April 27, 1926

PRO

John Warwick King

Progressive

Mr. KING (Kootenay):

As I have said,

I am delighted to have my hon. friend deny that statement. No one more readily accepts his denial than myself because I could not believe, in fact, I know that the conditions in British Columbia do not warrant that statement. I hold in my hand a statement that was published in the Vancouver Province, a paper not a supporter of this government, but an excellent paper that tries to present and does give to the people of British Columbia in a general way the news of the day. In its issue of April 11, 1926, it says:

to,000,000 building outlay for first quarter, 1926: $7,250,000 locally subscribed for British Columbia Electric loan. British Columbia Electric Bpending $30,000,000 in development. $160,000,000 British Columbia Electric payroll.

If I may be allowed an interjection here, it is with some satisfaction that I note our

present industrial payroll in British Columbia is $160,000,000, because on looking back to the year 1922, I find that the industrial payroll of British Columbia was then $120,000,000. It goes on:

Vancouver regular port of call for 42 steamship

lines. 916 ships entered Vancouver harbour in 1925.

That is an inspiring statement, one that will do much to inspire the people of British Columbia, and I believe that if the people of eastern Canada would take advantage of conditions as they exist to-day and set fairly before the people of Canada those conditions, there would be more optimism and less pessimism than we have to-day, and it would be to the advantage of Canada as a whole.

When the Minister of Finance brought down his budget the other day the hon. member for South Wellington (Mr. Guthrie), owing to the illness of the hon. member for West York (Sir Henry Drayton), replied on behalf of the opposition. I think we all admired the ease with which the hon. gentleman spoke, and the manner in which he developed his reply. He accepted the good things in the budget, the reductions in taxation, as being all right. Then he placed on Hansard certain figures, but those figures- whether due to lack of time in preparation or lack of opportunity for verification on his part-will stand examination and should be examined and discussed here. The hon. gentleman caused it to be inferred that this government had by means of the reduction in the British preference placed the woollen industry in a precarious condition in Canada. This is what he said:

In the first year two and a half per cent was taken off the duty on woollen goods. The Laurier-Fielding tariff had served the country, so well, that had kept the mills so busy, was tinkered with in the first year and reduced to 27) per cent. In the following year there was another cut of ten per cent in the British preferential bringing the tariff on woollens down from 27) per cent to 24.8 per cent net, and what was the result? All over Canada woollen mills began to close; men lost their jobs, the exodus started to the United States and woollen men would not invest more money. I say to the Minister of Finance: Look at your imports of woollens for those years. See them gradually rising in this country until last year, according to the government's trade returns of which I have a copy in my hand, we brought in $20,000,000 worth of woollen goods from Great Britain, all of wh:eh we could have made in Canadian mills if the Prime Minister had had resolution and courage enough to stand by the tariff which he helped to make in 1007.

Now, let us look at the woollen industry and see what has happened. In 1921 our total importation of dutiable woollen goods from Great Britain amounted to $45,795,573.

In 1922 we imported $22,895,016 worth; in

The Budget-Mr. King (Kootenay)

1923, $31,298,216 worth; in 1924, $30,447,895 worth; and in 1925, $30,283,675 worth. Now it may be that the importation of $20,000,000 to which the hon. gentleman referred had reference only to certain woollens. The figures I have given, however, cover the total importations of woollen goods from Great Britain. It will be noted that in 1921, owing to conditions that existed in Canada after the war-I wish to be fair-and before any tariff changes had taken place we imported $45,795,000 worth of woollen goods. In 1925, the importation had dropped to $30,283,000 worth. However, I wish to go on and follow the matter a little further. We have a great woollen industry in Canada known as Penman's Limited. This firm manufactures woollen garments and is a really great organization. We find that in 1921 they manufactured woollen goods to the extent of $4,789,053. In 1925, the amount had risen to $6,431,153. Apparently the Penman's are enjoying to-day a larger amount of business, at least their sales are greater, than in 1921 by almost $2,000,000. Now, if you go back and take the importation of $45,000,000 odd in 1921 as against $30,000,000 odd in 1925 you must go beyond the tariff changes to find the explanation for the diminution. The explanation must be found in some other cause because we find a decline in the sale of woollens in the United States. In that country, which our Conservative friends would lead the people to believe is not only the most highly protected but the most prosperous country in the world, no industry, they say, goes out of business because the government immediately comes to its rescue. Now, what do we find in the United States? In 1923 the average monthly consumption of woollens amounted to 53,467.000 pounds, whereas in 1925 it had dropped to 43,857,000 pounds. What, is the reason for that? It is not because there was not a tariff. We know, every man knows that in his own home to-day, woollen goods are not being used to the extent that they were used years ago: They are being replaced by goods

that are made from a mixture of wool, cotton, silk, and artificial silk. The result is that to-day the woollen industry, not only in Canada but throughout the world, is obliged to adjust itself to new conditions.

But I should like to deal for a moment with a further statement made by my hon. friend, as follows:

"I am witling to stand by my statement. Cultivators in the days of the Lauriei-Fielding tariff, when the present Prime Minister was a member of the government of that day and supported the tariff in that government, enjoyed a duty of 17i per cent. This government has cut the duty down now to 7J per

cent. No wonder that the trade has been almost abandoned in this country and our farmers are very largely being supplied with goods from the United States."

Now, Mr. Speaker, I contend that that statement does not correctly represent the condition as far as the manufacturer of agricultural implements in this country is concerned. We find that in 1922 the people of Canada imported binders amounting to $319807 in value. In 1925 they imported $216,427 worth. The hon. member for South Wellington did not refer to reapers, but I shall give the figures for that branch of the industry also. In 1922 we imported 6,805 reapers, and in 1925 reapers to the number of 198. In 1922 we bought $36,143 worth of mowers, and in 1925 mowers amounting in value to $27,930. We will now see what the export business by the manufacturers of agricultural implements amounted to in those years. In 1922 we exported $449,013 worth of binders. In 1925 the export amounted to $1,220,000 worth. In 1922, we exported reapers to a total amount of $12,901 worth, and in 1925 the value of the export of reapers was $105,893 worth. Of mowers in 1922 we exported $369,762 worth, and in 1925, a value of $957,695, showing that during that period the agricultural implement men had improved their position in the matter of export and had conserved the home market to a greater extent. Now as to the plow industry which was said to be ruined: In 1922,

we imported $554,846 worth of plows, and in 1925, plows to the amount of $613,998. In 1922, the export, of plows amounted to $1,465,919 worth, and in 1925 we exported $1,630,908 worth, showing a favourable condition as regards exports and also as regards the home market.

Now let us take the total trade in agricultural implements. The total importations in 1921 amounted to $24,317,190 worth, and the exports to $12,527,000. In 1925 we imported only $6,428,000 worth. We sold $11,342,000 worth. There is no question with regard to the manufacture of agricultural implements. We were told in 1924 the reduction the government then made would destroy that industry. We know that to-day the Massey-Harris stock is selling for more than it was previous to that date. We know that many of the factories in this country are enjoying great prosperity, and we know from the trade returns that the change has not seriously affected the agricultural implement industry.

I have stated that this budget is appreciated by the Canadian people. It is a budget that goes into every home in this country. My

The Budget-Mr. King (Kootenay)

hon. friend the former Solicitor General (Mr. Guthrie), complained the other day that the government's budget was two or three years too late. He overlooked the fact that in 1924 this government had a surplus of many millions of dollars, and at that time, brought about by reduction in customs duties and sales taxes, the government contributed some $20,000,000 odd to the relief of the Canadian taxpayer. That should not be overlooked, and when my hon. friend claims that the delay had been too great he did not give consideration to the fact that this government in 1924 did make reductions in taxation amounting to something over $20,000,000 or $25,000,000. A reduction in sales taxes will always be acceptable to the Canadian people, and it is the desire of the government, and I think ot the people of Canada, that we be relieved of that burden as early as possible. It is true that the sales tax is a convenient way of raising revenue. We are. told that this government had increased the sales tax from two and a half to six per cent, but if hon. members will go back to the period of 1923 and 1924, and read Mr. Fielding's statement on the sales tax, they will realize that the sales tax as administered by the late government did not bring revenue, because it was not collectable, and where it was collected it had pyramided itself. It has been found that the amendments made by Mr. Fielding have been effective in securing revenue, and it has been the policy of this government, when conditions permitted in the country, to reduce that tax on these commodities that would first give relief to the people in the homes of this country.

The reduction in postage will certainly not *be criticized. I think the Canadian people are to be congratulated that we are to go back to the day of penny postage, and as the hon. member for Bonaventure (Mr. Marcil) said the other day, the Canadian people being the first to introduce penny postage, would come back again to thit period with great gratification and pleasure.

The abolition of the receipt tax will give to the merchant and to the individual who is buying or selling relief from what has been termed a nuisance. It was not a large revenue producer, and the government, as the minister has said, considered it wise to abolish that tax. I am satisfied that the change will be acceptable to the people of Canada. The reduction in income tax has given general satisfaction to those who have been paying the tax.

I have listened for the last week to discussion on the budget as occasion permitted me, and generally speak in =* from the opposite

side of the House the argument has not been greatly against the budget as introduced by the minister. Exception however has been taken to the reduction in the automobile tax and it was on that score that the 4 p.m hon. member for Fort William (Mr. Manion) moved his amendment a few days ago, stating that the government should not have made the reduction in the automobile tax without referring this matter to the tariff board. One would think, after hearing hon. gentlemen opposite, that this was a new thing in the public mind of Canada. I cannot conceive that members who were in the last parliament who heard the debate and witnessed the vote in that parliament could have been deceived as to the minds of the Canadian public representatives in this parliament in the matter of automobile taxation, because last year, when the resolution was introduced by the hon. member for Macleod, (Mr. Coote), we found members from every group in the House supporting the proposed reduction. The government would have been remiss if, after that debate and that vote, they had not given very careful and thorough consideration to the question of reduction of duties on automobiles. It may be convenient for hon. members opposite to say that this question should not have been dealt with by parliament but should have been referred to the tariff commission, but that course would not have satisfied the majority in parliament or the majority of the people of Canada, because conditions had arrived in connection with the manufacture of automobiles that required adjustment. I claim that the government have acted wisely and properly in the matter. It is true that some men will, as the ostrich does, place their heads in the sand so that they will not see what is coming, but any business man engaged in the industry of manufacturing automobiles, after hearing the debate in this House, should have realized that, in the public mind throughout Canada, there was a feeling that the day had arrived when there should be an adjustment in the duties on automobiles. So that we cannot, Mr. Speaker, take too seriously our hon. friends opposite. I have heard only one hon. member-and this my hon. friend from Burrard (Mr. Clark) will not deny-on the Conservative side state in his place that if his party were returned to power he would vote for and see that there was a return to the former duty.

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

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

What else?

Topic:   THE BUDGET
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PRO

John Warwick King

Progressive

Mr. KING (Kootenay):

That is the statement my hon. friend made. If he wishes to add to it he can do so now or later.

The Budget-Mr. King (Kootenay)

Topic:   THE BUDGET
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CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

He did add to it and said that he would " refer it to the tariff commission."

Topic:   THE BUDGET
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PRO

John Warwick King

Progressive

Mr. KING (Kootenay):

I know that, but as far as he was concerned he was prepared to see that the duties were restored to the former basis.

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

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

Yes, and the pledge carried out.

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

John Warwick King

Progressive

Mr. KING (Kootenay):

Let us for a moment or two go a little further into this matter of tariff. It is true that in 1924 this government did reduce the tariff on agricultural implements. It was considered a very large reduction. We were told that the industry would be destroyed. It has not been destroyed, but for the purpose of this occasion and argument, I have tried to familiarize myself with what occurred when a similar condition arose in this parliament. In 1911 the leader of the opposition was returned to parliament and at that time he moved as an amendment to the budget:

That in the opinion o-f this House, a substantial reduction in the 'import duties on agricultural implements is now due the agriculturists of Canada, and is in just accord with the true ends of a protective tariff.

It is interesting to read the remarks of the right hon. gentleman made at that time, when although he was much younger than he is now he had the same faculty for acute reasoning and getting at his point. His argument on that occasion was that, the agricultural implement industry having pretty well secured the home market in Canada and having ventured into foreign fields, the time had come when there should be substantial reductions in duty. It is rather a remarkable coincidence that the agricultural implement industry at that time enjoyed a duty of 35 per cent, and the leader of the opposition evidently came to the same conclusion then as this government has arrived at in respect of the automobile industry. The reduction then was from 35 to 20 per cent.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

Does the

minister say that the duty on agricultural implements in 1911 was 35 per cent?

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

John Warwick King

Progressive

Mr. KING (Kootenay):

I understand so.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

The minister is absolutely wrong.

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

John Warwick King

Progressive

Mr. KING (Kootenay):

Probably it had been reduced, but the leader of the opposition was referring to the period preceding 1896. The duty on agricultural implements had been 35 per cent and the Liberal party

were asking for a reduction. To substantiate his case the leader of the opposition quoted Sir George Foster, who at that time was Minister of Finance:

The reduction in agricultural implements from 35 per cent to 20 per cent is one under which it would tax the ingenuity of the manufacturers to keep the field against what is now keen competition especially in the northwest.

Commenting on that quotation he said:

Thus did he postulate that the test by which these duties were to be judged, the guide by which he was to be governed, was such a duty as, ait the narrowest point, would test the ingenuity of the manufacturers to keep the field against foreign competition.

He quoted Sir George Foster further:

Our industries have not yet overtaken the home consumption of the people, but are gradually growing up to the point of meeting the consumptive demand of the country.

Later on, in order to lay down another guiding principle, he quoted the Hon. John Haggart as stating:

That they believe that our people can compete with less protection than formerly and to prove that it can be pointed out that we are now sending agricultural implements to many portions of the world.

The right hon. gentleman continued:

Now, sir, what are the manufacturers of agricultural implements enabled to do They are able under this tariff to exact a higher price than they could exact if the tariff were lower. I do not say that a reduction will to any very enoimous extent affect the price; I believe it will materially, and I think it will render some relief to particularly the farmers of the west. It will afford some relief to them and I believe it is the bounden duty of the government to so afford it

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

The duty

on agricultural implements in 1911 was 17i per cent and it was reduced in 1914 to 124 per cent.

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

John Warwick King

Progressive

Mr. KING (Kootenay):

I corrected myself. As I said, the leader of the opposition was quoting arguments that had been used by Sir George Foster when he was Minister of Finance, Sir George having pointed out that prior to 1896 there had been a reduction from 35 to 20 per cent. The leader of the opposition in the debate to which I refer enunciated certain guiding principles. He laid down three basic principles: First, that a duty must never be higher than is sufficient at the narrowest point to test the ingenuity of the manufacturers to meet the keenest possible competition. That is good reasoning, and it was advanced by the right hon. gentleman at that time as an argument in favour of his proposed reduction in duties. Secondly, that the duty must be maintained not until the Canadian industry has overtaken the whole consumption, but only until the indus-

2346 COMMONS

7'he Budget-Mr. King (Kootenay)

try is gradually growing up to the point of meeting the consumption demand of the country.

He was not suggesting that the industry should saturate the home market before the duty was reduced but that it should only partially cover the market. Thirdly, that the moment the home industry is able to export its products into foreign markets, that moment the duty should be taken off or at least materially decreased.

In view of the foregoing arguments surely we have arrived in Canada at the point where substantial reductions in the duties on automobiles should be made, especially when we know that last year the manufacturers exported from 40 to 42 per cent of their output. I do not think therefore that we need be disturbed by the activity of some motor dealers and manufacturers in this country, who on the day the budget came down closeted themselves in their offices and without notifying their employees had notices prepared and posted on their doors next morning informing the public and employees that their plant had been closed until they could ascertain just what the budget meant. Now that meant no expense to the manufacturers, but the two or three days during which the plant was closed down the employees suffered in the matter of loss of their wages. If the General Motors concern had been dealing with a rising market and were going to charge from $150 to $200 more for their cars I could understand that they might close their doors and advise their customers of the increase. But that was not the situation. They were readjusting prices to meet the new duty arrangements, and it meant a lowering of cost to the consumer. No one can tell me that a firm who had so much business as obliged them to move their output daily from their plant would find it necessary to deprive their employees of two or three days' work in order that they might revise their prices. No, Mr. Speaker. It was merely a demonstration against the government in this country, and as such it was both unwise and unfair.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

Against a

government.

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

John Warwick King

Progressive

Mr. KING (Kootenay):

It would have

been the same if my hon. friends had been over on this side; they would have had to reduce the duties. These people, in closing their doors merely because there was an adjustment of the tariff which the people of the country through their government con-

sidered proper, have not acted in the best interests either of their industry or of the Dominion.

Now we hear a good deal about increasing the manufacture of Canadian products. Well, there are many automobile parts that we do-not manufacture, but there are many parte that we have the raw material for. Therefore the Minister of Finance said in his budget: It is in the interests of our people that there should be a greater development in the Canadian manufacture of those parts; that is, if the so-called Canadian manufacturers of automobiles are to have the benefit of the rebates m duty, at least fifty per cent of the product must represent Canadian labour and material. Every member of this House should endorse that statement.

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

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN (Lincoln):

May I ask the minister a question? A minute ago he said there were many parts of cars that were not manufactured in Canada. Would he enumerate a few of them just by way of example?

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

John Warwick King

Progressive

Mr. KING (Kootenay):

No, Mr. Speaker I am going on.

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

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN (Lincoln):

Why,-

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

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

John Warwick King

Progressive

Mr. KING (Kootenay):

My hon. friend

will have time to dilate on that when he is addressing the House. I know that we have most of the raw materials to make the parts that go into the manufacture of an automobile.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 27, 1926