April 17, 1925

PRO

Henry Elvins Spencer

Progressive

Mr. SPENCER:

I can only say this: in respect to the larger incomes on which income tax is applied at present he would be well within the mark. According to the figures the hon. member has given here, $18,000,000 would be saved on the extra wealth which at the present time we do not tax.

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:

First of all, there is no saying where these incomes are. In 'the next place, if they were not non-taxable, they would be somewhere else altogether and perhaps there would be no income from them at all by way of tax. They would not be where they are if they were taxable.

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

Henry Elvins Spencer

Progressive

Mr. SPENCER:

The Budget-Mr. Spencer

competition, not in cutting interest rates, but in getting offices in the various cities, with the result that in many ways we are overburdened with branch banks. I have before me a comparison of the number of banks in Canada and the United States, taken from the Rand-McNally Directory for the year 1921. They report that there were then the following banks doing business in the United States:

National Banks 8,191

State Banks and Trust Companies.. .. 22,413

Private Banks 1,207

31,811

or 289 per million of population.

According to the Canadian Bankers' Association publication, there are in Canada 4,850 banks and branches, or 539 per (million of population. Some places, I might say, have too many banking facilities, while others have none at all. T have here a list of various towns which have a number of branch banks. This is taken from a statement that was prepared some time ago by a Canadian banker. Leaving aside the many places with one or two banks, or even as many- as nine banks, I find that:

5 towns have 10 branches; 5 towns have 11 branches: 2 towns have 12 branches; 3 towns have 13 branches; 2 towns have 14 branches: 1 town has 17 branches;

1 town has IS branches; 1 town has 23 branches;

2 towns have 24 branches; 1 town has 26 branches; 1 town has 39 branches; 1 town has 43 branches; 1 town has 45 branches; X town has 55 branches; 1 town has 82 branches; 1 town has 87 branches; 1 town has 220 branches.

I wonder What the people of Canada would think if the government in carrying on its administration of the postal business of this country imposed upon the people in these various towns p-ost offices to the same number. There is no doubt in my mind that there would' be tremendous criticism of such a way of doing business. When this question was up before the House the other dlay, the Acting Minister of Finance (Mr. Robb), who, I am sorry, is (not in his seat, referred to the fact that a certain member on this side of the House had requested' him to intervene to keep a certain branch bank open. I wish to say that I was the member referred to, and in the request I made I certainly have nothing to hide. The bank in question was serving a very good farming community, settled within a radius df thirty .miles one way, and: forty miles the other. The bank had done very well, but for some reason it had thought of closing its doors, I suppose to cut down, overhead, and it was going to leave that well-settled district absolutely without banking [Mr. Spencer'

facilities at all. Any district of that size, in my opinion, has a right to demand banking facilities. I say "demand,1" because we have given the present banks a very privileged monopoly and, under the Bank Act, we prevent banks of smaller capital being established in many of these places where they would Start if they had the chance.

There is another subject I wish to bring before the House which, I am sorry to say, has not been mentioned sufficiently up to the present time, and never has been mentioned as far as I know by any of the government officials. It is with reference to the effect of science and invention on industry; also, of course, the speeding up of industry, by which we are turning out such vast quantities of goods in a given time compared to what we were a few years ago. We often hear preached to us, through the Speech from the Throne and many speeches on the floor of the House, the need of greater production. That is an old cry in my opinion which we might just as well forget all about, because the problem is not one of greater production, it is one of under consumption. We have an under-consumption which is brought about by a lack of purchasing power. We have on the one hand lots of goods; we have the power to produce a much larger quantity of goods than we are using at the present time. On the other hand we have numbers of willing workers. There are thousands of them at the present time out of work, who want to work and produce more goods. We have between those the problem of finance controlled privately. It should be controlled publicly through this House; but I have not seen much control given to it up to the present time. Through the system of finance not functioning as it should, we find to-day that we have not been able to purchase the goods that have been made, and consequently a large number of our people are idle.

A good deal of thought has been given of late years to this problem of purchasing power. Nations have not been able to sell as they wished to do in their own country because of this lack of purchasing power. They are, therefore, trying to sell their surplus products abroad. All countries are trying to do the same thing, with the result that an economic warfare is being carried on which will undoubtedly result in disaster if the system cannot be changed. In respect to this I should like to quote from Mr. W. H. Wakin-shaw, M.A., formerly of Exeter College, Oxford:

The final result is that there is not left for the goods created, the simultaneous extra purchasing power

The Budget-Mr. Spencer

of money necessary to distribute them to the home public. Hence they must be exported, and we have accordingly the struggle for foreign markets and the fight to tap the purchasing power of other nations. This is, essentially, the key to the commercial rivalry of the great industrial nations which, unless its real causes are attacked and remedied, will inevitably again lead to world war-and possibly the extinction of western civilization as we know it.

As I have already said I regret that the Acting Minister of Finance-realizing, as he must do, the very serious problem this is- did not mention it in his budget speech. We know full well that the purchasing power of the people is equal only to the pay-roll of the people-nothing more and nothing less-and to support me in this statement I am going to quote from the speech of Mr. Babson, delivered before the Ottawa Board of Trade in 1922. On that occasion he said:

The purchasing power of the people is ultimately determined by t4je total payroll of tihe people. No matter what one's attitude is on questions of labour and capital, in the final analysis it must be realized that the spending power, the purchasing .power of the nation or a community is merely the sum total of the payroll of that nation or community.

The increase, of course, of machinery efficiency means a decrease in labour work, and a decrease in labour work means that more people will be obliged to walk the streets; and the more people who are obliged to walk the streets the more will have to be paid out in doles to keep that army alive, and the more that is done the more it will reduce the purchasing power of those people who are employed. To give the House some idea of how science is gradually transferring the work from man's shoulders to that of machines I should like to quote the following:

The cotton industry in Lancashire working one week could supply the total requirements of England for a whole year. In United States of America in place of the old-fashioned sock-making machines in use thirty years ago, which employed one operator on six machines, producing 432 socks per day, they now employ full automatics, one operator attends twenty-five machines, and produces 3,600 socks per day. A modem steam navvy does the work of 200 men. A brick laying machine sold by Arrol and Co., now in use in Glasgow, operated 'by three men, lays 1,2001,500 bricks per hour. A Wade Mechanical Woodman enables one man to do the work of thirty men. It can get through a three-foot tree in four minutes. At a certain rolling mill in Sheffield If-inch billets can be produced (without reheating) at the rate of 100 tons per hour. The labour consists of four men.

Referring to this same problem I should like to quote from Lord Moulton in the Observer of June 22, 1919:

The scientist has this to say to the world to-day. If you insist on going**to war again, the power which I shall give you will only enable you more effectively to destroy the world. But if you will remain at peace and accept the help I have to offer, it will lead you to such wealth as you have not imagined.

137J

There is a very interesting booklet out, which I understand is in the Parliamentary Library, entitled " The Inversion of Science " by Professor Soddy. In this pamphlet Professor Soddy shows that, instead of science making humanity free as it was intended to. it will eventually enslave it, if we do not know enough to make proper use of science. We have quantities of statements from very good men along this line. I should like to quote from Mr. Arthur Kitson. I may say that he is an engineering manufacturer and authority on financial questions and economics, and president of the British Banking Reform League. In referring to this problem he says:

It is quite certain that the need for labour must become less and less with the growth of inventions and the increase in industrial efficiency. Indeed the real problem we have to solve is not so much that of finding constant employment for our .people as our supplying them with life's necessities and comforts out of the abundance of goods created. Even to-day the labour of less than 10 per cent of the population will readily suffice to maintain the entire inhabitants of this country in a high state of comfort. Suppose discoveries and inventions during the nest half-century result in the displacement of all manual labour by machinery, must the bulk of the world's inhabitants then perish ?

Another authority, Sir Charles Sykes, a Yorkshire manufacturer, referring to this question says:

The problem of unemployment or its cause is not due to a defective system of production, but to a defective system of distribution.

I desire to bring another subject before the House which will call for more of our attention as time goes on, and I think should receive more of our attention at the present day. I refer to the concentration of wealth. The system as we have it tends rapidly to create large fortunes rather than to distribute wealth. I have some very interesting statistics here obtained from the Canada Year Book which I should like to quote. The first reference will be found at page 155 as follows:

Number of families enumerated in Census

1921 1,901,227

Deduct number paying income tax (p. 808).. 281,182

Number of families not paying income tax- less than $2,000 and exemptions, being 85.2 per cent 1,620,045

Number of males over 20 years of age, 1921

(p. 157) 2,603.217

Deduct income taxpayers (p. 808) 281,182

Married and single males over 20 years without sufficient income to pay income tax, under $2,000 and $1,000 exemption (89.199 per cent), or a total o*f 2,322,035

Instances of inability of wage and salary class to live and have surplus to bequeath at death.

The Budget-Air. Spencer

Average ye&rfy earnings of wage earners in manufacturing industries (p. 434) were as follows AverageYear Number yearly wage1919 v .. .. .. .. 594,118 $ 9411920 .. .. 596,052 1,1031921 .. .. 440,364 1,002

You will notice there that the average yearly wage has gone down from 1920 to 1921. Then the table continues:

Average yearly salary to federal civil servants of Canada. (See Malcolm Report, page 1043.)

Average

Year Number yearly salary

1918- 1919

43,492 $ 9601919- 1920

50,307 1,0431920- 1921

41,641 1,399

And I draw the attention of the House to the fact that, in spite of the fact that the salaries have gone up, the minimum standard of living allowance for average family required by the Department of Labour of Canada is $1,605-see pages 431 and 433, Labour Gazette, 1924,-which is $206 higher than the highest being paid.

I have another very interesting table on the wealth of Canada and its distribution, taken from the Canada Year Book at page 807, as follows:

Total population, 8,788,483.

Total estimated national wealth (1920) $22,483,841,122. Per capita wealth, $2,588.

Total value of production (1920) $5,000,000,000

Less depreciation 500.000,000 $4,500,000,000 page 219

Number of families 1921.. .. 1,901,227 page 155

Average income per family 2,366

Now I come to a very interesting table which I find at page 808 of the Canada Year Book, 1922-23. This is a table showing the distribution of the rewards and profits of labour and enterprise under the prevailing economic and financial system in Canada for the year 1923:

Distribution (Income tax basis)

Percentage of Amount of Percentage of

No. of income all income income taxes all incometaxpayers' taxpayers paid taxes paid380 .14 $ 8,212,112 25.77801 .28 3.810,107 11.961,181 .42 12,022,219 37.7320,464 7.28 11,814,387 37.0721,645 7.70 23.836.606 74.80259,537 92.30 8,030,762 25.20281,182 100.00 31,867,368 100.00Or, makin. g another comparison, we findthat .14 per cent of the taxpayers are ableto pay just as much in income tax as 92.30per cent-at least they pay a little bit more.

We all realize that where there is great wealth

it is often, accompanied by intense poverty. You cannot have a great accumulation of wealth on the one hand without a loss of income on the other. Following up this argument I would like to place the following before the House: Those people who have more income than they know what to do with, after spending what they wish on the necessities and luxuries of life, and who want to find some place to put it, Usually do one of two things: they may put it into capital investments, or they may invest it in interest bearing bonds or securities. In the first instance it simply tends eventually to create more goods to be put upon an already glutted market-and in this connection I would point out that men starve not for want of goods but because of a glut-in the second case, 'the interest that has to be paid on the securities when they come due, taxes the people to an equal extent, and takes from the 'purchasing power of the masses a like amount. It may be argued that this interest again goes into purchasing power; but it goes into the purchasing power of those who have already7 sufficient with which to obtain the necessities and the luxuries of life. Andl so the vicious circle goes on. As we often hear, money gets money, and we find, not only in the United States but in Canada as well, that the list of millionaires and wealthy people is gradually increasing, at the same time that a greater proportion of the masses must struggle to make 'both ends meet. I was interested to notice when the Acting Minister of Finance (Mr. Robb) delivered1 his budget speech to the House that, in spite of the fact that this has been one of the worst years for unemployment, incomes have been-large enough amongst that class to which I have referred, to enable the minister to raise an extra amount this year over the year before, by income tax, of $2,350,000.

I want to put in a plea to the Minister of Justice (Mr. Lapointe) to bring down legislation at an early date to make the necessary changes in the Bankruptcy Act so that the farmers can make use of it. As the minister well knows, the act at the present time needs sundry changes, and I believe he is sympathetic in the matter. Let me call his attention to the fact 'that these changes are absolutely necessary if we are to put a stop to the emigration from certain parts of Canada, and particularly of the west, from the farms. There are a large number of people who are in very bad need of such legislation, and the only way they can escape from their debts at the present time is to leave the country. They are first class settlers who know their business, and we cannot do better

The Budget-Mr. Spencer

than to make dt possible for them to use the Bankruptcy Act and clean their financial slate as it were, and so start over again with a clean sheet in panada. This would be a good thing not -only for the men themsdves but for the country 'as a whole. For those Who do not need to avail themselves of the Bankruptcy Act but who need much better financial facilities than they have at the present time, I W'ould put in a plea to the Acting 'Minister of Finance (Mr. Robb) to do what he can at this session to provide a system of rural credits, both long and intermediate-long on the (amortization plan and intermediate from one to three years. The present system of financing the farmer is, as we !all know, very costly indeed to agriculture. With an industry that has a turnover practically only once a year, to give credit to the extent of three to four months, and at rates of interest running from eight to ten per cent, is unjustifiable. I want also to put- in a plea with the Minister of Railway (Mr. Graham) in the hope that we may get some relief in the matter of freight rates in this country; ana especially would I appeal to him, through his officers or through the railway commission, to do away with the mountain rate where we have no mountain grade, I refer particularly to the Canadian National Railways going to British Columbia from Alberta.

There are two other subjects I want to touch upon before I close. I have not so far referred to one of the .most serious happenings of the day, namely, the situation of the miners in. Cape Breton. I have in my hand however a clipping from the Maritime Labour Herald from which I shall quote in part and comment upon. It reads:

Standing The Gaff

Outlining the titanic struggle that confronts the Nova Scotia coal miners in the struggles with the British Empire Steel Corporation, the national committee of the Trade Union Educational League has called on all workers to come to their support in a statement issued as follows:

Statement by the National Committee, Trade Union Educational League,-

*

Besco is brutally frank in its purpose and confident of the result. Vice-President McLurg of Besco says: " They can't stand the gaff. We hold the cards. Let them stay out two months or six months, it matters not. Eventually they will come to us." Here is capitalism stark naked. We hold your jobs, we have systematically starved you, your wives and children are hungry, you will come to us at our terms, says the beast Besco.

This is a challenge to the working class of North America. The British Empire Steel Corporation dangles the chains of slavery before the miners of Nova Scotia and taunts them. You will be willing to don these chains again, says this huge octopus, whether in " two or six months, it matters not." We have the militia and all the repressive forces of the state while you have only empty stomachs.

I admit that these are very harsh words, but they would not be written unless there was a- c-ause, and when such words are written and published in the press it cannot be denied that we have more or less of a crisis on our hands. It has often occurred to me that one of the first functions of government is to see that there are as few people as possible in the country who have nothing to lose. We have in Cape Breton a very large number of miners who at the present time have practically nothing to lose; and when men get in that state there is sometimes very little check on what they will do. The man who has something to lose, an interest of some sort, even a home, however humble, is not going to bring down destruction upon his locality if he -can possibly help it, because he realizes he has something to lose. If we are not careful we shall gradually drift into that position where there will be a very large number-a seriously large number-of people in this country who have nothing to lose, and that will be one of the most serious positions we can possibly get into. I wish therefore to draw the government's attention to this very serious situation, and I sincerely hope that in spite of the fact that they have withheld their hand up to the present time, because they do not wish to interfere with provincial autonomy, I hope, I say, they will see that things do not drift so far that drastic action may be thought to be necessary by those who are suffering.

With regard to my vote on this budget, I am reminded that the government of the day got into power on a platform very similar to the one on which I was elected, a programme drawn up in 1919, and which they seem to have forgotten entirely. The first two years they were in power they seemed to have that same lapse of memory, but in 1924, owing probably to the fact that they realized it might mean their defeat if they did not do something, some small tariff reductions were made. I believe the reductions of duty on agricultural implements amounted to the infinitesimal sum of about 83 cents per half section. This year, however-goodness knows why!-they have taken a backward step, whether because they are influenced by certain interests that we do not see and probably do not understand; I do not know, but certainly some interests are at work, and the government have gone back entirely on their pledges of 1919, in fact they have given us a budget such as we might expect from the Conservative party rather than from those calling themselves Liberals. I shall therefore be compelled to vote against the budget.

The Budget-Mr. Spencer

In closing my remarks, Mr. Speaker, I cannot do better than quote some very apt words by Mr. Lloyd Roberts, embodying a passage taken from a book written by the Prime Minister:

The Idle Poor

We hear a great deal of "those who labour and are heavy laden," but their lot is an enviable one as compared with those who do not labour and are heavy laden. Their number is legion and ever increasing. The time-worn policy of passing by on the other side draws to a close. The very foundation of our social structure rocks beneath us. Thanks to centuries of progress, we can no longer, like the barons of mediaeval Europev eat, drink and be merry while the people perish. The Prime Minister has said as much:

"Let us be assured of this: the unrest in the world of industry to-day is no ephemeral and transitory affair; no mere aftermath of the hideous convulsion which has shaken existing society to its very foundations. It is the voice of a grief-stricken humanity crying for justice in the relations of industry. . . . The truth is mightier than the sword, and in conference and co-operation between all the parties in interest, not in the coercion of the others by any one lies the only hope of an ultimate solution."

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

Aimé Boucher

Liberal

Mr. AIME BOUCHER (Yamaska) (Translation) :

Allow me, Mr. Speaker, to take advantage of the opportunity, which the budget as brought down by the hon. Acting Minister of Finance for the approval of the House affords, to express my personal views and what I believe also to be the views of the electors I represent, on the general aspect of the country's affairs, and, in particular, on the needs of the county of Yamaska.

I am not a pessimist, nor am I downhearted. I have too much faith in the almost unlimited resources of our country, I have too much faith in the youth ,and manhood of the Canadian people not to open up wide my heart to the hope of seeing Canada in a near future soar very high in its flight towards development and progress and rise step by step to the rank of a great nation. It is useless, however, to have any illusion on present conditions. It is better to face things as they are. Vainly would we try to grasp it, prosperity is not yet within our reach.

We have come through a terrible ordeal. Fanatical politicians demanded of Canada an effort far above its strength. The excessive participation in the most monstrous war of all times struck it in the full swing of its development. It returned shell-shocked, crippled, bearing in its side a wound slow in healing. Yet, we were on this free soil of America in a privileged position. I ask you, Sir, now that the passions have subsided, have we not to regret having gone so far, having given in to feelings that were not prompted by the true interests and natural aspirations of the Canadian fatherland.

LMr. Spencer.]

What was the outcome of throwing ourselves blindly into such a conflict? Glory? Mr. Speaker, it is a very wretched consolation. No! We have gained nothing, absolutely nothing! Unless it is experience dearly paid for, and from which the Canadian people must make the best of it to direct its future policy.

Would it not be more than time to exclusively look after our own affairs? Has not the time come to drop the League of Nations and cease drawing ourselves up on tip-toes to make believe that Canada is a nation that demands that her voice be heard in the concert of European nations and play a part which would appear ridiculous if it was not so candid and child like? The country's greatest need, is rest, tranquillity, it must remain aside, to recuperate in peace its los3 of strength, to make the best of its geographical and strategic position and quietly wait for time to close its sores and heal its wounds.

To remove all danger of being drawn into participating in future wars which might be foreign to us and to sweep away all pretext of being bound in honour and held down to it by skilful diplomacy, it is my opinion, Sir, that Canada should withdraw from the League of Nations, that it should drop sending delegates to all conferences, whether it be to Geneva or elsewhere, that it should cancel the treaties which are not of a purely commercial nature, and that it remain quietly at home to develop its industries, improve its inheritance, repair its losses and seek to conquer a prosperity which is still in the dim future.

After all, the great neighbouring republic is of some account in this world. It is, today, the richest state, I might perhaps add the most powerful. At the end of this century, the United States will probably have 300000,000 of a population. What nation on the earth will be able to compare itself with the United States of America? They give us a fine example, full of wisdom, which it would be to our benefit to emulate. Whether we wish it or not, we are a satellite in the orbit of the American sun and we cannot escape from the law of gravity. The Canadian frontier is not in Flanders nor is it in the Dardanelles, as it was once claimed; the Canadian frontier is in America and he who thinks the contrary may be an excellent citizen as regards other things, but he is not a true Canadian, he has neither the soul nor the spirit.

Among the problems which Canada, at present, has to solve, we must place in the foremost rank, I thank, the problem of transportation. It is an exceedingly delicate question

The Budget-Mr. Boucher

which is the greatest impediment to immigration, of which Canada is so much in need and affecting especially our most important industry, I mean agriculture.

I have often heard the views expressed in the House, that there are too many railways in Canada, and this contention has spread so much that to-day it 'bears the character of an axiom. I may seem presuming, however, I cannot subscribe to such a statement. If we make exception for that part of the Canadian Northern from Winnipeg to Sudbury, I do not think that Canada has one single unnecessary mile. We are sometimes wrong in reproaching the promoters of these splendid railways which connect the Atlantic to the Pacific. They were Empire builders endowed with a far-reaching insight. If the flow of immigrants had not suddenly stopped, owing to the war in 1914. I believe that all these railways would now be on a paying basis.

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

Thomas William Bird

Progressive

Mr. BIRD:

Mr. Speaker, I rise to a point of order. I doubt whether there is a quorum present in the chamber.

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I will ask the Clerk to

take the names whilst I will make a count of the members.

On the count being made, eighteen members were declared to be present.

Topic:   THE BUDGET
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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

There is no quorum.

And some members having entered the chamber:

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I will make a further

count of the members.

And on the count being made, more than twenty members were declared to be present.

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

A quorum being restored,

the sitting will proceed. I am very sorry to notice that the House of Commons is very often without a quorum. I am sure, if the country knew that seats in the House were deserted in that way, there would be some agitation in the matter. According to Rule 24, every member is bound to attend the service of the House.

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

William Alves Boys (Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. BOYS:

Did the Clerk of the House

make a correct count in the first instance, or was the result announced erroneous?

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I made a count from

the chair and there were but seventeen members present, when there should be at least twenty. In my judgment the time has come to increase the quorum of the House from twenty to fifty.

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

Some hon. MEMBERS:

Hear, hear.

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

Aimé Boucher

Liberal

Mr. BOUCHER (Translation):

It would

probably cost the country three times more to build, to-day, the National Transcontinental and the Grand Trunk Pacific. Moreover, have we even taken into account the greater value given to the country by these railways ever since they have been in operation? If we consider only, the country back of the Laurentian mountains, in the northern part of Quebec, between the city of Quebec and the borders of Ontario, an immense wild and unknown territory has been opened up and will, in the future, rival that of the valley of the St. Lawrence. Activity and life have sprung up where solitude reigned, about thirty parishes have been settled. The forest gives way to the farm. Mills have utilized the water-powers. The mines give up their wealth. Millions of dollars in capital have been invested, and I think, I can say without fear of being contradicted that, in those parts alone, the surplus value acquired by the country, equals, nay exceeds the cost of construction of the railways from ocean to ocean.

Once more do I state, Mr. Speaker, we have not too many railways, however, we lack one essential thing to give them more value, what certain economists designate, under a too realistic language perhaps, human capital; we have not sufficient population. This is an entirely different proposition. It is, therefore, a question of increasing the population of the country, and with that aim in view begin an active policy of immigration, selected as much as possible among the most healthy and assimilable classes, however, at all costs we must without further delay draw to our country a large immigration whose flow will help to solve our greatest difficulties.

If we wish to settle the immigrant on the land and make it sufficiently attractive for him to remain there, we must devote all our energies to making farming a flourishing and prosperous proposition. And to attain that end, the first condition, I think, required is to obtain for the farmer fair freight rates for the transportation of his products. The whole problem rests there.

Transportation, at reduced rates for the products of the farm, from their place of production to their point of distribution, would do away with the principal impediment to the return of agricultural prosperity. Immigration of a farming class will flow in the country when farming prospects are sufficiently enticing. I think, Sir, to rebuild the edifice of our national prosperity, we must do so starting from the ground up; we must first re-establish agriculture, bring back to the farming industry prosperity which it lacks and give to

The Budget-Mr. Boucher

the toiler of the soil the purchasing power which he no longer possesses.

The high freight rates weigh more heavily on the farming community than on all other classes, and, I think, that this is self-evident.

When the manufacturer ships a case of merchandise, the freight is charged to the wholesale merchant, who in his turn charges it to the retailer, and the latter does not forget to charge it to the consumer. The freight cost for the manufacturer, the wholesale merchant and retailer is of no consequence, since the consumer in the end pays. Such is not the case with the farmer. The price of his products is fixed at the distributing point, allowance having been made for the cost of transportation, so that the farmer finds himself in this particular situation: As consumer he pays the'freight on the articles he purchases, and as producer he pays the freight on the goods he sells. This is certainly a burden which weighs too heavily on the farijier and interferes with his prosperity.

Last year, Sir, I claimed for the farming industry the same measure of protection as that which is given to the other industries in Canada.

It is not necessary, it is not even desired that such a protection be based on a customs tariff; I have no confidence in a high tariff to help agriculture in a country like ours that exports to the markets of the world the greatest part of its farm products. There are other means of giving it an equivalent protection; and why should not one of these means be to give him better freight rates, special freight rates for farm products?

One might object that our National Railways are not in a position to reduce their freight rates, that their yearly deficits are already a sufficient burden to carry. There still remains this other objection: that it is not a fair proposition to carry on, with the state's funds, a ruinous competition against the Canadian Pacific which has so much contributed to the development of this country.

I do not think, Sir, that the state can legitimately ruin any private enterprise, however, it might make the community pay for the deficit brought on by the reduction of rates, and thereby, the farming industry would receive some protection Which it claims and is in need of. However, Sir, it is easy to find a practical way of solving this problem, and should the Canadian Pacific be the only stumbling block, I think, the time has come for the government to take over the control of all railways in this country.

The moment the state is owner of 22,000 miles of railway it is just as well for it to

purchase all railways, so as to do away with all competition and duplication of service, establish uniformity of rates and give full satisfaction to all parts of the country.

I am not one of those who think that our railways are leading us to bankruptcy. No doubt, we are under heavy Josses each year, but such will not always be the case. Suffice it that our population increases by 5,000,000- if only we exert- ourselves in taking efficient means, this increase will not be long forthcoming-our National Railways will be our best asset in Canada.

The motion of the hon. member for South York (Mr. Maclean) may seem bold, colossal, extravagant, however, I think it is worth being seriously considered, weighed and studied,

I wish, Mr. Speaker, to give my full support to the government's policy in regard to ocean freight rates. I approve such a measure, not that II am certain of its success, but because it shows some initiative, good will, a brave attempt to obtain a result which everybody desires.

Allow me, Sir, to dwell a few moments on the question Of transportation in that part of the south shore of the St. Lawrence, between St. Lambert and Levis, and more particularly in the county of Yamaska, which I have the honour to represent.

It is one of the oldest parts opened to settlement on the American continent. If it is not one of the most flourishing, it is certainly one of the most beautiful and fertile regions.

The census of 1681 shows that at the mouth of the St. Francis river, there were thirty-seven families established there, forming a nucleus of settlement which, little my little, spread, pushing back the forest, establishing parishes and forming what is to-day the county of Yamaska. Most of the families mentioned in the census of 1681 have left descendants scattered in all the parishes of the county spreading over the neighbouring counties of Drummond, Richelieu, Nicolet and others. For the last 250 years, this population has generously paid taxes of all kinds and nature to the state, and which amounts to an enormous figure, yet it is hardly only for the last 25 years that a railway crosses the county of Yamaska. The south shore of the St. Lawrence is served by a railway called the Quebec, Montreal and Southern, starting at St. Lambert and terminating at St. Philomene, in the county of Lotfoiniere. Let us now consider the services given by this company.

Between Montreal and St. Cyrille de Wend-over, by the Canadian National, there is a distance of 70 miles.

Between Montreal and Pierreville, by the Quebec, Montreal and Southern, the distance is 68 miles.

I have made up a schedule of rates charged bj' these two railways to ship from St. Cyrille de Wendover to Montreal, by the Canadian National; and from Pierreville to Montreal, by the Quebec, Montreal and Southern and it is as follows:

Canadian National,, St. Cyrille

Cheese per 100 lbs. in less than carload lots.. 0.36J

Hay (carload lots) 40,-

000 lbs $58

Live stock (carload lots)

20,000 lbs $29

Wheat per 100 lbs. in less than carload lots.. 0.19J

The Quebec Montreal and Southern, Pierreville

0.34

And here are the rates from Montreal to Pierreville and St. Cyrille de Wendover:

Anthracite coal, in carload lots, (No fixed

60.000 lbs

$45 rate)Soft coal

$45 $96Flour (carload lots, 50,000 lbs.). $50 $65Dry goods, per 100 lbs. in less than carload lots

0.47 0.57

Which shows that for carrying the same goods over a distance shorter by two miles the Quebec, Montreal and Southern rates are 30 per cent higher than the Canadian National rot es.

On only one item are the rates cheaper by 0.02J per 100 lbs, and that is on cheese: the exception is explained 'by the fact that between Pierreville and Montreal a navigation company makes a specialty of carrying cheese.

I am speaking, Sir, of an agricultural district which is inferior to none in the country. However, the population of Yamaska county has not increased within the last 20 years; and that is equally true of Richelieu. Sorel, so happily situated at the confluence of the Richelieu with the St. Lawrence, knew prosperous times in days gone by; to-day, without its shipbuilding plants, it would be nothing more than a big village. What important- industry has been established at Sore! during the last twenty years? The reason is that our railway facilities are not satisfactory. Has not the time come for the government to take over the Quebec, Montreal and Southern railroad from St. Lambert and operate the line as far as Levis; and wouldn't such expropriation be in the interests of the railway company itself since it cannot operate et a profit while maintaining a satisfactory service?

This problem must interest the hon. Minister of Marine and Fisheries (Mr. Cardin) whose devotion to the interests of the citizens

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of Richelieu country and of Sorel in particular is well known.

Is it not of equal interest to the hon. member for Chambly and Vercheres (Mr. Archambault) whose constituents, it seems to me, must be quite dissatisfied with the present state of .things?

The subject is perhaps more removed from the interests of the hon. member, for Lot-biniere (Mr. Vien), but I am convinced that several parishes in his county would welcome this plan.

As regards my hon. friend from Nioolet (Mr. Deseoteaux), I feel sure he will do ail in his power to obtain for his constituents in the southern' part of the county the railway they are entitled to.

This question is of vital importance to all the southern region of the St. Lawrence. When the government operates a system comprising 22,000 miles of railway, running in part through districts as yet sparsely settled, it is only right that this same government should not leave the old counties, where colonization was cradled in this country, to get along as best they can under a burden of excessive freight rates. .

This question 'has caused some agitation in my county. The farmers of Baie du Febvre, 167 in number, adopted the following resolution on the subject:

Whereas, owing to the present prices of farm products, the farmers find it impossible to pay the existing high freight rates.

It is hereby moved and carried unanimously that the proper authorities be requested to grant a special rate for the rail transportation of agricultural products.

I believe this parliament is the proper authority in the matter and it is with the greatest pleasure that I give my fullest support to this request of the worthy citizens of Baie du Febvre.

I realize that the problem is very difficult, [DOT]that its solution cannot be brought about in one day; but I hope and trust that the government will not fail to recognize how very legitimate this request really is and that the petition will be granted.

It seems to me, Mr. iSpeaker, that I would fail in accomplishing my full duty if I did not, once more, call upon the government this year to keep all expenses down to what is strictly necessary, to practise the most rigid economy in the administration of public affairs;-economy is as much a necessity for governments as for individuals if we are ever to extricate ourselves from our present difficulties. There is no gainsaying that in this country, within recent years, we have all become, from the highest to the lowest, more

The Budget-Mr. Boucher

or less extravagant. It is economic heresy to suppose that even useless spending is a boon to business. That may hold true for a while, but unavoidably the day must come when poverty and distress result from extravagance.

To reduce the cost of living we must first of all bring about a reduction in wages. It is useless to ask the workingman to accept a cut in his wages if here in Ottawa, in this House, we do not set him an example. For my part, I refuse to ask anybody else to undergo a sacrifice that I am not willing to make myself. (I believe that the public interest demands a decrease in the indemnity of members of parliament as also in the salaries of civil servants. I do not feel disposed to move this decrease myself, but if the government were to bring down a measure of this kind I would gladly support it.

Another conviction of mine is that law costs are far too high in my province. Things have reached a point where it is ruinous to apply to the courts: the costs are too heavy.

I have raised my voice in this House to protest against the evils arising out of the Bankruptcy Act; Sir Lomer Gouin, then Minister of Justice introduced certain important amendments to the Act, which at the present time is entirely satisfactory. All abuses of the kind have disappeared; in my own district since these amendments were brought into force, not one single farmer has failed.

But we are at the mercy of another evil: shunning Scylla we have fallen into Charybdis. To-day we are groaning under the burden of legal costs.

I am not saying this merely for the pleasure of criticizing; I have witnessed some extremely painful scenes. I have reached the conclusion, shared by the majority of businessmen, that most of the time it is impossible to obtain payment of a debt through the _ courts, without forcing the debtor into insolvency and losing one's money in the process.

Undeniably one of the essentials of prosperity in a country is to have courts of law that are within the means of each and every citizen, rich and poor alike, and that do not operate to the exclusive advantage, so to speak, of a professional class and of court officers as is now the case in the province of Quebec. I hope my voice will reach that eminently distinguished gentleman who presides to-day over the destinies of my province, who solved in such a practical and ingenious way the difficult liquor problem and who, a short while back, rendered his province one of the greatest sendees that any province ever had from its prime minister when he

snatched the Banque Nationale from the jaws of financial disaster-two acts that could only come from a statesman of foresight and courage, and when I use the word courage I am fully aware that it is not surpassed in beauty by any word in any language. I would like to say to him that there is something else to be accomplished, one more reform that requires foresight and courage and that is the reform of our courts of law, decentralization, simplification of proceedings and the reduction of legal charges which are burdensome and oppressive to the people.

It is with all due modesty, Mr. Speaker, that I have made these few remarks. They may not be couched in an agreeable form; all I ask is that they at least be recognized as candid and sincere.

I may be called an idealist; but that will not offend me and I do not intend to look for excuses, since I am convinced that every true Liberal is more or less of an idealist; for the idea, generous and fruitful, is the mother of that creative action which ensures a happier future.

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

Thomas Langton Church

Conservative (1867-1942)

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

Mr. Speaker, at the outset may I humbly express what I believe is the joy of every loyal citizen of Canada, that His Gracious Majesty King George V. has come through his recent illness, and with God's grace I trust he may long be snared to rule over a loyal and grateful people. King George and his gracious queen occupy a _ unique place in the affections of the people of the empire. Like his illustrious father, no monarch in modern history has realized more than he the constraining call of duty or the glory of loyalty, duty, courage and self-sacrifice for his people; and I suggest that on his return to England at the end of this month, a loyal address of congratulation be passed by both Houses of Parliament of Canada to him on his recovery.

His illustrious son, His Royal Highness the Prince of Wales, Britain's greatest ambassador, has set out on another trip of seven months' laborious work and self-sacrifice for the good of the empire. He will be the most travelled ruler since the days of the great Roman Emperor, Hadrian. I trust that he will have a pleasant voyage, and that he will continue to do work for the unity and consolidation of the empire, and of the overseas dominions, and that he may be long spared to go from strength to strength for our empire. This is the fond wish of every loyal Canadian citizen.

Coming from an industrial district in which there is much unemployment, I deem it my duty to-day to bring before the House the

The Budget-Mr. Church

question of additional protection for the industries of the country, and to urge that what Canada needs at the present time is a proper Safeguarding of Industries Act. The subject of protection is many-sided and should be brought up to date to meet the changed conditions that have taken place since the inception of this great fiscal public boon in 1878. I support it, not for its own sake, but because it is essential for Canada's sake. No one needs to apologize for what protection has done for Canada. I support it for principle's sake, and on the grounds of patriotism.

Canada must choose between protection and free trade, and the difference between them is as wide as the poles. Protection is not and should not be thought of solely as a manufacturers or bankers' question, or that it exists for the sole benefit of manufacturers. Protection is a great economic question of principle and of patriotism, and of life and death to Canadians. The big interests, who seek to grab all the benefits of protection for themselves, are its worst friends, and do the great movement little good. It should not be a manufacturers' question; or a banking question; or a grain growers' question; or a combine question; or a monopoly question at all. Protection should be brought up to date to meet changed conditions, and extended. Protection will make for a better Canada, and a happier and more contented people, with work plentiful; it will make Canada a country fit for heroes who have fought for Canada to live and die in, instead of being driven to join the exodus.

I am tired of those who, for their own selfish ends, sometimes seek to apologize for protection as a question of expediency. II protection is solely a question of a manufacturer's or banker's profits, it is sure to die. As an honest protectionist, the great question of protection is one which I support, not for the manufacturers' or bankers' sake, but for Canada's sake. It is with me a question of both patriotism and principle, for the building up of a united Canada; and the principle should be extended and maintained so as to extend, conserve, build up, develop, and preserve all the provinces of Canada from coast to coast. I propose later to show how protection, adequate protection, should be developed and built up by additions and conservation, to further develop each of the provinces according to its needs, resources and economic development, and the psychology of protection as applied to Canada.

Some forty-seven years have now passed since the dead hero of protection in this

country, Sir John Alexander Macdonald, first placed on the statute books of this country the old National Policy, and Canada can say of Sir John Macdonald as Rudyard Kipling said of the great John Bunyan: "The wisdom that he taught us is proven prophecy." If ye seek Sir John Macdonald's 5 p.m. monument, look around you to* day in Canada and see the industrial nation we have, and the still mightier nation we might have had. had the National Policy been brought up to date, instead of being apologized for as an expedient. The exodus would end right away were his principles carried out and extended. I believe in protection for the good it will do the people of this country and the average man. It is a great national ideal, which I support for national, and not sectional reasons; for the greatest good to the greatest number, and not for the sake of any individuals, private plunder or selfish ends.

The whole of the world to-day is turning and veering around to protection. Even free-trade England is in a curious, circuitous way, in its amended Safeguarding of Industries Act-as set out in the famous white paper- coming around to indirect, and soon direct, protection. ,

Politics is defined as the science of government. Political economy is one of the latest bom of the sciences, and has been built up on axioms worthy of credit.

The free trade professors have had their day and have about gone. They have lived on the dead text books of the past, and their days are numbered, although some of them still remain in Canadian universities. There are some here who talk one way and vote another. They will talk of the dead, but not vote with the dead, lest they become dead politically themselves.

If Canada is to be a great nation within the empire, to be- prosperous she must prosecute and develop various branches of industry and supply the people's real wants mainly by the labour of her own hands. Last year, in the budget debate, on May 5, I examined the principle of protection, and the psychology of protection, past, present and future, in all countries and in history, and dealt with the development [DOT] of England, France, Germany and the United States. I gave the history of protection in those lands in detail; and I showed that as an axiom and rule of political economy, it has been universal among these nations, and that it is the law of self-preservatiom and the survival of the fittest for nations in an industrial and national way. In Canada protection is, further, a social

The Budget-Mr. Church

and economic necessity. I also showed last year that free trade makes nations poor, and gave as illustrations Germany and the United States as they were in 1840, agricultural countries, undeveloped industrially.

We may take it as an axiom in comparing free trade and protection that the nation which is eminently agricultural and grain-exporting, which depends mainly or principally on Other nations for its regular supplies of manufactured fabrics, has been comparatively a poor nation, and ultimately becomes a dependent nation. I do not say that this is the instant lesult of exchanging the rude staples of agriculture for the more delicate fabrics of art; but I maintain that it is the inevitable tendency. The agricultural nation falls in debt, becomes impoverished, and ultimately subject. 1 believe that the policy of protection should be brought up to date, and I agree with one of the protectionist papers in Quebec, Le Soleil, which says:

To be worthy of the name, protection as a policy pught to be applied to the interests and well-being of society as a whole and not to the interests of the few. It ought to embrace all the professions, and all who fall within the categories of commerce, wholesale and retail; of all workers, whether they are engaged in stores or offices; of all women and children for whom the necessities of life are procured-provisions and clothing. In a word, protection ought to be for all classes of society. This provides a problem which cannot be solved in modifications of the tariffs of one kind and another, however important they may be.

I support such a policy as defined by Le Soleil not for the manufacturers' sake but for Canada's sake, and to ensure the greatest good to the greatest number. We learn from history of the fallacy of free trade from the failure of the prophecies in the early forties of Cobden and Bright that the whole world would follow England's example. I should like to quote for the benefit of the genial member for Brome (Mr. McMaster), whom I do not see here to-day, how those prophecies were fulfilled in the case of the United States and Germany. We might also show the fulfilment of that prophecy in the rising tariff walls of every country but our own. We might show the comparative positions of British, German, French and American industries, when free trade was adopted by England and . protection by the other three countries I have named. Then Germany was the poorest country in Europe, content, or forced to export such raw materials as com and timber in exchange for the manufactures of industrial England. We might show the Prussian peasant of that time, as contemporary travellers describe him, dressed in rags, breaking the clods with a wooden mallet because he {Mr. Church.]

was too poor to buy an iron plough. We might also quote the pathetic and almost despairing description of the German economist List, who described England about 1840 as:

Supreme in every branch of manufacture, as a world's metropolis whioh supplies all nations with manufactured goods, a treasure house of all great capital, a banking establishment for all nations, which controls the circulating medium of the whole world, and by loans and the receipt of interest on them makes all the peoples of the earth her tributaries. In vain did the Germans humble themselves to the position of hewers of wood and drawers of water to the Britons; the latter treated them worse than a subject people.

Then we should see the United States at that same time, in 1840, invaded every year by an army of British commercial travellers. We should then have a picture of a comparative situation of the three countries at the outbreak of the war, Germany producing twice as much steel and iron as England, the United States with an even vaster production, the two countries towering in their industrial strength above the nation which had once supplied both with everything they required except food and timber. These comparative diagrams might be accompanied by others to show how national power was a reflection of industrial power, and how free trade England which, as a protected country, had once ruled the world, was compelled to invoke the aid of one great protected country, the United States, to assist her in repelling the attack of another. We might have a very pretty model of England in 1840 as the workshop of the world, and another in 1924 under free trade as the workhouse of the world with a dole system as the fountain. We might have a beautiful and moving reproduction of a labour exchange with the clerk handing out, not work, but doles to a queue of about a million and a quarter people. We might have exhibits of crumbling factories, rusting machinery and cold furnaces. The National Union of Manchester could contribute some very interesting statistics, the result of a questionnaire which they sent recently to their members. It seems that 567 manufacturers who replied, estimated that with adequate protection they alone could employ over 100,000 extra hands. We had a typical annual free trade speech the other day from the hon. member for Brome with copious extracts from the dead economists of the last century *pon whom the hon. gentleman leaned very heavily for his guidance. The hon. gentleman gave a somewhat similar speech in a great protectionist centre, Toronto, recently on free trade where he spoke at Hart House to university students. While he

The Budget-Mr. Church

did so over 30,000 men were out of work there because of the unstable tariff we have in Canada. Hundreds of these men were sleeping in charitable quarters-in the House of Industry and in police stations. The hon. gentleman says that he will not vote against the budget because it would put the government out. As I say, he talks one way and votes another. For example in 1923 he crossed the floor and joined hon. gentlemen to my left. In 1924, however, when a redistribution bill was passed which might or might not have wiped out his seat, he returned to the government benches. The hon. gentleman need not fear that one vote will defeat the government because as long as any of the Progressives are here the administration will not be defeated. The hon. member, therefore, need not worry on that account. During his speech on the budget the hon. member for Brome spoke of the farmers in his constituency sending cream down to Boston. Judging from the experience of the past the farmers of Brome will only be able to supply cream to Boston so long as they do not interfere with the plans of the agricultural bloc in the United States. Just as soon as there is any interference with those plans, however, that bloc will put up the tariff wall on the lines I have suggested and exclude the farmers of Brome from the Boston market.

I regret very much the neglect of His Majesty's government to deal in the budget with the pressing needs of the unemployed, and I deplore the government's failure to devise and pursue a national policy to develop our resources, to diminish unemployment, and to restore the trade and commerce of Canada both at home and abroad to its old state of prosperity.

I regret also the negative policy of the government and its decision not to place an adequate dumping clause on the statute books of this country, leaving thousands of Canadians in want as a result of the lack of a proper tariff policy thus forcing industries to close and compelling many of our workers to join the exodus to the United States. I regret also any effort to come to the help to both capital anl labour by adopting such a dumping regulation as will be adequate and effective in the best interests of the country.

More than five-sixths of the budget is ancient and not modern history. A surplus in these days of high finance is not so much a matter of "cash on hand" as it is a matter of "heads I win, tails you lose"

it is a matter of statistics and figures. We are back to the old

days of Ontario politics of a generation ago when, instead of such questions as the Ontario Temperance Act and Church Union, the great issue was whether the province had a surplus or not. I remember debating this question in an election in Middlesex county against the late Hon. George W. Ross, the then Premier of Ontario. At that time he called me "a doubting Thomas" and told me to come up to the parliament buildings after the election, when he would take tne into the treasury vaults and show me the surplus in cash. I was there one day some time afterwards and asked him to carry out this promise. "Oh," he said, "never mind that now, Tom, here is a cigar." However, a short time after there was a change of government and Sir James P. Whitney became Premier. He made a survey of the assets and liabilities of the province and gave an honest budget that the people could understand. The late Sir James P. Whitney was honest enough to be bold and bold enough to be honest. With his accession to office there came an end of mythical surpluses. Henceforward under his administration a reliable and honest survey and statement of the assets and liabilities of the province was made by the government including that of all government commissions as well.

The Dominion government in its budget statement ignores the money advanced in cash to the Canadian National railways and the bonds guaranteed which are direct liabilities. So it figures out a surplus although $118,000,000 has been added to the capital of the Canadian National system during the past year directly and indirectly. Even if this was for the payment of interest it is nevertheless a debt. Frozen assets of some four millions of Roumanian loans in interest are included though not actually received, and we are not yet balancing our budget. The revenues are 52 millions less, and 13 millions more is spent, and only an estimate is given for the twelfth month's revenue at 35 millions, although one-twelfth of the gross would be nearer 29 or 30 millions. Net operating loans, plus cash advances and loans by the government, meet the fixed charges on the Canadian National Railway system's obligations, and a resort is made to direct taxation for 54 millions of a deficit. What the country wants is a little more of a railway policy that will lessen the deficit to be met by the taxpayer and a revaluation 'that would consolidate and write off a lot of frozen assets and of liabilities charged to public ownership which private ownership created in our railway situation, and give public ownership a chance.

The Budget-Mr. Church

I regret the present budget contains no relief to the business man. The sales tax retains all the features of annoyance, injury, loss and dissatisfaction to the business men.

As to the exodus to the United States, no effort is made in the budget to check this, nor will the incoming settler find anything in actual conditions to help him to stay in the country. The unemployed ask for bread and get a stone, namely a declaration that the federal government has nothing to do with unemployment and for the unemployed to see the provinces and municipalities. The industries of the country that were hoping for a safeguarding of industries act must still face the influx of products from foreign countries which have the advantage of cheaper labour with longer hours of work, depreciated currency and exchange and greater mass production. What we want in this country, Mr. Speaker, is a policy to check the exodus. The government should survey the whole field of public affairs, and analyse the causes of discontent, and upon the result of that analysis base their proposal for reform. This method of procedure would be in the interest of the country, and is what the Conservative party would do were they in office, and is in accordance with Conservative tradition, which has always exercised its beneficent influence for nearly two generations before the word "Progressive" was coined. Both Liberals and Progressives, no doubt, claim they have also looked into the troubles of the time, and are suggesting remedies. They are, though, of a negative value. There is this, at least, to be said of the Conservative party, however; they have preached the same doctrine of protection for all Canada in every province, and are a consistent party. They have been ready to risk unpopularity and to court the keenest opposition on the part of their political opponent in order to do what they believed the public interest required. All that the Conservative party can do is to rely on the educating of the democracy of the country. The central, idea of Conservative policy is simple enough. It is that the present and future prosperity of this country depends absolutely on the adequate development of a protective national policy, a right development of our resources, and upon the right development of the British Empire. Domestic policy, trade policy, international policy, and defence policy, alike must be shaped to that end. If the fact of inter-imperial dependence be ignored, every experiment in reform is no more than sewing patches upon an old garment. No sooner is one rent mended than another appears. Some day it may well be

that the dream may come true of an empire whose ways are the great waterways of the world, and in which men shall move for their industry, for their homes, from end to end with as little concern as to-day they move on the other side of the line-from the state of New York to that of California. It needs but little reflection to show how, if such conditions existed to-day here and in England, and in our empire, a mass of difficulties would be solved. These ideals have long been the ideals of Conservatism. It is equally true to say that they belong to no other party in the state.

In my opinion the National Policy should be brought up to date and be a new national policy for every province. There should be also a scheme of 'Combined insurance to include unemployment, sickness, provision for old age and disability, by way of pensions. The question of housing should also be carefully investigated. Even more important is the question of the food supply, and bread and1 its price. An impartial inquiry should be held into the whole matter of housing and rents, and action should be taken in accordance with the results of such an investigation. There are indeed few hardships which the poorer classes resent more deeply than high rents, the scarcity, the high prices and quality of their daily food. There should be adequate regulation of the necessities of life, instead of allowing all kinds of trusts to live unrestricted and cross the border into Canada unregulated. We want further a national policy for marketing our wheat, coal and other basic products; the development of our water powers; a new national policy for coal, for oil reserves, minerals, for all of our resources, and further development all along the line; a national policy not only for capital but also for labour without any dependence on the United States, or being tributary thereto; and a law to prevent the bringing in what might be termed "Yankees bulls" into Canada, either in capital or labour. The American millionaire who seizes our resources and finds Canada a happy hunting ground should find a national policy to take care of his greed, besides a national policy for capital, a national policy for our labour unions free of American domination and dictation. Canada should be for the Canadians first, last and all the time.

The Conservative party in Canada is nevertheless the real hope of the future, and sooner or later the people will awaken to that fact. Much political capital has been made in the past by shallow and thoughtless agitators in denouncing the "Big business interests", but

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Mr. Church

the country realizes more and more that the big business interests they have so often heard denounced are as much the backbone of the country as are its agricultural interests, and the two are so interwoven in their business relationship that when you cripple the one you cripple the other. The Conservative party is the constructive, the progressive, the farseeing and cohesive party. It stands for unity, for home protection, for home development, for home staying and for Canada.

They are sending deputations to Ottawa all the time from the west and from the Maritime provinces complaining of their grievances and asking for special representation on committees, and even in this House there has been formed a Ginger group to look after the affairs of one province. It seems to me that it is about time central Canada, Ontario and Quebec, the two largest taxpaying provinces in the Dominion, got together and looked after their own interests. I would say to my hon. friend from Brant (Mr. Good), the whip of the Ginger group, that instead of talking so much about the troubles of the west and the Maritime provinces he ought to organize a Ginger group to represent Ontario. In my opinion the west and the Maritime provinces are very well off compared with Ontario. For example, the budget itself is a clear case of discrimination against Ontario. On bituminous slack coal the duty is raised from 14 to 50 cents per ton, which means less competition for Nova Scotia coal. And that coal is not used in Ontario anyway. So that Ontario will pay about a million dollars more annually for its steam coal imported from the United States. Thus Liberal Nova Scotia is enabled to sell, and Liberal Quebec is able to buy, Canadian coal at better prices, while Tory Ontario is getting none of the advantage and must bear all of the extra cost.

Another example of discrimination against Ontario is found in the reduction of the duty on welL-drilling machinery from 27i to 15 per cent. Such machinery is made in Ontario and is used in the western provinces most extensively. This means that western residents can now import drilling machinery more cheaply from the United States than they can purchase it from Ontario, owing to the long railway haul to the west. Thus again Ontario is the goat of the new changes in the budget. Ontario, with one-third of the national population, pays two-thirds of the new imposts. Ontario gets nothing but must pay, and pay. The same is true of the tax on the export of power.

The question of unemployment is being made a football of. It is no one's business, apparently; it does not concern the government of our country. Unemployment in Toronto is very acute at the present time. Here is a daily account from the Toronto press of the situation there:

Thousands of hungry fed. Work of Reveille Mission. Over 300 given free meal last evening-many families helped-jobs for unemployed.

Following out its regular Saturday and Wednesday schedule, the Reveille Mission last evening fed 327 men. women and children.

The article goes on to say:

Accommodation both as to meals and beds, Pastor Paul Charbonneau announced, will be continued if funds are available till the end of the month. . . . 41 Conditions among you men are still so bad," he said, 44 that I feel I must go on helping you to the end of the month if the generosity of the Toronto public makes it possible."

There is the following paragraph from the press on the same subject:

Appeals for Odd Jobs for the Unemployed

Pastor Charbonneau of Reveille Mission, 383 Queen street west, is appealing for work of any kind for the unemployed. The pastor will be pleased if anyone who has an odd job will kindly communicate with him at the Mission or telephone Adelaide 2570.

The Mission is still feeding the unemployed, and opened its doors on Wednesday night to a crowd of 318 men, women and children.

Unemployment is caused by the failure of this country to develop its natural resources and to protect native industry adequately. The question of unemployment is primarily a matter for the Parliament of Canada to aid in solving. But the government, the nation, the provinces, the municipalities and the church should unite in arriving at a solution, and the Canadian people should consecrate their best intelligence, their intellect, conscience and heart in a nation-wide united effort to solve this difficult problem. We are told that unemployment is not a federal matter, but that it is for the provinces and municipalities to deal with. I should like to ask the government to give an expression of opinion regarding the following cable despatch, which is reported in the press. How is this if the Federal government have nothing to do with unemployment?

Canada Guarantees Employment For all

Col. Amery Refers to Immigrants Under Empire Settlement Act Canadian Press Cable.

London, March 9.-In the House of Commons tonight, L. C. Amery, Secretary for the Colonies, assured Sir C. Kinloch-Cooke, Conservative for East Cardiff, that the Canadian government had guaranteed employment to all persons emigrating to the Dominion under the Empire Settlement Act.

The member for East Cardiff had drawn the attention of the Colonial Secretary to the opinion of the United Farmers of Alberta, expressed in a resolution,

The Budget-Mr. Church

that no more people in Great Britain should be encouraged to emigrate to Canada until conditions in the Dominion changed for the better.

As I said before, unemployment in this country is due to the fact that we have failed to develop our own natural resources and to conserve our own raw material. We are exporting in the raw and crude state to the United States various materials that we could manufacture at home. Take for example the case of asbestos; we are sending out $6,000,000 worth of raw asbestos taken from the bowels of the earth in Quebec, and that material when manufactured in the United States yields a return of some $75,000,000. We are exporting mica, nickel, pulpwood, power and coal. If we manufactured or utilized these articles in this country, it would provide work for tens of thousands of men. Canada supplies 85 per cent of the mica of the world, and 95 per cent to the United States. In 1924 Canada sold 112,000 tons of mica to the United States in the mill fibre state, only one degree removed from the crude. For that we received $5,546,000. When that was manufactured in the United States, it realized $70,000,000 worth of the finer products of asbestos, and another $10,000,000 worth of rough asbestos. Had we developed our own mica, $80,000,000 would have been distributed among Canadians.

Canada controls the world's supply of nickel. We need fear no competition in this particular article. We should develop nickel in our own country and help provide employment here. Canada's great- nickel deposits give the United States all its supply and the world 85 per cent of its supply. Canada is limping along on a low tariff while the United States grows prosperous on a high tariff, three times as high as ours. The United States controls seventy-five per cent of the silk business of the world and seventy-five per cent of the rubber manufacturing, and yet not an ounce of rubber or silk raw materials is produced in that country. A proper protective tariff would induce growth and expansion here as nothing else in the world could.

*No one knows better than the grain growers in the west what need there is for some change in our system. Their grain is being taken across the line to Buffalo where there are now twenty-eight elevators, and it is being milled there, mixed with American wheat and exported overseas, while the identity of Canada's fine hard wheat is destroyed. All the employment that is furnished by those twenty-eight elevators in Buffalo would give work to 15.000 men at Port Colbome and other lake Ontario points, if a duty and embargo were placed up to 45 per cent on wheat, having it

milled in Canada and exported entirely through Canadian channels. I am glad that we are getting some converts in this regard, one hon. member to my left having advocated this policy.

We are certainly not developing our natural resources in this country as we should, for if we manufactured our mica and utilized our power and our coal in this country we could provide work for tens of thousands of men. Last year Canada sold 4,350,000 cords of pulp-wood to the United States, receiving $13,000,000 for it, while this raw pulpwood was converted in the United States into a value of $67,000,000. We sent one-third as cordwood, one-third as pulp, and one-third as paper. We are also sending $100,000,000 every year to the mine owners in Pennsylvania. We could use $56,000,000 of that sum to provide work and wages in the Maritime provinces, in Alberta and in central Canada. And do not forget that Canada on the other side of the account buys back the manufactured products of these raw mineral materials which are manufactured in other countries. Do not forget that copper, as a raw material, is being exported in bulk and is being manufactured in the United States into articles worth millions of dollars. For example, I know a large firm in Toronto which last Christmas purchased 30,000 radio machines made in New York, Boston and Providence, and the best parts of these sets were manufactured from Canadian copper. Last year Great Britain purchased about 145,000 tons of copper, and Germany took three times that amount.

With reference to unemployment, mapy of the clergy have interested themselves in the subject, and I am glad to see that, following the example of the Anglican, Presbyterian and Catholic churches, the Methodist church has now applied itself to the problem. On April 6 last a special committee of the Toronto Methodist Ministers' Association on Relief and Unemployment made the following report:

Your committee, after careful enquiry and conference. respectfully submits concrete proposals, designed to help in solving the problems of relief and unemployment.

Your committee is conscious that results will depend upon the birth and cultivation of a public conscience, which shall demand that standard of living in which no worthy citizen or his or her dependents shall suffer from hunger or cold by the operation of economic or other conditions beyond his or their control. To secure this conscience demands tact, tenacity and widespread use of the pulpit, the press, the platform, and every othier form of advocacy.

Your committee believes that this association must employ its strength and zeal with determination to obtain the defined objectives.

The Budget-Mr. Church

Unemployment is an unsolved but solvable problem. It results generally from the operation of forces beyond the direct control of the wage-earner, and constitutes a menace and challenge to every citizen.

Your committee believes unemployment contributes to the moral, mental and physical deterioration of our citizens, and involves immense annual economic losses. It permits thousands of children to exist cold, neglected, under-nourished, and exposed to the most serious afflictions affecting the human race; it robs womanhood and manhood of character, their sense of self-respect, and shadows their life out-look with shame and despair; it demoralizes unfolding youth, begets beggars and vagrants; it is so far reaching in its effect upon society that generations unborn will reap the awful harvest which follows inevitably in its wake.

Your committee believes the burden of responsibility to be a joint one resting upon all citizens and in particular embracing the federal, provincial and civic administrations. It would appear that the federal government has not been impressed by the serious and accumulative consequences of unemployment upon the citizens of the Dominion and we express the earnest desire that such representations shall abound through the voice of the church and associated public welfare agencies as shall impress the federal authorities of the gravity of the situation and secure an early and serious effort on the part of the federal authorities to meet by practical measures their responsibility to the people.

In particular your committee would urge action designed to eliminate the suffering resultant from the bringing into our country of immigrants who are inadequately informed concerning the conditions they are called to meet in Canada.

1. No one should be left cold or hungry.

2. These who are unable to work and are in need should be provided for adequately.

3. Work should be found or made for all able-bodied workers who, without it, would be in need of the necessities of life.

4. Those able to work and unwilling should be subjected to corrective discipline.

5. Reasonable means should be adopted to increase the earning power of those relatively inefficient.

While your committee recognizes that it is not primarily the function of this association to formulate a detailed plan for the elimination of unemployment, we feel that it will be of some advantage to bring the matter to the attention of the public in such a form as will show that a solving of this grave evil is possible. We believe it to be the plain duty of the church to protest against all conditions that menace the health, the morals and spiritual life of the people. Of such conditions unemployment is one that calls for immediate remedy.

On pages 1428, 1437 and 1797 of the current Hansard, the statement will be found that there were 20,000,000 unemployed in the United States, and as the debate is set out there I am not going to enter into a discussion with the Minister of Labour (Mr. Murdock), because I am willing to admit that Hansard speaks for itself. But I took the trouble, Mr. Speaker, to write the Secretary of Labour in the Coolidge cabinet, the Hon. James J. Davis, whom I met some time ago, and with whom I have no doubt the Minister of Labour is well acquainted. I received a reply from Mr. Ethelbert Stewart, Commissioner of Labour 138

Statistics, Washington, who in the course of his letter states:

I would say that one-tenth of the figure mentioned -20,000.000-would be more nearly a true statement.

He enclosed a copy of last month's report on Employment in Selected Industries, which contains a fuller statement of what the statistics really mean. I find from that report that employment in manufacturing industries in the United States increased 1.6 per cent in February as compared with January, while the aggregate earnings of employees increased 6.6 per cent and per capita earnings increased 4.9 per cent. These considerable gains in February indicate a decidedly increased momentum in the upward trend of employment and employees' earnings which has been in evidence since August, 1924, and which suffered a slight setback in January owing to the regularly existing conditions of that season of inventories and repairs. These unweighted figures are presented by the United States Department of Labour through the Bureau of Labour Statistics, and are based on reports from 8,755 establishments in 52 industries, covering 2,765,058 employees whose total earnings during one week in February were $76,334,726. The same establishments in January reported 2,722,124 employees and total payrolls of $69,115,408. Each of the nine geographic divisions shows increases in February, both in employment and in payroll totals, the increases in employment ranging from 2.5 per cent in the south Atlantic states to 0.3 per cent in the mountain states, and the increases in payroll totals ranging from 12 per cent in the east north central states to 1.2 per cent in the New England states.

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

James Murdock (Minister of Labour)

Liberal

Mr. MURDOCK:

Does my hon, friend know that the manufacturing employment figure in Canada increased ten points between January and March?

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

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

Mr. Speaker, the Minister

of Labour does not know what he is talking about, and if the information he gives now is just as reliable as the 20,000,000 figure which he relied on when addressing the House, I think it will be well for the minister to look over this report, which I shall be glad to hand to him. It is only fair to say that the Department of Labour in the United States has no machinery for showing how many men are out of work, but they divide the country intc certain sections, the mountain, central and southern, and they have their own investigators. Probably the minister was not in his seat when I gave the figures mentioned in the report on Employment in Selected Industries

The Budget-Mr. Church

in the United States and, I repeat, I shall be glad to hand him this pamphlet so he may go over it himself. The report contains an interesting comparison of employment in identical establishments during one week each in January and February, 1925.

In respect to food and kindred products there were 1,039 establishments, and the number on the payroll in January, 1925, was 191,217 and in February, 1925, 190,250, while the amount of payroll in January, 1925, was $4,782,473 and in February, 1925, $4,712,871. In textiles and their products, there were 1,686 establishments; the number on the payroll in January, 1925, was 559,972 and in February, 1925, 571,906, while the payroll in January, 1925, amounted to $11,231,816 and in February, 1925, $11,630,400. It will be noted that there is an increase both in the number and the amount of the payroll. Similar increases are shown in respect to iron and steel and their products, lumber and its products, leather and its products, paper and printing, chemical and allied products, stone, clay and glass products, and others.

Then there is a table making a recapitulation of these statistics by geographic divisions-New England, middle Atlantic, east, north, central, and so on. The total number of establishments is given as 8,755; the number on the payroll in January, 1925, was 2,722,124 and in February, 1925, 2,765,058, and the amount of the payroll in January, 1925, was $69,115,408 and in February, 1925, $73,664,326.

Another table in this pamphlet makes a comparison of employment in identical establishments during one week each in February, 1924, and February, 1925. It shows that in food and kindred products the number of establishments was 798; the number on the payroll in February, 1924, was 177,467 and in February, 1925, 168,545.

Then, there is a paragraph with regard to per capita earnings. It says:

Per capita earnings increased in February, 1925, as compared with January in 35 of the 52 industries here considered and decreased in the remaining 17 industries. The one outstanding increase was 30.4 per cent in the automobile industry. Comparing per capita earnings in February, 1925, with those in February, 1924, increases are shown in 27 industries and decreases in 24 industries, while the per capita earnings in the brick industry were unchanged. The rubber boot and shoe industry shows an increase of 5.9 per cent.

So that the conditions over there are improving. Then there is a paragraph with regard to time and capacity operation, which I quote:

Reports in percentage terms from 6,550 establishments in February show increases of one per cent each in the average per cent of full-time operation and the average per cent of full capacity operation as compared

fMr. Church.]

with January. The establishments in operation in February were employing an average of 83 per cent of a full normal force of employees instead of 82 per cent as in January, and these employees were working an average of 93 per cent of full-time instead of only 92 per cent as in January.

Two per cent of the reporting establishments were idle, 70 per cent wrere operating on a full-time schedule, and 29 per cent on a part-time schedule, while 43 per cent of the establishments had a full normal force of employees and 55 per cent were operating with a reduced force.

Over 2,000,000 employees are represented in the following table, and of these over 1,400,000 were working on a full-time schedule and nearly 600,000 were working on a part-time schedule.

Then follows a table to schedules which shows the full and part time and full and part capacity operation in manufacturing establishments in February, 1925. There is also a paragraph with regard to the index numbers of employment and of payroll totals for February, 1925, for each of the fifty-two industries surveyed by the Bureau of Labour Statistics, together with general indexes for the combined twelve groups of industries dealt with. I quote:

The general index of employment for February, 1925, is 91.6 and the general index of payroll totals is 95.1. These numbers represent an increase of 8 per cent in employment and an increase of 17.7 per cent in payroll totals since July, 1924, when the employment index was 84.8 and the payroll total index was 80.8, this being the lowest point reached in emploj'ment since May, 1922, and the lowest point reached in payroll totals since August, 1922.

Now, Mr. Speaker, the Toronto district is the home of: (a) industrial concerns and industries of all kinds; (b) market gardens; (c) mixed farming. The conditions in that district are not what they should be. What is wanted is added and adequate protection and safeguards. And there should be a root-and-branch reorganization, by revision of the tariff upward, to provide a safeguard from both fair and unfair competition. Protection, which seemingly was adequate before the war, is now inadequate. The reasons why it is inadequate can be found in the unfair competition abroad, in the lower wages, longer hours for labour, depreciated currency excessive taxation. All these unusual conditions now enter into the problems which face us, conditions which were not experienced by the framers of the tariff of the past.

Farmers and market gardeners in this district want to retain the home market which is now being taken away from them by unfair competition. That market used to be a steady market, not one which was here to-day and gone to-morrow; and the prices were correspondingly good. What I advocate is revision of the tariff and the safeguarding of the industries of this district, as well as those of

The Budget-Mr. Church

the rest of Canada, by equality of treatment. A general tariff law is wanted all over Canada. The farmer and the market gardener will get the benefit of this revision in the conservation of the home market they have held for years through the maintenance of the industries at their door, in the nearby cities and towns, in a healthy and prosperous condition, and the exclusion of foreign agricultural products from our home markets. I sympathize with the demand of these farmers to keep out those early fruits and vegetables the business in connection with which now goes to the American competitor; because we have in the Niagara and lake Ontario district the finest of fruit and vegetable farms.

As I pointed out at some length two sessions ago, protection is wanted for the wool growers and manufacturers of Canada. The present tariff in this respect is not only out of date; it is a relic of the past, It is an absurdity to try to compete with outside countries when you consider how cheap labour is in continental Europe. Because of the conditions to which I refer, hundreds of industries are closed and others are operating only part time. There are no orders and therefore there is no work. Our Toronto industries are undersold, undermined, economically put out of business. Tariff tinkering is a dangerous business; it has proved so for Ontario and for Canada. Some employers of labour are not to blame; they have tried to take the patriotic course and to continue, but they have had to close up. There is no use denouncing them. The net result of this undermining of industry is a condition of unemployment-men out of work; no pay envelope at the end of the week. The time has gone by to denounce the employers and the so-called big interests, whose interests are really identical with those of agriculture and labour. Protection of our industries is the remedy. The farmer will benefit by the preservation of his home market. Protection is the only weapon the workers can use if the country is to be conserved for future generations of workers and toilers, as was done in the United States in the early days of its history.

What is the opposite to the policy which I advocate? Free trade, unemployment, depression, closed factories; the exodus of our people, empty houses; suffering on the part of the wcfrkers' families, the members of which are underpaid and under-clothed. And all this for the want of a national policy, for the want of an adequate utilization of our abundant natural resources which would make for better times and more employment, 138i

for happy and contented industrial workers in agriculture and in industry. Protection will again bring us prosperity. Every Canadian can help by purchasing Canadian goods. Every article of clothing-shoes, hat, collar, tie, suit or dress; domestic food, fruit, vegetables-all these things can be bought in Canada. By purchasing only goods which are made in Canada we can protect our industry, our agriculture and our labour; in other words, we can pursue a policy of Canada for Canadians.

If the 1,700 textile factories now in Canada, which employ 90,000 men and women, were wiped out, and the $300,000,000 worth of goods now made in Canada were imported from abroad, five out of every hundred people in Canada would find the source of their maintenance gone. On the other hand, if the textile industry were safeguarded and the bulk of the $128,000,000 worth of textile goods now imported were made in Canada, it would employ about 40,000 additional workers in the mills, who, together with their dependents and those who would be needed to supply their requirements for maintenance, habitation, health, recreation and transportation, would add over 220,000 souls to our population in the rural mill towns.

It is beginning to be realized that it is not because the mills abroad are better equipped, or because the workers and technical men abroad are more skilled or more clever than Canadians, or because a better quality of goods can be produced abroad that the woollen and knitting mills in Canada need protection; for none of these things are true. It is because our main competition comes from Great Britain and the continent, where the workers accept lower wages, exist on a lower standard of comfort, and can dump the products of their cheap labour on the Canadian market.

The increase in the imports of woollen and worsted cloth from Great Britain in 1921 was 13,095,400 square yards, whereas in 1924 they had increased to 30,154,200 yards, and the effects of the reductions in duties on goods from Switzerland, Belgium and Italy in 1924, and the removal of the safeguard against German goods in the same year, have not yet been fully felt.

There was an article in a Toronto evening paper the other day headed "Put out of Business." This expression is used by Mr. Frank Welsh of Toronto, who is president of the Textile Manufacturing Company, and president and general manager of the Dover-

The Budget-Mr. Church

court Twine Mills, Limited, both of Toronto. The latter business, after being in existence forty-five years, and with trade extending from coast to coast, was forced to assign about a year ago, and under the direction of Mr. Welsh an effort is now being made to again build the business up. Mr. Welsh, commenting on the reasons for the failure said:

The reasons were not far to seek. The firm had manufactured tennis nets for one thing. We found we could buy in England tennis netting at a price that would enable us to sell at about 25 per cent under the cost of Canadian production. Consequently I do not think there is a tennis net being made in Canada to-day.

He further says:

Canadians must adopt a national attitude on this tariff question. Objection is made to increasing our rate of customs against the entry of foreign or outside goods, with the statement that the tariff merely makes manufacturers wealthy because they are greedy as a class. Let us take it for granted that they are greedy; the fact then remains that, as United States protective tariff is three times as high as our tariff, they must be three times as greedy over there. What is the result? The United States is the most prosperous nation in the world. She has the most millionaires of any country in the world, a great many of whom have risen from the ranks. Her working classes work the shortest hour and get the most money. Their standard of living is the highest of any industrial community in the world. Every year, for the past hundred years, she has added a million people per year on the average, to her papulation. This is the answer to those who pretend a high protective tariff is a curse.

Let Canada accept this protection in order to get some of the great blessings that have accrued to the other country.

We heard from the Minister of Agriculture (Mr. Motherwell) the other night about reciprocity, which is so near and dear to his heart. In view of the business depression and stagnation in this country, all I can say is that if such a policy of free trade and reciprocity is adopted by the people of the country, it means that we will go back to where we were in 1878. Industries will be ruined; people will be out of work and the times will be ten times worse than they are now. I may say further to the Canadian Council of Agriculture that free trade and reciprocity with the United States would make a Lazarus out of a country that Sir Wilfrid Laurier professed to have made a nation. That proposal would exhibit the Canada of Queenston Heights, or St. Juiian, of Vimy Ridge, or Passchendale, of Amiens and many other fields of glory, as a beggar for the poor favour of reciprocity and free trade

Canada cannot prosper on the growth and export of wheat alone. This was shown in the case of the United States. Protection was the path of glory to prosperity for the United States.

[Mr. Church.l

Geography has taught Canada one lesson, never to leave itself dependent on a neighbour for its fiscal policy, especially where that neighbour is one of the most prosperous, wealthy and highly protected countries in the world; I refer to the United States. Industrial dependence on the United States i3 no policy for a free Canada. Protection means good wages for our workmen, and our own markets for our own products, and our own work for our own workmen. Free trade means poor wages.

When the ve^ pedestal on which Canada's industrial prosperity rests is being attacked, Canadians who believe in protection as a national ideal and public patriotism, should bestir themselves for the country's sake.

The low cost wheat is an important factor in price fixing. An agricultural country that buys abroad is heading for the poor house, as in the end agriculture must pay for products bought in Europe. The point to be determined is: Could we obtain them abroad

cheaper, all tariffs being abrogated, than under an efficient system of protection? In other words, now-Canadian goods kill off native and struggling industries. The war has shown that free trade offers Canada nothing but a dump for European products; and the way German goods are being dumped in Canada proves this, until we get a more fair and up-to-date dumping clause.

Foreign manufacturers know that selfinterest will dictate their policy to compete against and utterly overthrow a young rival of a native industry. The foreigner will cut to undersell the native young rival, and when he has him beaten, will again mark up his price.

Protection is the only road to profit for the farmer of Canada. No big, great basic national industry like agriculture can live without protection; alien goods are high priced goods. Free trade never built up the United States and will never build up Canada either. Protection enables farmers to exchange raw agricultural products for industrial products. The growth of the United States since 1840 shows that great sacrifices were made by the vested interests, long established, to break down a young and penniless rival. It is so in a thousand instances, and is so even today, especially in so large an effort as the supplying of a great and new nation with manufactured goods. These foreign interests will, as long as they encounter Canadian rivalry, supply our grain-growing country with manufactured goods, and if let alone, would in time under free trade wreck our native industries first, for our farmers want "to buy

The Budget-Mr. Church

where they can buy cheapest." This is the first commandment of free trade. But these foreign trade prices would not last a year after a Canadian factory was silenced. Then the foreign manufacturer would again think of his profits and immediately raise his price and obtain a monopoly.

Now what basic effect will this foreign purchase of manufactures have on the price of Canada's agricultural staples as a result of aforesaid? This example given of free trade will be a foe to the farmers, for the price at which the farmers' surplus crop can be sold governs the price' of the whole crop, the question being whether the foreign or native manufacturer will supply the most manufactured goods in exchange for the least grain of Canada. President Coolidge and his cabinet agree with that view. Mr. Hoover, the Secretary of Commerce in the United States cabinet, has for a long time been telling United States farmers that their troubles will be at an end if they will so regulate production that there will be no exportable surplus of any staple commodity. This surplus, he says sold abroad, governs prices in the home market. If there were no excess, prices could be raised by the device of the tariff. He urges the growing of less wheat and more flaxseed and other products which can be absorbed by the home market.

The United States imports about 25,000,000 pounds of butter annually, and there is a movement to raise the present tariff of eight cents a pound with the object of shutting out Canadian, Danish, New Zealand and Argentine butter. Mr. Hoover admits that the duty of 42 cents a bushel has no effect on domestic prices, and that the wheat grower's only way of profiting by the tariff is to curtail his output. Last year the wheat area of the United States was cut down by four million acres, but the crop was larger than in 1923 because of favourable weather-contrary to Canada's experience. The high price of wheat has resulted in an increased sowing to winter wheat, though the recent slump may decide many ' growers of spring wheat to take Mr. Hoover's advice. What chance, then, has Canada to sell its agricultural products or any other products to the United States satisfactorily?

As the whole question of protection has been scoffed at and scouted in this debate, I think it is most desirable that some defence of it should be made.

Protection means cheap industrial products, made by our own workmen. The history of the United States shows that free trade retarded the growth in early days of that nation's young life, as it will do, if allowed in Canada. Free trade is no builder up of nations. This has been shown the world over. Germany is an example of this. England had protection for over three centuries before 1860. Protection saved America, a young agricultural country, and its great expansion from 1840 is due entirely to protection. It was a bitter lesson the United States learned in its effort to try and grow and thrive under free trade. For native goods in the long run are always cheaper than foreign goods.

The price of grain at any point where it is readily and largely produced is governed by its nearness to, or remoteness from, the market to which its surplus tends; and the least-favourable is the market in which any portion of it must be sold. The key to success in Canada is to build up a home market. Let Canada's goods be manufactured in her midst, thus affording a ready market for her grain and agricultural products, and prices will rise by an irresistible law to the best average in the world. In comparison, under free trade, the farmer, with his workshops in Europe, might buy a trifle cheaper, but such free trade in the long run will prove a dead loss to the farmer for though he might make a trivial saving by buying Where he can buy the cheapest, he will lose heavily on his grain, for the price will be fixed by the distance, or rates, for his surplus grain. Protection in the end will mean lower priced goods, while free trade will doom an agricultural country. For the law which dooms an agricultural country to inevitable and ruinous disadvantage in exchanging its staples for manufactures, involves it in perpetual and increasing debt and dependence.

It is not that agricultural countries are more extravagant, or less industrious, than those in which manufactories, or commerce, preponderate. It is only because there is an inevitable disadvantage to agriculture in -the very nature of all distant exchanges. Its products are far more perishable than any other. They cannot- so well -await a future demand; but in their excessive ibulk and density is the great evil.

Canada started like the United States as an agricultural country, and the early lessons the United States learned should be an example to Canada to learn by experience, and iihun free trade in the day of Canada's youth. Free trade proved itself the foe of the United States. The history of the United States is a strong argument for Canadia following in her footsteps, and -maintaining protection. What will become of Canada if she follows a natural tendency in every comparatively new country to become and con-

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tinue to be an exporter of grain and other rude staples, and an importer of manufactures? History shows that this proposition is illustrated and confirmed by universal experience and rests on obvious laws. The new country has abundant and fertile soil, and produces grain with remarkable facility, also other raw materials and most rude and bulky articles.

Labour is there in demand, being required to clear, to open up and build, to open roads, and the labourers are comparatively few; while in older countries labour is abundant and cheap, as also are capital, machinery, and all the means of the cheap production of manufactured fabrics. In the absence of any counteracting policy, the new country will import, and continue to import, largely of the fabrics of old countries, and to pay for them, so far as she may, with her agricultural staples. The history of the United States from 1842 to 1890, when they had no tariff and scarcely any paper money, proves that, whatever may be the currency or the internal conditions of a new country, it will continue to draw its chief supplies from the old, large or small, according to its measure of ability to pay for or obtain credit for them; but still putting duties on imports out of the question, it will continue to buy its manufactures abroad, whether in prosperity or adversity, inflation or depression. It is injurious to a new country thus to continue dependent for its supplies of clothing and manufactured fabrics on the old.

The ruling price of grain, as of any manufacture, in a region where it is considerably exported will be its price at the point to which it is exported, less the cost of such transportation. The average price of wheat throughout the world is something less than one dollar per bushel, higher where the consumption largely exceeds the adjacent production, lower where the production largely exceeds the immediate consumption. I put out of view in this statement the inequalities created by tariffs, as I choose at this point to argue the question on the basis of free trade which is of course, most favourable to my opponents.

All agriculture is no basis for the life of a nation. Protection must shelter the birth of every big industry, and it must be nursed in its struggling years and nurtured. Why not learn from history? Why build up alien countries instead of our own? For foreign factories are no friends of our native farmers. As a nation we should buy at home. These truths which the United States adopted early can alone save Canada in 1025, as protection gives bread to the worker in exchange for

work, whereas free trade is an obstacle to a nation's growth. The aim and object we seek in protection is not to make our country a manufacturer for other nations, but for herself, not to make her the baker and brewer and tailor of other people, but of her own household. If I understand at all the first rudiments of national economy, it is best for each and all nations that each should mainly fabricate for itself, freely purchasing of others all such staples as its own soil or climate proves ungenial.

It is best for every nation to make at home all those articles of its own consumption that can just as well, that is, with nearly or quite as little labour-be made there as anywhere else. I say it is not wise, it is not well to send to the United States for' various manufactured goods, to France for boots, to Germany for hose, to England for knives and forks, and so on; because the real cost of them could be less-even though the nominal price should be slightly more-if we made them in our own country, while the facility of paying for them would be much greater.

I may say I do not object to the importation of choice articles to operate as specimens and incentives to our own artisans to improve the quality and finish of their workmanship- where the home competition does not avail to bring the process to its perfection as it often will. In such cases, the rich and luxurious will usually be the buyers of these choice articles, and can afford to pay a good duty. There are gentlemen of " extra polish *' as our dapper Minister of Agriculture might call them, in our cities and villages who think no coat good enough for them which is not woven in an English loom, no boot adequately transparent which has not been fashioned in by a Parisian master and that scorn 4.4 per cent beer for a bottle of sparkling Burgundy.

Since the government must have revenue and the Canadian artisan should have protection I am glad it is so fixed that these gentlemen shall contribute handsomely to the farmer and gratify their aspirations with the least possible detriment to the latter. This principle should be extended to include early fruit and vegetables and protect ihe Canadian farmer and market gardener from the unfair competition of United States early fruit and vetgetables.

Further, free trade kills industry, destroys a young rival, then puts up prices, and the United States imports are a deadly menace to Canada in 1925. High tariffs saved the United States. The whole prosperity of that

The Budget-Mr. Church

country was built up by high tariffs. These are the facts from the fiscal history of that country. England's imports never menaced in 1844 the native industries of the United States the way American imports are menacing the native industries in Canada in 1925.

The free trade assumption is always false that manufactures are eternally and especially in want of protection, while agriculture and commerce need none. The assumption is false in any sense; our commerce and navigation cannot live without protection, never did live. It is the interest of the whole country which demands that that portion of its industry which is most exposed to ruinous foreign rivalry should be cherished and sustained. The wheat grower, the grazier, is protected now by ocean and land', by the fact that no foreign article can be introduced to rival his except at a cost for transportation of some thirty to one hundred per cent on its value; while our manufactures can be inundated by foreign competition at a cost of some two to ten per cent. It is the grain grower, the cattle raiser, who is protected by a duty on foreign manufactures quite as much as the spinner or shoemaker. lie who talks of manufactures and nothing else being protected, might just as sensibly complain that we fortify Halifax and Quebec, but not London or Ottawa.

The United States draws the life blood of Canada in 1925 the way Britain was in economic history charged with drawing the fife blood of Portugal in 1844, industrially. Our low tariff is a boon and aid to the United States. Canada suffers at the hands of the United States, the latter taking advantage of our low tariff. Canada is the happy hunting ground of the American millionaire, who is getting the title deeds of our timber, forests, pulpwood and mines.

Do we know that the manufacturers of the United States first shot up under the stringent protection of the embargo and war, that they withered and crumbled under the comparative free trade of the few succeeding years, that they were revived and extended by the tariffs of 1824 and 1828? Do we not know that Germany, crippled by British policy which inundated her with goods yet excluded her grain and timber was driven, years since to the establishment of her "Zoll-verein" or tariff-union a measure of careful and stringent protection, under which manufacturers have grown up and flourished through all her many states? She has adhered steadily, firmly, to her protective policy, while we have faltered and oscillated, and what is the result? She has created and

established her manufactures, and in doing so has vastly increased her wealth and augmented the reward of her industry. Her public sentiment, as expressed through its thousand channels, is almost unanimous in favour of the protective policy.

At six o'clock the House took recess.

After Recess

The House resumed at eight o'clock.

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

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

Mr. Speaker, when the

House rose at six o'clock I had been showing what protection had done for the United States, how it had built up that country, and the lesson given to Canada of the desirability of protection for all classes of industry in this Dominion. One of the things that protection does is to impose a tax on luxury-it taxes those who are well able to pay. The whole free trade policy is, in my opinion, a policy of greed beyond any greed ever dreamed of in the creed of protectionists. The whole country is to be taxed to build the Hudson Bay railway that is to carry wheat to a part where the wheat will be exchanged for goods. The goods made by producers who do not pay a cent in taxes for the railways are to be consumed by a population that does not spend, and does not want to spend, a cent in wages to their own countrymen. How are these countrymen to help pay for the Hudson Bay railway and all other railways if free trade conditions are to isolate the industries of the west from the general economic life of the country? A great number of the farmers in the west are misrepresented in this parliament. The farmers of Ontario have always shown themselves patriots on the battlefield and protectionists in the polling booth. Free trade theories have already encumbered the wheat grower with conditions that take 825,000,000 a year from him. Free trade conditions must be supplanted by protectionist principles in the shipment of grain, in the solution of the insurance problem and, if necessary, in the excise and export duties, or the wheat growing industry will be ruined.

Canada is able to offer two possible answers to a United States tariff increased to 42 cents per bushel on Canadian wheat. Answer No. 1 should be written in regulations that will prevent the Canadian milling combines and grain exchanges from wolfing the Canadian wheat grower out of his crop at low prices. Answer No. 2 should be written in a tariff of export duties that will make it impossible for United States millers to import a pound of Canadian wheat. Exclusion of Canadian wheat

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from the United States market must mean the exclusion of United States flour from every export market. Flour ground out of American wheat cannot compete in the export markets of the world with flour ground out of Canadian wheat. Let the United States increase the American duty on Canadian wheat. A higher United States duty on Canadian wheat will compel the American millers to seek, and vainly seek, an export market for the inferior flour they are able to feed to their own people.

There never was a time in the industrial history of Canada when the business men of the country, and the producing power, stood in need of more sympathetic consideration at the hands of the financial administration of the government than to-day. The crushing burdens and taxes on industry to-day constitute a colossal handicap for business men in a period when every nerve is being strained to strengthen stability and ensure expansion of production on economical lines in view now of the absence of revival of international trade. The sales tax, for example, is a crushing blow to industry. It was originally 3 per cent, was raised to 6 per cent, and was afterwards reduced to 5 per cent; the overhead of the industrialist is staggering. 1 As every person knows in keeping pace with the times, with the continued development, it is absolutely essential for progressive manufacturing concerns to be equipped with up-to-date plant and machinery. The march in machinery is unceasing. The lifetime of equipment in factory and machine shop to-day is very much shorter than in the piast, and the scrapping of existing machinery and plant in favour of more modem methods is.a 'problem that has always to be faced if Canadian industries are to maintain, and in some cases regain, their traditional pre-eminence. On these grounds there should be a reduction in the sales tax and income tax, and a more liberal allowance should be made for depreciation on account of wear and tear of machinery, to say nothing of allowance for expansion. I do not see how modern industry can be up-to-date in a way that the economic situation compels them to be unless it is relieved to some extent of its present burdens. A policy of safeguarding industries is badly needed in Canada and something should be done to provide immediate relief to industry by reduced taxes and also to protect our native industries now withering under foreign competition and the dumping in Canada of foreign manufactured goods.

A manufacturer asked me a question the other day. He said "How can-1 continue to keep my plant open under existing conditions?" He gave me the following argument. "The

law at present gaves me no encouragement. If I locate in Canada I am shut out from other countries by hostile tariffs and even in my home market I am given no preference. They tax my plant, my income and my excess profits; but if I am wise enough to locate in the United States, Germany, or elsewhere, and employ foreign labour, I will have the foreign market with tariff protection and free excess to Canadian markets on an equality with Canadian citizens." When foreign workmen are thus paid is it remarkable that unemployment exists in Canada? Is it not reasonable that Canadian workmen should have a preference in the markets of their own country?

I was sorry to see the withdrawal of the dumping clause.. When that was announced there was great applause from hon. members to my left. No doubt it was a surrender to their free trade policy. They wanted the concession but when it was granted it was a sorry day for Canadian industries. I advocate a policy of endeavouring to make our farmers more prosperous, the bringing of more people into the country and especially endeavour to get back the splendid type of Canadian who have gone to the States, and an expansion of our home market. On account of the withdrawal of the dumping clause I think conditions in Canada will be more disturbed than ever. We have the statement given by the American Secretary of Labour in which he compares the exodus in 1921, 1922. 1923 and 1924 and shows an average in 1921 of 4,410 per month, or a total for the year of 52,929. In 1922 the monthly averagei was 5,190, or a total of 62,289. In 1923 the average was 15,165 per month, or a total of 181,973. In 1924 the monthly average was 13,255, or a total of 159,063. We have to allow for the immigrants that come back, but that is a small number.

With regard to the dumping clause, I was very much surprised to see what happened, and I may say that the civilians and soldiers in the industries are very much affected by this. Under the trade policy in vogue in Germany, German goods come in here, and it is a great menace to Canadian industries. I have a letter here from a lady in Toronto, which I will read to the House. It reads as follows:

Enclosed you will find a package of rusty needles, purchased by me from a returned soldier, deaf and unable to find employment. You will notice they were made in Germany. Is it not the irony of fate that Canada has been given a government who would make it possible for our returned men who -fought for us, to peddle German rubbish from door to door in order to keep body and soul together?

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And the lady enclosed a package of needles made in Germany. I have seen these things on the streets myself. The departmental stores are full of cheap German goods. At ChriStmas-time it is impossible for the small storekeepers to compete with them. In the cities of Toronto, Hamilton, Brantford, Winnipeg, Vancouver and Halifax the small toy maker cannot compete with these German goods. The manufacturers cannot compete to-day because trash such as this package of needles I have in my hand are dumped in our cities and towns because there is no dumping clause to protect them. Coming from a soldiers' city which sent many thousands of soldiers bo the war I protest against this practice. I believe what the Acting Minister of Finance says, I further believe that there are men in the government who are trying to carry on the affairs of the country to the best of their ability, and I sympathize with them in their work. I was very sorry to see them withdraw this dumping clause, because such an action was not fair to the farmers. We have thousands of farmers residing in the vicinity of the city of Toronto. If we refer to the teaching staff of the city of Toronto, I say that two-thirds of them come from the country, and Toronto has been buiilt up by the farming community. Many farmers' sons in the different cities and towns, who have served as soldiers, have been driven out of employment on aocount of German goods being dumped in the market. Here is another item I wish to give to the House:

A Slap From Germany Busy Factories There

Germany taking every advantage of King government's policy-our factories closing

Whilst Canadian factories are closed up tight and others only working part time, Germany is flaunting her prosperous conditions in the face of our war heroes, who are in bread lines and securing relief from the House of Industry to keep home and family alive and together. Through the mail arrives a booklet, English edition, but issued for 98 different countries, on " The Export, Market," The centre part of the coloured cover is occupied by a ship representing world-wide commerce, whilst beneath is a photo of a large factory, and the words underneath " 800 employees." The irony of the thing is that over the comer of the busy factory is a white dove of peace inset in a black circle.

Under the present King government's policy German goods are allowed to be dumped on the Canadian market in unequal competition, and whilst Canada is suffering a terrible depression Germany is waxing audacious and winning our markets, and putting our men out of employment and sending them across to the United States.

And the same with the shoe industry. Germany is dumping her goods here in Canada and selling them, and the shoe factories have been closed up.

Referring to the income tax, I was sorry that the Acting Minister of Finance did not see fit to exempt incomes up to five thousand dollars, because after all these men are paying the bulk of taxation, and the city of Toronto alone pays about twelve million dollars. It is always possible to get the little men with the fixed income, but you cannot get the big men. In the United States they go after the big men, because they have a policy over there of publishing all incomes, and the educational campaign which has been carried on in the United States has had a good effect. As we have nearly a billion dollars worth of bonds on which no income tax is paid, I think we should adopt some policy to bring that money back into circulation, so that it could go back into the industries. The income tax in Canada is much heavier than it is in the States. In Canada there was no reduction in the rate of income tax in 1924 as compared with 1922, but receipts from the tax have decreased 31 per cent. In England there was a reduction of 25 per cent in the normal rate of taxation in 1924 as compared with 1922, and yet the decrease in receipts has been only 28 per cent.

I may say that President Coolidge stated that a larger amount of money could be collected from large incomes at a moderate rate than at a high rate. When the rate is too high large incomes disappear, leaving all the burden of taxes on the wage earners and people of small means.

Right Hon. S. M. Bruce, Prime Minister of Australia has said:

I think all students of economics are agreed that nothing curtails development, hampers trade and industry and reduces the standard of living of the people more than crippling taxation. In comparison with other countries of the world our taxation is not excessive, but having regard to our particular circumstances it is having a disastrous effect. We are a young country, with illimitable natural resources, but no great accumulated wealth. A burden which could lightly be borne by an old country, with its great capital resources, is one which might strangle the future development of a young nation.

Now Canada's income tax compared with that of the United States is pretty nearly six to one. In the case of a man with an income of S3,000, in Canada he pays $40 and in the United States he only pays $7.50. A man with an income of $4,000 in Canada pays $80, and in the United States only $22.50. A man with an income of $5,000 in Canada pays $126, and in the United States $37.50. A man with an income of $6,000 in Canada pays $178.50, and in the States $57.50. A man with an income of $10,000 in Canada pays $619.50, and in the United States $207.50. A man with an

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income of $20,000 in Canada pays $2,089.60, and in the United States $1,017.50. The small man is actually paying the burden of taxation. As I have explained, in the United States they have adopted a policy of publishing the incomes monthly in a bulletin, and it has had a good effect, and made the big men pay up. Some men tried to evade the payment of the tax, but the Income department has gone after the big men and the profiteers as well as the small men.

Then the Post Office Department in Canada is a very fine public utility. We have a fine Postmaster General, and I am sorry we have not seen more of him in the House on account of his not being in very good health. He is a very fine man and is giving us a good administration, particularly in the city of Toronto. People talk of the deficit on the Canadian National Railways. While there is life there is hope. They had deficits in the Post Office Department from 1867 to 1899 when surpluses began. At that time we had a very fine Postmaster General Sir William Muloek, Who was succeeded by yourself, Mr. Speaker, one of the best administrators we had in the department. He continued his good work. The penny postage was brought into effect and the men were given better hours and better working conditions. I am sorry, however, that the Post Office Department did not go back to the two-cent letters and one-cent drop letters. I believe we had a report yesterday that it is going to cost three and a half millions. A bonus has been given by the Post Office Department to the newspapers of Canada that costs two and a half millions. If the government can grant favours like that why can they not reduce the postage for the benefit of the poor man? I believe we have a faithful civil service, and many men in the public service render excellent service. In some departments we have very high-class men. I have had a good deal to do with the civil service myself and as a municipal officer I have come in contact to a considerable extent with the officials of the Customs department. I therefore know something of the work that civil servants do and I firmly believe that they are a hardworking class; they certainly earn their salaries. There may be some overstaffing here and there, but what private corporation is there which has not been overstaffed after a war? I want to see the lot of the civil servants improved. I do not approve of what the Unionist government did in appointing the Civil Service Commission; I think this was a mistake. Personally I have

always favoured the patronage system and it seems to me that the civil service leommis-sion to-day is a relic of what existed in the old Family Compact days. I am always for the patronage system.

I am sorry that the budget makes no provision for reducing the cost of the average working 'man's breakfast table; rather, it taxes the things which the working man is most in need of. There is some concession, it is true, in the matter of grapefruit, but the average man finds it next to impossible to obtain the necessaries of life, let alone grapefruit. Now, we have a Combines Investigation Act; and in the Criminal Code also section 492 provides for prosecution to restrain trusts, combines, and so on. It must not be forgotten, however, that when that section was passed there were no interlocking directorates nor were there any lawyers' and gentleman's agreements such as exist to-day. There were no mergers, and legislation in restraint of combines was then in its infancy. Now, however, we have all sorts of lawyers' and' gentleman's agreements between different corporations and we have interlocking directorates of one kind and another; all of which shows the necessity for a modern law to meet thi3 situation. I would advocate in this country something similar to the Sherman anti-trust law which is in force in the United States and under which trusts and combines are effectively prosecuted. Only the other day a bread trust across the border paid the penalty under this law. Combines flourish throughout Canada like the green bay tree and there is nothing to stop them; there is no really effective law either federal or provincial to bring them to book. And every bill of indictment that has been brought under section 492 of the code has failed. The people of this country are demanding that these trusts and combines shall be restrained, and certainly there should be no combines controlling the sale of such, vital necessities as bread and milk and so on; nor should we tolerate a condition of affairs which works to the detriment of our infant population, as the various health reports show. The price of bread having advanced rapidly in England as a result of the rise of the price of wheat, the House of Commons passed a resolution calling upon the president of the board of trade, who is a member of the cabinet, to account for it. And in Paris vigorous steps are being taken to put an end to the exploitation of the people in the sale of foodstuffs. The following press despatch, which speaks for itself, is interesting in this connection:

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A reduction of one sou in the price of bread, effective April 21, was ordered by the Bread and Flour Commission to-day. This is the third reduction within a month, bringing the price to one franc fifty centimes per kilogram (2.20 pounds). The drop is due to the recent fall in the Canadian and United States wheat markets.

It seems to me that nothing will be done here unless there is a change of policy in the administration of our public affairs. Why, there is a bread combine in Canada to-day which is spreading its activities into every province, and by and by the small men throughout the country will be driven to the wall. This is being done right now in the city of Toronto. There is a large merger in Canada and something must be done to curtail its activities. When the price of wheat and bread went up the bakers increased their prices, but there was no corresponding reduction in the price of bread when the price of wheat dropped fifty cents a bushel. The same thing is true of biscuits. This commodity has increased by three cents since the war. I am strongly in favour therefore of some legislation similar to the Sherman anti-trust law of the United States; this I think would be an effective means of meeting the combines. We have a high sales tax and a high income tax and the price of bread is beyond reason. We have combines in bread, oil, gasoline, and we have bankers' combines, American millionaires' combines, a grain growers' combine, a coal combine, an elevator combine, and combines in transportation and manufacturing.

We have had an interesting debate on the coal situation and what has been done is quite apparent. I have advocated for four years a national policy in regard to our coal supplies. I believe there should be an embargo on coal, for there ought to be a national coal supply. I believe in a bonus system, but the system which the Minister of the Interior (Mr. Stewart, Argenteuil) is putting into effect is not satisfactory inasmuch as it helps one province at the expense of another. The high industrial cost is due to fuel and transportation, which react on each other in an important degree; fuel reacts on the cost of transportation while transportation charges in turn affect the cost of fuel. There is no doubt that the coal miner's occupation is a perilous one and it should be well paid. But wages today are 100 per cent above the pre-war rate.

I am surprised at the condition that exists in the United States to-day in connection with the labour unions, and the situation is pretty much the same in Canada. Someone must do something in this country such as the Right Hon. Stanley Baldwin did in the Old Country to bring capital and labour together. On

August 22, 1924, Mr. John L. Lewis, president of the United Mine Workers, wrote to Mr. Stone in regard to the failure of his company to put in force the Jacksonville scale, adopted last spring. Mr. Stone is head of a large organization in the United States and he describes the conditions there. He says that one contract was lost for supplying Boston and Maine with their entire coal supply, which could have been secured if Lewis had allowed the men to remain at work. He adds that agitation is now becoming a regular profession. Labour is as bad as capital over there. The organization has a contract to carry coal but they will not carry out the contract because they cannot secure the rates they want. I predict that next summer and fall there will be a large strike here like that we had in 1922 and we may be starved out next winter of coal if something is not done. I sympathize to some extent with the conditions in the Maritime provinces but it seems to me that we in Canada are heading for a state of affairs similar to that in the United States. I am therefore for a national policy for capital and labour alike. The people of this country are friendly to labour and we have a federal labour department as well as provincial departments to look after their interests. There should be a fair day's pay in the mines for a fair day's work; but it is coming to this in Canada, that for the protection of the nation everyone in connection with the mines, from the president down, should be licensed by the country and should not be under the control of any labour organization from the United States.

Canada is in need of an economic revival. She needs a revivalist. It is not creditable to our system of government that the state of affairs in Nova Scotia should be allowed to continue. I sympathize with the men in the mines, and I sympathize with the mine owners, who are handicapped by high transportation rates, an unsteady market and American competition. I do not attempt to blame one side or the other, the trouble is largely industrial, and, I repeat, I am very sorry for both parties to the dispute. The government could spend 830,000 to fight the hydro municipalities of Ontario right up to the Privy Council, and they certainly ought to be ready to do something to get the parties together in Cape Breton. Never mind who owns the mines, never mind the British North America Act; this is an emergency and should be dealt with as such. If such a dispute had happened in England, what would have been done? Right to-day, the darkest of England's

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industrial troubles, when she is losing her shipbuilding orders to Germany, she is fortunate in having so resourceful a leader and patriot as Stanley Baldwin, who is heading a national awakening in England in and out of the House for industrial peace. He is rendering a service to the whole industrial world. He does not Stand aloof and rely on technicalities. He boldly goes out and faces and solves the problems confronting the country. Unfortunately, that is not the way our statesmen act. He is winning over the hearts and minds of all men of all parties, of the whole civilized world, for speaking out in open meeting of the real crisis in industrial affairs and the need of a united effort to solve these industrial troubles to the mutual benefit of all concerned. The public of England are sitting up and realizing the economic condition, and Stanley Baldwin has won the heart of both capital and labour in an endeavour to get them together. He has personality, he has the human touch, he has 'sincerity,-these qualities have appealed to the imagination of the British people of all classes and parties, and in my opinion he will rank with Pitt as a leader of men. "Capital and labour," he says, "must come together in a bigger spirit, and pull together the way they did to win the war, with a united strength, if there is any hope of England weathering the storm and securing a more prosperous state of trade and commerce, thus making things better for all classes." Now, he has done all this in a month by close and incessant study, by social vision, by the conciliating spirit and temper, by the human touch, by the persuasive means and methods of a real democrat-a plain Englishman. He is to storm-tossed industrial England a revivalist, the like of whom has not been seen since the days of Pitt. The other night the hon. member for Springfield (Mr. Hoey) was looking for such a revivalist in Canada, one to lead us out of the present industrial wilderness. I should'like him to listen to this appeal o*f Stanley Baldwin.

I never sought the office; I never planned or schemed in my life. I had but one idea, an idea which I had inherited. It was an idea, so far as one can give service, to give service for the people of this country.

My father lived in that belief all his life, and beyond him members of my family, in an obviously more restricted way, practised the same thing. It is a tradition. All my life I believed from my heart the words of Browning, that all service ranks the same with God, and it makes very little difference whether a man is driving a train or sweeping the streets or being Prime Minister, if he only brings to that service everything he has in him and performs it for the sake of mankind.

Hon. members will notice the human touch in this address. Is it any wonder he is getting

capital and labour together? He does not hold back and rely on technicalities. How long would it take him to solve our Nova Scotia problem or any of our other industrial problems, or to give us a safeguarding of industries act? I do not think it would take him very long. In my opinion what Canada needs is a safeguarding of industries act. My hon. friend from Springfield1 said there was no Safeguarding of Industries Act. Well, here in my hand is the celebrated white paper of only three pages-not like one of our bills of several pages. There it is, the Baldwin government's Safeguarding of Industries Act introduced on January 25. A committee is appointed by the board of trade, and this committee decides whether or not an industry shall be safeguarded. It has now reached the stage where it- is a direct protectionist measure, and a large number of industries are getting relief. Where an industry complains of the severity of competition, for the purpose of the inquiry such competition is not to be deemed to be unfair unless it arises from one or more of the following causes:

(a) Depreciation of currency, operating so as to create an export bounty.

(b) Subsidies, bounties, or other artificial advantages.

(c) Inferior conditions of employment of labour, whether as respects remuneration or hours of employment, or otherwise, obtaining amongst the persons employed in the production of the imported goods in question as compared with those obtaining amongst persons employed in the production of similar goods in the United Kingdom.

In my opinion the Conservative party in England would have been much wiser if they had followed protection consistently and whole-heartedly both in agriculture and in industry. The British Board of Trade approved of a set of rules by which industries may be safeguarded. The duties imposed are for a limited period. The New York Times in commenting on this measure said:

Every company appealing for customs duty to " safeguard " its interests must show that it is doing business in an efficient and economic manner. It must also prove that a tariff benefit to its own industry would not hurt some other. It would have to produce facts and figures demonstrating that foreign competition with it is " unfair." Then after all these impertinent questions had been answered, it might get a bill through parliament imposing a duty " for a limited period," that period being definitely prescribed. As a crowning insult, from the strictly protectionist point of view, it is stipulated that no one having to do with any of these investigations for the Board of Trade shall be a " person " whose interest may be materially affected by any action which may be taken.

I do not know what they would do across the border if they had such a protective measure as that. During this debate I have heard members from both sides of the House talking about consistency in respect of free trade and protection. I do not know what

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that virtue has got to do with the question. Whatever is the right way of settling the problem, I say to the government: Never mind the tariff, never mind who is Mamed for it, the times and conditions have changed and if we really are to improve the condition of the country we must evolve adequate measures for the purpose, regardless of consistency.

What is the case for a safeguarding of industries act? The case is found in the figures of the number of unemployed, the number who have joined the exodus to the United States, and the number of factories closed. You cannot feed the army of the unemployed on the present tariff or on the hope of a revival of trade, whether that revival is coming or not; nor can you do it with what is afforded by the negative side of this budget. The unemployed must live from day to day, from month to month and from year to year; they need money at the end of each week to pay their rent, fuel and clothing bills and to feed their wives and children. I say you cannot feed the unemployed on the free trade fallacies of the past or on the British North America Act. Unemployment, as I have said, is caused by the failure to bring the National Policy up to date, to bring about the development of our resources and to take care of our raw material. The lack of protection has destroyed the home market for the farmers of Ontario. The farmers of Ontario in June, 1923. voted solidly for protection; they have always done it.

A report of the Trade and Commerce Department shows that $150,000,000 worth of fruit, vegetables and other farm products which could have been produced in Canada were imported during the year ending March 31, 1924. Our tariff is to blame for this condition. Compare the duties imposed by this country with those imposed by the United States on similar products, as indicated by the following table:

U.S. Customs Duty- Can. Customs Duty-

42 cents per bushel, Wheat, 12 cents per bushel.

15 cents per bushel, Com, Free.

$2.04 per b'bl., Wheat Flour, 50 cents per bbl.

$4 per ton, Hay, $2 per ton.

35 per cent, Fruits, 25 per cent.

50 cents per 100 lbs., Potatoes, 35 cents per 100 lbs.

8 cents lb., Butter, 4 cents lb.

' 5 cents lb., Cheese, 3 cents lb.

8 cents doz., Eggs, 3 cents doz.

40 per cent, Cattle, 25 per cent.

100 per cent, Woollens, 27i per cent.

55 per cent, Silk Fabrics, 15 per cent.

75 per cent, Art. Silk Fab., 15 per cent.

75 per cent, Woollen Cloth, 27A per cent.

75 per cent, Woollen Hose, 25 per cent.

33^ per cent, Hats, 22\ per cent.

75 per cent, Blankets, 22J per cent.

We imported a large number of agricultural products from the United States, including the following:

Butter, over 1,000,000 pounds.

Cheese, 900,000 pounds.

Eggs, 5,000,000 dozen.

Fruits, $25,500,000.

Corn, 9,000,000 bushels.

Hides and skins, 49,000,000 pounds.

Lard and its compounds, 8,000,000 pounds.

Bacon and hams, 3,000,000 pounds.

Fresh pork, 10,000,000 pounds.

Pork in brine, 5,500,000 pounds.

Seeds, $3,000,000.

Vegetables, $6,000,000.

Raw wool, 15,500,000 pounds.

All of these ought to be produced in Canada. The value of the fruit imported is indicated

by the following:

Fresh fruits $18,253,447

Dried fruits 6,095,388

Fruits otherwise prepared

1,936,938Total - $27,285,773Nearly all these domestic fruits should be grown in Canada, and protection should be given to the farmer in Ontario and other parts of Canada. The figures which I have given indicate some of the agricultural products that we ought to produce in our own country. We should increase our tariff duties until they are on a par with those of the United States. We can copy them in

this respect with beneficial results.

A thought occurs to me in connection with the tables which I have just read: Our navy

of fishing boats has been called a "tin-pot navy" and, some may say, well may it be. But it is nothing to Canada's tariff, which is only a tin-pot tariff. The government should explore every possible avenue for the protection of our industries and for their extension and improvement. ,

Let us look elsewhere for lessons in this respect. Take the case of England: One

third of her population, living now under free trade, is on the verge of starvation, and even here in Canada two or three hundred thousand have gone to the United States, including almost 100,000 of the Canadian Expeditionary Force. Does that not indicate that the time is ripe for a safeguarding act? The industries of the country cannot be nurtured or maintained without adequate protection. They cannot be helped by free trade, which is the "mildewed straw of the last century," as a well known authority once called it. Canada should safeguard employment by helping industries where the need for such action is palpable.

Under adequate protection I believe we could solve the unemployment problem by the development of the resources of the

The Budget-Mr. Church

country. Free trade produces low wages. For example, agricultural labourers in England are paid an average of $5 to $6 a week, and there is not a profession, trade, calling or industry in that country from John O'Groat's to Land's End in which the average wage is not just as low under free trade as that paid to the agricultural workers.

In England they are veering around to protection, although they have as yet gone only a little part of the way, in what has become known as the Safeguarding of Industries Act. I would ask hon. members to my left: Has England, under free trade, solved the unemployment question, the housing question, the low wage question, the question of hours of labour? No, it has not. Has England, under free trade, been able to abolish the poor law? Has it made the worker rich? Has it improved the lot of the skilled or the unskilled workman? No, it has not. Has it made old age pensions or doles unnecessary? Has it eliminated sweated goods from the market? Has it made employment more secure, or checked dumping? The answer is in all cases in the negative.

Unemployment is the most crucial problem in Canada to-day. But the government are unwilling to meet it; they fall back on the British North America Act and pass the matter over to the provinces and municipalities. The government would fight it without weapons, but if we are going to battle along as we have been doing we shall have graver unemployment in the future; it will be with us to the end of time. The only way I can see to fight it is by developing our own resources and safeguarding our industries, directly and indirectly; iby going the whole distance instead of a quarter of it as was done in England.

Abnormal conditions are still with us. Let us apply the principle of a national policy in order to restore conditions to what they should be, and, under such a safeguarding act as I suggest, prevent that unfair competition which arises where goods from foreign countries are offered for sale in Canada at prices materially below those at which similar goods can be profitably produced in Canada.

Will any hon. gentleman on my left say that one single labour organization in the United States would ever pass a unanimous resolution condemning the high American protective tariff; or that one single labour organization in America would ask for the reduction of the tariff of the United States? The American labour movement is all solidly protectionist, as is also what hon. gentlemen to my left would call the " American

capitalist." During the past quarter of a century, in spite of the high tariff in that country, not one single state has asked for modification of existing duties, and the whole tendency of tariffs everywhere has been upward. Ever since the war even France has carefully considered1 how to foster foreign industry so as to put British goods off the market, and where this can be done, up goes the French tariff every time.

The more I look into this question and consider the policy the government adopted with regard to the dumping clause to meet the wishes of hon. gentlemen to my left, the more I compare the Progressive party with the government, the more clearly I see that the only difference between them is the difference between Tweedledum and Tweedledee.

Mr. Shaw, the president of the Canadian Manufacturers' Association, gave evidence at the unemployment conference held in Ottawa last September regarding the depressed condition of industry. He pointed out that 1,351 industries had been closed down, and he enumerated them. I do not know whether his figures are right or not, but that is the evidence he gave, and it is in the Labour department.

The coal industry in the Old Country is going to follow the steel industry, which is in a very depressed condition at the present time. The plight of this industry is causing a good deal of anxiety in the Old Country, and if there is no improvement it will soon be a case of going to Germany, not Newcastle, for coal. The high wages, short hours, and increased cost of production in England have given Germany the advantage. The German miner works longer hours and for less wages than the English miner, and he is taking the English market away from him. An order has gone from England only recently to the Hamburg yards for five motor ships. If England loses the coal and steel trade to Germany, what will happen? England will gradually dwindle industrially, and also from a defence standpoint. These industries are essential to the safety of England and the empire, for a country cannot defend itself without iron and steel. If Germany wins the supremacy in the coal and steel trade that Great Britain now enjoys, when they come to take our gold, for instance, how can we defend ourselves? The iron and steel industry is essential to the very life and existence of a nation.

In my opinion, Mr. Speaker, the group system of government in this country has seen

The Budget-Mr. Church

its day. Criticize the old party system, if you like. It has its advantages, and its disadvantages. It sometimes leads men to stand by the party always, rather than for the good of the country; it leads men to extremes in some cases, and to forget the very basic principles for which political parties were formed. But when you criticize the party system and its defects, do not forget its virtues, for it has many. The mother of parliaments has given the empire the good government it has today, an example that has been copied all over the world. The group system is a different system. It has been tried in the Old Country and found wanting. The group system over there was destroyed last January by a most decisive verdict. The group system has been destroyed in the United States, as the Coolidge election shows. In June, 1923, in the province of Ontario, the Farmers' government was swept from office, after it had denounced manufacturers as thieves and robbers and preached blue ruin for four years in and out of season. So, Mr. Speaker, I say that the hope of labour lies wathin the old party system. The so-called Labour party in this House is composed of the hon. member for East Calgary (Mr. Irvine) and the hon. member for Centre Winnipeg (Mr. Woodsworth), but calling themselves the Labour party does not make them the Labour party. I do not know whether they represent even the labouring classes in Winnipeg and Calgary, let alone the labouring people in this country from coast to coast. Certainly they do not represent the workers of Toronto, for we have nine members representing them. I believe that the party system is the best system, and I firmly believe that the hops of labour is ' within the two old political parties. I quote from the Morning Post of London:

The best labour can do is to get back to the two old political parties where they belong.

In the province of Ontario labour got the best results from the two old political parties. Sir Oliver Mowat was not unfriendly to labour. He was a wise and sensible prime minister. His successor, Sir James Whitney, and Sir William Meredith gave the working classes the Workmen's Compensation Act, and the Hydro-electric movement. The morning Post says that the American workmen have renounced the idea of maintaining a Labour party separate from the two great political parties in the United States. That idea was always opposed by the late Mr. Gompers, the powerful and astute American labour leader, who preferred to sway the balance between Republicans and Democrats with the

votes of his fellows. As a matter of political tactics the principle of Mr. Gompers is obviously much more effective than the British plan of creating a separate party, and it has the further great advantage of economy. The Morning Post shows that the American unions have succeeded in obtaining higher wages and better conditions than the unions in Great Britain, despite all their political operations, and says that the results of political action on the part of British trades unions are depleted funds, a loss of some fifty millions sterling, and a permanent army of unemployed. So I believe, Mr. Speaker, that labour will get the best results inside the two old parties.

I wish to refer briefly to the railway question. I have always been a supporter of public ownership. It is not public ownership that is responsible for the railway 9 p.m. situation to-day; it is private ownership that is responsible. Public ownership did not build the Grand Trunk railway, or the Grand Trunk Pacific or the Canadian Northern. These roads were all built by private corporations, with useless duplication and great waste. These private corporations were assisted by subsidies, cash and land grants of every kind, and they were supported by some of the very newspapers which today are denouncing the National railways, which on the whole have presented not a bad statement for the year. Public ownership has not 'been a failure in Canada. The most shining example of a successful ownership undertaking is the Hydro-Electric Power Commission of Ontario, a system which has cost $241,000,000. Every contract was built ahead of time. It has reduced the cost of domestic lighting one-fourth, and of commercial lighting one-fifth. The rates are the lowest on the continent bar none. This movement has saved the taxpayers of Toronto $28,000,000. It allows for depreciation, and is earning interest and sinking fund.

With regard to the railway situation 1 sympathize with the Minister of Railways (Mr. Graham), who I believe is one of the most popular as well as the most efficient ministers of railways that we have ever had. I am opposed to cutting out trains, passenger and freight, on certain units, if that is going to result in handing over more and more of the Canadian National business to the Canadian Pacific railway. I believe in giving the National railways a chance. Sir Henry Thornton-you are almost guilty of contempt of court if you mention his name-made a fatal mistake in not letting the Hydro radials, the people's own railway, alone. They would

The Budget-Mr. Church

have been feeders for the Canadian National railways.

The Canadian National Railways should have worked with the municipalities and they would have got the cream of the business. The government talked about giving the National system a free hand. Why, parliament has practically effaced itself in the matter of the railway estimates. The Canadian National Railways had a deficit in

1924 of $54,860,419, which is just $3,162,744 more than in 1923. On the other hand the Post Office Department had a deficit for twenty-four years down to 1899. It has had a surplus ever since except, perhaps, when war conditions prevailed. As to the Canadian National Railways the net, before fixed1 charges, showed an improvement of $1,270,687, but fixed charges increased by $4,433,423 swallowed the increase in the net and made the deficit $3,162,744 greater than in 1923. The report of the Canadian National Railways shows that in spite of the decrease in gross earnings of $17,547,305, due to a smaller crop and general business conditions throughout the country, the company was successful in earning a net operating profit of $17,244,251, or $3,186,397 less than in the preceding year and therefore maintained "to a very considerable degree the rate of improvement during 1923 which was a phenomenal year in many respects from a transportation point of view." The operating expenses of the system were reduced by $14,360,907 to offset the reduction in gross receipts. This reduction could have been carried further, according to Sir Henry Thornton, if the management had considered it advisable to pay less attention to maintenance of way and structures. An effort should be made in

1925 to reduce these estimates further in the interest of econoifiy and efficiency and not be satisfied with a scale of expenditure which is too elaborate compared with that under private ownership.

In looking over the report of the Canadian National I was very much struck with its similarity to the report of the Canadian Pacific. The Canadian National Railways reports a decrease in operating revenues of $17,547,305 or 6.93 per cent. We have been told by the Minister of Labour (Mr. Murdock) that everything is lovely in the Dominion. We are told, however, by the president of the Canadian National of the adverse business conditions which obtained during the greater part of the year throughout Canada and elsewhere. We are told: "Traffic during the first three months of the year was in excess of that moved in the same period of 1923, but general

fMr. Church.]

business suffered a reduction early in April and the depression continued until the end of the year." The report of the Canadian Pacific contains this statement:

The working expenses for the year, including all taxes, amount to 79.60 per cent of the gross earnings, and the net earnings to 20.40 per cent, as compared with 80.86 per cent and 19.14 per cent respectively in 1923.

The gross earnings for the year were less by $13,334,933 than those of the previous year, freight earnings alone decreasing $10,794,416. Working expenses, however, decreased $13,083,165, resulting in net earnings, before deducting fixed charges, of $37,227,241, or a decrease under the previous year of $251,768. The decrease in freight earnings is largely accounted for by the much smaller movement of grain and flour, particularly the former, owing to the smaller crop in western Canada. There was also a substantial decrease in the movement of manufactured articles due to the depression which existed in Canada during the major portion of the year.

The time has come to get a sane railway rate policy free of government and legislative control, with equality of treatment and rates fixed from an economic and not from a political standpoint. Agricultural products are carried, as I said in the debate on coal, on a preferential tariff basis, and the grain growers of the west have also favourable rates at less than cost, and other classes of products must pay increased rates in order to extend this boon to the agricultural industry. There should be a revision of rates. Our railways should be run from a commercial point of view and there should be a reclassification. However, as the taxpayers of the country will have to meet the deficit on the system by the payment of taxes the effects of reclassification will not be very marked. Let me point out that there is a lot of waste land belonging to the railway in cities and towns of this country that could be sold and economies effected. There is duplication and waste in many directions which could be prevented. The hon. member for South York (Mr. Maclean) and the hon. member for North Waterloo (Mr. Euler) have recommended the cutting out of this duplication to which I would be sympathetic if it did not divert business from the Canadian National Railways to the Canadian Pacific Railway. No doubt the Canadian Pacific would approve of any plan likely to have that effect. There is no railroad on the North American continent under private ownership, that is spending capital in the way that the National Railways are. Certainly the Baltimore and Ohio, the New York Central, and the Pennsylvania Railways are not doing it; they are not spending money on betterments either. There is no use throwing bouquets at the management in view of the great deficit on the Canadian National, the stagger-

The Budget-Mr. Church

ing burden of taxation which is crushing the country, and the depression in business which exists throughout the Dominion. Let the National Railways cut out the expenditure on golf courses, on hotels-of which there is quite an epidemic-radio outfits, and branch lines. The Senate is to be commended for having prevented the construction of a number of branch lines. Had not the Senate intervened, there would have been more of a deficit from Canadian National branch line building and this would have added to the debt and fixed charges. The Senate in preventing these additions prevented a situation which would have necessitated a worse statement for the present year. We were told nearly three years ago that the new arrangement entered into would put the system on a paying basis. Two years have gone by and we are into the third year and the deficit on the National system is three millions more than it was last year. The overhead charges are going up by leaps and bounds, there was an increase of four and a half millions this year alone on this account, and $118,000,000 has been added to capital since last year. Even if this is an addition to the annual fixed charges it is still on the debit side of the account. After making allowance for a small crop, depressed business, and reduced freight and passenger earnings there is a falling off of seventeen millions in revenue notwithstanding that a cut of fourteen millions has been made in expenses. The system is going deeper and deeper into difficulty. It is said that the staff of the system is loyal. This is small consolation to the man who has to pay for the railway deficit in the form of taxation. Why would not the staff be loyal? That is what they are employed for. The Canadian National radio is working overtime reporting speeches of the president, vice-president and other officials. It is small comfort in view of the unemployment situation to learn that the Canadian National Railways has expended $124,290 on a golf course at Jasper, Alberta- with $4,895 additional for grass seed-and another $94,631 on a golf course at Minaki, north of Kenora; and that it is also expending fabulous sums on radios and other frills and fads.'No doubt also a fine new extension of contract to Sir Henry Thornton will be shortly forthcoming at a salary of $100,000 instead of $50,000. I imagine that this will also be a case of "wait and see".

I am very much surprised at the attack which has been made by this government on the Hydro Electric movement in the province of Ontario through the tax on the export of power. The export tax on electric power is 139

a direct tax on Ontario's great municipal ownership enterprise. The Provincial Hydro Commission is bound by long term contracts which it did not execute, but which were obligations assumed when the private corporations generating electric power were taken over by the Ontario Commission. These contracts with American consumers cannot easily be cancelled. If the export duty could be passed on to the consumer all would be well. But it is impossible to cancel these contracts. That electric power should not be exported is justifiable but the action of the Dominion government is not designed to preserve power for Canadian factories, its purpose is to augment the federal revenue. The net effect of the export duty is to impose directly an unwarranted burden on local consumers in Canada. Instead of equalizing the cost of power by taxing the American exporter who is now getting power generated in Ontario away below leas than cost, it increases the difference between the price paid by the Toronto manufacturer and his factory competitor in New York state, who is now getting power generated in Ontario away below less than cost. It increases the difference between the price paid by the Toronto manufacturer and his factory competitor in New York state. Two hundred thousand dollars of the four hundred thousand dollars which the government will net from this tax will be collected, not from the foreign consumer blit from the municipalities in central and .western Ontario. No tax could be more unfair and unwarranted in its direct effect. It is hardly possible that the government were fully aware of the unfair discrimination when the export duty was imposed. Strong representations are being made to the government by the Ontario Hydro Electric Municipalities Association to relieve this province from an intolerable burden. I may say that three hundred and forty municipalities of Ontario have been assessed for $200,000 of this $400,000 estimated in Ontario alone, and they say the people of the province of Ontario and the farmers of the province of Ontario have paid fabulous sums on this account. This movement started away back in 1905. I want to say to the farmers in and out of this House that the farmers gave to Sir Adam Beck-who may not be here with us much longer and whose illness we all regret. I trust he may get better and be long spared when he is so needed-the chief stewardship of $160,000,000 invested in Hydro-Electric on behalf of 2,200,000 shares in Hydro properties. The results that Sir Adam Beck achieved by his stewardship of hydro are set down in the following statement:

The Budget-Mr. Church

1. Every dollar of the $160,000,000 Hydro investment is earning interest and sinking fund.

2. Hydro investment saved Ontario from a coal famine that would have bankrupted the province in war time.

2. Hydro investment saved 2,200,000 shareholders over $75,000,000 in reduced coal, light and power bills.

4. Hydro investment saved Ontario over $100,000,000 on coal prices which would have gone to $30 per ton in war time but for the Hydro investment that gave Ontario the equivalent of 3,000,000 tons of United States coal per annum.

I doubt very much whether the act is legal, and I hope, as in the case of the Industrial Disputes Act, that the matter will be taken to the Privy council because the Hydro Conservatives of Ontario are the protectionist party. They supply the protectionist principles of public ownership, and if any gentleman doubts that public ownership is a protectionist principle I reply, as I did last year, that public ownership is protectionist in the true sense of utilizing the public resources of the country for the benefit of the people of the country. Protection as applied by the Hydro Conservatives of Ontario has fought the battle of the masses as against the classes, of the people against their oppressors; I mean what the Hydro Conservatives have done for the sections of Ontario that get their power from public ownership; I mean what the Hydro Conservatives of Ontario were prevented from doing for the gold mining country that is forced to get its power from private ownership. The Hydro Conservatives of Ontario supported Adam Beck in his effort to electrify the Timiskaming and Northern Ontario railway after Sir James Whitney's great victory in 1905. The Hydro Conservatives wanted to protect the mining industry with a supply of power at cost. The Hydro Conservatives believed with Sir Adam Beck that the Temiskaming and Northern Ontario railway should be electrified, and that that railway should serve as a trunk power line. From that trunk line, power could be carried to every camp qpened up in the mineralized zone. I say that I doubt very much whether that act is legal. I asked some questions in regard to it, and I am sorry to say they are not answered. I doubt if anybody will answer them, and we are not allowed to put them on the order paper. It has been charged that the Conservative party was in league with the big interests. The Conservative party started the Hydro Electric movement, and I say it is doubtful whether the tax which has been imposed is legal. In regard to the legality of the tax I asked some questions, and I said:

Will the Acting Minister of Finance secure an opinion from the Department of Justice as to whether:

(1) The export tax on power based on an order-in-Council and on R.S.C. 6 Edward VII c. 16, which seeks to give power to impose export duty not to exceed 10 cents per annum per horsepower on power exported, is intra vires of the Parliament of Canada or not, inasmuch as the power .taxed is generated from works or undertakings which are wholly within the province, and have not as yet been declared to be works or undertakings for the general advantage of Canada.

(2) That the said tax is retroactive and taxes contracts made which are wholly within the province, and that the said tax is indirect and an infringement of property and civil rights in the province and is outside the scope of subjects by section 91 of the British North America Act exclusively assigned to a federal authority;

(3) And that the international waters used to generate the direct current exported is from the surplus waters after the rights of navigation under federal control have been satisfied, and is of the surplus waters from the bed of the river, and the banks and rapids of the Niagara river wholly belonging to the province;

(4) And that such a tax could only be imposed by the province under section 92; and further that such a tax is to be levied on the export licensee who is wholly within the province, and whose long term contracts cannot be made the subject of retroactive federal taxation on many grounds;

(5) And that the said tax is ultra vires on the aforesaid and other grounds, and on the ground that the indirect method of assuring the said tax from the municipalities is an invasion of provincial and municipal rights under section 92 and is not specific against the exporter who uses and gets the benefit of the exported direct current;

(6) What machinery is, or has been, provided to collect said tax and from whom will it be collected and when, and how will, in default in payment, a collection be made and by whom?

(7) Will the minister consult with the Justice department as to whether such an indirect tax is legal, and if it can be collected from the municipalities using hydro power on a long term contract to which they have no privity, and for which they receive no consideration?

(8) Can said tax be collected without the express consent of the parliament of Canada as is proposed here based only on R.S.C. 6 Edward VII C. 16 above, and without further legislative enactment?

I believe those are good, legal grounds under which that legislation could be set aside in the Privy Council. The contest will take place in Ontario, in defence of public ownership, and in defence of 8250,000,000 of the people's money. In the interests of the industries of the province the tax will have to be set aside. The Industrial Disputes Act was contested, it was declared to be ultra vires, and they spent 845,000 or,$50,000 in the contest as to its validity. This tax should be contested and 8100,000 should be spent on the contest if necessary.

I want to read the following despatch, which will show fairly well the situation in regard to the export of Canadian power to the United States and how it will aid a great super power trust over there and injure the Hydro in Ontario by forever holding the ipower exported.

The Budget-Mr. Church

Rearrangement of capital and securities of the electric power companies whose names follow, comprises the first leg of a super power merger that will extend from Niagara Falls, perhaps to San Francisco, and its component heads will endeavour to bleed Canada of several million horse power of electric energy to feed the leviathan:

Niagara Falls, N.Y., Power Company.

Canadian Niagara Power Company, Niagara Falls, Ontario.

Niagara, Lockport & Ontario Power Company.

Buffalo General Electric Company.

To make this giant caterpillar function properly, it is required that some 4,000,000 h.p. of Canadian origin be tapped, not only because that much added energy from the Ottawa and St. Lawrence sources is needed, but also if the Mellon-Harriman-Dupont interests who are planting the chain of fortresses now can get a foothold on the Ottawa, and are able to export power to United States, the Ontario Hydro Electric Power Commission will be blanketed and confined to the area in which it now gives service. The Northern Ontario pulp and mining areas will be isolated from the commission.

The companies named are preparing for the merger which, when consummated, will form the first unit of the super power merger. Buffalo General Electric Company, which serves light and power to Buffalo area at double Hydro rates, is getting ready to expand its capital to give one new share for each five now held by shareholders.

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

BOOSTING THE STOCK


Buffalo General Electric Company has $25,000,000 of capital, all common stock. This will be enlarged. Niagara Falls Power Company has assets of $81,000,000 including sole ownership of Canadian Niagara Power Company, the latter located at Niagara Falls, Ontario, with $3,000,000 capital, and which exports 50,000 h.p. of Canadian origin to Niagara Falls Power Company. Thence, the latter company sells power to Buffalo General Electric Company. In addition, the concerns mentioned are already tied to Niagara, Lock-port and Ontario Power Company, which is a $35,000,000 corporation owning a 450-mile right of way from the Niagara river into Syracuse. So that the first unit has capital of $141,000,000 now which will be later expanded. Niagara & Lockport Company serves 2,000,000 people in 17 counties in central and western New York. Niagara Falls Power Company owns one-third of Niagara & Lockport Company, which pushes the juice generated on both sides of the falls as far as Syracuse and the rest of Niagara & Lockport Company is owned by the Aluminum Company, dominated by Mr. Mellon, Secretary of the U.S. Treasury. By interchange of power contracts, the monopoly then gets into Pennsylvania, and through the Adirondack region by means of Adirondack Power & Light Corporation, which is owned by the General Electric Company. Another tentacle is added by means of New York Utilities Company, which controls power generation and service from Syracuse to Massena, on the St. Lawrence river. Also there is connection with New England States. All through the fields mentioned, which contain about half the population of the United States, there have been mergers of the smaller units, in preparation for a final merger into a great holding company, or at least into control of the most powerful power bankers of the United States. This includes the Harrimans, the Duponts, the Mellon group, General Electric and others, who with their subsidiaries and affiliations are dealing in 17,000,000 h.p. of electric energy. Tracing this power caterpillar, with its hundreds of subsidiary legs, from Niagara Falls to Massena, on the St. Lawrence, brings the matter to 13&i the point where Canada is directly interested, and may be most adversely affected. Well informed power men say that because Dr. MacDougall of Montreal aided Mackenzie King in the St. Antoinp election, that the doctor has been promised the lease of Carillon rapid on the Ottawa, and if he gets the same, the Harriman interests will be standing ready to finance the development of that generation of power, estimated at 400,000 h.p. If the Carillon lease is given out, and if satisfactory terms of power export with the Dominion government can be stabilized, then the Mellon-Harriman-Dupont group can look forward to tapping Canada to this extent: 400,000 h.p. from Carillon rapid to be exported to United States to feed the super merger. 1.000. 000 h.p. from the international area of upper St. Lawrence, to be also exported. 2.000. 000 h.p. in Quebec powers to be picked up and harnessed for export to the United States. If the Canadian end of the coup goes through, and the Americans become entrenched on the Ottawa, they will turn a valve that will throw millions of h.p. of Canadian energy across the line, following our pulp-wood, nickel, copper and other raw materials. Of the income from power sales, 7 per cent is derived from the power sale, and 93 per cent is contained in the value of what the power produces. So in all export of power, Canada gets 7 and the other fellow gets 93. The super power merger indicated does not immediately and directly threaten the Ontario Hydro Electric Power Commission. But, if United States interests dig themselves in on the Ottawa river banks, they will block the route of Hydro from extension into the northern Ontario mining, pulp and settlement areas. In connection with this matter it is interesting to note that the recent promulgation of the Ottawa government, in the charge of $2 per h.p. for all power exported from Canada, is already creeping into the rates charged by the Buffalo General Electric Company. That corporation has already notified customers that the consumer must pay, although how they will translate the charge into increasing a monthly electric light bill rendered in terms of so many kilowatts is difficult to determine, because such charge must be almost negligible. That is the condition of affairs which the Hydro Electric movement in Ontario will have to fight. The Hydro system has cost some $241,000,000 and it has paid its way. There is to-day a scarcity of power in the province of Ontario and the people of Brockville, Ottawa, Peterborough, Hamilton, the Niagara district and the people of western Ontario generally are clamouring for supplies, as some of our Progressives of Ontario know. I do mot see why the government should have singled out public ownership for taxation in this way. Is not the government friendly to the Hydro Electric system that it should tax it in this way without giving it a chance to answer in its own defence? I want to say a word now with regard to the grain question. Last year I urged an export duty on hard wheat to aid in having our best grain, now going through the United1 States, shipped from Canada instead. I have made a year's study of this question since and have consulted experts and millers; and I have The Budget-Mr. Church



examined the bulk of government reports on the subject. I have also taken the trouble of visiting the mixing centres in Buffalo and other parts, and I do not blame the fanners of the west for organizing to destroy the gigantic trust which to-diay has the mam who grows grain at such a disadvantage. I regret that lack of time will not enable me to go fully into this question, but the report which has been submitted by the commission that investigated this question is interesting in its way. We had a commission comprising a judge and two university professors looking into this subject, and I want to say that if you want to have anything impractical you have only to get university professors to report upon it. Instead of a commission of business men who know something about the matter, the government spent $200,000 on a commission consisting of a judge and two professors. I read the following from the report of the commission: At the present time, the duty on Canadian wheat- entering the United States-is 42 cents per bushel. On wheat flour, semolina, crushed or cracked wheat, and similar wheat products, the duty is $1.04 per hundred ponuds. These duties are practically prohibitive, in their effect. They prevent Canadian wheat or wheat products having access to the American domestic market. On the other hand, under the provisions governing milling in bond and drawbacks, it is quite possible for the American millers to obtain Canadian wheat virtually free of duty to grind for export. Considerable quantities of Canadian wheat are ground in American mills and exported abroad under these conditions. This American flour ground in American mills, but the product of Canadian wheat, enters into competition with the output of the Canadian flour mills. The benefits of manufacture are lost to Canada, while at the same time, the general benefits of reciprocal free trade in wheat and wheat flour do not exist. It was suggested to us that in view of these conditions, an export duty should be levied at the same rate as in the American tariff, upon Canadian wheat and wheat products entering the United States. The American tariff having already closed effectively the domestic market to the Canadian farmers, the result of such a levy would be to eliminate the export of American flour ground from Canadian wheat, and to transfer this market to the Canadian millers. While, as a general thing, export duties are to be deprecated, the exceptional situation that arises in this instance might warrant such an import. As I have said, during the recess I visited these mixing places, and I am one of the most surprised men in Canada that such a condition of affairs should be allowed to exist for one moment. I think that an export duty should be levied to prevent Canadian wheat from going into the United States. At present the port of Buffalo is being built up by means of Canadian wheat going there; our wheat is mixed in the United States and then shipped overseas from that country with the American certificate. There are twenty-eight elevators in Buffalo to-day, every one of which should be in Canada, and if we had an embargo not one of these elevators would remain across the line. Buffalo to-day is taking the place of Minneapolis, so much so that the millers are building elevators. I was in conversation with a Mr. Barnes, a great transportation and elevator man, and he is spending millions of dollars in this connection. I was surprised to find in a pamphlet issued in Buffalo a statement to the effect that at the present time Ontario is being drained "to make a greater Buffalo." The House will note that statement, which is significant. Now then, the sky line has been rattling some since the embargo was proposed. This is the background of the huge structure. I may say that the Washington tariff buttress against Canadian wheat and flour is a most ingenious scheme, as I pointed out, to prevent these products competing with agriculture and milling on this side of the line, while at the same time encouraging Canadians to ship as much of their grain and dour for export through the states as possible, permitting Buffalo elevators and similar warehouses in New York, Baltimore and Philadelphia to exact a rich toU from the traffic, as well as the transportation companies to levy the maximum charges for their service. As I explained in my plea for protection of Canada's vast grain and mill traffic against foreign aggression, Buffalo boadts in every piece of literature placed before the public of the value of this Canadian business as- a factor in contributing to the development of the port, and painful as this may be to the pride of Canadian people, Buffalo is guilty of no exaggeration in this boast. Buffalo publishes annually through its publicity bureau a text book of growth, industrial strength and reasons why big factories should be located here. In this volume of 224 pages there are innumerable references to what the port gets from Canada-how Ontario is being drained to make a greater Buffalo. Note this gem under the caption of "Centre of economic assembly," page 89, in the issue of March 21, 1924: The second feature of Buffalo's market territory is the fact that Buffalo is strategically located with regard to the control of the Canadian trade. In fact, of all the American industrial centres Buffalo can claim this advantage as peculiarly her own. Canadian markets for American manufacturers is a certainty. At this time, in spite of an unfavourable tariff, 67 per cent of Canadian purchases are made in the United States. During 1923 imports to Canada from the United States increased from $501,445,464 to $615,205,580. Three-quarters of Canada's industrial population lies within Buffalo's market territory. In fact Buffalo can be said to be the gateway to Canada. The greater Canada becomes the greater will be Buffalo's advantage as the distributing centre for the markets of Canada. The Budget-Mr. Church I asked an officer of one of the largest flour milling companies in Buffalo what would happen in his city if the proposal became law to have Canada put an export duty on grain and flour entering the States equal to the import duty on those products imposed by Washington. He looked serious, and replied, "I don't like to contemplate such a thing. I am afraid it would not only deal Buffalo mills and elevators a serious blow, but would be felt in these industries all over the United States. Our customs laws, of course, are for the protection of American farmers, but they are framed to permit Canadian grain and flour for export passing through the States in bond with the least possible delay. Of course, American mills must have a very considerable percentage of Canadian hard wheat to blend with United States soft wheat to manufacture the best grades of flour. This is specially necessary for the export flour trade of the United States. Our flour could not compete in the world markets where the best grain is purchased, otherwise with the Canadian article. Then, too, where our flour is shipped through the torrid zone, the soft varieties will not stand the hot, humid atmosphere with which it comes in contact. That is the reason Washington exempts Canadian grain, milled here in bond, from the operation of the 45-cent duty. If our mills could not have this trade equality with Canadian flour, I am afraid some of them would have to establish plants on the Canadian side to take care of a considerable portion of their export trade." For 1923 the United States total flour export was 14,882,000. a monthly average of 1,248,000 barrels, 149,000 barrels less than Canadian mills exported in the month of March, 1924, and the United States monthly average for 1924 does not show the proportionate increase as recorded by the Canadian trade. Buffalo has eight great mills with a total daily capacity of 61,000 barrels, while in Canada there are a total of 1,333 mills with a combined daily capacity of 128,225 barrels though 163 of the largest account for 110,000 barrels of this daily capacity for the Dominion. What relation to the tremendous growth of Buffalo's flour milling has the suspicion that something is wrong here in the handling of Canadian grain in bond en route to the world markets, and the flour ground in bond here from Canadian wheat? Our royal grain commission went into this matter, but no definite proof of the evil was secured, although the suspicion was very strong. Here is the way Canadian grain gets into a bonded warehouse, and the way it gets out. A vessel arrives from the Canadian lake head with grain; a customs officer is notified before it is unloaded; if it is going through in bond to the United States seaboard, after the customs officer examines the bill of lading he sees it unloaded into a bonded warehouse. The grain is in possession of the warehouse company until it is ready to continue to the seaboard. Then one of Smith's deputies is present as the grain is transferred to a freight car or Erie canal barge, or perhaps it is moving out via Montreal. The seals are broken only by a United States customs officer as it passes into the floating elevator or into the vessels at the seaboard. If one of the Buffalo mills receives a cargo to be ground into flour in bond to be shipped out of the country, a customs officer watches the transaction and sees that the quantity of flour, corresponding to the bonded grain handled, is moved on to the seaboard, and this in turn is still under the control of the United States customs until loaded into the ' ocean vessels. The United States government is not interested in determining the quantity of soft wheat flour "blended" with the Canadian hard wheat bonded flour, but only is seeking to prevent any of the flour from the Canadian bonded grain remaining in the United States unless the 45 cents a bushel duty has been paid. But there have been repeated and persistent complaints from the buyers m the United Kingdom that somewhere between the time the Dominion government inspection at the head of the Canadian lakes is made and the arrival in Liverpool soft wheat is frequently mixed with these consignments. One notable case is still pending in the courts involving a claim of $35,000, the difference between the grade called for by the Dominion government certificate and what the buyers claimed was the quality of the shipment when it reached them. This cargo was sent via Baltimore and has been the subject of repeated United States investigations but if there was "bootlegging" the responsibility has not yet been determined. But the toll levied on the Canadian grain passing through the Buffalo elevators is but a fraction of the cash extracted from these products of the Canadian farmer by Amercian interests before it passes out of their hands. You will find that the Erie barge canal is spending millions of dollars to take care of this export Canadian trade, and undoubtedly there is a big profit made by the elevators. For each bushel capacity an elevator costs from $1.50 to $2.50 per unit. This would The Budget-Mr. Church


April 17, 1925