April 14, 1924

CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

It is just the same.

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

John Frederick Johnston

Progressive

Mr. JOHNSTON:

That is what I wanted to get from my right hon. friend, because it puts me absolutely right.

Reverting to matters pertaining more to federal affairs, I feel that those who are to-day charged with the responsibility of government in this country are not responsible for the geography of the country, and we have geographical conditions to contend with. It is often stated, and I think generally agreed to, that we in this country are divided into three sections, the Maritime provinces, the central provinces and the western provinces. In many ways British Columbia cannot fairly be classed with the prairie provinces. This geographical condition makes for division in an economic sense, for the needs of one section are different from those of another. I think it may fairly be stated that the needs of the Maritime provinces and those of the prairie provinces are nearer alike than the needs of these six provinces are with the other three. The natural market for the Maritime provinces lies in the New England states, and the natural market for the prairie section lies to the south of the international boundary. If this be true, it must follow that we are going against an economic law in endeavouring to build up trade channels east and west when natural routes lie in the opposite directions. Let us then admit this difficulty frankly and seek for a remedy or for the best way to overcome the handicap. I may say, Sir, that the people of the prairie provinces are not only willing but anxious to do their share to build up a united Canada, but they will not continue indefinitely to pay tributes to other parts of Canada in bonusing industries that cannot stand on their own feet, particularly those industries -which are not based on products natural to this country and from the operation of which the agriculturists receive little or no benefit. So far as the prairie sections of Canada are concerned, I make this statement, Mr. Speaker: they are through with high tariffs in thil country. All changes must be downward.

I am going to read to the House a statement made by a gentleman whose views will, I am sure, carry some weight with my hon friends to the right. It. is a statement made by the Lieutenant Governor of Alberta, speaking in Winnipeg some little time ago, and reads as follows:

Until we have a real voice in the settlement of our own affairs Canada as a whole will not go ahead efficiently. During my recent visit to the East, I have at times been goaded to exasperation when I have heard people there saying that it has been the East that has developed the West. It has been the West which has been a godsend to the eastern manufacturer and I would say it was the West that had made possible the efficient development of the East and the stabilization of its industries. If a barrier was placed at Fort William, what would happen to all the eastern industries? They would be ruined. I am not given to talking but, on this occasion, I feel called upon to give out this statement, so that the peoples of the West will realize the absolute importance of continuing to hammer away until they have a real voice in their own affairs.

The article goes on:

When a man in Dr. Brett's position, whose loyalty to Canadian ideals cannot be challenged, allows himself to speak for publication of cutting Canada in two at the head of the Great Lakes his words should not pass unnoticed in the older provinces to the East. There are only three ways in which the western provinces can secure " a real voice in their own affairs." They are secession, outvoting the other provinces in the House of Commons and convincing those provinces of the justice and necessity of admitting the right of the western provinces to a larger measure of authority in the determination of questions vitally and primarily affecting them.

I thought when I read this article that if a western member from this part of the House had given expression to a sentiment of that kind, he would have been severely taken to task. Nevertheless there is some feeling along that line in western Canada and it behooves not only members of this House but the people generally of the central provinces to take heed. Political discontent is reflected in threats against confederation in some quarters. Political unrest has its root in economic disability, and so long as in this or any other country you have people labouring under economic disabilities you are going to have trouble which, if prolonged, will lead to political disintegration.

When the hon. member for Springfield (Mr. Hoey) was speaking in the debate on the Address some weeks ago, he proposed that this government call an economic conference. I think that was a wise suggestion, and I was confirmed in that idea when I had the pleasure of listening to a gentleman known personally to some members of this House and by reputation to many, Mr. John F. Sinclair, the United States economist, author and banker, and an ex-Canadian. Mr. Sinclair, speaking to the Canadian Club here a few days ago,

The Budget-Mr. Johnston

stated that the United States must co-operate with England and other nations by calling an international trade congress which must accomplish everything necessary to build up again the broken industrial machinery. Mr. Sinclair advanced five courses of action which he considered were necessary to solve this problem.

The first was, and I would direct this to the attention of my friends to my right, that tariff walls all over the world must be cut down and cut down drastically; 50 per cent now, and 5 per cent per annum for the next ten years'

Secondly, all nations, creditors and debtors too, must be gathered at the round table and must cut arms and arsenals; 50 per cent at once and a further percentage each year until they reach the vanishing point.

Thirdly, a moratorium must be declared for 15 years all over the world in the matter of the payment of war debts. Six hundred million dollars a month is an altogether impossible sum to be paying in interest charges on these.

Fourthly, the surplus of gold that America has, and does not need, must be handed back to Europe.

Fifthly, credit must be extended by the United States and by England to other nations; for Europe cannot live as peasants.

By these means Mr. Sinclair thought the industrial machine could be rebuilt. With regard to the tariff walls he admitted that the United States led in this respect and he characterized it as an exceedingly bad lead. As to the gold, he stated that America had two billion dollars more gold over there than she had three years ago. Her federal reserve was bigger than necessary. A $10 bill had $15.64 of gold behind it in the treasury. "We don't need it," he said, " and Europe does." Besides this, we find that seventeen nations of Europe owe the United States twelve thousand million dollars, with interest charges piling up at the rate of two million dollars per day, or as my hon. friend from Springfield (Mr. Hoey) calculates, at the rate of $4,000 per minute. It would appear that there is need for such a conference, and as has been suggested what a fine thing it would be if this young country representing the two great races, could be the first in the field and take the initiative in calling a conference.

In conclusion, I wish to quote from the words of the Acting Minister of Finance (Mr. Robb) in his address of Thursday last. He says in Hansard at page 1218:

Whatever division of opinion Canadians tnay have, surely we share a united confidence in the future cf our country. We have great natural resources. We

have certain basic industries, upon the success of which depend the growth of all other industries, and the greater development of our trade. Of these basic industries, I would place agriculture, in all its varied branches, first. Next to agriculture, I would place our forests, our minerals and our fisheries. A real national policy is a policy that will encourage the growth and development of these basic industries.

Too bad, Mr. Speaker, that this was not thought of some fifty years ago when we adopted a national policy in this country that started to build from the top down instead of from the bottom up. We have got an economic structure to-day as a result that is like a pyramid standing on its apex. Had we given a chance to the basic industries as pointed out in the words I have just quoted of the Acting Minister of Finance, we would have had a much greater development and a much larger population in this country. He continues:

The more of the products of the farm, the fisheries, the mines and the forest we have going to market, the greater will be the earnings of our transportation companies-

And no one will deny that our transportation companies need more tonnage.

-the greater the purchasing power of the nation, and as a consequence we shall have factories running full time and tradesmen working overtime to supply the needs of those who will have money to buy.

There is the point. Had we given a chance to these basic industries to develop as they would have done, the factories of this country would not be crying out to-day against reductions in the tariff, as they would have had a much larger population to cater to. Now that the government have taken this step, let them not stand still, but press forward until the protective element in our tariff is completely eliminated. This will remove the shackles from our basic industries, and we may then look for that progress and development in our country which is so much desired by all. .

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

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

May I. ask the hon. member a question? He told us that the natural market of the West was to the south. Will he explain to us how the AVest is going to get entrance to that market with the existing United States tariff?

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

John Frederick Johnston

Progressive

Mr. JOHNSTON:

My hon. friend will

remember that I spoke of the year 1911, when an attempt was made to get into that market with our natural products, but my hon. friend and his friends denied us the right.

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

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

That is thirteen years ago. If the hon. gentleman cannot answer the question, I will accept that statement, of course.

The Budget-Mr. Stansell

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

John Frederick Johnston

Progressive

Mr. JOHNSTON:

I am dealing with conditions as we have them to-day and have pointed out the geographical handicaps we have to contend with. Canada is a young country, and I hope for better conditions, as I hope my hon. friend does.

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

John Lawrence Stansell

Conservative (1867-1942)

Mr. J. L. STANSELL (East Elgin):

Mr. Speaker, before entering upon the few remarks I have to make on the subject now before the House, that of the budget, I feel that I should say a few words on another subject in order to protect the interests of a gentleman who is not able to appear on the floor of this House to protect himself. I refer to the statements attributed to the Hon. Mr. Martin, Minister of Agriculture in the Ontario government. I have been intimately acquainted with the Hon. Mr. Martin; I have appeared on the same platform with him, and I know his views on the fiscal question very well. From the standpoint of the farmer he is a pronounced protectionist. I believe, however, that he is not the first public man who has had a chance remark distorted or twisted in a way to bolster up some argument entirely foreign to his views. I noticed that the article that was read here to-night by the hon. member for Last Mountain (Mr. Johnston) was followed by an explanation in the press the following day that in a large measure contradicted what the hon. member has just read. I think every member of the House will recognize that the views of the Hon. Mr. Martin should be given to the House as he wished to express them, rather than as they have been read this evening. I quote from the Canadian Press:

Hon. John S. Martin, Minister of Agriculture, in the Ontario government to-day denied that an interview given by him last night in connection with the Dominion government's budget could be construed as a general approval of the budget.

" Such an impression is entirely erroneous," said Mr. Martin to-day. " So far from approving of the budget I consider it disastrous from the standpoint of the Canadian farmer, particularly the eastern farmer." -

I might say further that he explained that his remarks had reference to a style of incubator not made in this country, and naturally if the duty were taken off an article not made in Canada it might be of assistance to those who wished to purchase it. However, it would be of very little advantage to the great majority of farmers because most of us do not use that st.yle of implement. I am quite sure that the House will feel that it should have the Hon. Mr. Martin's actual views upon this question.

First I must offer my congratulations to the Acting Minister of Finance (Mr. Robb), who is not in his seat, for the manner in

which he delivered the budget. The financial statement was brief and concise, and for that the hon. gentleman is entitled to commendation; but I am not so sure that we can congratulate him upon the subject matter of the budget itself. The budget leads inevitably to a discussion of the question of protection versus free trade. In the few words I wish to utter on this question I shall do so from the standpoint of the farmer. I shall not speak as a theorist, but as one who is interested in agriculture and having a practical experience of that great industry.

The hon. member for Springfield (Mr. Hoey) in outlining his views on one occasion stated that he was entirely free from political bias, that he was simply uttering his own personal views absolutely untrammelled, and that in giving such expression he was as free as the wind which sweeps over the western prairies. I have no reason whatever to dispute that statement on the part of the hon. gentleman, and the only request I have to make is, that in the discussion of this question my hon. friend and his followers will give me credit for the same independence. Any claim which he set up to freedom from political bias I should like to apply with equal force to myself under the present circumstances.

Before referring to the tariff changes I might say just a word or two with respect to the government's claim to have balanced the budget and reduced the national debt by about thirty million dollars. I believe it is generally understood that this result has been arrived at by a process of figuring in which, by guaranteeing fifty millions more of railway securities, we have lessened our obligations to that extent. To cite the minister's own words this is merely a guarantee or a simple endorsement, and does not add to the national debt. Perhaps I am not the only member of the House who knows what "signing a note" or "endorsing" one means. This is the first time I ever heard the effect of such a policy of this kind explained in this manner. Because it must be remembered, when it comes to dealing with the National Railway system, that the people of Canada are the owners, and hon. gentlemen in this House are simply the directors of that system. If that be so then the people of Canada have got rid of fifty millions of indebtedness by endorsing their own note. On many an occasion, in my own experience I should have been glad to have been able to get rid of an obligation by such a simple process. It is a very simple matter to balance a budget or reduce the national debt by any such means. However, in my humble opinion more sub-

The Budget-Mr. Stansell

stantial evidence will be needed before the House, or the country, is convinced that we are prospering to that extent.

Conflicting views prevail among hon. gentlemen with respect to the tariff. Some hold that free trade is a very desirable thing, and they would like to see the principle adopted in our fiscal policy. Others-and among them must be included those of us sitting in this corner of the House and representing the Liberal Conservative party- believe in a moderate protection. It will, I believe, be admitted that in Canada we must either have tariff protection or we must have recourse to free trade. Surely no one will argue that we can have free trade in operation on part of our industries and protection in force as respects the balance. I think it will be apparent also that the framing of a policy by the counting of votes does not demand a very high order of statesmanship. Nor is the national interest best served by evolving a policy calculated to win sufficient votes to enable a party to remain in office. In this country we do not want such a policy as that. What we want is a tariff which will protect all industries that are natural to Canada, including agriculture. I believe hon. gentlemen to my left are more inclined to favour a polic3r of free trade than are other members in this House. But even these hon. gentlemen, I think, would scarcely deny that if the time has come for tariff cutting, the reduction should be upon all lines of manufactured articles to which the tariff at present applies. Otherwise it cannot for a moment be claimed that the policy proposed is a national policy at all. I believe that the farmers generally throughout Canada only want fair play in this matter. They are not asking for anything more than they consider is their just right. Now, agricultural implements are not the only articles that the farmers are interested in. If the tariff is too high we should have a gradual lowering of the duty on all articles. If the tariff is not too high a few industries should not be singled out for sacrifice.

Let me point out that the imposition of duties is not the only form of protection. We hear a great deal about free trade in Great Britain, and the advantages which that country enjoys under such a policy have been depicted from time to time.. The hon. member for Brome (Mr. McMaster) can always quote authorities in support of free trade. Nevertheless I want to point out this very interesting fact, that notwithstanding the advantages of free trade the United Kingdom is suffering far more from unemployment than Canada is. Furthermore, if

the conditions in free trade England are so much better than they are in Canada, where we have a policy of moderate protection how is it that so many people have emigrated from Great Britain to this country in the hope of bettering their conditions? We know there are quite a number of former residents of the United Kingdom who are much

9 p.m. better off in this country than they would have been had they remained in free trade England. They came to this country and have benefited from a protective tariff, and yet they come down here and tell us that in a country such as this we do not need protection, but that free trade is what we want. As I have already said there are different forms of protection. Great Britain so highly lauded as a free trade country has some of these forms. They may be camouflaged a little but they are protection just the same. In addition there are certain natural advantages which exercise a protective influence for Great Britain. First, she has a splendid isolation which, of itself, is a natural protection. Then she has the protection of the greatest shipping industry in the world, which controls markets in a way which it is impossible for a country such as Canada to do. I know it is said by some that farmers do not profit from a protective tariff in the same ways as those engaged in other industries, and to some extent that, is true. Possibly it is true to a greater extent on the prairies than in Ontario or Quebec, but I want to point out that Canada has almost unlimited territory containing perhaps the richest wheat fields in the world, so that the farmer who goes in there has a protection of cheap land such as he cannot get in any other country.

Reference has been made, from time to time, to the policy of the United States, which, as we all know, has been that of high protection. If we refer to the United States as prosperous under protection we are at once told by those representing the policies of my hon. friends to my left that the United States is the greatest free trade area in the world. If we observe the condition of the farmers in the western states, we have every reason to believe, from reports that we have, that they are not nearly in as favourable position as our own farmers. What then becomes of the "free trade area" argument? Surely hon. members know that our difficulties cannot be solved by a policy of free trade, although in theory it has a very enticing sound. But beautiful as this theory may be, we are living, not on theories, but in a real world and a world of competition, and even though we were all united in the belief that free trade

The Budget-Mr. Stansell

would be a desirable policy, we must admit that other countries are not practising that, and that to a large extent we are controlled in our policy by the actions of those countries with whom we have to deal. Particularly are we affected by our nearest neighbour, our great competitor, the United States. It is foreign to our very being to reduce this matter to an individual basis and promulgate any such doctrine as that. That is, we would not think for a minute of throwing down the bars, trying to encourage dealings with a neighbour who was absolutely antagonistic to us and who did everything possible to prevent trade. Satisfactory trade relations can come only by mutual goodwill and co-operation. I believe if I were to ask members of this House who sit to my left their personal, private opinions in matters of this kind, as I have sometimes heard them expressed, they would say that when our chief competitor put up the bars against our trade, that was not [DOT]the time for us to lower ours to their advantage.

From the standpoint of the farmer, let us see what is the Liberal policy as indicated by the budget that has been presented to the House. Before doing that, I wish to refer for just a moment to a quotation read by the hon. member for Springfield (Mr. Hoey) dealing with this question. He quotes, I think, Mr. J. F. Sinclair, who said in part, as follows:

Business is slowing down. Farmers and live stock men have as a result been ruined by the hundreds of thousands. The disease of Europe has spread to America. The manufacturer will be next to suffer.

And it goes on. I believe we are prepared to admit that after all, what we in Canada are suffering from is not so much a high tariff, but the general economic condition of the world. In a reaction such as that which has come after the war, I believe it is easily understood that farmers will be the first to suffer; but they are not the only ones to suffer, and I think anyone with ordinary powers of observation would say to-day that many other industries are suffering equally as much as the farmers were a year ago and, in some cases, even more so. It has been said that farmers do not profit as much by protection as others, and in part I am ready to admit that; but I want to point out in that connection that the average farmer who operates a small farm, say 100, 150 or 200 acres-I am speaking more particularly of Ontario farmers-does not require a great deal of outside help. When the pinch comes, he is able to adjust himself to conditions in this way: He will have to reorganize to cut down expenditures, but there

is still a safe living on which he can depend. The manufacturer is not in quite as favourable a position. When a factory is shut down and men are out of employment, they do not have a living that they can fall back upon. They either become a burden upon the state or emigrate to a foreign country, and that very thing has been going on during the past year. When any of us farmers have an animal that is sick, we try to take proper measures to ensure its recovery; but if we operated in that respect in the same way as the Acting Minister of Finance has in respect to the budget, having regard to the condition of Canada at the present time, when the animal became sick, we would attempt to cure it by knocking it on the head. This is not the time for tariff cutting, for readjustment, for uncertainty. If this country were in a prosperous condition and we felt that the tariff was higher than necessary to effect the purposes for which it was imposed, namely, that of keeping, as far as may be possible, men and capital employed within our own boundaries, then I might say that the time was ripe for making reductions in the tariff, but in a time of difficulty when business is stagnant, when men are out of employment, tariff cutting is the height of folly, because it leads to uncertainty disruption of business and emigration.

The conditions under which farmers are suffering to-day is not that of too high protection on agricultural implements. Let me illustrate that. I do not know exactly how many implements are required on the average farm in the West, but from experience I can say what the amount of reduction, as shown in this budget, of about 50 per cent on the existing tariff would be if applied to implements actually required on an Ontario farm. Such implements, if they were looked after carefully, would have to be renewed about once in ten years. Personally, I believe greater economy than that can be effected. I had a binder made by a reputable Canadian firm which has done a great deal to build up Canadian industry, and this binder was used on a farm on which the average cut was fifty acres per annum.

I used it for nineteen years, and it was still in working condition. So that if I place the average at ten years I think I am safe. It would surprise hon. gentlemen to know that by the method this government has adopted for the advantage of farmers of this country the benefit from the tariff reduction will amount to an average of about $2.50 per annum. Does the minister mean to tell me that he will assist agriculture by a sop of $2.50 a year for farming? At the same time

The Budget-Mr. Stansell

that this is being done we have a duty of 3 cents on eggs coming into this country. If we wish to ship eggs to the country to the .south of us we pay 8 cents. Can any one by any stretch of the imagination say that that is a square deal? Conditions are even worse than that, because they have a warmer climate in the country to the south of us, and can produce eggs more cheaply and place them on the market earlier in the season than we can. As a result, we had the spectacle a short time ago of 20 carloads of American eggs being shipped into Toronto by those whose interest it was to control the market, and the price dropped in one week 10 cents Do not get the idea that the 10 cents would re-act entirely to the benefit of the consumer. Not at all. It broke the market to the extent of 10 cents a dozen, and the housewife in the country lost 10 cents on every dozen of eggs she took to the market. The price having been lowered, the eggs will go into storage till next winter when they will reach the consumer at a high price. Because of the break in price due to insufficient protection the farmer and the producer will suffer, and the consumer will not benefit in proportion. If this government were anxious to help the farmer and make a reasonable increase in the duties on eggs, I am free to say that the advantage in one month would be greater to the Ontario farmer than the slight benefit he may hope to get from the reduction of duty on farm implements.

When we base our argument on these figures we assume a reduction in duty means a lowering in price and I think a great mistake is made in always assuming that this is so. I doubt very much if the price of farm implements will be reduced very materially because of the lowering of the duty. I am willing to admit that a reduction in the sales tax may have some slight advantage, but I wish to point out that we heard previous to the last general election volumes of eloquence about the iniquitous sales tax which, in the words of the present Prime Minister (Mr. Mackenzie King), added to the existing visible tariff an invisible tariff in the form of a sales tax. Now the manner in which he' altered it was by the increase of 50 per cent to that already iniquitous invisible tariff. That iniquitous tariff has been remodelled once or twice since, and still it is higher than it was when they came into power. If the desire was to assist the agricultural people in this country they might have at least taken off a few of the taxes they themselves have put on.

There is another thing that might have been a great advantage to the farmers of this

country, many of whom are being carried at the present time by the banks. If the government had been desirous of assisting the farmer do hon. members not think it would have been some help if they could have cut down a little of the stamp tax? I will refer to the condition of the farmer who is being carried by the financial institutions of the country. Possibly he owes the bank a thousand dollars and has given a note for the indebtedness which he must renew every three months. He has to plaster this with stamps at the rate of 2 cents per $50 and thus pay $1.60 per year or nearly as much as the whole benefit he would reap from the reduction in the duty on agricultural implements. It is even worse than that, because if he pays the money by cheque he has to place stamps on the cheques at the same rate. The result is at the end of the year he has paid an amount for stamps in excess of the reduction on implements. Do hon. members not think it is more in the interests of the farmers of this . country that we should attempt to remedy the conditions under which they suffer by some internal arrangement rather than to attempt to remedy these conditions by handing our interests over to the big concerns of the United States?

A great deal has been said about the big interests. I must admit that I do not like to think that I am contributing to the big interests an unfair share of my earnings, but I want to say, if you are going to take that view, that I prefer very much to contribute to the big interests in this country which are taxable and which will help to pay our national debt, rather than to contribute to build up big industries on the other side of the border, which are of no use whatever to us. We have incurred a great debt partly through the building of railroads and industries which we hope will operate for the best interests of our country, but are we going to nullify all our efforts in this direction by building up big interests on the American side of the border?

There are matters which could have been dealt with to the real advantage of the Canadian farmer other than the tariff. I mentioned before the case of the man who was being carried by the bank. It seems to me something might be devised in the form of rural credits more generally adapted to agricultural requirements than that which we have at present. . If that could be done, the relief would be far in excess of any relief which could come to us by tariff reductions. Another thing which possibly could be done- but this could only be done by building up

The Budget-Mr. Stansell

the industries in Canada-is a reduction of transportation costs. It is impossible to hope for the reduction of transportation costs while we send our men out of the country. We might get a little revenue for the railway which carried the men out of the country, but we might better have them here and get a profit on the goods they would manufacture. This is a time when we should consider ourselves as Canadian members of parliament and not as United States senators? What are we here for? For our own country or for our neighbours to the south? I believe Canadian farmers will take that view. We should endeavour to benefit our people by something in the way of internal arrangements and not by concessions to foreign countries. Times of difficulty and times of stagnation are not proper times for tariff tinkering.

Some years ago-and this has been referred to by the previous speaker-there was a reciprocity arrangement made with the United States. It was not ratified but that proposal did have some advantages. There were features perhaps not so desirable. But it did have this advantage that it was an attempt at a fail-bargain between the two countries. But what could we say in regard to the budget proposal? This is not a bargain. Out of respect to the Acting Minister of Finance (Mr. Robb) I will not call it a national robbery, but I think I am justified in terming it a national giveaway. When one is engaged in bargaining, I quite understand that one must give something in order to get something, but this is a direct hand-out to another nation. The hon. member for Springfield (Mr. Hoey) quoted from an address recently delivered in this , city by Mr. John F. Sinclair, a citizen of the United States, in which he advised the calling of an international .conference to settle all trade difficulties. For the sake of argument let us suppose that such a conference actually recommends a general tariff readjustment, then, if we believe that this is likely, let us in the name of all that is sensible maintain our present tariff so that we may have a chance to bargain, otherwise we shall simply be bonusing the industries of the United States.

The right hon. Prime Minister, on whose shoulders the mantle of Laurier has fallen, has desecrated it by shooting holes in the Laurier-Fielding fiscal policy, in an effort to maintain in power a wobbling administration. But as the wearer of that mantle he should follow in the footsteps of his illustrious predecessor and appeal to the country for endorsement of this change of policy, this national giveaway. If he does seek such a verdict I think there can be no doubt that the

people will have no hesitation in voting for the retention of a policy adapted to the national requirements of this country and the rejection of the present makeshift budget.

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

Robert John Woods

Progressive

Mr. R. J. WOODS (Dufferin):

Mr. Speaker, in opening my remarks I congratulate the Acting Minister of Finance (Mr. Robb) on the concise, clear and very able manner in which he delivered his first budget speech. I also congratulate the government on steering the course which I believe the Liberal compass has been indicating for some time. Possibly they have not sailed as far in the right direction as some of us -would wish, but when they steer their course by the compass there appears to be no great danger of immediate shipwreck.

Naturally in this debate we are dealing largely with the tariff question. To my mind the tariff may be considered as a wall, or rather as a network of schedules and of clauses dealing with dumping, drawbacks and so forth ; in a word, its purpose is to protect a certain class of our citizens. Now, we have been told by certain hon. members and by the press that last session the representatives of the farmers indulged in a great deal of complaining and whining about the difficulties confronting agriculture in this country, that they were in fact crying blue ruin, which it was claimed was not a very wise proceeding in the national interest. But this session the cry of blue ruin has been taken up by the manufacturers. By circulars, by delegations, and by every other conceivable means our industrialists have been bringing to bear upon the government and upon individual members of this House the greatest possible pressure, pointing out that the Speech from the Throne spelt ruination to the manufacturing interests of the Dominion, and implying that the wheels of industry would stop and the workers be turned out on the streets if any reductions were made in the tariff on manufactured commodities. That has been the cry. An hon. gentleman met me in the corridor after the presentation of the budget, and said, "Ontario has get a terrible blow." I inferred that he was thinking only of the industrial interests of the province. But we must not lose sight of the fact that the manufacturers do not compose the total population of the province of Ontario; our labourers, our retail merchants and our agriculturists form a very large proportion of the population, and their interests must not be overlooked. Is it not true that every section of our people have been hard hit? We can sympathize with the manufacturers; they have had many difficulties to contend with no doubt; but other

The Budget-Mr. Wood.s

classes of the community also deserve our sympathy. Are not the retail business men in our cities, towns and villages passing through very trying times just now? Are the farmers not passing through trying times? I venture to say that they have never had greater difficulty in making ends meet and keeping things going. than they are having at present. But so far as I can, learn the farmers are not threatening to desert their farms, to pull up stakes and leave, to turn their boys and girls out to rustle, for themselves or to send adrift the farm labour that they have engaged. I believe that the farmers, notwithstanding the strenuous times through which they are passing, are going to carry on and try to make the best of it, are going to produce as they have done in the past and work for the best, interests of this country until conditions are readjusted and we get back to a better footing. And if we have to take our medicine in passing through these hard times, why should not the industrial classes take a share of the same medicine?

I am going to quote a few figures taken from the 1921 census returns which will give hon. gentlemen some idea of the relative standing of the industrial and agricultural portions of this country. In 1921 there were 711,090 occupied farms in Canada, ranging in size from one acre to upwards of 200 acres; I do not know how far in excess of 200 acres the larger ones would range. I will give the figures of the number of farms of different sizes up to 200 acres:

No. of Acres No. of Farms1 to 4 5 to 10 11 to 50 51 to 100 101 to 200 201 and upwards

So you see by these figures that the greater number are large farms. These farms represent a total invested capital, including the value of the land, buildings, equipment and stock, of $6,586,648,126, and that means that the average farmer in Canada is worth approximately'-the value does not quite reach that figure-$10,000. The farmers, therefore, are not so exceedingly wealthy as some people try to make us believe. I have heard persons who have driven through the country' say, "Look at the fine buildings, look at the surroundings; the farmers are immensely rich". Especially was this said some years ago, at the close of the war, but as I have pointed out, the census of 1921 shows that, taking into account total capital value of land, buildings,

equipment and stock, the average farmer in Canada is worth only $10,000.

Now let us look for a moment at the industrial classes and see what similar figures show in regard to that. The statistics of the same census indicate that in Canada there are 41,323 manufacturing industries. These are made up of a great many different industrial activities, and in order that we may have the matter clearly in our minds and also have them on record I will give the list of industries which go to make up that total figure:

Flour and grist mill products.

Slaughtering and meat-packing.

Pulp and paper.

Saw, lath and shingle mills.

Butter and cheese.

House building and construction.

Electric light and power.

Sugar, refined.

Automobiles and motor trucks.

Cotton yarn and cloth.

Rolling mills and steel furnaces.

Printing and publishing.

Tobacco, cigars and cigarettes.

Petroleum, refined.

Bread and other bakery products.

Biscuits and confectionery.

Boots and shoes (leather).

Electrical apparatus and supplies.

Clothing, men's factory.

Foundries and machine shop products.

Steam railway cars.

Agricultural implements.

Hosiery and knit goods.

Clothing, women's factory.

Woodworking, sash and door factories. '

Printing and bookbinding.

Breweries.

Plumbing and tinsmithing.

Sheet metal products.

Rubber goods.

Furniture and upholstering.

Leather tanneries.

Industrial machinery.

Shipbuilding and repairs.

Fish curing and packing.

Gas, lighting and heating.

Automobile repairs.

Paints and varnishes.

Furnishing goods, men's.

Heating and ventilating appliances.

Those are the lines of industry listed, comprising altogether 41,323 established in this Dominion. The capital invested in those industries is $3,210,709,288, according to the census report of 1921. That figures out at approximately $78,000 capital for each industry, showing the difference bet-ween the wealth of our industrial enterprises and the wealth of the agricultural industries of this Dominion.

Let us now take the income tax figures, which will indicate very clearly the degree of prosperity these industries enjoy and the amount of money they get from their investments, for if we have not the income we cannot pay the income tax. In the four years from 1920 to 1923 inclusive, the manufacturers

The Budget-Mr. Woods

paid $14,111,979 in income tax, and the farmers $2,909,724, a difference in favour of the manufacturers of $11,202,255. That to my mind is a very clear indication of the comparative prosperity of our industrial and agricultural industries.

I wish to quote a clause from a little pamphlet published by the committee representing the agricultural implement industry of this Dominion: .

Through the energy of their executives and their salesmen, and through the high standard of their implements, Canadian manufacturers have built up a great export trade. Canadian implements are a familiar sight on the farms of every important country in the world.

Note the sentence which follows:

The beginnings of this export trade were laid when the tariff was at 35 per cent, which gave the Canadian manufacturers the firm foundation of an assured home market from which to operate in their struggles to secure trade abroad.

Now if I understand that aright, it is capable of no other interpretation than that the fanners of this Dominion have been unduly taxed through the customs tariff in order that the manufacturers might build up large industries and sell their goods on foreign markets in competition with the manufacturing industries of the world. That is the meaning: that the manufacturers have been enabled to raise the price of their goods to the consumers in Canada and at the expense of our agriculturists accumulate wealth and build up a large export trade selling their goods in foreign markets in competition with the large manufacturing industries of other nations.

I wish to make a reference to the textile companies. We have heard a great deal

about them since this session began. We have been flooded with a lot of literature, they have been trying to influence us by telling us they were in a very precarious position, that many of their mills had to close down, and that unless some remedy was provided through the preferential tariff a lot of these textile companies would have to go out of business. In that connection I wish to quote from an article that appeared in the Toronto Financial Post of February 29, 1924. It is referring to the success of Penman's Textile Company and says:

The company's sales increased during the year by a moderate amount and made possible an increase in profits that more than justified the payment of a common stock bonus of 2 per cent above the regular dividend of 8 per cent.

There is one at all events of the textile companies that has made a success. I wish now to quote the latest available figures that I could obtain from the Bureau of Statistics.

[Mr. Woods.!

They show that in the year 1922, the textile companies in their knitted and cloth departments increased their number of employees by nearly four thousand. That does not indicate that these textile companies are in such a serious condition as they would make us believe. Some of them may be going out of business, but where, is there an industry in this country of which the same thing cannot be said. Take the retail merchant, the farmer, and those engaged in other occupations, numbers of them are being forced out of business from time to time and-let me ask it again-why should these particular industries not be willing to take their medicine along with other lines of business?

As to the fiscal policy, the government have advanced in the direction of reduced taxation in the interests of the agriculturists of Canada. But the compass is still pointing forward, and I believe that the great consuming masses of the people will not be satisfied until the ship of state pushes considerably further in the same course. There should be further relief in the customs duties on boots and shoes, on clothing, and on other necessaries of life. We appreciate what we are getting and we feel confident that it is impossible to revolutionize the fiscal policy of this country at one stroke. We know that, and we are content to rest for the moment at the state which has been reached. But we are looking for more, and we want the government not to remain satisfied with the progress they have made. We want them to press on to a far greater reduction in the customs taxation and the other taxation of this country as conditions may warrant. I want to repeat that the government have diagnosed the economic condition of Canada and they are prescribing the remedy. The doses they are administering are not, perhaps, as large as the patient can stand, but the treatment, if continued, will eventually prove a remedy for the malady from which the country is suffering.

I should like for a few minutes to try and analyze the policy of hon. gentlemen to my right. They tell us that we must have greater protection. In an editorial in the Mail and Empire, which is the favourite organ of the Conservative party, of about the 8th April, last, reference was made to the necessity of increasing the customs taxation and at the same time lowering the sales tax. So the prescription advocated by the Conservative party is higher customs duties. That is in line with the policy of that party for a great number of years past. Well, what has that policy accomplished? Seeing that it has been

The Budget-Mr. Woods

in force since 1878 if it is of any practical value at all it should have accomplished something.

Now, the constituency that I have the honour to represent was practically, until a few years ago, Conservative to the core, and I personally know something about the working of the Conservative party in past years in the county I now have the honour to represent. But during all these years what has the policy of protection accomplished? We live in a country whose climate cannot be excelled, well adapted for a virile race of people, splendidly endowed with natural resources, possessing agricultural lands that are unequalled elsewhere on the face of the globe. A protective policy was in force when Conservatives occupied' the treasury benches, and it was in force when Liberals administered the government. During all this time we have had what I term a high protective policy; I cannot see it in any other light than a policy that has protected the special classes of this Dominion. But that policy having been in force for over forty years, I cannot see anything it has accomplished. As many people formerly left the country as are quitting it to-day; there have been in the past times equally as strenuous as we are going through to-day; but the policy of protection has failed to build up this country in the way it should have been built up considering Canada's unexcelled natural advantages and resources. We are told that the great thing is to restore our prosperity. But why did the prosperity collapse seeing that the policy which we are now told is going to restore prosperity, was in force for so many years? lIf protection is needed to restore prosperity why did that policy not keep prosperity during the forty years of its operation?

It is said that we are in the midst of a readjustment period following the events of the Great War. That is true. We are told that there is difficulty in readjustment; that it will take some time to readjust everything as it ought to be readjusted. But let us leave the war period and go back prior to the war. What prosperity could we reasonably boast of prior to 1914? I refer particularly to the agriculturists of this country. I am prepared to admit frankly that, during the period of the war, the agriculturists of Canada made a little money, but it was at the sacrifice of blood. If a little money was made and if more money was. in circulation, we deplore the fact that it was co-incident with the sacrifice of the young men from the farms, towns and cities of Canada who laid down their lives on the battlefield. I think those 87

figures that I quoted to-night, taken from the census of 1921, are possibly just as high or a little higher than they would have been had the census been taken in 1914, that is, probably an average of $10,000 for the total value of every occupied farm of this Dominion. Was that great prosperity? To my mind, there was nothing to be elated over. It is true the farmers struggled; they worked from daylight until dark; they worked holidays and every day. Many of them took scarcely a holiday. While driving along the roadway, you would see nice-looking houses and fine bams; but if you investigated, how many Canadian farms would you find with city conveniences? You would find that the housewife has to take her pail and walk to a well in the barnyard or some other place in order to get a pail of water. The farmers have to contend with outdoor conditions in storm as well as sunshine, and I venture to predict, although I do not know the facts, that not two per cent of the farmers of Canada have on their farms conveniences such as the people have in the cities, and as we enjoy when we have the privilege of spending a little while in this city. We do not by any means begrudge the people in the cities or towns their conveniences, but the nice-looking houses and fine 'barns are no indication of prosperity on the part of the farmers who work hard, toil early and late and seldom take a holiday. I know farmers who live not a hundred miles from the city of Toronto, who have never attended the national exhibition there. Why? Because they are interested in their home, their children and in making things as comfortable, convenient and happy as they can for their families. Because of that, they fail to spend the money or to take the time to attend many of those events that they would enjoy and be glad to attend if their financial condition would warrant their doing so.

Let us go back to the war period again and refer to the attitude of the government of that day. Those are the hon. gentlemen who are telling us that this country will return to prosperity if their policy is adopted and they are given the privilege of handling the fiscal policy of Canada. In those years, as I stated before, we had a free circulation of money, and while the farmers made a little money, every other class made money. Many manufacturers built themselves up to be millionaires while the war went on. Money was in circulation abundantly. The labouring classes had plenty of money. While our boys were fighting overseas at $1.10 a day, foreign workers manning our munition factories and so forth were making money, getting rich, re-

The Budget-Mr. Woods

ceiving from ten to possibly twenty dollars a day. What were the government of that day doing? When there was an abundance of money in circulation, the government of that day fell down in failing to pay off a great portion of the war debt instead of saddling the enormous debt of the war upon the government which now occupies the treasury benches and the people of this Dominion. The government of that day fell down, and yet they are the men who are telling us that they will restore prosperity and good times and that everybody will be happy, if they are again permitted to occupy the treasury benches and to put into force the fiscal policy as they had it in the past.

I come to another reference that I saw in the Mail and Empire. Sometimes when I quote things from memory, I make a mistake. I have this extract here and I am going to read it so that there will be no mistake. This is the Mail and Empire, the official organ of the Conservative party, and it reports an address delivered by the right hon. leader of the opposition (Mr. Meighen) in the city of Windsor. I am going to read this paragraph from it. He went on to say:

I would make a treaty with Britain on just the same basis as others. I do not believe in showing loyalty by giving industrial concessions unless you get something in return.

What does that mean? I do not know if the leader of the opposition could give any other explanation or not, but the only meaning I can get out of it is that he would abolish the preferential tariff to Great Britain; that he would deal with other nations in exactly the same way as with Britain. That would be doing away with the preferential tariff and putting the British nation on exactly the same fiscal terms as other foreign nations the world over. That is the way I look at it, and I cannot arrive at any other understanding, so far as my limited knowledge goes. Now I want to compare that with the utterances of those hon. gentlemen in the campaign of 1911, where the real issue was camouflaged-at least, I am going to assert that it was camouflaged in the part of the country where I live and possibly all over Canada. In that campaign it was stated to the people "If you adopt the reciprocity treaty you are going to be swallowed up by the United States of America; the treaty spells annexation and it savours of disloyalty to the British nation." They quoted Champ Clark of the United States as saying that it meant the parting of the ways. That is what was coming to us in 1911, and the same gentlemen who in 1911 waved the Union Jack, cried loyalty, and trembled

[Mr. Woods.J

at the knees for fear of annexation, now draw right back, hit out from the shoulder and say "Britain, we will deal with you the same as any other foreign nation." My attitude from youth up has been that I will take second place to no man in the Dominion of Canada for loyalty to Great Britain; but I condemn most emphatically any man or body of men, any political organization or other organization that will take the Union Jack in a campaign and make a political football out of it. I think in the first speech I made in this House I said I was not here to play politics, not here to do or to undo any political party, nor to oppose any government for the sake of making opposition. I am not here to support any government nor any party simply for the sake of supporting that political party; but I am standing here solidly on the foundation of true principle and will support any party or government that will enact legislation in this country that will be, in my opinion, of the greatest benefit to the greatest number, and I would oppose any government or any party that legislates to build up a favoured few at the expense of the masses of the consuming public of Canada.

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

Robert King Anderson

Conservative (1867-1942)

Mr. R. K. ANDERSON (Halton):

I understand that the government has no followers who are ready or perhaps willing to support the proposal made in the budget; and it is left to the members of the opposition to continue the discussion. The Acting Minister of Finance (Mr. Robb) is new to the office which he holds, otherwise I do not think he would have introduced the budget which he presented last Thursday. It is a budget, Mr. Speaker, that has brought dismay to the minds of the people of this country. It was so prominently heralded in the Speech from the Throne, much to the delight of hon. members to my left, and it fulfilled its worst expectations. Not since confederation has there been a budget which has created so much dismay and consternation in all parts of the country, particularly amongst the industrial and also the agricultural classes. It is a budget which has been actuated more by expediency than by the exigency of the national situation, a budget that is scarcely intended to assist the national affairs of the country, but rather to assist the government in carrying on in the House and in office, a budget which is intended to purchase-and I use the word " purchase " advisedly-the support of hon. members to my left. I think that is its main purpose. Had the reciprocity pact of 1911 been consummated by the government and announced in the Speech, it would not have created greater consternation than the

The Budget-Mr. Anderson

present budget throughout the country today. The people of Canada spoke emphatically against the reciprocity pact, and I prophesy that they will speak just as emphatically against the policy indicated in the budget when they get the opportunity.

The reductions in the tariff announced on Thursday are not so sweeping in themselves, but it is the menace for the future that alarms people. This is the second instalment of the Progressive policy of free trade introduced by the present government. I am constrained to believe that those reductions would not have been propounded by the hon. Acting Minister of Finance (Mr. Robb) if he had had his own way, and I Am quite satisfied that if the Minister of Finance himself had been in the House such a budget would not have been introduced. The Finance Minister is the pilot who has been thrown overboard, so eloquently referred to by the hon. member for Brantford (Mr. Raymond) in his speech on the Address, and with him has been thrown overboard his promise of last year that there would be stability-stability which is so badly needed at the present time, which industry needs and must have before it will be able to take its proper place again. After thinking over our protective policy for the last twenty-eight years, the Liberal party has finally decided to leave the harbour of protection and sail for the open sea of free trade. Fortunately the issue is now clear cut, for the Liberal party have stepped off the platform of protection, a platform which has always belonged to the Conservative party.

The hon. gentleman who has just taken his seat (Mr. Woods) wants to know what protection has done for the Dominion since the inception of the National Policy in 1878. Well, if that policy has not done anything for us, what policy has? Our industrial development during the past forty years has been due to the National Policy, which was inaugurated by the Conservative party, and was never departed from by the Liberal party until to-day. Indeed, what we in this quarter of the House are complaining of is that the tariff policy which has served the country so well is now being interfered with. Had it been such a poor policy as some hon. members would have us believe, it would have been eradicated from the statutes many years ago. But it is there yet, and probably will remain in spite of the reductions introduced by the present budget.

The hon. gentleman seemed to be dissatisfied with the growth of the country. From 1911 to 1921 Canada had a greater per cent increase of population than any other country in the world. Surely that is not a bad showing. To-day our percentage of growth 87i

is, in proportion, equal to the rate of growth of the United States a hundred years ago; they are about that far

ahead of us. As to the prosperity of our farmers, my observations would lead me to believe that they are just as prosperous today as they have been at any time, even under Liberal rule. The Minister of the Interior (Mr. Stewart) had a good deal to say about the prosperity of the Dominion from 1896 to 1911. Well, that prosperity was enjoyed under the National Policy. I remember the former hon. member for Red Deer-Mr. Clark-stating in this House that during their fifteen years in office the Liberal party had reduced the protective duties by seventy-nine hundredths of one per cent! Not very much of a reduction. But they are making a reduction to-day-a reduction which I believe will not be in the interests of the country, indeed, will be absolutely detrimental not only to the industrialists but to the farmers themselves. Anything that tends to destroy the home market is certainly not in the best interests of our agriculturists. Our farmers- including those of the West-sell something like 80 per cent of their produce in the home market. By doing away with some of our industries the population of our cities naturally will be adversely affected, and consequently our farmers will have to seek the foreign market for the disposal of more of their products. There is no market like the home market, for it is close at hand and the best prices are obtained there.

Since the withdrawal of those in the cabinet who overshadowed him the right hon. Prime Minister is more the leader of his party than at any time since he took office. Therefore he has been able the better to control his followers and to lend a more attentive ear to the advice he receives from the Progressives to my left. Since the opening of this session-and probably it existed last session- there has been a sort of underground coalition between the Liberal and Progressive parties. The right hon. Prime Minister has in fact capitulated to the Progressive group, and I notice with a great deal of amusement that since the opening of the session he has been received by the leader of the Progressives with a sort of conquering smile -a " smile that won't come off."

Canadian industry was stunned by the ill-timed announcement in the Speech from the Throne of tariff reductions on the implements of production; to-day our manufacturing business is practically paralyzed by the budget. I can scarcely reconcile the budget with the statements which appeared in the press a week ago of what the government

The Budget-Mr. Anderson

said to the delegations of interested industries that came to Ottawa. Those delegations were positively assured that no tariff reductions would take place. It was also stated that the country had looked upon the announcement in the Speech from the Throne too seriously, and that it was not intended by the government to reduce the tariff. Yet to-day we find the very worst fears of the people have been realized. No revival of trade can be expected under present conditions, particularly when the gun of the free trader is pointed at the very heart of capital. Under such circumstances capital will go into hiding; it cannot do anything else. No capitalist is likely to start an industry at the present time when he does not know how long our tariff duties are to be maintained. If they are to be tinkered with every year, reduced a bit here and a bit there, a sales tax put on one article and left off another, no capitalist will invest in industrial enterprises, consequently industry will stagnate and unemployment will increase throughout the country.

I cannot see how those interests which expect to be benefited by these tariff reductions can receive any assistance whatever. Our economic ills cannot be cured by pulling down the tariff wall which protects them, especially when all other countries have adopted a high protection policy. Under the circumstances it is simply a suicidal policy to move towards free trade when our neighbours are still further raising their already high protective wall. Such a policy will not assist our manufacturers and farmers to get into the markets of the United States; on the contrary, while we languish our neighbours will invade our markets and profit at our expense.

The annual budget, Mr. Speaker, is always awaited with a great deal of interest, for it deals with the taxation necessary to keep the machinery of government running. It is a huge proposition to gather revenue from a population of only nine million people scattered over such a vast area. With our country stretching from ocean to ocean, with many miles of wilderness separating different sections, we have to carry a burden of government machinery which would easily suffice for more than three times our population were it all in one compact homogeneous mass.

We require probably five times the transportation facilities on account of the long distances lying between the different parts of our sparsely settled territory. If our nine millions were congregated say in Ontario or Quebec we could do with very much less government and would incur very much less

expense. It is hardly fair to compare our expenditure with that of other countries of less extent and greater population, and it is even hardly fair to compare it with that of the United States, which has a similar extent of territory and a very much larger population. The expense of government does not increase in proportion to increase in population, consequently our per capita expenses of government are necessarily larger than those of other more thickly settled countries. It is easy to criticize but not quite so easy to offer a remedy, and that is one of the things that the citizens of this country should consider when they have a tendency to criticize too severely the expenditure of government.

We have a huge debt, amounting to $2,-

453,000,000, or $260 per capita, but we have great natural resources to compensate us for that debt. We must remember that the great bulk of the debt was incurred in the defence o fthe country. The Great War was a war of conquest by Germany and defeat would have meant confiscation of our property, or, if not confiscation, very heavy imposts in favour of the victor, so that we look upon this $2,-

453,000,000 as not too much of a price to pay for our national liberty. As to the amount paid to our railways, that also is a capital investment which, with careful management, will some day yield a return: these are the principal items which have increased our public debt so tremendously since 1914. In 1914 our debt was something like $335,000,000. There is a big difference between $335,000,000 and $2,453,000,000. We have invested in our railways something over $900,000,000 of the peoples' money-I mean through the government channels; the total investment in the roads is very much more than that,-and we are investing more each year in rolling stock and branch lines in an effort to provide efficient transport service for the people. Competition with the Canadian Pacific should not be the object of making these roads efficient, because both roads are needed and should be sustained. Our great object should be to make the Canadian National Railways efficient for the needs of the people in the sections which they serve; I am opposed to any encroachment upon the sections adequately served by the Canadian Pacific.

In view of our large debt, Mr. Speaker, it behooves us to retrench, and that applies not only to the Dominion government but to all provincial governments as well. There has been a spending orgy in this country ever since the war and individuals as well as governments, municipal, provincial and Dominion, have been responsible for it. The time has

The Budget-Mr. Anderson

arrived when we should retrench and when our budget should more than balance: not only should we pay our running expenses but we should have a surplus each year to apply to the reduction of the debt and thus to the lessening of the heavy interest charges which take such a large part of our annual income. Our interest payments last year were $137,892,000, or $10,000,000 in excess of our total expenditure for all purposes in 1914. Our interest charges in 1914 were $12,893,000, so that $125,000,000 of the annual interest charge is due to the war and to our national railways. The National railways may be regarded as a sort of war casualty, because the government were compelled to take them over in thq national interest. Pensions, which in 1914 amounted to $311,900 had increased in 1923 to $32,985,000, an increase of $32,674,000 directly due to our war effort. This expenditure will 0f course continue for two or three generations in varying amount, but it is a just claim on the bounty of the government. Our soldier land settlement in 1923-24 cost $12,000,000 and soldiers' civil re-establishment cost $15,573,000, making in all $21,262,000 which must be added to our direct war expenditure. This amount will decrease year by year as the Great War recedes into history, but so long as there is the slightest need this expenditure must be retained in order that the returned soldiers may receive every consideration at the hands of the country. These amounts make quite a large demand on the annual revenue, something like $199,250,000 over what was needed in pre-war years. Taking this amount from the expenditure of 1923-and these figures are for 1923-as constituted in the consolidated fund, $332,293,000 we have left a balance of $132,689,000 for governmental purposes on the basis of pre-war expenditure.

The government has been speaking during this session about economy, and I am glad to see that they are beginning to practise economy, or at least to say that they are. Let us see how far the government have gone in this direction. Economy is a vital necessity; the time has arrived when we should make our revenue more than pay our expenditure. Let us compare our current expenditure, chargeable to the consolidated fund account, with what it was before the war so that we may see how near we are getting to pre-war conditions. We will eliminate such charges as interest on public debt, war pensions, soldiers' civil re-establishment, land settlement-in other -words expenditures due to the war-in order to see how our expenditure compares with that of 1914, at the beginning of the war. I think that is a reasonable way to compare our annual

operations of government. We find that the expenditures have been as follows: In 1914 our total expenditure was $127,384,000; eliminating pensions, $311,000, and interest on debt, $12,893,000, a total of $13,204,000, we have a balance left of $114,180,000. That is, taking out what I am going to eliminate from the figures of subsequent years, namely, expenditure on the public debt and the amount paid for pensions. During the year ending March 31st, 1922, the expenditure for interest, pensions, land settlement and soldiers' civil re-establishment amounted to $222,633,000 If you take that from the total expenditure of that year, approximately $347,560,000, it leaves $124,827,000, compared with what it was in 1914, $114,180,000. So that in the year 1922 the expenditure was only $10,647,000 in excess of the expenditure on the same basis in 1914. In 1923 the amount spent on these four items was $199,604,000. Taking that from the total expenditure of that year, $332,293,000, you have a balance of $132,689,000, and deducting from that the amount spent in 1914 you have an amount of $18,709,000 in excess of the expenditure in 1914. In 1924 the amount spent on these four items was $190,369,000; taking that from the $328,250,000 of total expenditure in that year you have a balance of $137,881,000, leaving an excess over the expenditure of 1914 of $23,701,000. That places the expenditure of those three years on the same basis as that of the years previous to the war. You will therefore see that the present government has not advanced very far in the direction of economy over any other year. In fact, there was a smaller amount in excess of the expenditure in 1922, than in 1923 and 1924 over 1914.

Coming to the surplus which the Acting Minister of Finance shows, of $67,000,000 or thereabouts, on consolidated fund account, if we compare that with the figures for other years we find that this is not the first year we have had a surplus, although it was fairfy prominently featured in the budget speech that this was the first year our revenue and ' expenditure had balanced, or more than balanced. According to the Public Accounts I find that in 1916 there was a surplus, in round figures of $41,979,000; 1917, $101,000,000; 1918, $40,463,900; 1919, $80,215,000; 1920, $45,902,000; 1921, $73,268,000; 1922, $34,391,000; 1923, $62,321,000. Those are the surpluses for those years on consolidated fund account, in each of which the revenue exceeded the expenditure; so this is not the first year we have had a surplus.

Coming now to the trade of Canada, of course our trade is increasing, and it has in-

The Budget-Mr. Anderson

creased very markedly during the last ten years. The war gave it a great impetus, and the increase has kept up since that time. I will give just a few percentages with regard to our trade with the British Empire and the United States. In 1924, 26 per cent of the total trade of Canada went to the British Empire, and 52 per cent to the United States; in 1923, 35 per cent to the British Empire, and 51 per cent to the United States; 1922, 33 per cent went to the British Empire, and 54 per cent to the United States; 1921, 27 per cent to the British Empire, and 57 per cent to the United States. You will notice that the amount going to the United States has decreased somewhat, and the amount going to the British Empire has increased: we are gradually beginning to send our trade across the ocean.

As regards imports, the percentages of

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
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imports from



the British Empire



and from



the United



States relatively to



the total



imports wese



as follows:



Imports



from the British Empire



and


April 14, 1924