February 18, 1926

PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Winnipeg):

I do not

want to be offensive to the hon. member and possibly if I explain what I mean it will serve the purpose. Under that system of rural credits, rural credit societies were formed in various municipalities. A board was created in the municipality consisting, I think, of nine members or directors. If I were a farmer seeking a loan in the province I would have to go to the society in my own municipality and put in my application to that board of nine. Now the intention of the legislation was good. The government took the view that no better advice could be obtained as to the desirability of any particular loan than the advice of nine men who were right in the heart of the municipality where the borrower lived. And in theory that is all right. But hon. gentlemen know that municipal politics are just as heated sometimes as provincial, and just as keenly contested as Dominion politics; under that system a temptation crept in among the members sitting on the board to pass loans, not on the strength of the security offered but because of other considerations. I do not think that the hon. member for Brandon will suggest that this phase of the question was entirely absent from the rural credits scheme in Manitoba. I do not say that it has been widespread, but just the same it is one of the weaknesses of

1150 COMMONS

The Address-Mr. Kennedy (Winnipeg)

the system. In any event the result of the operation of rurail credits in that province has been an obligation on the part of the government for S3.000.000, of which as I have already said $700,000 has been dissipated, and before the thing is through at least half of that total sum will represent a loss to the province. And by whom will that loss be met? It will be paid for by the taxpayers of the whole province, not only by those engaged in farming alone but by people in all industries throughout Manitoba. They are the ones who will have to pay that $1,500,000 for the benefit of a certain number of farmers who borrowed and defaulted in payment. If that were all it might not be so bad, but there is another aspect.

In many cases, instead of being an assistance to the farmers themselves for the purpose of developing their farms and improving their position in the community, the loans have only served to put them deeper into debt from which they will never be free, so that ultimately when the government endeavours to realise on the loans they will find that many of these farmers whom they sought to help have been ruined by the very generosity extended to them and will be driven from their farms. The hon. member for Brandon will, I think, agree with that. That is why I say at this stage it is impossible for any member to deal intelligently with the question of rural credits.

There is another matter that interests me and which I almost hesitate to mention because of the warning I received in the election just past as to the attitude that would be displayed by members from the east. You can guess, I think, that I am referring to that old political chestnut, the Hudson Bay railway. I am quite aware that that measure will receive support from a number of members on the opposite side of the House while it will be opposed by some other hon. gentlemen over there. I am aware too that it will be opposed by some members on this side while it will receive support from others in all quarters of the House. On the question there is a great diversity of opinion. When the matter comes up for consideration it will be the duty of those of us who support it to bring to the attention of the House all those reasons which we can fairly urge in its behalf. I am not going to go into details now, as I hope to have the privilege of discussing the subject on a subsequent occasion. I shall simply touch upon it in passing. I want to give you the picture of the Hudson Bay railway as it stands to-night. We are sometimes told, "You members from the west want this

Hudson Bay railway whether it is feasible or not. You want the Dominion of Canada to dip into the treasury and spend millions of dollars on a thing that is economically impossible".

Well, let me first ask those hon. members who are of that mind this question: by whom were we encouraged to believe that the Hudson Bay railway was a practical proposition and one that would be carried to completion? Is the answer to be found on one side of the House alone? I say that if you will examine the records you will find that right back to the days of Sir John A Macdonald every Prime Minister of prominence of whom I know has at one time or another expressed himself in favour of that railway; and not once or twice, not ten times, but on scores of occasions members of parliament from both sides of the House have gone to the west at election time and definitely and explicitly promised the completion of that railway.

WThat was the stand of the late Sir Wilfrid Laurier in this matter? He was a great champion of that railway. It was under his administration that the contract for its construction was let. The Minister of Railways (Mir. Graham) in 1910 turned the first sod, but the government of that day failed to turn any more. The following administration under the Right Hon. R. L. Borden proceeded with the construction and continued it until the war put a stop to it. Now what is the position? Under the Borden administration the whole line from the Pas to Port Nelson was graded, steel was laid for three hundred miles, and switches and other accessories were installed. At Port Nelson millions of dollars were expended on terminal facilities. Large quantities of materials were brought in through the channel which is not supposed to be navigable, and those materials are still stored on the shores of Hudson bay at Port Nelson. Today another ninety miles of steel will complete the road. To date approximately twenty-two and a half million dollars has been expended on the undertaking. How much more money will be required to complete it?

I do not know, but here is what we are up against. I have recently received, as no doubt other members have, a pamphlet from Calgary giving pictures of floating icebergs in the straits during practically every month in the year. Personally I am not in a position to say whether those pictures represent abnormal conditions or not; but I do know that experts engaged by past governments have examined the route, and while it is true that those opposed to the completion of the road can produce experts to say that it is not feasible, yet many honest and reliable men

The Address

Mr. Kennedy (Winnipeg)

who have been on the spot say that the route is practicable.

Now, I grant you, Sir, that with this conflict of opinion, if we were initiating the road, I would not vote a single dollar for its construction until something more definite and concrete was presented to me. But with three hundred miles virtually ready for operation and the balance ready for the laying of steel, with twenty-two and a half million dollars already expended, and the road promised by all governments practically since confederation, I say that if the expenditure of further money within reason to complete the road forthwith did no more than prove that as a grain route to the markets of the world it is not practicable, it would be money well spent. And for another reason, that it would remove once for all a question which at every election is no small factor in raising dissension between the east and the west at a time when the expressed desire of all Canadian statesmen is for a strong and united Canada.

I think, though, that the House should be given the information that was asked of the leader of the government as to what extent he intended to commit this parliament to further expenditures for completion of the road. While I desire its completion, yet I know I would not be representing the best interests of my constituents or of the people of western Canada if I worked in season and out of season for the expenditure of large sums of money which would be wasted. I say that the attitude taken by the right hon. leader of our party in favour of spending such an amount of money as is necessary to give that route a proper test is the correct attitude to take, and I do not believe that members from the west, if they consult the interests of their constituents and their own real convictions, will ask for more; but that much they will ask for, and in pressing their demands I intend to bring to the question such energy as I can exert and the results of such investigation as I personally can make respecting this undertaking.

Now, while it does not appear in the original Speech from the Throne, yet in what is referred to as the supplementary Speech from the Throne there is a promise of some legislation along the line of old: age pensions. I am in sympathy with the principle of such legislation. I think I have gone far enough along the road of life to believe that in the final analysis a country is responsible for seeing that those of its people who are aged and infirm and no longer able to fare for themselves are not allowed to starve. I believe in the principle that they should at least be

taken care of. I believe that a reasonable measure in this direction will find support in all parts of the House. With a view to obtaining information, I placed on the order paper early in the session a question as to whether or not the government proposed to include in that legislation some measure of relief by way of pension for the blind. To that I have received no answer.

The Speech from the Throne suggests something which was intended, I think, to meet with the approval of members from the Maritime provinces. I will not attempt to go into the question or to discuss their needs. We have heard from them at length, and their views have been put forward very ably. Unless I am mistaken, I gather that what is suggested in the Speech from the Throne is not really what they want. It occurs to me that the offer of a royal commission, instead of mollifying the members from the Maritimes, haa rather increased the urgency of their demands for something a little bit more tangible.

So much for the measures forecast in the Speech from the Throne. I wish to refer, now Sir, to some of the things that appear to me to be lacking, for I feel that not having expressed any animus against the government in the discussion of these matters in which I see some element of virtue, no one will deny to me the right at least to criticize. When I look through the Speech from the Throne I suggest to the government that it is not unreasonable for me to expect to find there the legislation which during the election the leader of the Liberal party told the country was so urgently needed. It is not surprising that I would expect to find some proposals to deal with those pressing problems which, at 'Richmond Hill, the leader of the government declared could not longer wait for solution.

Now what were those pressing problems? I want hon. members to mark them in their minds and see to what extent a solution is offered in this Address. Speaking at Richmond Hill, as reported in the Ottawa Journal of September 7 last, the Prime Minister asked, "What are some of the national problems pressing for solution?" and he said:

First and foremost is the problem of taxation.

Well, do you find any suggestion in the Speech from the Throne as to alleviating taxation? He goes on to say:

I can see no solution of the problems of taxation, no means of reducing materially our public debt, our income tax, our sales tax and other taxes, apart from a satisfactory solution of the four problems I have mentioned.

1152 COMMONS

The Address-Mr. Kennedy (Winnipeg)

When the matter of income tax was mentioned early in this debate, if I am not mistaken, the hon. member for Brandon when referring to it intimated that he was not very much concerned with cutting down the income tax, or that he would not favour it. Well now, what prompted such an expression? What about the sales tax? What about various other taxes which have the effect of holding back the wheels of industry? who pays these taxes? If it were true that when I pay income tax this same tax would not affect my neighbour. I could very well understand the selfish interest that would prompt him to say "I am in favour of keeping on the income tax." It is the same with the sales tax and a multitude of taxes. But in the final analysis all taxes come out of the producer, and therefore what is for the benefit of the man who pays the income tax is also for the benefit of the producer, in so far as reduction of those taxes is concerned, and I say that we should endeavour to give business an impetus in this country, to unshackle industry by cutting off all special taxes at the earliest possible moment.

Sir, while no solution appears in the Address I will suggest one avenue through which some relief might come, and the avenue I suggest-is that the government concern itself with collecting all the customs dues which are properly payable into the exchequer, and not permit goods to be smuggled into this country wholesale, brought in by people without paying the customs duty. If it is true, as has been charged, that not one million but many millions of dollars have been lost to the treasury of this country through that channel, then I say that every million dollars collected in that way by the diligence of the government means that by that amount it will be able to reduce the extent of the other taxes collected from the honest people of the country. While these smugglers of whom we have heard so much, these pariahs of business, become wealthy by evasion of the customs laws of this country, honest business men find themselves unable to meet their honest debts, and while these men with their ill-gotten gains parade the streets of our cities, honest business men are closeted with their creditors.

I say to this House and to the government: that if the government knew that smuggling was being conducted in a wholesale way, as the charges would indicate, then it was the duty otf the government not to wait until forced by a resolution of this House, but on its own initiative to take proceedings to stop it, and to see that the exchequer was recouped. I suggest that it would not be amiss, under the heading of taxation, to have inserted in

the Address something to this effect: "That

your government regrets that many millions of dollars of the money of people of this country have been lost to Canada by smugglers bringing in goods from foreign countries without paying the customs duty thereon, thereby defrauding the treasury, and that this government expresses its intention to proceed forthwith to rectify that state of affairs." However, that apparently is not the custom, so far as governments are concerned, in the Speech from the Throne.

The second problem mentioned by the Right Hon. Mackenzie King at Richmond Hill was the matter of transportation. Is there any concrete suggestion in the speech as to a solution of that problem? Is the "building of the Hudson Bay railway forthwith" the real solution of the transportation problem of Canada? I think some of my friends from the Maritime provinces will not agree that it is. Many from the province of Alberta who want to get their coal into centra! Canada will not agree that it is the whole solution. Right there I want to point out to this House that the Speech does not represent a real effort on the part of the government to bring about a solution of this country's problems. On the contrary, it represents an attempt by this government to obtain support by suggesting these measures which it thinks will appeal to some of the groups in this House.

Another one of the four problems mentioned by the Right Hon. Mr. Mackenzie King was the matter of immigration. I will deal with that later, but in passing I may ask what solution of the immigration policy is offered by the government? They have told us that they have entered into an agreement with the railways for the purpose of encouraging immigration into this country, and by the terms of that agreement they are getting people to come in by guaranteeing these people employment for five years from the time of entry. I suggest to this government that it would be a sounder policy, in dealing with the matter of immigration, if, instead of guaranteeing employment to people who are not here, they should adopt a policy which would give employment to people who are here in order to hold our people here and prevent them leaving the country. Surely the basis of a sound policy in the matter of immigration is not to bonus people to come here, but to make conditions in Canada such that those who are here can make a living and remain in Canada. If you do that and make the country prosperous you will not have any difficulty in bringing people to Canada.

The Address-Mr. Kennedy (Winnipeg)

The other and last matter with which he dealt was the fiscal policy. He called it one of the outstanding problems. Well, there is some mention of that in the Speech from the Throne. It says:

My ministers are of the opinion that a general increase in the customs tariff would prove detrimental to the country's continued prosperity and prejudicial

to national unity.

Now what is that? Is that a solution? It is not in itself a policy. It is simply a statement of negation of policy; it offers no solution. It simply says that to do something would not be good for the country. To be fair, the Speech does suggest the appointment of a tariff board for the purpose of studying tariff conditions in this country and seeing what changes should be made. Now is the tariff a new question? Is it not discussed on every election platform during every election campaign? It has been since I can remember, and I believe since any hon. member of this House can remember. Has not a great amount of data been gathered by the departments upon that question already? I submit that with all the data at its disposal the government ought to do one of two things: it ought to declare definitely either that it believes in a policy of protection of industry in this country, or that it does not so believe. They did not do that in the last campaign, but they did it once. In August, 1919, when the National Liberal Convention was held in the city of Ottawa, among other resolutions, one was passed on the tariff. On that occasion they were very specific. I shall not read the whole resolution, but only those portions that are pertinent to my argument:

That the best interests of Canada demand that substantial reductions of the burdens of customs taxation be made.

Did you hear any reiteration of that during the recent campaign? They go on to say, and I ask Progressive supporters of the government and also the Liberals from the west who delight to be connected with the party that always keeps its pledges to pay attention to these words:

That, to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery: farm tractors, mining, flour and saw-mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net-twines and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into same.

That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption.

And they finish up by saying, so that there shall be no doubt where they stand:

And the Liberal party hereby pledges itself to implement by legislation the provisions of this resolution when returned to power.

Now they were returned to power, I think they will admit, in 1921, and did they implement these pledgee? Did we hear any repetition of those promises during the recent campaign? Did we see any indication of their intention to proceed along those lines foreshadowed in the Speech from the Throne? Not one single word. Only do they say that they believe a general raising of the tariff would not be good.

Mr. DARKE. Does the hon. gentleman contend that no reductions have been made in the tariff by the Liberal government?

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PRO
LIB
PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Winnipeg):

I contend

that there were no substantial reductions all along the line, or anything approaching it. I contend, further, that the Liberal government as at present constituted does not intend to bring in any substantial reductions all along the line, or anything like it.

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LIB
PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Winnipeg):

We can

judge them by their past performances and by what is suggested in the Speech from the Throne. If they believe in these substantial reductions, why do they not say in the Speech from the Throne that they intend to put them in force? What do they do? They simply shirk the question by saying: We will appoint a commission to inquire into what changes should be made.

Topic:   P.C. 1758.
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LIB

Francis Nicholson Darke

Liberal

Mr. DARKE:

Is it not a fact that the right hon. leader of the opposition (Mr. Meighen) has declared himself in favour of a tariff commission?

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PRO

Donald MacBeth Kennedy

Progressive

Mr. KENNEDY (Winnipeg):

Quite 90, and I am in favour of it. But there is this difference: the right hon. leader of the Conservative party declared his belief in the efficacy of a tariff commission in 1912, and a bill looking to the creation of such a commission was introduced into this House but was killed by the Liberal party in the Senate. That is the history of the tariff board. It is true that t'he present time it is a plank in the platform of the Conservative party, but with this difference from the policy of hon. gentlemen opposite: The Conservative

Hudson Bay Railway

party's policy as to a tariff board starts with the premise that the Conservative party believes fundamentally in a policy of protection for building up the industries of this country. With that as a basis, it says: We will appoint a tariff commission, which, believing in that policy of protection, will head right into the storm, face the needs of this country, and give this country a tariff policy which is suited to the needs of the country. I submit that between that attitude, and the appointment of a tariff board by a government which says it believes in substantial reductions, but never carries them out, there is alll the difference between life and death so far as an effective policy is concerned. I hope I have made myself clear to my hon, friend.

Mr. Speaker, I move the adjournment of the debate.

Motion agreed to and debate adjourned.

On motion of Mr. Lapointe the House adjourned at 11 p.m.

Friday, February 19, 1926

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February 18, 1926