April 23, 1926

?

An hon. MEMBER:

They won't pay it.

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

Thomas Erlin Kaiser

Conservative (1867-1942)

Mr. KAISER:

My point is this: When you look over the list of articles that are now paying a duty of 35 per cent or thereabouts, why should our automobile industry be singled out from all the rest and have this drastic cut made? I think that is a fair question to ask.

We had a delegation of workingmen and returned soldiers come here to:day from the city I represent in order that they might express their opposition to this cut in the duty on automobiles. There is no question that in their minds and hearts there is a feeling of protest against the action of this government. For the last three weeks there has been a feeling of unrest in the city of Oshawa and in the county I represent, because information had gone out from the capital of this country that something might be done in connection with the tariff on automobiles. The people of our city were disturbed by this report. They came to me as their representative and I said to them: "Do not be afraid." The reason I told them not to be afraid was that we had as Minister of Finance a Scotchman and a fair-minded man, and in

order that I might back up my opinion I took my old Hansard and I read to them the words the Minister of Finance used one year ago when he pointed out that this country needed the revenue from the automobile tariff, when he said there were too many automobiles in this country, and when he told the House and the country he was not prepared to vote for the amendment offered on that occasion by a representative from one of the western constituencies. I argued that this man would never stand up in the House and say that this industry should be shot. I expected that he would defend us because of his past record, and because of the faith we had in his common sense. Can you imagine, Mr. Speaker, the outraged feelings in my mind and the widespread disappointment in the city I represent when these men read in the press that the Finance Minister stood up in this House and without warning, without giving our industries a chance to explain their case, reduced the tariff to such an extent that it threatened the very existence not only of our industries but of the city I represent? I stated, when I went home, that I was amazed and alarmed at the situation; that the only satisfaction I had was that as I listened to the Minister of Finance when he announced this cut in the tariff on automobiles, I ob served that he said it with a lump in his throat. We are amazed; we W'onder at the situation; we ask ourselves how came this about? Why this change of mind? It drives us back to the original conclusion that" the one thing that is wrong is the effort of this government to hold power at any cost, and at the dictation of a few men whom they would otherwise expect to vote against them.

We believe, Mr. Speaker, that this government was absolutely defeated on the 29th of October last. We believe that the people of this country pronounced against them, and pronounced against their policy, but we never dreamt that in order to hold on to power they would think of destroying an industry of the size to which the automobile industry in this country has grown, and further, that they would not for one moment contemplate the destruction of one of the youngest cities in the Dominion of Canada. I have read modern and ancient history to see if I could dig up a parallel, and only one case comes to my mind. When I read the budget resolutions this year and those of last year and the statements made, I am reminded of the ancient story told in Plutarch's Lives where old Cato came to the Senate every day with his little bunch of figs and stated that "Carthage must be destroyed." Carthage in this case is the city of Oshawa.

The Budget-Mr. Kaiser

Some hon. gentlemen sitting opposite say that we are unduly alarmed. They tell us that our captains of industry do not know what they are talking about. They tell us that if we take this reduction, and consider the present attitude of this government, if our men should go to work and our industries try to continue, the industries will go forward and do better than ever. Yet the men who are at the head of these industries told the government and this country to-day that it was utterly impossible for them to go on under existing circumstances. Is it possible that the government and those who support the gov-vernment to-day imagine that these men do not know what they are talking about?

I pass on, not to deal with the economics of the question but to try to bring home the situation as I see it and as I know it. The people at the head of General Motors have never deceived the city of Oshawa. Thirty-five years I have lived among

10 p.m. them; thirty-five years I have observed their struggle and progress; for that length of time we have listened to their statements regarding their industry and their relations to the city, and during all those thirty-five years they have always taken ns into their confidence and told us the truth and what the actual situation was. Do hon. gentlemen suppose that this is one time that they do not know what they are talking about, or that they are trying to deceive the city and deceive the people of this country?

Lest I forget, I desire to pay tribute to the kindly remarks of the Speaker of this House when he paid the delegation that came to this city to-day the compliment of saying that it was the most orderly and respectable delegation that he had ever had the pleasure of seeing come to this city and the House of Commons.

Let me point out to this House that in the city of Oshawa, which employs a larger percentage of people in proportion to its population than any other city in the Dominion of Canada, among these men who work in our factories within the limits of that city, there has never been a crime of the first order committed-never in the history of the city. There has never been an execution there-never a trial for the more felonious and heinous crimes-and why? There are two reasons. In the first place, the people who work in our factory come from the townships in the counties surrounding Oshawa, and in the second place they are so busy, so -thoroughly employed, that they have neither the time nor the inclination to commit offences of that kind. I will admit of course

that in recent years they have turned into the coffers of our country tremendous sums in respect to a little thirsty difficulty that we in the province of Ontario understand quite well.

The people who formed that procession to-day were almost entirely labouring men; they were not representatives of capital, they were not representatives of the factory management. It included, however, hundreds of women workers in that factory who, in their innocence, imagined they had one representative in this House who might sympathize with them in their struggle. Sorry am I to know that this representative told them that they were sent here at the expense of the General Motors Corporation. I stand here to deny the truth of that statement; they came here at their own expense. The expenses of those who were unable to pay were defrayed by other workmen in the city. They were here representing nobody but the owners of three or four thousand little homes in that city.

We had in that procession 784 returned soldiers. The Prime Minister to-day intimated that those ex-soldiers may be working for the automobile trade, but that there were hundreds of other soldiers who might require to buy an automobile. That may be so, but let the hon. Prime Minister remember that in 1918-19, when the soldiers returned from the front, the automobile business was growing and expanding; labour and assistance was required in the factory at Oshawa, and they took on, I may say, a greater percentage of the returned soldiers than any other industry in the Dominion of Canada. Those soldiers reclaimed their jobs and to-day a returned soldier in Oshawa is given a preference over any other applicant for a job. We sent from our city to the front between 1.600 and 1,700 soldiers to fight the battle of civilization and of Christendom. Of this number 132 never came back; they fell in France. During the last few years we at home endeavoured to have our city represent our ideas in stone, and we erected a monument to the memory of those who fell in France. We did not erect a monument to glorify war. We placed upon that monument a statute of a retured soldier in his garden home, and we called it "The Garden of the Unforgotten." We hoped and trusted-and our hope was realized -that the people of our city, when they passed that monument, would remember that they owed something to the returned soldier.

I should like to say something about that little monument, which is probably one of the most unique monuments of its kind in

The Budget-Mr. Kaiser

the British Empire. Our aim was to build a symbolic monument, one that would carry also to the memories of the allied countries which joined with England in that struggle the fact that this British Empire passed through that terrific struggle and came out triumphant. We tried to bring to the minds of Canadians the battlefields upon which the great struggle took place, and the way we did it was this: we asked every allied country to send us a stone to put in this monument. We asked1 every part of the British Empire to send1 us an Empire stone. From some of the great men of the war we received stone from the very battlefields where Canadians fought and fell. And what is the result? We have in that monument a stone from the ruins of Louvain, a stone from Loos, a stone from Passchendaele, a. stone from Cambrai,, a stone from Mons, the Governor General of Canada sent us a stone from Vimy Ridge. We asked various cities of Europe to send us, if possible a stone that might have some little historic value. Let me read a letter we received' from one of the cities where Canadians fought and fell. This letter was directed to me, and it reads:

Dear Sir:

The city of C&mibrai considers it a duty to respond to your desire and to send you the souvenir stone which you ask, for your memorial to the Canadians who fell in the war, 1914-1918. May it, by the name of Cambrai, which we have had engraved on it, recall to those who see it in your city that our city testifies to the bravery and self-denial of your men who fell here in the cause of liberty.

You have asked that this stone come from an edifice destroyed by the war: we thought we could not do better than take it from the ruins of our city hall to which so many memories are attached. You will have thus a symbol not only of the recent war but also of our struggles prior to this time, and for the same object.

The period 1914-1918, in fact, is not the first in which we have had to submit to the heavy yoke of the German empire, the tyranny of its governors and the brutality of its soldiers. Almost 1,000 years ago our ancestors have had to live in the same difficult days and, as deliverance was slow in coming, they wished to get free from the bonds that were ' heavy upon them.

<( 0ne day in the year 956 united together in the Peace Hall" they took a community oath to unite their efforts to get back their independence, and the most bloody atrocities did not make them renounce it.

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

Jean-François Pouliot

Liberal

Mr. POULIOT:

Were all those atrocities committed by the kaiser?

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

Thomas Erlin Kaiser

Conservative (1867-1942)

Mr. KAISER:

What does the hon. member mean by that question?

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Go on.

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

Thomas Erlin Kaiser

Conservative (1867-1942)

Mr. KAISER:

I would like the hon. gentleman who interrupted to answer that question. Right well I know the object of his reference. Let me answer it. Mine is an Anglo Saxon name; my family has carried it for five

hundred years. The kaiser of Germany was not known before 1871. My ancestors were not Germans; I want that clearly known. On my father's side they were United Empire Loyalists; they fought on behalf of the British cause in the revolutionary wars of 1776. My grandfather on my father's side fought at Queenston Heights and at Lundy's Lane in 1812 and 1814 to preserve this country for the British crown. In 1837 he stood for ordered government in Ontario and he opposed the grandfather of the Prime Minister of this country (Mr. Mackenzie King). In 1866 likewise my uncles assisted in bringing about order in Ontario. Twenty-six of my close relatives were on the line in the Great war of 1914. On my mother's side my grandfather belonged to the 79th Highlanders and helped to make the famous charge at Waterloo. As a Canadian I do not think I need stand for any insult from the hon. member or from any other man in the Dominion of Canada. It is because I am a Canadian and a Canadian first that I wish to have this House listen for a moment while I finish this letter and when I have finished hon. members should all feel prouder that they are Canadians:

On the day of triumph, in 1070, the "Peace Hall" was taken over as the seat of 'government: to-day it is our "City Hall", still devotedly preserved in the same spot, as a witness.

For the same reason, our city hall has been made .precious to us, because it has had to submit to the enemy's outrage, as when it was ordered to be destroyed under Emperor Henry in 1095 and under Emperor Frederick in 1226, and again when it was burnt down under Emperor William in 1918. Each time we built it again and this time, too, we propose once more to raise it from its ruins, because dt united in its structure the sufferings and the glories of our thousand year struggle for liberty, for our own liberty, and the liberty of France. We are proud to remember that the German invasions of 1792 and of 1870 have come to its steps and then expired without being able to go beyond it, and that in 1914 even, if the invading tide has overwhelmed it, that tide has scarcely been able to reach further.

We remember also that when in October, 1918, the privilege was given to the few scattered inhabitants remaining in the city of thanking those who had delivered them, in the very first rank was your General Loomis and it was in the ruins of our city hall that they thanked him.

This last remembrance would have been sufficient in itself alone to fix our choice in .providing the stone that you desire. Other remembrances are added to it, however, since they will make you feel that having often suffered we know how to understand and appreciate sacrifice. Now, no sacrifice is so entire as the sacrifice of one's life, and numerous are your dead on our so.il. We do not forget here-and I will cite only this example-that it was the Canadian battalion that on October 9th, 1918 forced the passage of the bridge at Gantimore in the west suburb of Cambrai; the battalion lost 380 men out of a force of 640, i.e. two-thirds. We do not forget either that it was to the efforts of the survivors that we owe the stopping of the fire by which the enemy had hoped to reduce our city to ashes.

The Budget-Mr. Kaiser

So, believe us, we are heartily with you in the homage you wish to show to the fighting-men of 1918.

Kindly accept, sir, the assurance of our best and highest feelings.

The Mayor of Oambrai.

Mr. Speaker, my object in mentioning this is to show you the spirit of the returned men of the city which I represent. It is on account of what they have done, on account of the fact that most of them are married men and that most of them relied upon the pledges given to them in 1921 in the armoury at Oshawa when the Prime Minister of Canada stood up in their midst and assured them that if he were elected no industry in that city would suffer. Nevertheless, in two years' time, through their juggling with the tariff, this government destroyed one of the greatest industries we ever had in Oshawa, namely, the malleable iron industry.

During the last election a similar visit was paid to our city by the same Prime Minister of our country, and there he gave the same kind of promise. Our soldiers and our workmen returned to their little homes resting assured that no injury would be done. 1 know from personal contact with them that there are to-day in that city representatives of three or four thousand little homes with a few hundred dollars paid upon them, and these men are endeavouring to pay the balance in monthly instalments. It is little wonder that they feel alarmed over this situation; that they feel that they have a grievance in their hearts and that they are going home to-nighjt dissatisfied with the answers and assurances that they have received. The answers given by the Prime Minister were evasions of a strange character. He told these people that in the House of Commons no amendment was made to the budget, and then he split hairs by saying that the automobile itself was not mentioned in any amendment, that [DOT] no pointed effort was being made by members of the House to save the automobile industry, although he knew that the amendment of the Conservative party pointed to that as directly as the compass points to the north pole. The Conservatives are in the minority in this House as regards voting strength, but it is my belief that the great body of Conservatives and two-thirds of the Liberals of this House sympathize with the efforts we are putting forth to save the industrial fabric of the province of Ontario. We fear not only for the automobile industry itself, but for the people of Ontario who have spent $200,000,000 in developing the water-powers of that province, which depend for their success

upon the continued operation of our industries. The greatest customer the hydro-electric enterprise of Ontario has east of Toronto at the present time is the General Motors Company of Oshawa, and the representatives in this House from western Canada, it seems, are going to destroy or very seriously impair that concern along with all the others throughout the province, curtailing in consequence the operations of the hydro. When this happens, how are the people of Ontario going to bear the tremendous burden of debt that will follow the collapse of industrialism in the province? Is it not clear that the farmers of the province will have to carry it? Cannot the farmers of the west realize that there are other people besides themselves engaged in agriculture in Canada? And do those farmers imagine that they can go on forever selling anywhere from four hundred to five hundred millions of bushels of wheat a year? Do they think the soil of western Canada can indefinitely yield such a crop? Why, science has demonstrated that this cannot be done, for it is imperative that the soil be replenished with some portion of the fertility that is taken from it. Let hon. gentlemen from the west study the history of China, where some of the fertile valleys are just as productive to-day as they were two thousand years ago. Why is this? The reason is that even the Chinese know better than to produce to the limit without putting back something of the fertility they take from the soil. I agree with those who say that Canadian producers should grind all their wheat at home and export it in the form of flour, because this country needs the offal in order to replenish the soil.

Some of the theories that are being preached in Canada to-day will ruin the country if they are carried very far into practice, with the result that Canada in the end will find herself in an inextricable mess. Look at what has happened to the sheep industry as a result of our free trade tendencies. In 1870, fifty years ago, we had in Ontario 3,500,000 sheep, whereas to-day we have only 2,500,000. I have letters on this subject, from some of the leading agriculturists of our country, and of the Dominion for that matter, all going to show what an advantage it would be to Canada to develop the sheep industry. The sheep is the best scavenger that is known in any country. You will not find a dirty farm where there are sheep in any large numbers, but in Ontario many sections are growing wild with weeds, and the same is true of Manitoba and the west. This country, in my opinion, should have at least 30,000,000

27S2

The Budget-Mr. Kaiser

sheep, which would represent an asset of some 8300.000,000, but we cannot hope for any development of the industry without protection. Protect the industry and you will have woollen mills throughout the country affording employment to our people.

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

Milton Neil Campbell

Progressive

Mr. CAMPBELL:

Does the hon. member imply that those who are engaged in agriculture know less about it than he does?

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CON

Thomas Erlin Kaiser

Conservative (1867-1942)

Mr. KAISER:

I have the authority of William Dryden and Robert Miller, gentlemen who are known throughout the Dominion as among our greatest agriculturists, and I am prepared to take their opinion in preference to that of my hon. friend. I am not giving the hon. gentleman my views; I am simply quoting the views of those who are in a position to speak authoritatively, having made their names famous in agriculture in Canada. I come from a county which is perhaps the .Mecca of Canada so far as good stock is concerned, and I know what the possibilities are if the people are given a chance.

As regards the proposed reduction in the duty on automobiles, I am convinced that this whole Dominion expects the government to heed the voice of the delegation which visited the capital to-day. I know what the result of this attack on the tariff will be to thousands of our workingmen. Now, these people are making a reasonable request of the government. All they ask is that this question be referred to a tariff board of experts for careful consideration, and that everyone concerned be given an opportunity to state his case clearly. This is what the people of Oshawa want and they are prepared to stand by the verdict of such an investigation.

I am pleading with the government to-day simply to honour the pledge which the Prime Minister himself gave to the country, and the pledge which the government put into the mouth of the sovereign's representative when he read the Speech from the Throne. Can the government solemnly give an undertaking in that speech and then in a quiet moment repudiate it, especially when, as we know on the authority of men who are well versed in the matter, this breach of faith will bring about the destruction of thousands of homes in Canada? I have lived among these people. As a doctor I helped to bring into the world many of the boys and girls who will be affected by this action of the government, and I have seen them grow up from infancy. I know the kind of people they are, and I am sure it would be with feelings of deepest regret that they would

leave Canada to find employment elsewhere. But this is what they will have to do if the government persists in its present intention. The situation is unparalleled in our history, and all we ask is that the government and the Prime Minister carry out the solemn pledge they gave to the people and which they put into the mouth of the Governor General of Canada.

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Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Robert McKenzie

Liberal

Mr. ROBERT McKENZIE (Assiniboia):

We have listened to a very able defence of the action of the people of Oshawa, but it is difficult for us to believe that these people are always consistent, and we question whether they were consistent in their visit to-day. I have here a copy of Hansard of last year in which I find that Mr. Clifford, the Liberal member for what was then the constituency of South Ontario, which included, the city of Oshawa, voted against the amendment proposed by the hon. member for Macleod (Mr. Coote) to reduce the duty on automobiles. The Coote amendment of last session read:

That in the opinion of this House a substantial reduction should be made in the customs tariff on automobiles and motor trucks.

We find that the then member for South Ontario, Mr. Clifford, a supporter of the government, voted against that resolution, but at the general election the people of Oshawa rejected him. I learn further that on that division six Conservatives who are still members of this House voted in favour of the resolution, namely, the hon. member for South Oxford (Mr. Sutherland), the hon. member for Kingston City (Mr. Ross), the hon. member for York-Sunburv (Mr. Hanson), the hon. menber for Kent (Mr. Doucet) and two others whose constituencies I do not recall.

Now, we are told that the government is going to destroy the automobile industry. To me, Mr. Speaker, that is an old chestnut; we have been hearing it for a great many years. I well remember reading years ago the same story whenever the tariff was reduced.

I am not a particularly old man yet, but in my younger days I followed the occupation of a veterinary surgeon. I found a few years ago that t'he horse industry, which meant my livelihood, was largely ruined-I say, ruined-in the same measure as that word is now applied to the automobile industry. Therefore it is just putting the shoe on the other foot. The horse industry has been hurt to a certain extent by the automobile industry,-more, I believe, than the automobile industry will be hurt by this reduction of

The Budget-Mr. McKenzie

fifteen per cent in the tariff, yet no one ever suggested a government subsidy to horse breeders.

Before I proceed with the general trend of my remarks with reference to the budget, I desire heartily to congratulate the Minister of Finance (Mr. Robb) on the clear, comprehensive and concise manner in which he presented his budget to this House and the country last week. For a number of years now it has been my duty to prepare at certain stated periods financial statements for organizations with which I am connected. Of course these statements are on a much smaller scale than the budget, but what I have done in a small way enables me to appreciate how the Minister of Finance must have felt when he was able to present such a favourable report on the financial condition of the country. It was always a source of satisfaction to me when I was able to bring in a financial statement showing a financial improvement in the organizations with which I was connected, and I am sure the hon. minister must have *been deeply gratified to be able to record such a substantial improvement in the affairs of this Dominion.

For a number of years past I have studied the budgets-to a limited extent it is true- and when I listened to the Minister of Finance last week the thought struck me most forcibly that this was the best financial statement that had ever been presented to this House. I was particularly pleased a day or two afterwards when no less an authority than the veteran member for Bonaventure (Mr. Marcil) stated that it had been his privilege to sit in the House of Commons and hear twenty-five or more budget speeches, and he believed this was the best. I think this warrants my saying that the minister has probably presented us with one of the best budgets since confederation, in that it contains, at least when coupled with the legislative programme of this session, something that appeals to our people in all walks of life. For instance, the reduction in the national debt by $22,000,000 is a welcome piece of news to every Canadian. We believe and hope that this is only the beginning of a number of similar reductions and that before many years we shall be relieved of the great menace of our enormous debt, thus getting back to the conditions which prevailed before the war. We are all pleased to note the increased trade, and the resultant increased revenue approximating $30,000,000. This, coupled with the decrease in expenditures leaving a surplus of revenue over expenditures of some $55,000,000, is" indeed very gratifying in comparison with the conditions which prevailed when the government took office in 1922. The reductions in taxation also appeal to all classes of people. The reduction in the income tax will probably appeal more to some than to others. But we have the reduction in postage and the abolition of the receipt tax, and altogether it is estimated that there will be a general reduction in taxes amounting to some $25,000,000. This does not apply to any particular section of the country or to any one class, but everyone will benefit in some measure.

In connection with the finances of the Canadian National Railways we are gratified to find a more satisfactory condition. There has been a gradual improvement since the coming into force of the present system of operation, and during the election campaign I stressed this point particularly. If there is one thing more than another for which this government deserves credit I believe it is the improvement shown in the Canadian National Railways. When this government took office the condition of affairs was very unsatisfactory. There is no use in enumerating the conditions which then existed, but we find now, after some four or five years of operation, a surplus over all operating expense of some $32,000,000, almost double that of 1924. It has been stated-and I am not sure of the truth of the statement-that certain items which are considered as assets and included in the capital account of the Canadian National Railways do not represent real value. If that is the case I would suggest a revaluation of the assets in order that the railway may receive encouragement, and the management be given a proper opportunity of making an earlier success than would otherwise be obtained.

Returning again to the budget, I believe it is one which will be accepted with almost universal satisfaction. A day or two after the presentation of the budget I was interested in reading the comments of the daily press. It was very noticeable that, irrespective of the political leanings of individual papers, almost every one had some favourable comment to make with regard to this budget. These things must be far from consoling to some hon. members of this House, and to some of the people who went on platforms in every part of Canada picturing dire calamity and prophesying certain ruin unless the King government were defeated and a Conservative government elected. On October 29 last the electors of Canada did not elect a Conservative government; the King government is still in power, and desolation and ruin have

The Budget-Mr. McKenzie

not yet overtaken us. That the country has on the contrary made remarkable strides and shown great vitality is exemplified by the fact that in this budget it has been possible to reduce the taxation as I have already indicated. Moreover, we learn that the export trade of the country in the last year showed a favourable balance of some $381,000,000, as compared with an unfavourable balance of $29,000,000 in 1921. Is it any wonder that the people do not want a Conservative government in power?

In connection with these prophecies of financial ruin and dire distress we cannot help observing the reports brought in by our banks, insurance companies and financial institutions generally during the last few months. Almost without exception they have shown increases in business, and managers and directors have expressed confidence in the future. Surely, Mr. Speaker, if there were any evidence of the dire distress predicted by our Conservative friends it would be reflected in these financial statements. A number of manufacturing concerns also, some in the central part of Ontario, have reported the year 1925 very good in a business way. These statements can hardly be said to be issued for political purposes, because our financial institutions do not enter into politics to any great extent.

_ We have heard a great deal about conditions in the Maritimes. I do pot know very much about that question, but a few days ago I received through the mail a paper called The Evening News, of New Glasgow, Nova Scotia. Page 2 was marked, and in turning to that page I found an item which, although not truthful, at least shows that this paper is not favourable to the King government. It went on to say that the government is holding office by theft, and a few other things of that kind, but on the front page appears the following heading:

Business Conditions Improving in New Glasgow.

It goes on to say:

Merchants look with confidence to the future. Volume of business better than last year.

Then the remarks of several business men are given, and the conclusion is as follows:

The foregoing are some of the opinions expressed by a number of merchants taken at random througnout the town. Others added comment along the same line. The general consensus of opinion seems to be that there is a noticeable improvement, and that tihe summer should be appreciably better than last year.

If there is an improvement in conditions throughout this country, however, some of our Conservative friends are not prepared to give the government any credit for it. They say it is due to Providence, to crop conditions and that sort of thing; but, on the

other hand, every ill that befalls the country is in their estimation the fault of the government. I was pleased the other day to hear the hon. member for South Wellington (Mr. Guthrie) make, perhaps unwittingly, a remark that I should like to have appear again on Hansard1, because it is something that we people from the west believe with him to be the truth. Speaking on the 15th day of April he said-Hansard page 2458:

I believe I am within the mark when I say that Providence has blessed Canada during the past season with a wheat yield in the western provinces unsurpassed both in quality and quantity, a yield which is to-day commanding a good price in the markets of the world and this fact constitutes the most important feature of our commercial success. I do not believe I am far wrong in making that statement. But fortunately it is not only in the prairie provinces of the west that Providence has blessed us. Ontario, this great central province of Canada, has also been blessed with a wonderful harvest. So far as Providence has seen fit to act in the matter, He has poured out on this country an abundance which we have not enjoyed for many years past and we are to-day reaping the benefits.

Mr. Speaker, we in the west believe with the hon. member for South Wellington, as recorded there, that the crop conditions of the west have been largely responsible for the progress that has been made. We -believe that it is a great factor, and that the improvement of conditions in the west will do more than anything else to bring about the prosperity that we want in this country. We believe that if the farming industry of our prairie provinces is property nursed, and if we are given the proper -opportunity in that country, wre can bring back again something approximating the conditions of the early years of this century when there was a certain amount, of prosperity all over Canada. And let it be noted that while there was a great development taking -place on those western plains, the cities of Ontario were being built up and there was very little unemployment in these central provinces during that period. The cities of Ontario and eastern Canada generally developed and prospered, which development and which prosperity was largely due to the great market which was opened' up in the west for all classes of goods produced here in eastern Canada. They had! a market for all the lumber, all the machinery, all- the household furniture, clothing and other products that it was possible for them to produce, and as time went on they kept increasing the number of their factories because of the great market that was opened up on the western plains. We in the west, then-, are convinced! that it is impossible to bring about the improved conditions we are looking forward to by increasing tariffs, and we are n-ot going to -be

The Budget-Mr. McKenzie

the tariff upon an article enters into its cost to the purchaser. That was very well illustrated in the debate which took place here a few weeks ago in connection with the automobile tariff, where I believe it was amply demonstrated that the automobile industry was taking the full benefit of that tariff protection. We have heard the hon. member for Ontario (Mr. Kaiser) give his views in that connection, but I should like to read to the House the opinion of another man, who, I believe, is at least as capable of sizing up the situation with respect to the automobile industry as the hon. member for Ontario. This is a copyrighted article by Charles Vining, published in -the Ottawa Evening Citizen, stating the views of no less a person than Henry Ford. It reads as follows:

Dearborn, Mich., April 23-If Henry Ford became prime minister of Canada, Robert Forke could qualify as a good Conservative and the Robtb budget of 1926 would be abouit as exciting as 'hike warm iemonacfr.

Mr. Ford would not merely reduce the tariff on certain classes of automobiles, he would wipe out lit tariff. He would establish free trade, absolute and unequivocal. As a manufacturer of automobiles in Canada he believes the tariff to be a hindrance and stupidity.

Mr. Ford surprised people with something of this opinion in a brief remark after visiting his great Canadian plant on Wednesday. This afternoon he enlarged on the subject, confirmed his statement that free trade would benefit industry, gave his reasons and explained their application to the manufacture of Ford cars in Canada.

From the conversation came voluntary statements of pertinence and encouragement ito Canadians, that it is possible to manufacture as cheaply in Canada as in the United States, that Ford cars in Canada have been selling at a higher price than necessary because of the tariff, that the tariff encourages industrial indolence and tends to permit prices based on what the market will pay rather than on proper costs of production, that the Ford Company of Canada, and presumably other Canadian companies will develop greater efficiency and economy o>f manufacture as a result of the proposed tariff reductions.

Supplementing discussion of the tariff came a picture broadly sketched of industry twenty years from now, a thing of gigantic forces and stupendous organizations compared with which the great corporation of to-day is a "peanut."

I introduced the subject of my visit. Had he said that free trade would be a good thing for his Canadian company. Did he. the largest manufacturer of automobiles in Canada, agree with the proposed tariff reductions? Would he offer an opinion which might oe useful to Canadians who are -perplexed?

"You people are just waking up," said Mr. Ford in reply. "You ought to rub the other eye now, too, and clean out the tariff."

"Would it be a good thing for your company in Canada?"

"Cemtainly."

"The tariff is a hindrance to trade. I would have free trade. I believe in free trade everywhere."

"Do you mean by that that you can manufacture a Ford car as cheaply in Canada as you can here?"

"I can. Give me that plant at Ford City and I'll compete with the plant here at Highland Park any day. Why shouldn't I? Our unit in Canada can buy as cheaply as we can here. We make every part of the

fMr. McKenzie.]

car in the Canadian plant and ninety-five per cent, over eighty-five anyway, of the raw material is supplied right in Canada. We get our steel from Algoma, lumber, everything we need."

"The usual answer," I suggested, "would be that large scale production makes the difference. Many Canadian manufacturers believe that they cannot compete with American manufacturers because the latter have advantages in mass production."

"I don't see that," said Mr. Ford, "What do you mean by mass production? I think we've got large scale production in our Canadian unit. They're turning out six hundred cars a day."

"How many are you making here?"

"Oh, we're doing between seven and eight thousand a day, but I don't think that's any advantage after a certain point."

" Do you mean that large scale production ceases to be an advantage when it grows beyond a certain, degree?"

"Yes," said Mr. Ford, and explained that costs of manufacturing are almost equally divided between-labour and raw materials. In both of these items, he argued, the Ford Company of Canada is as favourably situated as the American plants.

"In fact," he added, "you have a better class of workman in Canada than we have here, more intelligent, more vigorous. I like to look at their faces. They're mostly Anglo-Saxon."

"If it is true then," I said, "that the Ford car can be made as cheaply in Canada as here, why have we had to pay a much higher price for it all this time?" "The old story," replied Mr. Ford, with a twist of: his shoulders, "Because they have been able to get the price, that's all."

"Because the tariff has made the higher price possible?"

"Yes, certainly they've been able to get a higher-price in Canada, naturally they've taken it."

"It is quite evident that the consumer will benefit from tariff reduction by lower prices," I said, "but you say that the automobile manufacturer will benefit also. Can you explain in what way?"

"Why, yes," replied Mr. Ford in some surprise, "It's quite simple. Lower prices mean more buyers, more buyers mean more business, more business means growth for the manufacturer. I would cut out the tariff," he repeated, "and have free trade. Free competition brings healthy business. I can tell you that those fellows over in our Canadian unit are going to manufacture more efficiently now. They'll have to, it's going to be a better plant over there, better organization. That's another reason why it's a good thing for the manufacturer."

"You believe then," I asked, "that to help the manufacturer one must first help the consumer, and if the consumer benefits the manufacturer is bound to benefit?"

"1 don't know any other way," replied Mr. Ford briefly.

"Some people," I explained, "believe in the reverse process. They say that tariff reduction will kill manufacturing in Canada, that there will be unemployment and no wages, and therefore no money for the consumer to spend, that you must first help the manufacturer in order to help the consumer."

"That's all wrong," said Mr. Ford.

It seems to me that after that it is unnecessary that -I should say anything further with reference to that phase of the tariff question.

We have heard a great deal in this House about the tariff question, and I should be glad if the leader of the opposition (Mr. Meighen) were in his seat now, while I say

Immigration Act

just a word in regard to my constituency. I was not a candidate in the election of 1921 in the constituency which I represent, but in the election of 1921 as well as in 1925, Conservatives, speaking on a good many platforms, stated that if the people of my constituency or the people of Canada wanted reductions in the tariff they would have to elect a Conservative government because Conservative governments had in the past reduced tariffs more than the Liberal party had. If the leader of the opposition were in his seat I would ask him whether he would own or disown that statement of his lieutenants out there. I would like him to tell this House what reductions have been made in the tariff by the Conservative party, and to state his attitude with regard to the tariff on agricultural implements.

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CON

James Arthurs

Conservative (1867-1942)

Mr. ARTHURS:

What about the tariff

on furniture?

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LIB

George Washington McPhee

Liberal

Mr. McPHEE:

Does the hon. member

want to buy a casket for the party?

Mr. MeKENZ'IE: The hon. member for

South Wellington (Mr. Guthrie) the other day was inclined to condemn the Liberal party because it had not lived up to its policy as enunciated even as far back as 1879, and particularly in the days of Sir Wilfrid Laurier. I believe that as conditions change in this country it is necessary for any political party to change its policy to a certain extent in order to meet changed conditions. To my mind, one reason why the Conservative party is as unpopular as it is at the present time in western Canada is because it is trying to stick to the old policy of 1879 and from then on, forgetting entirely that since that time there have located out on those western plains more than two million people who that party ignores. We people out there have a right to be considered, not only because we represent more than one-quarter of the population of this country, but, as I have stated, because those western plains are responsible for the vast majority of our agricultural production.

We have heard a great deal about unemployment in Canada. That there is unemployment I am well aware, but it is no new thing; it is not a matter that is confined to the last three or four years. There has been unemployment in this country for many years and probably the chief reason why there has been more of it in the last few years than 14011-1771

formerly is due to war conditions, the aftermath of the war. But to my mind the remedy is for us to set ourselves to make farm life so attractive that many of the unemployed from our cities will go on to the land where they will find employment the year round, for it is in that way that the situation in our cities will be relieved.

On motion of Mr. Stirling the debate was adjourned.

On motion of Mr. King (Kootenay) the House adjourned at 11.27 p.m.

Monday, April 26, 1926.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 23, 1926