April 15, 1925

LIB

THE BUDGET

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


The House resumed from Tuesday, April 14, consideration of the motion of Hon. J. A. Robb (Acting 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 Sir Henry Drayton.


PRO

Levi William Humphrey

Progressive

Mr. L. W. HUMPHREY (West Kootenay):

The reasons for my rising to take part in this debate are based principally upon three grounds: first, to give if possible a true account of present and past conditions in the province of British Columbia with particular reference to my own district; second, to impress upon the government some legislation in which my province and more particularly my constituency are interested, and third, to place before this House my position in regard to the present budget. I wish to base my remarks, few though they may be, on a spirit of confidence. I rise in a spirit of optimism, with the utmost confidence in my province and in this country. I have listened very attentively to practically all the speeches that have been delivered during this debate. I have been greatly impressed by many of them, and I have noticed that the majority have been characterized by a strong infusion of the spirit of pessimism. I have often said to myself in the course of the speeches made during this debate that I am indeed glad, and consider myself fortunate, to live in a district and a province in which, in my opinion, there is not such a wave of pessimism. That is my first purpose in rising to take part in this debate.

Going on further, I might say that most of the speeches that have been made during this debate have referred to either protection or free trade, and the same thing is true of speeches delivered during many of our debates, the contention being that either protection or free trade is the cure for all our troubles and ills in Canada. In fact, I think during this debate we have heard the budget speech which was delivered by the Acting Minister of Finance (Mr. Robb) called nearly everything a budget speech could be called. It is my intention, not to take issue with regard to those remarks, but if possible, to put on record in this House my views as to what are the paramount or first issues in this country, or in other words, what I would consider questions of the greatest importance. My position is that I do not consider the tariff question altogether the most important issue in Canada to-day. I know quite well there are in this Dominion people who have made

The Budget-Mr. Humphrey

an interesting and; exhaustive study of the tariff question and who maintain that it is the most important. I maintain that the question of decreased taxation, the question of expenditure and questions pertaining to transportation are of greater importance to this country than the tariff question.

I wish to consider the affairs of Canada along the lines of a strictly big business proposition, as I would consider the affairs of a private business, and to urge a decrease, if possible, in the burden of taxation and the adoption of policies that will be in the best interest of the country. I desire to be identified with policies that will work out to the benefit of the country, that will restore public confidence and that will, if possible, overcome some of the serious tales of woe that are continually being broadcasted throughout Canada. If, in any degree, confidence can be restored by some other means than by recognizing the tariff as the paramount issue, I believe it will assist in lessening our taxation burden.

I should like, for a moment, to explain my position in this House. My primary duty has been to labour and to the farmer. I was not elected under the auspices of and I do not owe a duty to any political organization, and this, perhaps, accounts for some of the positions I may be able to take and why I may be able to look at questions from a different angle. Not having a political organization to respond to, but having a primary duty to my supporters, especially to labour and to the farmers, I might be in a different position as regards some of the statements to which I shall refer.

Keeping in mind my first reason for taking part in this debate, I should like for a moment to refer to conditions in British Columbia. Yesterday evening, we listened .to a very interesting address delivered by the hon. member for New Westminster (Mr. McQuarrie). At the conclusion of his remarks, he, being a member for British Columbia, referred to the conditions in that province. Having the honour and privilege of representing a constituency in British Columbia, I cannot subscribe to all that he stated last night, and I should like to describe conditions as I find them to-day in my province and more especially in my constituency, keeping in mind The remarks that have been made by previous speakers, particularly the Minster of Public Works (Mr. King) and the hon. member for New Westminster. My statements that I have confidence in this country and that I am filled with a spirit of optimism, are, I believe, based on existing conditions in British

Columbia. In my constituency business conditions have not been as good' for many years. There is increased activity in mining and in practically every other industry in the province. It is only necessary for anyone tt>

pick up a newspaper from British Columbia to find that these statements are, in the main, correct. This increased activity is prominent, not only in one part of British Columbia, but throughout the entire province.

I am not prepared to say just what is the reason for this period of prosperity, nor do I intend either to give credit to, or to criticize anyone in particular. I say simply that this condition now exists in British Columbia, and if the present government wishes to take any degree of credit in the circumstances I for one have no hesitation in according it. We are taking the conditions to-day as we find them in the province, and after listening to some of the remarks made by the hon. member for New Westminster last evening the House might be inclined to believe that the state of things in British Columbia was just the same as has been described by practically every hon. member to my right. That being the case, I desire in my own small way to give as briefly as possible the situation as I see it. The hon. member for New Westminster, in dealing with the questions affecting the province of British Columbia, referred to the Minister of Public Works (Mr. King, Kootenay) observing that he, like the Minister of Labour (Mr. Murdock), had tried to make conditions in that province appear rosy. I quote from the remarks of the hon. gentleman:

The Minister of Public Works told us that things were very prosperous, that conditions were good in British Columbia; and he referred particularly to the timber industry, to the fisheries, to the mines. . . .

Further on he said: j

That is all right. I quite agree with the Minister of Public Works that things in British Columbia are, in some respects, getting better. But what has the government got to do with it?

Well, as I have already said, I am not here to defend the government; but I am here to give if possible as true an account of conditions in the province and in that connection to offer probably a word of criticism. The hon. member went on to say:

The government is not assisting the mining industry; it is not even building a smelter on the Pacific coast which is so badly required; in fact the government is not doing anything at all to assist the mining industry. I say that any prosperity that may have come to the mining industry is not due to anything this government has done.

I am not so much concerned about these statements, nor do I wish to criticize too harshly what the hon. member has seen fit to

The Budget-Mr. Humphrey

say. But as I have the privilege and honour of representing a mining district I think I am in a position to represent mining conditions fairly accurately. So far as I know, my hon. friend, living as he does in the city of New Westminster, has not very many mines in his district; nor are there very many mines within the radius of New Westminster. The district of West Kootenay, on the other hand, is practically a mining centre and its greatest asset is the mining industry. I can therefore say something on the subject, and in my opinion there are many conditions that have gone to place the industry on a better basis. There are many factors to account for the renewed activity in mining; and this being our greatest asset, there is no question in the world but that labour, the farmer, the producer and the consumer alike, must all be interested in what brings about prosperity to the mining industry in that province. And what brings about prosperity in mining in British Columbia brings about prosperity in other parts of the Dominion.

Some criticism has been offered of the action taken by this parliament last year in endorsing the move of the present government in sending representatives over to the exhibition at Wembley. I for one at the time expressed myself as being heartily in accord with the policy. Since then I have been favoured with many interviews with people who have come in contact with the representatives not only from this parliament but as well from our provincial governments, and I gather that our representation at the exhibition has been one means of bringing about a renewed activity in our mining districts. Personally I have always believed that in this country it is well for us not to be at all backward in telling others of our resources, and we should not fail to recognize that in our mining district we have a great asset. The visit of our representatives to Wembley has been responsible for thousands of pounds of foreign capital being invested, in my own district for example. As a result of the information which our representatives were able to give over in England regarding our mining resources, we have been favoured since last summer with visits from people in Great Britain, particularly from England, with authority to invest thousands of pounds of English capital in the district. This has happened within the last year and it has restored confidence among the people; it has opened up our mining resources. And in my opinion it has done much more than this [DOT] it has served, if only to a modest degree, to unite the Dominion of Canada closer with Great Britain by interesting the Mother

Country in our resources and in this way securing British capital to develop our mining industry. In that way, it seems to me, our representation at Wembley accomplished some good. The capital that has come into the district has been the means of opening up many mines that are of great value; it has opened up resources that were lying idle. Speaking of mining, I believe that in this district we have one of the largest mines in North America; as a matter of fact we have the largest smelter on the North American continent. To corroborate my statement that there has been increased business, with an accompanying wave of optimism, I would refer to a mining and smelting company in the district which is well recognized as the Consolidated Mining & Smelting Company. Only within the last two or three days the company published their annual report; and whether or not this government takes credit for the condition of affairs there, the fact remains that while the present administration has been in power certain legislation has oeen enacted in regard to mining, and1 this company is in a very sound financial position, doing a real service to the district.

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

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

To what legislation

does the hon. gentleman refer?

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

It will be seen that the hon. member does not live in a mining district or he would not ask that question. He should know that some two years ago this parliament passed legislation providing for a copper bounty, and that is at least one factor that enters into the present situation.

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

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

Is that not just continuing the bounty?

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

No. That goes again

to show that the hon. member is not well versed in the mining situation. The government up to 1921 had a very expensive tariff commission travelling the country, and a promise of a bounty on copper was made this company, but it did not materialize until this government came into office, it being granted in 1922. I do not wish in any way to criticize, but I want to place the facts before the House. If there is credit due to anyone may it be given him, and if opposition is to be expressed I am the first to express it, but I was going to state-

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Has the hon. member

any information as to when the lead and zinc bounties were given, and the results?

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

Mr. Speaker, at the

moment I have not any particular information. I am quite well aware that these bounties were

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granted by the previous government, and I am also well aware that they are not in existence to-day, that as soon as the present company and others were in a position to get along without the bounties they automatically ceased.

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Will the hon. member

not tell some of the results that came from those bounties, though?

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

I have not the facts

at hand to go into all the results. I do not know whether there are any particular results that can be shown to-day. At the time the lead and zinc bounties were in effect I am quite walling to admit that there were good results obtained.

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

There are yet.

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

To some extent that

has passed. There are no lead and zinc bounties in existence in the province to-day. I am quite willing to concede that they were the means of establishing the lead and zinc industry upon a substantial and sound footing. For example, in 1924 this particular institution sold lead and zinc products to the value of nearly $15,000,000. But the point I would emphasize particularly is that conditions in the mining industry are getting better each year. If this improvement has been brought about in any way by legislation, I am quite willing to concede the fact. May I quote from the annual report of the company published some few days ago? This extract is interesting:

After taking care of current development, depreciation of plant, depletion of property, and paying interest on bank loans, the net profits were $4,341,014.30, as compared with $2,401,346.71 iin 1923, $1,467,528 in 1922, and $570,043 in 1921.

I need scarcely assure the House that this comparison makes it abundantly clear that the industry is not going out of business. I am confident that the mining industry as a whole is improving, and this perhaps contradicts some of the statements of our hon. friends to the right that our industries are going out of business. At any rate the mining industry is not going out of business in British Columbia, and practically every business is improving to some extent.

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

William Garland McQuarrie

Conservative (1867-1942)

Mr. McQUARRIE:

Does the hon. member *efer to the poultry industry?

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

Levi William Humphrey

Progressive

Mr. HUMPHREY:

I am not so much concerned about the poultry industry going out of business, I am aware that certain representations have been made to the government and to hon. members respecting this industry, based on pretty much the same grounds as

representations regarding the development of Vancouver. I do not know that I am in a position to go so far with the poultry industry as with some of the other industries. Practically every question interjected in the course of this debate hinges upon protection or free trade; when a question comes from our friends to the right it is based on protection, and therefore I am not so much concerned as I have not considered protection to be a paramount issue of the day.

Following up my remarks regarding conditions in British Columbia, -while I hesitate to go beyond my own constituency,-for I feel that the representatives of other ridings in my province are more competent to speak for conditions in their districts,-yet I crave the indulgence of any of my hon. friends in referring to one particular question, I mean the reimbursement of the Home Bank depositors. The city of Fernie suffered severely, the losses of Home Bank depositors exceeding $800,000. Notwithstanding the protracted strike among the miners, and in the face of this heavy loss, the town and district of Fernie, I am informed, is now entering upon a period of better conditions. So far as my information goes the mining industry was never in better shape than it is to-day. But I am given to understand that practically every citizen was directly affected by the Home Bank failure. As I say, there are other members who are perhaps better posted on local conditions, but living in a district adjoining Fernie, and having many close associations with the locality, I -feel that I would be shirking my duty if I did not press upon the government the urgent need of legislation to reimburse these depositors. Legislation to this end would help to restore confidence, which is so important not only to the people in the Fernie district but also to those in other districts.

Further substantiating my remarks regarding conditions in my province, particularly in my own district, I may say that 1924 proved the best year for the small-fruit growers that they have enjoyed for a long time. Better returns were obtained from the sale of their fruit, and as the fruit grower is in an improved financial position he has a feeling of renewed confidence which cannot but be helpful. The inquiry into combines with respect to the marketing of fruit, which took place last year, has had a good effect, and we can only hope that the government will follow up the investigation, benefiting, as it does, the fruit growers of British Columbia. The investigation disclosed startling conditions, and I trust the government will enforce any legis-

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lation that is necessary in this connection even though the provinces do not consider it wise to take the initiative.

I would be failing in my duty to my constituents did I not also continue to press the government to take some action in the way of legislation respecting Asiatic immigration. I will go so far as to say that the conditions in British Columbia to-day, more particularly in my own district are better than they were four or five years ago; I have received many favourable comments regarding the legislation that was enacted by this parliament imposing restrictions upon Chinese immigration. But I would strongly urge the government to go further, to keep up the good work they have started, by tightening the regulations and by introducing further legislation with respect to Japanese immigration. If the policy already adopted can be continued with respect to the Japanese I am sure it will meet with the grateful approval of the people of British Columbia.

I need not dwell at length upon the necessity of legislation respecting old age pensions, because I notice that the government have a resolution on the order paper looking to some action in this regard. So far as I can see now, their proposals in this respect will receive my whole-hearted support.

I would like to tough for a moment upon one or two questions affecting our returned men; and as these matters also are to some extent covered by legislation of which notice appears on the order paper, it will not be necessary for me to discuss them in detail. But I would like to refer to one of the reports brought down by the special parliamentary committee appointed last year to look into these questions. I have always maintained that the conditions affecting the returned men in Canada were not as they should be, notwithstanding the legislation that has been passed in that connection. A good deal of expense could be eliminated by a reorganization of the different pension boards and medical staffs. I am aware that the report submitted to the House last year was not concurred in; nevertheless I would like to emphasize the fact that that recommendation was adopted by the special committee and reported to the House, and the government are bound at least to take some notice of it. I would like the privilege of putting on Hansard the fifth report of this committee, which was submitted to the House on Tuesday, July 15, 1924. It reads as follows:

In view of the widespread dissatisfaction amongst returned men and others, and the representations made in regard to the attitude shown by the present Board of Pension Commissioners for Canada, your committee

has taken evidence and having considered the matter very carefully, has come to the following conclusions:

That the interests of the returned men will be better safeguarded, and the intent of parliament will be better carried into effect by a more sympathetic interpretation of the Pension Act, and its schedules, and that this can be best carried out by the reorganization of the Board of Pension Commissioners for Canada and the medical services attached thereto.

Your committee therefore recommends to parliament that the government be asked to take the necessary steps to carry this resolution into effect.

That report embodied the sentiments of the returned men generally, and if the government can find it possible to act upon it I am confident that a good deal of expense will be eliminated and much of the dissatisfaction that now prevails throughout the country among the returned men will be overcome. I have had my attention drawn to a resolution adopted by the Nelson branch of the Great War Veterans' Association, and I notice also that this resolution was included in the memorandum presented to the government this year by the Dominion Veterans' Alliance. It reads as follows!

Whereas November 11th does and always should remain in the memories and hearts of Canadians as the anniversary of a day of rejoicing and supreme thankfulness; and as it is fitting and right that this date be perpetuated for all time to keep alive in the minds of our people the supreme sacrifice made by 60,000 of our comrades who died for their country, it is resolved;

That the Nelson branch of the Great War Veterans' Association go on record as strongly opposed to the anniversary of armistice being observed on any other date than the eleventh of November, which date should be declared a legal holiday by legislation.

Action should therefore be taken to have the existing act of 1921 to read:

"The eleventh day of November, being a day in 1918 in which the Great War was triumphantly concluded by an armistice, shall be a legal holiday and shall be kept and observed as such under the name of Armistice Day."

This resolution is backed up by practically every social organization in my city, and it is the demand of the representatives of the Dominion Veterans' Alliance. It is not necessary for me to go into the matter in detail; I think it is obvious that the government should take some action to recognize the 11th of November as a legal holiday. The practice of combining Armistice Day with Thanksgiving Day, as was done last year, Should not, it seems to me, be continued; there is no doubt that when it comes to determining the holiday the preference should be given to the 11th of November. I trust that the government will recognize the value and importance of the resolution.

One of the most important questions that demand our interest to-day, I think, is transportation. It is a question that has been before the public for the past few years, and

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no doubt will be more prominently before us during the coming year. There have been many complaints and criticisms during the past few years of the high freight rates, and the argument has been used that freight rates, were high because of the high wages paid to the railway employees. Having been identified in many ways with railway operation and railway construction not only in this country but in the United States, and having' had the privilege of studying railway conditions not only in Great Britain but on the continent for the last twenty years, I feel that I can speak with some authority on this question more particularly from the point of view of the railway employee. I believe that an organized propaganda has been carried on to confuse the public mind over this question of high freight rates, and to make it appear that they were due to the wages paid to railway employees. An organized propaganda has been carried on with a view to creating that impression, and I should 'like to go into that phase of the question for just a moment in view of my position with regard to labour, and because of the fact that I am directly in touch with labour, the railway employees, and the railway question. My only object is to have the true facts placed before this House and before those who have an interest in this question. Many have approached me, with whom I have had discussions of this question, stating that they have been misled into believing that the high freight rates were the direct result of the high wages paid the railway employees. Labour is interested in railway rates only in so far as those rates will conduce to the prosperity of the railway and the prosperity of the country, and they are only asking, and so far as I know have only endeavoured to obtain, recognition of that to which they were justly entitled. I hope and trust that parliament will not in any way endeavour to bring in the wage question when it comes to consider the adjustment of our freight rates. I believe the officers of our different railway companies are quite capable of adjusting the wages of the employees over whom they have control, and in that connection I should like to quote a paragraph from a speech delivered by Sir Henry Thornton:

Trade unions are here. They cannot be gotten rid of, and it is very much better to work with them than to fight with them. I have had considerable experience with labouring men on both sides of the Atlantic, perhaps more especially in England, and I have never yet had a trade union leader or a trade union play any other way than is fair.

Further on he says:

I see no reason why there should be constantly recurring contentions between capital and labour. X Relieve that labour properly handled will invariably respond.

I believe that is practically the position that labour would take also. It is a well known fact that conditions respecting labour in this country are as good to-day as in any other country of the world, but on account of the misrepresentation, as I would call it, that has been going on, perhaps by members of this House, not directly but indirectly, in reference to wages being the cause of certain conditions, I should like to refer to that matter a little further.

In the month of September last year an application was made to the Railway Commission for a reduction of freight rates. I understand that the hearing has not yet taken place.

The application was made on the 4 p.m. 11th of September, 1924, and in arguing for a reduction in freight rates, the applicants urged that the wages of the employees should be reduced. I believe the company that made the application is a member of the Manufacturers' Association, and I would infer that this was an organized attempt to create in the public mind the impression that the wages of the railway employees were too high. The application was made by- the Tudhope Anderson Company, Limited, of Winnipeg, which has a factory in the town of Orillia, Ontario. They applied to the Board of Railway Commissioners:

-for an order declaring that all existing tariffs of freight rates established and promulgated by the Canadian Pacific Railway Company and by the Canadian National Railway Company and the entire rate structure embodied in and upon which the said tariffs have been promulgated and established are unfair, discriminatory, excessive, and contrary to the provisions of the Railway Act, and that the said rates as established and promulgated constitute an unjust, unfair and unreasonable exaction upon all shippers and consumers of goods throughout Canada, and unfairly exact from shippers and consumers of goods throughout Canada large sums of money which from the point of view of sound public policy and of fair dealing between shippers and consumers of goods throughout Canada on the one hand, and the said railway companies and their employees on the other, should be prohibited and brought to an end.

They further state:

That the respect in which the said tariffs and the freight rate structure embodied therein and the exactions made under and by virtue thereof are unreasonable, unfair, discriminatory and excessive is by reason of the fact that the said rates contain as a large element an allowance for the wages of the employees of the said railway companies, out of which allowance for wages the said railway companies pay to employees engaged by them in the carriage of goods

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and ancillary services, unreasonably high, unfair, extravagant and discriminatory wages, by reason of which the said railway employees are able to maintain and do maintain a high standard of living at the expense of shippers of goods and in particular of producers of cereals, live stock and agricultural and dairy products of all kinds, whose prices for their products are materially reduced by reason of the high freight charges exacted by the said tariffs for the carriage of their products, and the said producers are as a class suffering great hardships and unable to maintain a reasonable standard of living by reason in great measure of the aforesaid unreasonable tariffs.

And Tudhope Anderson Company Limited further state that the said wages paid to the said railway employees are unreasonably high, unfair, extravagant and discriminatory in comparison with the wages of other industrial workers throughout Canada and that by reason of the tolls exacted by the said tariffs the wages of other industrial workers are forced down and lowered and their standard of living is lower than is fair and reasonable.

And Tudhope Anderson Company Limited further state that the said (railway employees are receiving grossly high and excessive rates of wages which enable them to live in a state of luxury which is wholly unjustified having regard to the nature of the services rendered by the said employees when such services are compared with the services rendered by other classes of employees throughout Canada who receive wages very much less in amount.

And Tudhope Anderson Company Limited further state that the wages of the said railway employees were advanced during the period of the war and shortly'thereafter at a time when the prices of commodities and wages were generally inflated and notwithstanding a general reduction in the rates of wages and prices of commodities, the wages of the employees of the said railway companies are still maintained by the said companies at unfairly high levels and the said railway employees are in fact enjoying real wages much greater in amount than they at any former time have enjoyed, while the real wages received by other workers and the real prices received by producers of commodities are materially lower than the wages and prices which existed at the time the wages of the said railway workers were advanced as aforesaid, which advance is commonly known as the McAdoo Award.

And Tudhope Anderson Company Limited represent that the public interest and the interest of all classes in the community, excepting railway workers, demand and require that freight rates should be reduced by cutting down and lowering the element in the said rates which represents wages paid to the said railway workers, and the said railway companies should be directed and ordered to submit tariffs in which the labour element shall be reduced to bring back the wages of the said railway employees to a parity with the wages of other industrial employees and into fair relationship with the prevailing prices of the commodities carried by the said railway companies.

And Tudhope Anderson Company Limited further state that if it should be represented or made to appear that the unfair rates of wages paid by the said railway companies as aforesaid cannot be reduced by the said companies by reason of the fact that the said railway workers have great bargaining, economic and political power, and by reason of the fact that their refusal to accept lower wages might be enforced by a general interruption of railway traffic throughout Canada, then the said companies should be directed and informed that such portion of the said wages as is found to be excessive and unjust must be borne by them by way of decrease of profits or increase of deficits as the case may be

to the end that the proprietors of the roads shall bear the burden of such excess and that they shall not be permitted to impose such excess on the shippers of goods.

I apologize for going to the extent of reading this document, but I want to emphasize the fact that there is a prevailing opinion throughout the country, caused by misrepresentation, that these wages are responsible for the high freights, and therefore I wish to reply in a small measure to these proposals, not in any way substantiating the position of the railway companies, but endeavouring to place the true facts before this House and the public, having in mind the matters that are going to come up within the next year, and if possible to overcome a very strong sentiment and public opinion which is caused by such representations as these people have made. It has always been the practice to blame everything on the railways and the employees when it comes to freight rates, and as that idea is now being used by politicians to serve certain purposes, and more especially by manufacturers as a smoke screen, I am sure that I might have the privilege of replying to some extent to these representations. Perhaps as a representative of labour in some degree, being a labour man myself, I should in a way deal only with the wage end of the question, but I believe that if we are going to enter into the wage question we should also have before us every phase of the railway situation, and find out at first if possible whether the railway employees are obtaining too high wages for their labour, and also ascertain whether the railway companies of Canada are economically and efficiently managed, and from that angle I wish to speak for a moment.

In connection with the question as to whether our railways are efficiently -managed, we must confine our comparisons to the United States railways, as the conditions in that country are similar to the conditions on our own roads. But when we take into consideration the fact that Canada has but 221 people to each mile of railway, while the United States has 450, the comparison is hardly fair to the Canadian railways, because under such conditions there is no density of traffic to reduce the average cost of hauling a ton and one might consider that under such conditions we should be satisfied if we could have rates equal to the lowest where cost conditions and wages are about equal. In any event we must compare our roads with some other roads and taking the United States roads for a comparison, I believe the railways in Canada are as efficiently managed and as economically run as those in any country.

The Budget-Mr. Humphrey

It has also been said in these representations by this company and the others interested that railway companies should reduce their expenditures every year and more especially reduce their overhead by reducing the wages of their employees, but by referring to the reports made by the presidents of the Canadian National Railways and the Canadian Pacific Railway Company, we can see that their operating expenses have decreased each year, although their net profits perhaps are not as great. Apart from this, our railways are efficiently managed. Let us compare with the United States roads the number of tons of freight handled per mile and per employee. We find the average number of tons handled by the Canadian Pacific Railway to be 267,836, and by the Canadian National, 195,808. The average for Canada is 231,872 and for the United States 220,000 per employee. So hon. members can see that Canadian roads handle 11,872 tons more a mile for each employee than United States roads do. Going further, an editorial in the Railway Age gives the following figures, and I might state that these figures have been used in other parliaments and for the same purpose, so far as I have been able to learn. I believe they are figures that can be substantiated. The Railway Age states that the average wage paid for 1923 by the Canadian National was $1,421, by the Canadian Pacific, $1,482, and by United States roads, $1,588. The Minister of Railways and Canals (Mr. Graham) in his report states that the average hourly rate of all employees, including the president down to the lowest employee, is 64 cents. If we take the average earnings of railway men in Canada, the United States, Italy, Germany and Switzerland, we find that Canada has the lowest labour cost per ton mile of any country in the world. The statistics are as follows:

No. of Labour employees cost per required to ton mile Average move 1 ton I

Country wage 1 mile Cents

Canada $648 5 3.24United States

757 5 3.78Germany

409 23 9.40Italy

377 24 9.04Switzerland

305 31 11.31

I would take it from these figures that the cost in regard to handling freight per ton mile is less in this country than in any other country in the world, if you take into consideration the average wages, the labour cost per ton mile and the number of employees.

As regards the effect of wages of railway employees on freight rates, hon. members will remember that during the war the cost of living increased very rapidly and that wages

were increased in an effort to keep up with the increased cost of living. It is significant that living costs increased first, and this is absolute proof that increased wages were not the cause of the increase in the cost of living. Railway wages never overtook the cost of living. The peak was reached in 1920, since when the 200,000 railway employees in Canada have had their wages cut and conditions changed so as to reduce their earnings by approximately $45,000,000 annually. The wages of employees were not increased from 1913 to 1918. Nevertheless the cost of living increased each year, and in 1920-21 there was a cut of something like 15 per cent in the wages of railway employees, amounting yearly to the sum of $45,000,000. This, I think, is the largest voluntary contribution by any class of workers.

I should like to make a further quotation regarding increases that have taken place since 1913 in wages paid in other occupations, as it was stated in the representations made by the Tudhope, Anderson Company that wages paid railway employees were far in excess of those paid to other industrial workers and had increased more. These figures-were taken from the Canadian Annual Review for 1923, and using the index number of 100, the year 1913 and the year 1923, the wage increases are as

follows:

Index Index

Occupation 1913 ,. ... 100 1923 166.4

100 174.0

100 188.9

100 197.8

100 181.7

Miscellaneous factory labour 100 100 196.1 170.4

100 186.2

157.4

Cost of living, wholesale prices ... . 100 153.0

This shows that wages of railway employees increased only 57.4 per cent, which is the smallest increase for any of those industrial workers from 1913 to 1923, and the cost of living increased about 53 per cent.

Going further in regard to representations made by these different corporations that railway wages are the cause of high freight rates, we find that the different manufacturing industries that are clamouring for a reduction in freight rates and claiming that railway wages are the cause of high freight rates have certain startling figures to produce in regard to the administration of their own businesses. I should like to refer to remarks made by the hon. member for Neepawa (Mr. Milne) in speaking to the budget a year ago. I believe he quoted certain figures showing the cost of making binders in 1913 and 1923, and the

The Budget-Mr. Harris

figures that he used were taken from figures submitted by a manufacturer to the special committee appointed to inquire into agricultural conditions. Although the figures are given in regard to binders only, no doubt they can be applied to agricultural implements as a whole. The figures are as follows:

1913 1922 Increase per centMaterials . ...$ 45 55 $ 86 21 89Wages . ... 25 10 56 77 126Factory expenses . ... 5 51 26 55 382Administration .... 5 10 38 66 658Freights . ... 23 91 34 69 45Distribution 63 15 114Branch department ... . 47 31 60$163 99 $353 33 116

So that, taking the total in these nine years, the increase on binders would be 116 per cent while freight costs have increased 45 per cent and implement manufacturers' employees' wages 126 per cent. It would therefore be interesting to the people of Canada to have the manufacturers explain how they have come to have an increase of 658 per cent in administration costs. This I think is a fair example which might be applied to a good many other industries; and it shows in my opinion that the cry of high freight rates being caused by high wages is nothing but a smoke screen for them to hide behind in the conduct of their own affairs. It seems to me that the conditions governing the administration and the operation of the railways here are such as cannot be compared with the conditions that obtain on many of the roads of the United States. I would point that out before going further. We have extreme weather here and the conditions in that regard are not experienced across the line; this applies particularly to the use of equipment for the seasonal carrying of grain and other perishable products. The railway reports show that something like 84,000,000 is the expense incurred in snow service on the roads in Canada. These facts are all taken into consideration in the adjustment of wages and I believe that the entire figures will show that the wages paid railway employees on this side are lower than those that are paid in the United States, the roads being equally well operated and managed.

I come now to the last reason for discussing the budget; I must state my position on the motion now before the House, that Mr. Speaker leave the chair, as well as on the amendment that has been introduced by the hon. member for West York (Sir Henry Drayton). That amendment will of course first be voted on; and having declared my views on the questions affecting my own

district, and not unmindful of the associations I have held in parliament, but remembering the duty I owe my constituents as well as the country at large, I believe there is only one course open to me. It is my intention to support the budget at this particular time and in doing so I feel that I am carrying out my duty to my constituency and to the country. I do not want to have it inferred, that I am in any way governed by political influences. But I believe that it is in the best interests of the country that the budget should be supported, although I know that some of my friends with whom I associate at the present time do not agree with this view. It must be remembered, however, that conditions in the province from which I come are extremely different from those in other parts of the country; it has been recognized as a concession to myself and other members from British Columbia that we have certain conditions there that do not exist anywhere else. For this and other reasons that I have stated,

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CON

Joseph Henry Harris

Conservative (1867-1942)

Mr. J. H. HARRIS (East York):

Confidence, lack of confidence, and restoration of confidence was the keynote of the first portion of the remarks that fell from the lips of my hon. friend from West Kootenay (Mr. Humphrey). My associations in this corner of the House lead me to say there is no one here in the Conservative party who will in any way take second place to my hon. friend so far as having confidence in the country is concerned. But surely the hon. gentleman is not going to confound confidence in the country with confidence in this government. Is this government the country? Is it fair to say that this government to-day is a fair reflection of the country? Has it a mandate from the country to-day?

We all regret the absence of the Minister of Finance (Mr. Fielding); we all regret that stability has disappeared from this government owing to the fact that the right hon. gentleman is not here. We think of the Fielding Liberals; where are they? And we are all wondering perhaps why the ex-Minister of Justice (Sir Lomer Gouin) is not in his place to-day. Where are the Gouin Liberals, and what do they think of this administration? Have the Protectionist Liberals a right to sit in this House behind this administration? And has the administration any mandate from the province of Quebec? I question very much whether it has! If it has a mandate from the province of Quebec I should like to see the ex-Minister of Justice (Sir Lomer Gouin) in his place; I should like to

The Budget-Mr. Harris

see him give his endorsation to the policy which hon. gentlemen opposite have enunciated from time to time. No; the hon. member who has just sat down, in saying that anyone who undertakes to citicize this administration is a pessimist, is very far from the mark. In my opinion the hon. member who criticizes is a great optimist. He sees that this country is not going in the right direction and so, optimist that he is, he first offers some criticism to the government and then advances something constructive by way of telling them what they ought to do to bring Canada out of the condition that she is in at the present time. I would ask my hon. friend how he or any Canadian with any degree of intelligence could be other than confident in the country itself-not in this government-when he considers the great possibilities of this Dominion. Look at the Maritime provinces and think of the possibilities that are latent there; look at Quebec with her great resources; and consider for a moment the fact that we have in this country just four per cent of the world's population. And you all know the rest of the story. You all know that Quebec has the world's supply of asbestos; Ontario has the world's supply of nickel; and in the western provinces we have the great granary of the whole empire. The hon. member spoke also about the wonderful things there are in British Columbia. Well, to hear the views of some people, one would think that there was nothing there but a few Japs, a few Chinese and a few saw logs. But the hon. member has told us about the mining industry in that province. And then think of the Okanagan valley with the fruit it produces, and consider the province of Alberta from the mineral point of view with her fifteen per cent of the world's coal supply. Think of all these things and tell us where there is room for pessimism in Canada. There is absolutely none. I do not take second place to any man in this Dominion in my optimistic outlook on the future of Canada; and when I criticize this administration I do not bow to the dictum laid down by this hon. gentleman, nor yet to that laid down by the Acting Minister of Finance (Mr. Robb), that' such criticism tends to embarrass the nation's credit. No, sirl I do not for a moment bow to any such opinion.

The balance sheet as brought down by the Acting Minister of Finance is not in my opinion a credit to him; it is not a credit to the great Liberal party; it would not be a credit to any business organization to tel! its shareholders-in this case the people of Canada-that it gives an auditor's certificate in verification of the accounts when in fact

that certificate is not in tihe true sense of the term a certificate at all; certainly it is not an auditor's certificate as understood by the man in the street. There is something radically wrong when the government has to put a blanket over its balance sheet in the form of a so-called auditor's certificate in order to restore to the minds of the people confidence in that balance sheet. In my opinion the results of the year's operations ought to flow from the balance sheet in a uniform way so that the average citizen can understand its contents; there should be no necessity for page after page of explanation as to how the balance is arrived at. It is almost an insult to the intelligence of Canadians when the Acting Minister of Finance (Mr. Robb) attempts to show in the second paragraph of his budget speech how the national debt has been reduced. Why should it be necessary to give such explanations? Are we not fifty or sixty years old as a nation? Do not the people know how the national accounts are made up and the balance arrived at? I repeat, there must be something radically wrong when the government resorts to these methods. I like to think of the Minister of Finance (Mr. Fielding) himself reviewing his balance sheet. His budget was an honest, frank expression of inhere we stood. He did not hesitate to say that there was $31,000,000 added to the national debt, he did not hesitate to put his railway deficit in the place where it belonged. To-day in order to cover up the fact that through trade depression throughout the country we are slipping in revenues, the Acting Minister of Finance finds it necessary to take $50,000,000 in 1923-24 and loaned to the National railways on bonds guaranteed by the government and put this loan in the category of Canadian National Railway finance. As a matter of fact where does it belong? We all know it should be included in the national debt. Then in the face of that to declare that the national debt has been reduced by $35,000,000 is not, in my opinion, an honest, frank statement by the government.

But let me return to the auditor's certificate which, the Acting Minister of Finance told us, has been printed on the balance sheet on page 3 of the Public Accounts for 1923-24. I have no doubt, Sir, that you and everv other hon. member have read auditors' certificates from time to time. This certificate says:

We have examined the balance sheet of the Dominion of Canada as at March 31, 1924, and we certify that the balance sheet conforms to the balance sheets of previous years in not including in the net debt of the Dominion issues cf the Canadian

The Budget-Mr. Harris

National Railway company and companies included in its system, which cany the guarantee of the Dominion of Canada. Such guaranteed issues are shown year by year as indirect liabilities.

Well, that is not such an auditor's certificate as we find in the annual report of the Canadian National railway system which we received last night. Is any opinion expressed in the auditor's certificate as to the correctness of the national balance sheet? None at all. But appended to the accounts of the National Railways we find a certificate of the sort which we are accustomed to look for at the end of any statement of accounts, and it is in this form:

We certify that, in our opinion, the above consolidated balance sheet is properly drawn up so as to exhibit a true and correct view of the affairs of the system, as at the 31st December, 1924, and we further certify that, in our opinion, the attached income and profit and loss accounts for the year ended the 31st December, 1924, are correctly stated.

I have another form of auditor's certificate appended to the balance sheet of a large corporation, which I will give the House:

We have examined the statement and it agrees with the books of the company. After due consideration we have formed, an independent opinion as to the position of the company. With our independent opinion so formed, and according to the best of our information and the explanations given to us, we certify that in our opinion the statement sets forth fairly and truly the state of the affairs of the company, after providing for contingencies, and that all transactions of the company that have come within our notice have been within the powers of the company.

That is what the people of Canada understand by an auditor's certificate. This so-called auditor's certificate which the Acting Minister of Finance found it necessary to quote in his budget speech is not an opinion as to whether the books are kept properly or not, it is not an opinion as to whether the railway loans should be included in the national debt or should be placed among the capital charges of the Canadian National Railway; it is just a mere statement that the balance sheet is a continuation of former practice. The point I am trying to bring out is that the average man in the street is not going to stop and ask you what kind of auditor's certificate this is. By an auditor's certificate he imagines the Acting Minister of Finance is referring to the sort of certificate which accompanies the balance sheet of any corporation. I can imagine some Liberal spellbinders out on the stump shouting to the people, "Yes, this, financial statement which the Tory press is criticizing we had a couple of chartered accountants go over, and they have put their certificate of approval upon it." In my opinion it is a very poor way indeed of getting 133

Topic:   THE BUDGET
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REVISED


over the difficulty the government finds itself in, due to the diminished revenues resulting from the trade depression which we are experiencing from one end of the country to the other. I repeat, it is a poor way to try to hide the fact that we are slipping more and more regarding the public debt. Let me again say, and I shall continue to repeat it, I have the utmost confidence in Canada', and when I am criticizing the government it must be borne in mind that there is not much connection between the two, and after the bell rings next time there will be no connection at all. Cluttered up within Hansard of March 24 will be found all maimer of excuses and explanations by the Acting Minister of Finance as to why such-and-so is done. Why is it necessary to insert this in the budget statement? The railway company from earnings are not yet able to meet the arrears of interest accumulated on our loans to the company. This government, following the policy of its predecessors, continues to relieve the company from the payment of interest. To do otherwise wouid require the increasing of our annual provisions in the estimates, thus adding to our debt on the one hand, and, after receiving back from the company the amount so provided in our estimates, crediting it to interest on investments account on the other hand, thus reducing our debt by the very amount by which we increased it. Why, Mr. Speaker, ever since we took over this railway system has not this been the practice? Why draw a red herring across the trail and say: "This $131,000,000 is a bad debt, but we are so generous to the Canadian National Railways that we want to treat it in this way, because if we received the interest back we would only have to reverse the ledger entry and put it on the other side?" Does any man of intelligence in the Dominion ever expect that that interest is going to be paid back? Are we not clamouring every day for reduced freight rates? My friends from the Maritime provinces, my friends from the prairie provinces, my friends from Ontario and Quebec, each and every one of us, are looking for the day when reduced freight rates will come. Reduced freight rates will be ahead of this proposition which is suggested by the Acting Minister of Finance in his budget speech. It is not fair to the Canadian people to draw a red herring across the trail in respect to the country's accounts. It is time we tried to give them a frank, clear statement to show them exactly where we are, exactly in What direction we are going, exactly what we are doing. If the revenues are slipping, tell them so. They do not mind having the truth; they do not mind a clear statement of the facts.


April 15, 1925