

1923.. .. 39.7

1921.. .. 24.35

1922.. .. 14.2

1923.. .. 14.1

If we take our total trade, that is imports and exports, the percentage is as follows: t

Percentage of total trade

British Empire United States Other Countries

1921.. .. 27.3

1922.. .. 33.2

1923.. .. 35.7

1921.. .. 57

1922.. .. 54.3

1923.. .. 51.9

1921.. .. 15.7

1922.. .. 12.5

1923.. .. 12.9

This shows that we have been gradually adjusting our trade conditions in an easterly and westerly direction, trading more with the British Empire and less with the United States. I think that is the way our trade should go. I cannot see why we should particularly demand trade with the Unitea States in the commodities produced by the western farmers. I cannot see the logic ol trading with a country that is a competito of ours in those commodities in the world's markets. They produce a surplus for export. If they want the wheat of the Canadian west

The Budget-Mr. Anderson

-and Canadian wheat "s probably the besf wheat that is grown-they want it for blending purposes. They do not need it for their home market because they have plenty of their own. It does not seem to me a logical way to start to improve our trade by trading with people who produce the same artielse which we do and in a greater quantity than we do and who are our chief competitors particularly in the markets of the British Empire.

Just a word or two with regard to immigration, which is an important, subject at the present time. The other day I noticed an article by Sir Henry Thornton. Sir Henry Thornton speaks on many questions, and although possibly he may speak too often, yet his statements in this article are sound indeed. With regard to immigration he said:

Four salient points were emphasized with regard to the immigration problems of Canada by Sir Henry Thornton. . . . First, a capable Minister of Immigration who would co-ordinate all the efforts of the people, is needed.

Topic:   THE BUDGET
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LIB

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

Which we have.

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CON

Robert King Anderson

Conservative (1867-1942)

Mr. ANDERSON:

I think he is quite right in that. I am not saying that the present Acting Minister of Immigration (Mr. Stewart) is not capable. I do not know whether Sir Henry Thornton had that in mind or not, whether he was hitting at the present Minister of Immigration.

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

George Perry Graham (Minister of Railways and Canals)

Liberal

Mr. GRAHAM:

He was saying that he was good.

Topic:   THE BUDGET
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:

In a funny way.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert King Anderson

Conservative (1867-1942)

Mr. ANDERSON:

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

Robert Gardiner

Progressive

Mr. GARDINER:

Which was the more ridiculous, the Progressive party or the Minister of Agriculture?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Robert King Anderson

Conservative (1867-1942)

Mr. ANDERSON:

I think the House

must decide that question; I do not care at the moment to give a decision. Like the hon. Minister of Agriculture, I am not the interpretation clause of the House. I hope my hon. friends to the left will not take it as being discourteous on my part, for it certainly is not so intended, when I attempt to show that the farmers of the prairie provinces financially are as well off as the farmers of the East. We are all suffering more or less from hard times and the people of Ontario are no exception, indeed it is a condition that prevails not only in the western provinces but in the eastern. I had the curiosity to look up a return showing the number of rural income taxpayers in Canada for 1922; these numbered 18,873. In the three prairie provinces, 11,656 rural citizens paid income tax, or 61-75 per cent of the total number, while the rest of Canada accounted for 7,217, or 38-25 per cent. The rural citizens of the three prairie provinces who were able to pay income tax were almost twice as many as those in the rest of Canada. Our western farmers are either better able to pay income tax, that is, they are enjoying larger incomes, or they may be more honest than their rural brothers in the other provinces. Of course, I cannot say as to that. I believe the government is making every possible effort to collect income tax from all who are liable, but I have no doubt many escape payment. Taking the rural income taxpayers in proportion to popu-

The Budget-Mr. Anderson

lation, I find the prairies provinces with a population of 1,252,753 show 1 in every 108 farmers; the rest of Canada with a rural population of 3,770,197 show 1 in every 523 farmers; Ontario with a rural population of 1,226,292 shows 1 in every 200 farmers. In other words in the three prairie provinces they had almost twice as many rural income taxpayers to the population as they had in the province of Ontario, and five times as many as in the rest of the Dominion. That surely is not an index of hard times; it shows that the farmers of the West have money. Taking the figures by provinces they are as follows:

In Saskatchewan, 6,560 in rural population of 538,522- 1 in every 82 farmers.

In Manitoba, 3,458 in rural population of 348,651-

1 in every 100 farmers.

In Alberta, 1,638 in rural population of 365,550-

1 in every 223 farmers.

In Quebec, 150 in rural population of 1,038,128-1 in every 6,920 farmers.

In British Columbia 640 in rural population of 272,020-1 in every 425 farmers.

Taking our bank shareholders I find on referring to Hansard that in the rural districts the prairie provinces contain

1,794 out of a total of 3,887 for the whole Dominion, leaving for the rest of Canada 2.093. This means that among the rural population of 1,252,753 in the three prairie provinces one farmer in every 698 is a bank shareholder, while in the rest of Canada with a rural population of 3,770,397 one farmer in every 1,802 is in this happy position, Bhowing again that the rural people of the prairie provinces had more money than their rural friends in the other provinces for investment in bank shares.

Again, take the field crops. I will not go fully into this; it will suffice to say that Canada ranks second in production among the wheat producing countries of the world and third in area, the United States first in production and first in area; India third in production and second in area. The wheat production of the world amounted in 1922 to 3.012,293,000 bushels; the production of Canada was 391,425,000 bushels, and of the United. States 310,123,000 bushels. Here is a table showing the value of field crops in the various provinces, including grain, vegetables, hay and sugar beets, and covering the years 1921

and 1922:

1921 1922 Decrease

Quebec $219,000,000 $167,000,000 $52,000,000Ontario

239,000,000 233.000,000 6,000,000British Columbia. 20,000,000 18,000,000 2,000,000

Prince Edward

Island

14,000,000 10,000,000 4,000,000Nova Scotia.. .. 29,000,000 24,000,000 5.000,000New Brunswick.. 38,000,000 31,000,000 7,000,000

So that in those parts of Canada exclusive of the prairie provinces there was a decrease in the returns for 1922 from those of 1921, totalling $76,000,000. The following are the figures for the prairie provinces:

1921 1922 IncreaseManitoba $ 72,000,000 $104,000,000 $32,000,000Saskatchewan.. .. 215,000,000 299,000,000 84,000,000Alberta

82,000,000 94,000,000 12,000,000

So that there was an increase in the prairie provinces for those years of $128,000,000 as against a decrease in the rest of Canada of $76,000,000, as I have shown. That does not indicate that there are any harder times in the prairie provinces than there are in the rest of Canada, and I fail to see what basis the Progressives have for the statements they have made in this House, statements which are not in the best interests of the Dominion of Canada and are certainly very detrimental to the West. The rest of Canada has always been friendly to the West. Only a few days ago some of the members of the Progressive party suggested to' me that there was an unfriendly feeling between the East and the West. I cannot undertsand such a statement; there is nothing of the kind. It seems to me that the western members have thought so much on this question that they have failed to realize its significance.

There were other matters, Mr. Speaker, to which I might refer, but I shall not take occasion at this time to put any further figures on Hansard. I have only to say that I cannot vote for the amendment because it declares for free trade, neither can I vote for the budget on account of the reciprocity resolution which it contains. I am therefore under the necessity for voting against both.

Mr. R. J. \\ OODS (Dufferin): Mr. Speaker, in offering a few remarks in connection with the budget I do not propose to charge the government with responsibility for all the ills at present prevailing in the Dominion of Canada in connection with industrial or agricultural or labour conditions. I am confident that it would be impossible for any government to discover a panacea for all those ills, but I am convinced that the government are responsible for the fiscal policy of the country; therefore I feel quite free to offer some criticisms in connection with the present budget.

To my mind the government of the day have had-possibly still have-a dual policy.

I have had more or less to do with political contests on the back concessions and in the rural sections of Ontario for thirty years or

The Budget-Mr. Woods

more, so that I am not entirely a stranger to political contests, to what has been advocated on the hustings, or to the legislation that has been enacted in connection with our fiscal policy As I have viewed it during the last thirty years or more, the political parties have had a double policy, one for the time during which they sat on the opposition benches and the other while they sat on the government side. So that from that point of view in any case I am justified in offering some criticism of the minister's budget for the present year.

The Minister of the Interior (Mr. Stewart), in his address yesterday, told us that the government were moving in the direction of lower tariff. Well, in watching the history of the Liberal party for a considerable length of time I have been impressed by the fact that the motion has been very slow. According to the statements made, and according to what is put before the people in political campaigns, the party now in power have been moving in that direction for a great number of years. I have tried to view the situation honestly and fairly, but my observation is that the progress has been so slow that it has been almost impossible to detect a movement during the last thirty years so far as reduction of the customs tariff is concerned. So that if the government continues to move as slowly in the future as it has in the past, a lot of us boys who are sitting in the House at the present time will have passed out oi existence so far as this world is concerned before there is any considerable reduction in the customs tariff.

There is one thing I want to commend the government for, and that is the proposal of a reciprocity agreement with the great nation to the south of us. That proposal has been objected to by some hon. members of this House. I think it was the member for East York (Mr. Harris) who suggested yesterday that the people of Canada were not in favour of entering into an agreement with the United States on trade matters, were not in favour of our standing at the door of the United States begging for an opportunity to carry on our trade. So far as my experience and knowledge goes of the rural people at least they are very, very anxious that such an agreement be brought about, for those of us engaged in agriculture know the benefits that we received while we had an open door into the country to the south of us for our natural products. So I want to congratulate the government upon this step and I hope that negotiations will proceed and the agreement be brought about as speedily as possible.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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REVISED

May 17, 1923