April 23, 1926

CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Mr. Speaker, I wonder if my hon. friend thinks that all those who are engaged in industry in this country are capable of reading the minds of my hon. friend and his friends to know just who is going to be singled out next? What reason had the automobile industry to expect that this attack would be made upon them? They had the definite declarations of the Prime Minister, made from one end of this country to the other, and made specifically in the Speech from the Throne delivered at the opening of this House, that the tariff would not be touched until an independent body had given the matter consideration. I am sorry he is not in his seat, but I wonder if my hon. friend from North Bruce (Mr. Malcolm) is worrying in his home town whether he should come down here and present his case to the government, and ascertain whether the duty is to be taken off furniture next.

The next point on which I would like to say a word is this: My hon. friend says:

If, after investigation by the tariff board, conditions are found to be such that this industry cannot carry on, we will reconsider the matter. They will reconsider, not before the industry is closed, not before these workingmen are forced to leave Canada. No, but after they have gone to the United States to get work, then they are prepared to listen to any representations they may make as to whether there is any possibility of re-establishing themselves in this country.

My hon. friend referred to the implement industry, and to the fact that it was found that certain firms engaged in the manufacture of agricultural implements could carry on notwithstanding the reductions made in the tariff. That is true. I believe some of them are

carrying on, bufc let me from memory just give you the statement of Mr. Vincent Massey in relation to that. Speaking in the county of Durham, where he was a candidate for the House of Commons in the last election, he said: When the duty was taken off agricultural implements, there was very great concern in the agricultural implement industry, but we waited on the government. Who are we? Mr. Vincent Massey. Then what happened. He says: Concessions were made to us by taking the duty off steel and other products of allied industries which go into the manufacture of agricultural implements, with the result that we were able to carry on and make just as much money as before. But, Mr. Speaker, the steel industry went out of business.

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

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Did Mr. Massey say that the steel industry of Canada went out of business?

Topic:   THE BUDGET
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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

It was not necessary

for him to say that. I will come to that in a moment, and tell of conditions of which I have personal knowledge, to show what has taken place in the steel industry.

Passing from the remarks of my hon. friend, and before touching on what I really want to say in relation to the budget itself, I ask your permission, Mr. Speaker, to refer, as my hon. friend did, to the delegation that came to Ottawa from the industrial centres all over the province of Ontario and parts of Quebec to present their case to the government this morning.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

Were there any people

in that delegation from the province of Quebec, and if so, who were they?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

I did not take a census of the delegates, but I had the privilege of listening to His Worship the Mayor of Ottawa, who introduced the delegation, and he definitely made the statement that there were present representatives of a large number of municipalities in the province of Ontario as well as some in the province of Quebec. If His Worship the Mayor of Ottawa made a statement that was not true, then I submit my hon. friend can discuss that matter with His Worship.

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LIB

Georges Parent

Liberal

Mr. PARENT:

Discuss it yourself. You are speaking now.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

If my hon. friend does not like to have the province of Quebec linked up with the province of Ontario even in a matter of this kind, he can settle that matter also for himself. I was going on to say, Mr. Speaker, that I am confident that anyone who

The Budget-Mr. Nicholson

looked into the earnest faces of these workingmen and their wives, who paid their own transportation costs to come here and present their case, could not be otherwise than impressed, and very greatly impressed, with the seriousness of the situation that faced them when they would undertake to do what they did at very great expense and sacrifice to themselves. After all, Mr. Speaker, they are Canadian citizens. Many of them have demonstrated that very fully; I shall not refer to that at the moment. I take it that the tradition of the fitness of things in relation to a question of that character is this: That the first citizen of Canada, in the person of the Prime Minister, surrounded by his government, will be prepared to receive any delegation of Canadian citizens presenting their case, it matters not what it is; that he will be prepared to consider the justice or injustice of their claim; that he will receive them in the dignified manner in which the Prime Minister of Canada should receive them; and that he will hear their case and either give them a decision or advise them that he will take the matter under consideration and give them a decision later. That is what one would have expected from the Prime Minister to-day in connection with the delegation that waited on the government in the railway committee room. But what did we find?

First, the Prime Minister, accompanied by the Finance Minister, went to see these people where they had assembled in a downtown theatre, and there he made a speech to them, and what was the character of that speech? Just perhaps what one might have expected from him. He told them in his speech in the theatre that his government were prepared to hear what they had to say, to consider the representations made, and reach a decision;

perhaps not exactly stating it, 4 p.m. but at all events leaving the impression in the mind of anyone who listened to him that the government had an open mind on this question. But as I said, he was accompanied by the Finance Minister, more inclined perhaps than the Prime Minister seemed to be to state definitely and at once what was in his mind. He stated: "So far as I am concerned, I stand by my guns," thus administering a rebuke to the Prime Minister for side-stepping the issue in the first place. Then what followed? The Prime Minister met such of the delegation as could be accommodated in the committee room, but instead of meeting that delegation as he and the government should have done, what did we listen to? A political

speech pure and simple. I venture the statement that never before in the history of this country have men been called upon to listen to a Prime Minister meet a delegation of Canadian citizens as the Prime Minister did this morning and listen to a statement such as that. What, after all, did it amount to? As I stated, it was purely and simply a political speech, and if it was not designed to deceive the delegation, then the words uttered had absolutely no meaning at all. The Prime Minister in the first place said: The government is in the

hands of parliament. What does this involve? The government comes down with this legislation. Does the Prime Minister mean to say that parliament had anything to do with the preparation of the budget? I am perfectly aware of the fact that the budget was prepared under the dictation of my hon. friend from Brandon (Mr. Forke), without any question; but parliament had nothing to say in connection with it, it is the first time I submit, in the history of this country where a Prime Minister, in connection with the budget statement, comes before a body of Canadian citizens and says: In relation to our budget we take no responsibility. We wash our hands of the whole thing. If it suits parliament all right, and if it does not suit them they can do as they wish with it. That practically Is the statement, but the Prime Minister went further, and let me say again, if his words were not designed to deceive that delegation and to make political capital out of what he said to the delegation, then they had no meaning at all. He undertakes to fasten on the opposition in this House, or members of parliament here assembled, responsibility for the position the government took in the matter. The right hon. leader of the opposition (Mr. Meighen) would have been entirely out of his place if he had even presumed to meet that delegation or to say anything to them. It was the government's business, but notwithstanding that fact the Prime Minister takes advantage of the opportunity, when no member opposed to him could with decency even interject a remark, to undertake to fasten on this side of the House the responsibility for what has taken place. And in doing so, what did the Prime Minister say? He stated that no member of parliament in this House had moved a resolution or taken one step to remove the grievances that these people were complaining of. It is true the Prime Minister did not use those exact words. He stated that no member of this House had taken any step or moved any resolution to

The Budget-Mr. Nicholson

restore the tariff. Has any member of the House, except the Minister of Finance (Mr. Robb), the right to submit a resolution to restore the tariff on an article which the Minister of Finance has taken off. Let us see what hon. members on this side of the House have done. On Tuesday April 20, my hon. friend from Fort William moved this amendment to the budget:

That all the words after "that" be struck out and the following substituted therefor:

In the late general election campaign assurances were repeatedly given by the Prime Minister and other ministers of the crown that before further tariff changes were made an opportunity would be given industries affected thereby to be heard before an advisory board.

After reciting the entire resolution this is the conclusion of it:

And this House regrets that in the case of drastic changes announced in the budget such assurances have not been fulfilled.

The language of the memorandum presented to the government, placed in the hands of the Prime Minister by the delegation this afternoon, was practically identical with the language used by my hon. friend from Fort William in that resolution-the only language that could be used-the position taken being that the assurance was given by the Prime Minister during the election campaign, and assurance given in the Speech from the Throne that these matters would receive consideration, and that this whole question would be referred to the tariff commission appointed by the government. But the Prime Minister, endeavouring again to make political capital out of the tragic position in which these workingmen and women find themselves, makes the statement-let me repeat-which if it means anything, had for its purpose nothing more or less than the deceiving of this vast delegation of Canadian citizens: "that no member of this House had made any effort or moved any resolution to grant these people redress.v

Passing from that and coming to the budget itself, I desire to deal only with three phases of it, first, the public debt; second, the changes that have been made in the taxation, and, finally, the tariff changes and their relation to the whole industrial and economic life of this country. Perhaps I might be pardoned for repeating from memory, if I can, what was said by the hon. gentleman from Brandon (Mr. Forke) in the introduction to his speech a few days ago, when he congratulated the Minister of Finance on the manner in which he performed his difficult task. Whether we disagree with the hon. member for Brandon on other things or not, we agree with him that the task

which was put in the hands of the Minister of Finance by the hon. member for Brandon and those who support him, was indeed a difficult task for the Minister of Finance to perform, because those of us who know the Minister of Finance know that he realizes just as well as any man in this House and out of it the effect the budget will have on the industrial and economic life of this country and on Canadian citizens generally.

Coming now to the statement of the Minister of Finance in relation to the public debt, we had again the same profuse assurances with regard to the abundant revenues and reduction of expenditures and of the public debt; and as I listened to the statement of the minister, I could not help but feel, how long are the Canadian people going to submit to have an annual financial statement given to them by the Minister of Finance ,or by those who prepare the financial statement for the minister, which, if made by the president or directors of an incorporated company on which to secure a loan from the bank, would land them behind the bars. In reality that is the character of statement we have been receiving because of this fact, that the annual statement, and particularly this annual statement, does not disclose the actual conditions in relation to the public debt of this country. It does not disclose what our assets and liabilities in reality are. The minister says we have a surplus of revenue over expenditures, ignoring entirely $18,000,000 of bonds, referred to by my hon. friend from Muskoka (Mr. McGibbon) last evening, issued by the Canadian National, ignoring entirely $63,000,000, the amount which the Canadian National went into debt last year, and wiping out the so-called surplus, and making a deficit of $50,000,000 on these two items, ignoring entirely the bond issue of $5,000,000 guaranteed in December last, to what we termed in this House previously and may term again, the 1925 election campaign fund railway, which is being built up in northern Quebec. There in the aggregate, Mr. Speaker, is $85,000,000 in these three items entirely ignored, and that is the character of statement we have.

I do not intend to go any further into the general financial situation, because I know that, as soon as his health is sufficiently recovered, the hon. member for West York (Sir Henry Drayton) will deal with this question exhaustively.

Coming to the reductions in taxation, there is no question, Mr. Speaker, and everyone will agree, that it is time Canada put her house in order, and reached the point where there

The Budget-Mr. Nicholson

would be genuine reductions in taxation, and if I might digress for a moment again, I would say that if the government would give some consideration to the complete reorganization of the finances of the country, they could save 825,000,000 in interest on the national debt, a saving which could have been effected at any time during the years since 1922. Every country in the world with a debt as large as ours has done it. The United States did it, Great Britain did it, and France, notwithstanding all her difficulties, has done it. Germany is doing it and countries in southeastern Europe, the new states created out of the war, have undertaken to fund their debt, spreading it over a long period of time, but we have the government going back and forward, between Ottawa and New York, issuing treasury bills and bonds at six months or a year, and all that kind of thing, at the highest rates of interest, and with the expense of issuing and re-issuing the series of bonds that is involved.

As regards the question of taxation reductions, a reduction has been made by doing away with the stamp tax on receipts, a tax which was imposed by this government itself. There is a further reduction in postage from three cents to two cents, and then there are the changes in the income tax which have been heralded as a means by which the Canadian people are to be saved, perhaps, $20,000,000 to 822,000,000. But, Sir, if you will analyse the provisions of the new income tax law you will find that instead of a reduction in the income tax there has simply been a transference of the burden from one set of people to another It may be that the set of people to whom the income tax has been transferred are the people who should pay lhat tax; but when the Minister of Finance came forward to make his budget statement, he should have manfully said: I am going to relieve one class of people and impose the tax burden on the other. Instead of that he camouflaged the whole situation by saying: We are making a reduction in the income tax, whereas it will work out as I have stated in transferring the incidence of the tax from one class of people to the other and transferring it to that class of people where it will do more injury to the economic and industrial life of this country than any other kind of taxation that could be imposed.

If the Prime Minister, as he did during the 1924 budget debate, had gone down to New York and surrounded himself with Henry Ford, representatives of the International Harvester Company and representatives of the United States Steel Corporation and asked

them to work out a plan by which the investment of money in Canadian industry could be completely discouraged, he could not have arrived at a better plan, because this is what has happened. A man who puts his money,

'f he has any, into United States securities, Brazilian securities or government bonds, is taxed once; but il he dare invest a dollar in Canadian industry, if he should undertake to do anything for the development of his country, he is immediately taxed twice.

Let us see how the new tax with its so-called reductions works out in relation to the old. On an income of 85,000 that is earned in a Canadian industry, under the old act the tax was 8525. Under the new act, you pay a company tax of 8450 and an individual tax of $160, making the tax $610 instead of 8525.

On a $10,000 income earned in the same way, whereas you formerly paid $1,165, now you pay $1,460 or an increase of $295, because you invest your money in Canadian industry.

On an income of $20,000 secured in the same way, whereas you paid formerly $2,990, now you pay $3,340, or an increase of $350.

How does the new tax work out in relation to the man who invests his money in Canada and the man who invests it outside of Canada? A man who invests money outside of Canada or in non-productive bonds of some character where his money is not doing anything to develop this country, on an income of $5,000 pays a tax of $40. If he is the type of man who wants to assist in building up this country, he pays $490 on the same amount.

On a $10,000 income in the same way, the man who invests his money outside of Canada pays a tax of $290, whereas the man who puts his money into business or industry in Canada pays a tax of $1,190.

On an income of $20,000, the man who invests his money in foreign securities pays a tax of $1,540, whereas the man who invests his money in Canada pays a tax of $3,340 and so on.

The government is not satisfied with that double form of taxation and if a man happens to invest his money in a northern Ontario mine, for instance, he is still further taxed. I may say just at this point that if the government would give some attention to assisting in the development of the vast resources of this country and encourage the men who are willing to go out into the newer parts of Canada and spend their lives and money in building up this country, it would be doing something worth while for the Canadian people. Let us illustrate the

The Budget-Mr. Nicholson

26 per cent on the invoice price, plus 10 per cent on labour, inland freight, ocean freight and so on.

Now with regard to export. The point so frequently stressed against the Canadian industrialist is that he can sell his goods in the world markets. On cars he exports the manufacturer gets a drawback of ninety-nine per cent of every cent of duty he pays on the materials entering into their manufacture. But in his home market he is at this disadvantage, that he must pay a sales tax of five per cent and an excise tax varying from five to ten per cent, according to the value of the car, or fifteen per cent in all. Now, if the desire of the government, as has been stated, was to give the Canadian people cheaper cars, and if the desire also was to give the industry a chance to live, why did not the government take off the sales tax or the excise tax? Instead, they preferred to take off the duty and leave those taxes as a bonus to the United States automobile manufacturers.

Now, Mr. Speaker, as I said at the outset, it is not my purpose to argue that the duty on automobiles is what it should be, but I do say that if we are to deal fairly with all classes of Canadian industry and all classes of our people, the automobile industry should have been given an opportunity to present their case before their protection was interfered with. If the government were serious in appointing the tariff board rather than simply taking this means of sidestepping their responsibilities and deceiving the people, as they have frequently done by appointing commissions of all kinds during the last four and a half years, why was this automobile industry not allowed to submit their case to the Tariff Advisory Board?

This morning I listened to the Prime Minister address the delegation of automobile employees in the Railway committee room, and I was amazed that he should make such statements to a lot of intelligent working-class Canadians. You will recall, Sir, that last year in Kingston, in Oshawa, and in a score of other places the Prime Minister stated definitely that no changes would be made in the tariff until expert advice had been secured and the whole question investigated. How are you going to investigate a question if one party to it is left out altogether? The Prime Minister stated to that delegation of workingmen and their wives that this whole matter had been under serious consideration during the last session of parliament and during the intervening period, and that the government had arrived at its

conclusion only after the most careful investigation. Where did the government get their facts? Was anyone employed in the automobile industry given an opportunity to present the case of the workingmen? The great majority of these men are members of recognized bodies of organized labour, and they could have sent delegates to give the government expert information on the manufacture of automobiles. Where did the government get their expert advice? In the resolution presented to this House by my hon. friend who sits at this desk (Mr. Coote) and in the representations from those sitting around him. No one associated with the automobile industry had an opportunity to say a single word.

But if the Prime Minister was correct in what he said at Kingston, Oshawa and other places last fall, and if subsequent to that we are to assume that some investigation was made and the government reached that conclusion, why did they go further and undertake the deception of His Excellency the Governor General, of this parliament and of the country in the Speech from the Throne? Here is the language they put into His Excellency's mouth:

We believe that in the interest of industrial development every effort should be made to eliminate the element of uncertainty with respect to tariff changes; that changes in the tariff should be made only after the fullest examination of their bearing upon both primary and manufacturing industries and that representations requesting increase or decrease of duties should be made the subject of the most careful investigation-and report by a body possessing the necessary qualifications to advise the Ministry with respect thereto. A Tariff Advisory Board will accordingly be appointed" forthwith. This Board will be expected to make a careful study of the Customs Tariff, the revenue to be derived therefrom and the effect of the- tariff and allied factors on industry and agriculture..

That was presented to parliament on January 7, a little more than three months ago. Speaking to the delegation this morning, the Prime Minister said: We have been

giving the most careful consideration to this whole question. Then why this paragraph in the Speech from the Throne? I say to you, Mr. Speaker, that the reduction in the automobile tariff not only affects that industry, you cannot name a single industry of any account whatsoever in this country that is not also affected by the reduction. When the duty on automobiles and trucks was reduced, I repeat, Sir, the last stone was taken from the foundation of the whole industrial structure of this country. Let me go back over this again:

We believe that in the interest of industrial development every effort should be made to eliminate the element of uncertainty with respect to tariff changes.

The Budget-Mr. Nicholson

Does the uncertainty created by the tariff reductions in this budget tend to stability in our industrial life? You could not find anyone in Canada to-day or outside of it who knows anything about our conditions who would be fool enough to invest one single dollar in a Canadian industry in the face of this interference with the tariff, notwithstanding the undertaking given in the Speech from the Throne that no tariff changes would be made except on the advice of the Tariff Advisory Board which was there promised, and which has since been appointed by the government. Again I say, Mr. Speaker, the Prime Minister was either deceiving His Excellency the Governor General and this House when he put those words into the Speech from the Throne, or he was deceiving the delegation in the speech he made to them this morning.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

May I remind the hon. gentleman that it is not parliamentary on his part to say that either the government or any member of the House has spoken or acted in a way to deceive anyone. I would refer him to Beauchesne's Parliamentary Rules and Forms, where at page 63, paragraph 238, he will find the following:

The imputation of bad motives, or motives different from those acknowledged, misrepresenting the language of another, or accusing him, in his turn, of misrepresentation, charging him with falsehood or deceit; or contemptuous or insulting language of any kind ; all these are unparliamentary and call for prompt interference.

The language used by the hon. gentleman a little earlier in his speech was apparently somewhat involved, otherwise I would then have called him to order. Whether it be the government or a member of the House, as I said the other day, individually or collectively, neither can be accused of deceiving. Such language is not parliamentary. I would therefore call on the hon. gentleman to withdraw the expression.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Mr. Speaker, I bow to your ruling with very great pleasure, and I will say at once that not being able to understand the implications the Prime Minister was making in his remarks to the delegation this morning, nor the language used in the Speech from the Throne, he perhaps was not deceiving either the delegation or parliament.

Just in relation to that matter of stability m industry and the result of this instability, T wonder if the House would bear with me if I very briefly went back over the fiscal history of this country. Those who are old enough will remember the condition which prevailed before the introduction of the National Policy in 1878, and we know the conditions which prevailed thereafter. As soon as the National Policy was introduced the country began to prosper, and continued to prosper until an attack was made on that fiscal policy in 1889. That continued in three different specific phases until 1896-as commercial union, free trade, unrestricted reciprocity and so on. Hon. members will remember all the different phases of that controversy. Then the country became unsettled; those who had money to invest were afraid to invest it; industrial establishment did not expand and the country stood still. There were two political parties in the country, one a declared protectionist party and the other declaring that if and when it came into power it would destroy every vestige of protection.

Then what happened? In 1896 a general election took place; that so-called free trade or commercial union or unrestricted reciprocity party came into power, and the great leader of that party secured the Hon. W. S. Fielding, now Right Hon. W. S. Fielding, as Minister of Finance. There is no man in the public life of this country for whom Canadians have more respect, because of his steadfastness of purpose during the whole of his public career, than the Right Hon. W. S. Fielding. In 1897 Mr. Fielding introduced his first budget, and this is what he said:

It would be folly not to remember that we are dealing not with the protected manufacturers only but that the interests of labour have to be considered as well as the interests of capital. ... I hesitate not to say that if we should to-day, by some rash step, do that which some hon. gentlemen say we are bound to do. . . . we would not only break down the manufacturing interests of the country, but we would deal a blow to other interests of a wider and more serious character.

Then again, Mr. Fielding said:

We submit that it is a wiser policy to wait and see what shall be the outcome of the present uncertainty in the United States. ... We submit that pending such negotiations and pending the settlement of the American tariff question and a clear understanding of what will be the effect which their policy may have upon the affairs of Canada, it is the part of prudence that we should to-day hold our hands

Further on Mr. Fielding said:

I have to tell the House that it is not the intention of the govemement. ... to propose any great reduction in the tariff as applied to those countries which are not disposed to trade with us.

Then what followed? Will anyone disagree when I say that as soon as that statement was issued the Canadian people took heart and the country again went ahead under a protective policy maintained by the late Sir Wilfrid Laurier and by Mr. Fielding as Finance Minister, just as the country had prospered under the previous government?

The Budget-Mr. Nicholson

The total changes made in the customs tariff, between 1896 and 1911, was less than six-tenths of one per cent, and in many items the tariff was increased. The country continued to progress until the outbreak of the Great war.

We need not go into the conditions prevailing during that period, but what followed? In 1919 Canada had the greatest opportunity that has ever come to a people of the same numbers in the history of the world. Europe was completely devastated; complete chaos followed the war, and millions of people were anxiously looking for some place to make homes for themselves. Canada has the greatest store of undeveloped natural wealth of all the countries of the world. If we had had the vision and the wisdom to maintain an economic and fiscal policy which would have made it possible for us to develop Canada we would have gone far, but again what happened? A political party, more anxious for office than for Canada, declared that if they came into power the tariff would again be attacked, joining with the United Grain Growers of western Canada in their declarations for the wiping out of every vestige of protection afforded Canadian industry.

That party came into power in 1922, with Mr. Fielding again Minister of Finance. In his first budget speech Mr. Fielding practically repeated what he had said in 1897, that we must have stability in fiscal matters. Following that statement there was a reheartening, to some degree at least, of the Canadian people, notwithstanding the fact that the clamour continued for the wiping out of protection to Canadian industry. At the end of 1923 Mr. Fielding's health broke down; he could no longer carry on and a new Finance minister came into office. I do not wish to say one harsh word against my hon. friend the present Minister of Finance, for whom I have the highest personal regard. I will say, however, that he did not have the strength of character to stand up and do what he knew should be done if this prosperity were to continue, so the tariff was again attacked. What was the result? In very much less time than Mr. Fielding anticipated, industrial stagnation has taken place all over this country.

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?

Some hon. MEMBERS:

Oh, oh.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Hon. members may

laugh if they wish, but let me repeat this question, which I have asked in this House more than once. Will someone rise and tell any dozen of these workingmen who have come here from the city of Toronto, having

lost their jobs through the closing down of the automobile factories, where they can go in Canada with a reasonable assurance of getting profitable employment? Will anyone answer that question? I say you cannot point out a single-

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LIB

George Spence

Liberal

Mr. SPENCE (Maple Creek):

Yes; let

them come out west and we will give them employment.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

I will come to the

west in a moment, if the hon. member will just have patience. Will anyone guarantee these men permanent, profitable employment in western Canada?

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LIB

Alexander MacGillivray Young

Liberal

Mr. YOUNG (Saskatoon):

In western

Canada we do not guarantee things; but if a man goes out there he has to work and look out for himself. If any man comes out west and wants to work he will find employment which will give him a fair return for his labour.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

What about the 10,000 people who went west last year, paying their own transportation, who were unable to earn enough money to pay their fares back home? What has my hon. friend to say about that?

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LIB

Alexander MacGillivray Young

Liberal

Mr. YOLTNG (Saskatoon):

I would say to the hon. member that if that is true surely he should give us some chance, and make the implements of production a little cheaper.

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

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Let me tell the hon.

member something. I happened to be in western Canada last fall on two occasions during that period, and I assisted men to come back from the west when they were unable to earn sufficient money to bring themselves back home. I will come to this question of cheaper implements of production and give my hon. friend some information if he will just possess his soul in patience for a few moments.

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

An hon. MEMBER:

He farms the farmers.

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

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

There are a good many men in this country who are farming the farmers. Let me repeat: That condition has been created in this country, notwithstanding the fact that more than a half million Canadian citizens have been forced to leave Canada during the past four and a half years because they were unable to get employment at a living wage in their own country. I challenge any hon. member of this House to show me a single village, town or city from North Cape Breton to the west coast of Vancouver island to which a dozen of these men who have lost their jobs in Toronto, Oshawa, Windsor and St. Catharines could go, with a

The Budget-Mr. Nicholson

reasonable prospect of getting profitable employment. Will anyone undertake to answer that challenge?

Now I will come to my hon. friend's question. He suggests that the farmers of the west be given a chance through cheap implements. That is the theory of the free trader, of the man who wants to destroy Canadian industry: Give us cheap implements! Let me repeat,

I know what it means to buy implements, and I say that implements of every variety have increased in price since the cuts were made in the tariff of this country. It is the same with everything else: just as soon as you put yourselves in the hands of the industrial corporations in the United States, the price immediately goes up.

In 1919 a committee of this House earned on an investigation, and they asked the grain growers of Saskatchewan to send here someone who was an expert on the production of wheat. The man who moved that resolution, as a matter of fact, was the then representative for the constituency of Mackenzie, Mr. Reid. Mr. Hugh Thompson, of Moose Jaw, Saskatchewan, was sent down here by the grain growers of Saskatchewan to give evidence. He went into complete detail in relation to the growing of wheat on 320 acres of land in Saskatchewan, and after he had given these full details to determine the value of machinery of every description he was asked the question: Assuming that the Canadian manufacturer adds the full duty, plus a reasonable profit, to the cost of manufacture, which every sane man who knows anything about the business knows he does not do- but assuming that he did, for the sake of the western free trader's argument, not mine- what effect would that have on the cost of production of wheat on a 320 acre farm in western Canada? Now remember, this man was under oath, and in reply to that question he gave his own figures: he said, six-tenths of one cent per bushel. That would be the effect based on the assumption, which is wholly fallacious, that the Canadian manufacturer added the full amount of the duty, plus a reasonable profit, to the cost of production.

Another witness was brought before that committee to give evidence, this time from the province of Ontario, sent here by the United Farmers of Ontario to give evidence as to the cost of producing foodstuffs on an Ontario farm. It was the Hon. E. C. Drury, the leader of the United Farmers of Ontario, the Progressive party in this province, the man who was going to usher in a new day in the province of Ontario, and who

certainly did, but the kind of day the Canadian people never want to see again, and Mr. Drury's sworn testimony was this: If the

manufacturer added the full amount of the duty, it had the effect on the cost of producing foodstuffs in the province of Ontario of less than 2-i per cent.

Let me repeat, Mr. Speaker, I know something about purchasing implements, and I know that the price of implements has gone up, and it goes up every time we place ourselves in the hands of the industrial corporations of the United States. May I, in passing, say just one word with regard to that? If there is any country that has given the whole world an example in industrial economics and one that we at all events would do well to follow, it is the United States. From 1866 right down to the present day, taking their whole tariff on the average, the United States has been the most highly protected country in the world, and what have they accomplished under that policy? They have multiplied their population three and one-half times during that period, they have multiplied their industrial wealth almost one hundred times, and with what result? They have raised the standard of living to the highest level known in any country in the world, and their standard of wages is the highest of any country in the world. Their production of implements and of everything else that they produce is the lowest in cost of any place in the world. They sell their steel products in free trade Manchester. Steel rails made by the United States Steel Corporation are laid on the streets of the city of Manchester for the street cars to run on. Hon. gentlemen all over this House have proclaimed that they can buy their goods cheaper in the United States than they can in Canada. Why? The United States is the most highly protected country in the world. They have mass production, and yet some say that we should subject ourselves, our industries and our workingmen, to the competition of that country. I have said a score of times in the last three or four years that unless Canada adopts a different course from the one she has been travelling along economic and industrial lines in the last few years, this generation will see Canada absorbed industrially into the United States. As a cold matter of fact, we are now vassals of the United States industrially and economically. I am going to take the liberty of quoting again an extract quoted by my hon. friend from South Wellington (Mr. Guthrie) in the speech he made in this budget debate. It is taken from the bulletin of the United States

The Budget-Mr. Nicholson

Department of Commerce, an official document presented to the President of the United States by an official board set up to inquire into all economic and industrial matters. It says:

Economically and socially Canada may be considered as a northern extension of the United States, our trade, with Canada being in many respects more like domestio trade than our foreign trade with other countries. The movement of industrial raw material from Canada into the United States and the return flow of a miscellaneous assortment of manufactured goods is not unlike a similar flow between the west and the south and the more industrialized eastern part of the United States.

Again, quoting from the same report, and if anyone desires to check this up they can do so by referring to page 265 of the bulletin

of the United States Department of Commerce, dated November 3, 1924, they say this, in relation to what this government is doing:

Against the set policy of the Conservative party of building up a thoroughly protective tariff to favour Canadian industries, has been oiperating the influence of the Liberal party who stand for a moderate level of import duties and a generous measure of preference to empire products.

Again:

Each of the three budgets presented by the present government have carried changes m the Canadian import duties, and almost invariably downward.

Then here is the sting: [DOT]

United States manufacturers have been the principal suppliers to Canada of most of the classes of goods on which the duties into Canaxia have been reduced during the last three years.

In other words, United States manufacturers and United States citizens, instead of our own Canadian manufacturers and Canadian citizens are the beneficiaries of the policy of this government, and have been beneficiaries for the last four years.

I said a moment ago that we were, if not completely, rapidly becoming vassals of the United States, and that we cannot maintain our national identity if we continue in the course we have been travelling the past few years. Already 500,000 Canadians have gone to the United States in the past five years, and what class of people are they? Are they men and women who came here as immigrants, stayed with us only a short time and then left? Many of them are, no doubt. Last week I took occasion to go to the office of the registrar general for the province of Ontario, in the city of Toronto, and I learned that during 1924 and 1925 the registrar general of this province had issued duplicate birth certificates to native sons or native daughters of the province to the number of one hundred per day, to permit these young men and these young women to become permanent residents of the United States. Has the exoduz

stopped? During January, February and March of this year the average was something a little over seventy per day.

Last year the Hon. Senator Beaubien put on Hansard-I have not got it here-a statement showing what has taken 5 p.m. place in our sister province of Quebec. How long, Mr. Speaker can we continue to export our native-born sons and daughters and maintain our national identity?

What else? A return brought down in this House prepared by Mr. Grant MacNeill of the Great War Veterans' Association showed that some 100,000 of the men who put on uniform, and pledged their lives to save civilization during the Great war, have found conditions on coming back to Canada such that it was necessary for them to leave this country and go to the United States, and still this movement keeps on.

Let me now quote from the Manitoba Free Press of the 6th of October last: Mr. Johnson, registrar of aliens in the United States, speaking at Providence, Rhode Island, on October the 6th last said:

A new deportation law and a more easily workable Naturalisation Act were advocated by Chairman Johnson, of the House Immigration committee, in a prepared address to-night before the League of Women Voters of Rhode Island.

Citing "the increasing percentage of arrivals from Cuba, Mexico, South American countries and Canada" Mr. Johnson said these arrivals would provide a basis for fixed quotas 1

And so on. Mr. Johnson, the registrar of aliens in the United States, includes as aliens those coming from Canada and those coming lrom Cuba, Mexico and South American countries. The influx of these people has become so great, Mr. Johnson says, that steps will have to be taken to restrict the number of Canadians, Cubans, Mexicans and South Americans entering the United States. Still hon. gentlemen tell us this exodus is merely a myth. Go into any town, village or country place you like, in any part of Canada, gather twenty-five people together, and ask them if it is a myth. Ask the fathers and mothers of the boys who have gone if it is a myth.

I have a letter from a Roman Catholic priest in my own riding pointing out that since October last seven families have left his parish and gone to the United States to find employment.

Hon. gentlemen opposite referred to the steel industry and the effect of the tariff on it. I will deal briefly with that matter, because my hon. friend from West Algoma (Mr. Simpson) will speak on that question later on. The industry to which I refer, the Algoma

The Budget-Mr. Nicholson

Steel Company, is located in his riding. That company operating to capacity would employ 7,500 men, a potential population of 50,000 people. What has happened since 1922? It has not been working half time since that year, and never more than 2,000 men employed in it. I have somewhere under my hand the quantity of pig iron we import into Canada which I will give to the House. But the Algoma Steel Corporation, on account of pig iron being a heavy commodity, and transportation charges being very high, had worked up a business in northern Minnesota and Michigan for the small quantity of pig iron they could produce; they were doing this to give employment to their men, and the total amount exported in 1924 was 3,600 odd tons. The United States did not consider it necessary to raise their duty on pig iron, but the United States tariff board said, "We cannot afford to allow 3,600 pounds of Canadian pig iron to come into the United States. We will put a barrier against it, and not one single ounce of that pig iron will come into our country." This was done notwithstanding the fact that we are importing millions of dollars worth of the same commodity from the United States. I will give the House some figures of what we have imported. I have the latest bulletin issued by the Minister of Trade and Commerce, under the signature of J. A. Robb, Minister of Finance, and these figures are extracted from this book. The

figures are as follows:

Binder twine $ 6,671,823

Fertilizers 2,831,411

Paints and Varnishes 3,853,853

Soap 1,128,154

Fire bricks 1,397,342

Cotton yams

2,718,190Cotton fabrics, bleached

1,724,189Cotton fabrics, dyed

10,104,458Cotton fabrics, printed

1,754.807Wearing apparel

2,314,234Miscellaneous glass

7,155,760Window glass

1,248,712

And three window glass plants in Canada have been closed down as a result of that tariff, which has turned 2,500 Canadians out of employment. Window glass and glass of every description is 20 per cent higher than >t was before the import duties were removed and we are now importing our glass from Belgium and the United States. The table

continues:

Plate glass $1,829,007

Hats and caps 2,951,753

Boots and shoes 1,670,054

That is the reason the men have already .'eft their homes in Quebec.

Electrical apparatus $15,501,301

Pig iron ingots, etc 1,551,783

And yet the Algoma Steel Company is forbidden to export 3,600 tons of pig iron from their plant in Canada to the United States:

Rolling (mill products, general $38,006,810

Tubes, pipes and fittings 3,142,701

Wire 2,648,403

Engines and boilers 11,603,174

Farm implements 11,234,839

Hardware and cutlery 3,369,937

Machinery 30,158,936

Now what has happened to the steel trade? The great majority of these things are the manufactures of iron. That is what has happened to our steel industry. The changes in the tariff have placed the industry at Sydney in a position where it is unable to operate and that is the reason every steel industry in the whole of this country is tied up. The man who will say that the steel industry in Canada has not been ruined knows nothing about the conditions. The table continues:

Miscellaneous tools 5 1,912,204

Vehicles 36|4ie!906

Freight automobiles 1,693,369

Passenger automobiles 12,855,940

Automobile parts 20,690,989

Nuts and bolts 4,567,451

Oil cloth 729,273

PaPer 9,142,177

They take our raw products to the States and send them back in the form of paper.

The next item is:

Pneumatic tires $ 492,473

Furniture 1,269,331

That is in spite of the tariff my hon. friend from North Bruce enjoys:

Dress goods of wool $2,643,850

I want to turn to another phase of the matter. My hon. friends to the left say that they are anxious to improve the condition of the farmer in Canada. I heard an hon. member to my right say that it was a case of desiring to farm the farmer. Be that as it may, some of us would like to feel that we are living in a farming country and that we should, if we are going to develop this country, laise in our own country all the farm produce we require. If we destroyed all our industries end reverted to the stone age, surely we should be able to raise enough maize and grind it between two stones to enable us to live. Last year we imported the following:

Agricultural and vegetable products.. .. $196,041,785 Animal products 45,703,203

Total $241,744,988

If the House will permit, I will put the details on Hansard without reading them, but I wish to refer to one or two special items in connection with this matter.

The Budget-Mr. Nicholson

Topic:   THE BUDGET
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LIB

Ernest Lapointe (Secretary of State of Canada; Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE:

Is it just the figures my hon. friend wishes to place on Hansard?

Topic:   THE BUDGET
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Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 23, 1926