May 17, 1926

CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Where do the ordinary working man and the small farmer come in?

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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LIB

William Daum Euler

Liberal

Mr. EULER:

Is my hon. friend now showing special consideration for the farmer?

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I have always shown special consideration for the farmer, and so has my party. They have shown just as much consideration as has my hon. friend, but I am asking a fair question. My hon. friend said that this budget would relieve the great mass of the people. I asked him in all sincerity, to elaborate a little. He speaks of the income tax and cheaper automobiles, but how about the ordinary working man and small farmer, who never earn $3,000 a year?

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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LIB

William Daum Euler

Liberal

Mr. EULER:

I should say the small farmer and the working man benefit by the reduction in duty on automobiles.

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Subtopic:   THE BUDGET
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LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn) :

How about the duty on electric lighting equipment?

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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LIB

Charles A. Stewart (Minister of Immigration and Colonization; Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Liberal

Mr. STEWART (Leeds):

There is no

change, is there?

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn):

Yes, 25 per cent.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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CON

Arza Clair Casselman

Conservative (1867-1942)

Mr. A. C. CASSELMAN (Grenville-Dun-das):

Mr. Speaker, as one of the younger

members of this House I have taken very little part in the discussions which have been carried on, but I feel that I cannot let the opportunity pass to make some observations on the budget. After doing that, and before concluding my remarks, I wish to take up certain matters which are of particular interest not only to the county which I have the honour to represent but to the Dominion as a whole.

I do not intend to follow the hon. member for North Waterloo (Mr. Euler) very closely in my remarks, but I would like to make a few comments upon his speech. In attempting to do so I realize that in making my first

[Mr. Filler.i

speech in this House I am in a very disadvantageous position. The hon. member is an old parliamentarian with a great deal of experience, and is recognized, I think, as one of the smartest men on the government side, if that were not so we would not have heard that he could have had a portfolio in this government. On various occasions in the past the hon. member has criticized the government-much more strenuously than in his remarks to-night

for their nibbling tactics with regard to the tariff. I wonder if the reason that he is not so strong in his criticism to-night is because this time they have taken a whole bite instead of a nibble.

He says this is a popular budget. I believe the hon. member was elected as an Independent Liberal, and to me the addition of the word "Independent" must mean something. I do not know whether he has always been elected as such, but I do know that the riding whidh he represents is one of the most highly developed industrial districts of Canada, and I wonder if that has anything to do with the use of the word "Independent." If his constituents should be here when the budget vote is taken I wonder what they would think, seeing him vote directly against something which materially affects them. I am sure they would not support him in the next election.

Topic:   QUESTIONS
Subtopic:   THE BUDGET
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LIB

William Daum Euler

Liberal

Mr. EULER:

Does not the hon. gentleman believe that my constituents will know exactly how I vote?

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CON

Arza Clair Casselman

Conservative (1867-1942)

Mr. CASSELMAN:

I realize that, but I

also realize that before we have another election possibly three or four years will have passed.

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Subtopic:   THE BUDGET
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?

Some hon. MEMBERS:

Hear, hear.

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CON

Arza Clair Casselman

Conservative (1867-1942)

Mr. CASSELMAN:

I mean exactly what I said. In that time the Minister of Finance (Mr. Robb) may adopt the suggestion advanced to-night by the hon. member and show by his actions that the tariff is going to be stable and that industry can go along unafraid of the changes which may be brought down in the next budget. As this is the first speech that I have attempted to make in this House, I promise hon. members, if they will grant me their indulgence, that I shall get through as quickly as possible.

My first statement must be that I am dumbfounded at the action of the government in claiming office in the face of the adverse vote at the polls. When one considers the platform on -which the election was fought, I could not believe that those members forming the government were the same individuals who pledged themselves to Senate reform, reduc-

The Budget-Mr. Casselman

tion of taxation, and above all, that there should be no changes in the tariff that would be detrimental to industry until after full investigation had been made by that much talked of tariff board. As a result of this, I must state that so far as this government is Concerned their first object seems to be to keep themselves in power, and secondly, to do nothing that will in any way injure their prospects at the polls, if any they have. The only conclusion, therefore, that I can draw is that this government is looking after them-,selves first, and the interests of the country second, provided that in looking after the interests of the country they do nothing which will in any way affect their political prospects.

The Minister of Finance, when he laid his budget proposals before the House on the 15th day of April, drew the attention of the House to the remarkable development that had taken place in our trade. He further pointed out that the favourable trade balance of over $402,000,000 was the greatest in the history of the country with the exception of the war years. From the discussion which has taken place since that day-and may I refer particularly to the address that the hon. member for Lincoln (Mr. Chaplin) made some days ago-I think that the opinion of the majority of the members of this House is that that favourable balance of trade is not in the interests of this country. The hon. member excepted the war years. I presume that he did this in fairness, knowing that during the war years there were more reasons for certain industries being developed than there were at any other time. But I do not think he should have done so because to me there is a great similarity betweeen the balance of our trade in the war years and our balance of last year. In the war years our balance of trade was caused largely by the fact that we were shipping ammunition out of this country. Ammunition in itself is deadly to man. Last year our balance of trade was caused by the fact that we were shipping out of this country large quantities of raw materials, materials upon which we should have done the finer work. Although their shipment was not deadly to man, it was deadly to industry in this country. I am favourable to action which increases our trade, but, on the other hand, I feel that the policy which we must pursue to build up this country is to retain these raw materials and work into the finished product as far as possible these great resources with which a beneficent Providence has so bountifully blessed us. Unless we do this, I do not see how it is possible for us to secure the one thing which will solve many of our various

problems, particularly our railroad problem, namely population.

Having mentioned population, I would like to place on Hansard certain figures _ which I have just received from the Department of Labour of the United States. Before doing so, I would like to remind hon. gentlemen that in the last five years there have gone from this country to the United States over 600,000 of our very best citizens. Why did they leave this country? They did not leave because of their dislike for Canada. They left here for the simple reason that it was not possible for them to get any' work in this country. I do not see before me at the moment the letter to which I have just referred, but if I remember the figures correctly they showed that in the year 1925, 123,000 or 128,000 Canadians went to the United States. During the fiscal year, which runs until the first of March, that had decreased to a certain extent, but I do not think there is any decrease at the present. As a matter of fact, from my' own personal observation-and I am in a position to make personal observation-I think there are more people going to the United States at the present time than have ever gone before. It is my privilege, due to the fact that my home town is Prescott, directly across the river from Ogdensburg, where the American consular office is situated, to see the workings of that office. I am also privileged to be in my own office on Saturdays and as a rule for a few hours on Monday morning, and I do not think on any day' since the session opened I have been in my office when I have not drawn affidavits for some Canadian citizen who was going to the United States. I would draw the atteqtion of hon. members to the effect that the requirements that one must meet in order to go to the United States are now well known, and it is only through some technicality that these people come to a law office. I had occasion this morning to go to the American consular office at ten o'clock. I found there ten Canadians waiting their turn to get vises to go to the United States. Those ten Canadians come out of a population of approximately 100,000, and if the exodus from Canada to the United States to-day is in the same proportion all over the Dominion as it is in this particular consular district to which I refer, hon. gentlemen can see that in the neighbourhood of at least a thousand Canadians have gone to the United States to-day.

I have before me an article written by Mr. Herman Kull. Any one who is familiar with the district at Ogdensburg will know that Mr. Kull is chief immigration inspector at Ogdens-

The Budget-Mr. Casselman

burg. This letter is dated Ogdensburg, New York, September 10, 1925, and reads as follows:

August immigration frotm Canada at this point broke all records if or the month. The figures Show a gain of 7,367 over August, 1924.

It is all very well, Mr. Speaker, for members of the government or for those who are suporting the government to say that people have always gone from this country to the United States. I am willing to grant that, but never in the history of this country have people gone to the United States to the extent to which they are going at the present time, and the figures which can 'be obtained from any official source only show those who go through the legal channels. If hon. members were familiar with the schemes which are used to get into the United States, they would know that -those official figures in no way give a proper idea of the exodus.

I wish, Mr. Speaker, to be as complimentary as I can to the hon. Minister of Finance, but I regret that it is not possible for me to be as complimentary as were some hon. members who have preceded me. There are some changes in the budget which I -think are commendable, possibly not as commendable as they might have been, because I do not think that they should ever have been made law in the first place. Take the receipt tax, for instance. I think the Minister of Finance himself will admit that this tax has always been a failure. I do not think there was ever a law passed that was observed as little as this law. The removal of the receipt tax gives relief to certain corporations and certain classes of business, but it does not give any relief to the -farmer or to the man who really requires relief. *

The Minister of Finance has been complimented very highly for reducing the sales tax. I am willing to compliment him for that as well. My compliments may be more or less left handed because of this fact: Before making the reduction the tax was raised, thus getting us 'back to the position in which we were before.

Great credit has also been -given the Finance minister for the reduction of the income tax. In this respect I feel very much like the hon. member for North Waterloo, who preceded me, but in my statement I will not go as far as that hon. gentleman did. I grant you that certain -people who previously paid taxes have received a reduction, but I venture to assert that when one year has passed and we find out the amount of money that is received from income tax, it will be found that instead of there being a great reduction the taxpayers of this country will pay just as much money as the}7

did before the so-called reduction went into effect. I say that -for this reason: After the budget was brought down I was at home and some nine or ten people came to me with their income tax returns. One of them was a man who last year had paid something less -than $3, but who under the new tax will not pay anything. Almost every other individual in the group was a person who had received a certain income from stocks which previously were exempt from taxation, the taxation being paid by the corporation. Now, although most of those people were strong supporters of the government they were greatly surprised and aggrieved, in view of the announcement as to the reduction in taxation which they had seen in the newspapers, that their taxation had doubled and in some cases trebled.

The Minister of Finance has also been given great credit for the reduction in the postal rates. In that respect there is very little actual saving to the country. There is a reduction in the -three cent rate but not in the local rate. If it were possible to secure statistics showing the proportion of local letters that pass through the mail as compared with the number of three cent letters you would find, I think that there are as many of the former as there are of the latter. The reduction in the postage rate amounts to one cent. The farmer will not derive any great advantage from this. If any hon. member holds a view to the contrary let him go out to the country and- interview every farmer he meets as to how many letters he writes. I think it will be found that if a farmer benefits to the extent of fifty cents per year by this reduction he is one of the biggest correspondents among the farming class.

Now, Mr. Speaker, I do not wish to enter into any discussion in regard to the tariff, but I shall place on Hansard an article which appeared in the Toronto Mail and Empire of April 28th. The article in question deals in a general way with the advantages of industry, but alludes more particularly -to the manufacture of motor cars. The article starts out by saying:

The great majority of Canadians who can afford to have motor cars already have them. Every man who owns a car is poorer to-day than he was the day before the Mackenzie King government reduced the tariff, because his car is worth less. If for any reason he wants to sell hiis car without buying a new one he will feel the full effect of the reduced value. If he desires to buy a new car the price quoted will be lower, but when he offers his old car in part payment he will get so much less for it that he will receive very little advantage from the lower price of the new car, and in many cases no advantage.

The Budget-Mr. Casselman

I am told that in ninety per cent of the cases where people buy cars they have an old car to dispose of. If that be the case, and the statements in the foregoing paragraph are correct, only ten per cent of the people who buy motor cars at the present time are going to receive any advantage because of the reduction of duty. I am speaking only of the purchasers of cars. I make no reference to those men who, because of the change in duty, will 'have to follow the million Canadians who have already crossed the border into the country to the south in order to seek employment. The article continues:

Will the man who never had a oar because he could not afford it be any better able ito buy one if the money now put into circulation in Canada by the automotive industries is sent to the United States instead? If he is out of employment will the shutting down of many Canadian plants help him to get rwork or if he has employment will his salary or wages be increased by the wrecking of a great Canadian industry ?

The output of the Canadian motor car factories for ithe last fiscal year was valued over $110,000,000. Will the sending of a large proportion of that amount to the United States add to the prosperity of Canada? Will at help men employed in other Canadian industries, of farms and factories or those engaged in mercantile business and the professions?

An .answer may be found in the result of an experiment of a manufacturer in a small New England town in the days when the manufacturers of the United States had a struggle for existence and were in constant danger owing to the attacks of free trade theorists who wished to take away their protection. This manufacturer decided to mark all the money paid out in wages to his employees and ask the merchants and the banks of this little town to let -him know how many hands the money passed through within three weeks after it was paid out in wages to his employee. Careful records were kept and it was found that on the average every dollar paid out in wages had passed through the hands of eight different persons.

For instance a workman paid his doctor five dollars; the doctor used the five dollars to pay a grocer's bill; the grocer paid it to a baker; the baker paid it to a miller for flour; the miller paid it to a farmer for wheat; the farmet bought groceries with it; the grocer paid dit to a carpenter who made some alterations in his store; the carpenter spent it at a hardware store; the hardware merchant paid his butcher's bill with it; the butcher paid it out to a farmer's wife for butter and eggs; the farmer's wife bought dress materials at a dry goods store; the dry goods merchant gave it to his daughter to pay her music teacher; the musdc teacher used it to pay her dentist. If the money had been followed for a year instead *of for a few weeks the record of circulation would have been even more surprising. Consider the effect upon Canadian trade if even half the money now paid out in Canada by motor car manufacturers in wages and for materials is sent to the United States to pass from hand to hand in that country instead of in Canada.

It is not my intention to follow this subject further. I shall content myself by saying that the arguments advanced in the foregoing article are absolutely irrefutable.

The next subject I wish to take up, and which is of particular interest to the locality in which I reside, is the development of power on the St. Lawrence river, and I trust I shall be pardoned if I adhere rather closely to my notes in discussing it. As the question of power development has already been discussed in the House this year in connection with the resolution moved by the hon. member for Toronto Northwest (Mr. Church), I will take up this branch of the subject first.

For years an agitation has been carried on in eastern Ontario to have the great sources of power on the St. Lawrence river developed, due to the fact that eastern Ontario could not compete with the western 11 p.m. part of the province industrially because of the excessive cost of power. Industry has attempted to get a foothold in eastern Ontario, but whenever an application for power would be made to the Hydro-Electric Power Commission of Ontario, the body which to a large extent controls power in Ontario, the estimated cost was such that invariably the industry in question settled in the western districts where power could be secured at a fraction of the cost. The transportation advantages which we enjoy in the east were of no avail because of the high cost of power. Steps were taken to remedy this situation, one of the reasons being that the sources of supply in western Ontario were nearing the verge of exhaustion. The St. Lawrence being an international waterway it was necessary for the federal government to make arrangements with our neighbour to the south for the required development. Applications have been made by the Hydro-Electric Power Commission of Ontario and the Ontario government for the right to develop power at Morrisburg, this being the desirable location agreed upon by the experts of the department, but in spite of the fact that these applications are of long standing no progress has been made in - the matter. I am informed that no reply has ever been given to the Ontario government or the Hydro-Electric Power Commission. The International Joint Commission was capable of arranging the scheme, but rather than use this existing organization the government has seen fit to appoint various commissions or bodies, and although these bodies have been in existence for several years they are apparently no nearer their goal than they were a year ago. We have been told by the Minister of the Interior (Mr. Stewart) that that body is due to report during the month of June. If they report favourably I assume from what the minister has said that the

The Budget-Mr. Casselman

province will be authorized to commence the development. But what will be the result if we receive an unfavourable report?

I am under the impression that the report will not be favourable owing to the fact that as a rule United States interests are unfavourable to this kind of development as a public ownership project. I have also had an opportunity of talking to various members of the United States body and unless the have changed their ideas, or unless their ideas have been misinterpreted by me, I feel the development will be delayed for many years. Another very important point is that along the United States shore during late years, and since this agitation for power development has become more acute, water rights have been secured by large private interests, and as there are no powers of expropriation in the state, this in itself will delay the development in the event of the United States members of the commission being favourable to the development.

I wish to compliment the Minister of the Interior upon his statement that this government admits the right of the province to carry on the development. I was greatly surprised at this admission because of a previous experience. Some two years ago I had the pleasure of hearing Sir Adam Beck address a large mass meeting at Prescott where he made the statement that the former Minister of Railways and Canals, Mr. Graham, had admitted that afternoon to him the right of the province to carry out the development. That statement was received by those present with great satisfaction, but that satisfaction was turned into consternation a couple of days later when there appeared in the press an article in which Mr. Graham denied making such an admission.

The eastern part of Ontario is sorely in need of power development. With this development we can go forward and carry our share of the immense burden under which the people of this country rest. Without it we must continue as we are now in a more or less dormant state. For this reason, as well as the fact that the development of industry will result in advantages to all classes of the community, I urge the government to use as much pressure as they reasonably can to have the development carried through and to free themselves from being dependent on various commissions except for the technical advice which they will give.

The other subject which I wish to take up and which I think is of greater outside than local interest is the development of navigation. May I make reference to a development

/

which, in my estimation will do more than possibly any other scheme to assist both those in the west who are interested in the transportation question and the Maritimes which, in my opinion, have not procured what they reasonably expected when they entered confederation? In opening this subject, as one of the younger members of this House I feel chat I am voicing the sentiments of the younger element of the central provinces when I say that we realize the great difficulties under which both the east and1 the west are suffering. It is the desire of the central provinces to look at these difficulties from a national standpoint rather than from the selfish standpoint of their own interest, and to do everything that can be done to assist those parts of the country which require assistance owing to their geographical position or from other causes. But on the other hand we expect that in turn you will realize that we who furnish the large proportion of revenue to the country Shall have assistance from you in those things which make for our economic wellbeing. During the last decade an amount of money verging on $100,000,000 has been spent on the new Welland canal. Although that money is being spent in the central part of the Dominion, that development is bound to result in great benefit to the west by way of reducing rates, and if the proper policy is put into effect by the management of our National railways the eastern provinces will also benefit greatly. Their benefit will come about through decreased freight rates, reduction of debt on the National railways, and above all, through the return of empty Cars there will be car space that can look after the carriage of their coal and other products.

When the Welland canal is completed I feel that although a great benefit will be derived from the development, a small further expenditure would almost double the benefit. When the Welland canal is completed deep water navigation will be open to the foot of lake Ontario. From there eadt to a distance of over sixty miles a very small expenditure, which I am told the federal government of the United States are willing to be responsible for, will open the river for boats which will be running in and out of the lake ports. This would make the town of Prescott the eastern terminus of the deep waterways system. Although the Minister of Agriculture (Mr. Motherwell) is not in the House now I would like to compliment him upon an address he delivered or an interview he gave in Toronto, I believe, in October of last year, when he favoured carrying on this development as far

The Budget-Mr. Robinson

as it could be carried on without too great an expenditure being required, and in which he favoured Prescott as the eastern terminus of the deep waterways system.

Any one who is familiar with conditions with respect to both our railway facilities at Prescott and our harbour there will at once realize that this undertaking would be* the only logical one to carry out. Lack of grade on the railways from Prescott east is such that a maximum load can be carried. This statement could not be made to apply if Prescott were situate even fifteen miles west because as soon as one goes west of this point grades are encountered which diminish to a large extent the carrying capacity of a railway engine. The only expenditure that would be required is an elevator at Prescott of reasonable capacity to look after the late shipments of grain which cannot get through to Montreal, and as the harbour is kept clear of ice in the winter it would be possible for boats to be laid up with cargo for storage until such time as it is needed for transshipment. By carrying through .this proposal, which I strongly urge should be taken up by the government of the day in time to ensure that it will be a reality when the Welland canal reaches completion, a step will be taken which will result in an advantage in price of several cents per bushel upon all western grain carried in this way. This is estimated by various parties who have gone into the rates at from four to eight cents per bushel. It will also result in traffic which is not now going over our National railways being routed in that way and this would mean a greater use being made of our own ports and a consequent increase in railway revenue. The Halifax elevator would then become more than a monument to the present senior member for Halifax (Mr. Black). There would also be the advantage of return cargo being available for the products of the Maritimes, which are now labouring under railway rates that they cannot reasonably overcome under present conditions.

In closing I would draw the attention of hon. members to a resolution passed at the annual meeting of .the Associated Boards of Trade of Ontario, held at Kingston last fall. I believe copies of this resolution are in the hands of the Prime Minister and various members of the government, but I would like to put it on record. It states:

That the Ontario Associated Boards of Trade are clearly in accord with the Domimion Marine Association in the opinion that the progress which has been made in the construction of the new Welland ship canal, and the heavy investment in the Canadian

canals system demand that the preparation of a transshipping port on the Canadian side at /the foot of deep water navigation be no longer deferred; and that the Dominion government be urged to announce the selection of the trans-shipping port at the point considered to be in the best interests of the citizens of Canada, and to hasten the steps necessary to ensure the erection of transfer and storage elevators for the first grain cargoes to come down through the enlarged canal.

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

Sidney Cecil Robinson

Conservative (1867-1942)

Mr. S. C. ROBINSON (West Essex):

Mr. Speaker, if it is the wi^h of hon. members and the understanding of the whips that I should go on to-night I will take only half an hour of the time of the House. I would not speak at this late date were it not for the fact that I represent so important a constituency as West Essex.

The most important item in the budget speech of the Minister of Finance (Mr. Robb) is the reduction in the duty on automobiles, which will affect the main industry and some 280 manufacturers of parts. This is a serious matter to my riding and one which was not contemplated after the speech from the Prime Minister (Mr. Mackenzie King) at Richmond Hill on September 5 last and the further promises made in the Speech from the Throne, all to the effect that there would be neither increases nor decreases in the tariff until a thorough investigation had been made by a commission. The people of the country now realize that the promises and pledges of the _ Prime Minister only amount to a scrap of paper. The effect of this reduction on the industrial and building operations will be serious indeed. I am informed by the manager of the Chrysler corporation that they had a building programme which would take three j^ears to carry out and it was their intention if possible to do all their export business from Windsor instead of from the United States. As a result of the budget announcement, however, this building programme has been held up indefinitely. The Ford, Ontario, mentor plant had a programme to manufacture closed bodies in Canada. It was to be the first plant of its kind and was to cost some $500,000, while the equipment and machinery would cost some $3S0,0O0 more. This programme also will be held up indefinitely. They were to employ 1,000 men in this branch of their business. It seems ithat the policy of this government is to penalize industry wherever it is successful. We find another example of this in the woollen industry. I think it only fair that the government should announce beforehand the next - industry to be attacked so that those engaged in that industry may be prepared for the worst. Rumour has it that next year it will be either cottons, furniture, or the boot and shoe industry.

The Budget-Mr. Robinson

As regards the income tax, we are all pleased to note the reduction- in so far as the exemption up to S3,000 in the case of married men is concerned, but instead of referring to it as a reduction, the minister should have described it as a transfer of income -tax. What is really taking place is the transfer of the tax from one class to another. It is being placed upon those who derive tlheir incomes from dividends and who will suffer from the system of double taxation. Had it not been for the extravagance of the present government, reductions could have been made in this direction some two years ago. I trust that the reduction in postage will not be seized upon as an excuse to cancel the order in council of October last directing the Civil Service Commission to regard favourably the application made by employees of the postal service for an upward revision of their salaries. This is badly needed by the postal service employees in the cities, owing to the fact that rent and living expenses are much higher in these centres than in rural Canada.

In the election of 1921, in the by-elections of 1923, and again in the general election of October last, the main issue of the compaign was the tariff, and to illustrate the change of sentiment among the people I may point out that whereas in 1921 the late Hon. W. C. Kennedy carried what is now East and West Essex by a majority of 7,195 votes, that majority in the by-election of March 1, 1923, for the same territory, was out down to 1,072, while in the recent election held on October 29 West Essex was carried by a majority of 2,521 in favour of the Conservative candidate, the other two Essexes also voting in support of the Conservative policy.

The border cities, and especially the city of Windsor, have grown more rapidly in the past ten years than any other part of the Dominion, but I regret to say that this growth has been at the expense of the rest df Canada. There are coming to Windsor every day hundreds from the prairie provinces and the west and from the Maritimes, and these people either acquire homes or rent their houses. If therefore they cannot find employment in Windsor and vicinity they are obliged to go to the other side, especially their sons and daughters. So that it is only a matter of time in most cases until whole families drift over to the United States.

Referring to the want of sufficient tariff protection, Messrs R. G. Dun and Company last year reported that fifty-four industries in the border cities had either closed their doors or failed in business. Let me mention a few instances to show how the border cities have suffered for the want of adequate tariff protection.

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

Robert McKenzie

Liberal

Mr. McKENZIE:

Did R. G. Dun and

Company report that it was for want of tariff protection.

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

Sidney Cecil Robinson

Conservative (1867-1942)

Mr. ROBINSON:

I did not say that.

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

Robert McKenzie

Liberal

Mr. McKENZIE:

I understood you to say that.

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

Sidney Cecil Robinson

Conservative (1867-1942)

Mr. ROBINSON:

ables and fruits from the United, States, especially those who grow under glass. When their product is ready for the market they have to compete with the surplus from the more southern districts of the United States. I maintain that they are entitled to protection, especially during the season when the better quality of Canadian products is ready for the market.

Now, Mr. Speaker, let me make some reference to what Australia and the United States have done under a protective tariff. During the last four years the United States has experienced unprecedented prosperity. Heretofore in my memory Canada has always shared in that prosperity. We may have been six months later in getting it, but we were always six months later when a depression came along, as well. President Coolidge in his message to congress on December 6, 1923, said:

The present tariff law has accomplished its two main objects; it has secured an abundant revenue and been productive of an abounding prosperity. Under it the country has had a very large export and import trade. A constant revision of the tariff by the congress is disturbing and harmful. The present law contains an elastic provision authorizing the president to increase or -decrease present schedules not in excess of 50 per centum to meet the difference in cost of production at home and abroad. This does not, to my mind, warrant a rewriting of the whole law, but does mean, and will be so administered, that whenever the required investigation shows that inequalities of sufficient importance exist in any schedule, the power is authorized to make adjustments.

I have the report of a speech made by Sir James Elder, before the board of directors of the Canadian National Exhibition last September. This is what he has to say regarding the tariff in Australia:

"Australia is now riding on the crest of a phenomenal wave of prosperity, and the wheels of industry are spinning as never before, so much so that the people of Australia are fast being relieved of the heavy burdens of taxation. Protection has been the one cause of Australia's wonderful success in the interchange of trade with the other countries."

Sir James declared that during the past three years Australia had reduced her war debt by over $110,000,000, while the aggregate federal debt had been decreased to the extent of $200,000,000. Australia had not only reduced her public debt, but the government was seized of the importance of relieving the peopJe of heavy income taxation and four reductions had been made since 1914, the present tax being on the basis of pre-war days, plus 20 per cent, and further reductions were contemplated in the very near future.

I claim that if protection and an increase in the tariff has done so much for the United States and Australia, Canada should adopt the same principle and we would experience unprecedented prosperity.

I would just like to touch on the question *f taxation. As everyone knows, this country [Mr. Robinson. 1

is overburdened with taxation, and under the present government there seems small chance for relief. In Ontario we have municipal, provincial, and Dominion taxes, twenty in all as follows:

Real estate.

Business tax (Corporation).

City income tax.

Federal income tax.

Cheque tax.

Gasoline tax.

Automobile tax, sales and license.

Sales tax.

Real estate transfer.

Amusement tax.

Stock transfer.

Excise tax on beer.

Sleeping and parlour car tax.

Business tax to province, to provincial secretary.

Manufacturing license to Ottawa.

Tax on notes and overdrafts.

Matches.

Playing cards.

Tobacco.

Workmen's compensation tax.

I claim that if Canada had raised her tariff instead of reducing it as she has done five times in as many years, we would have been able to reduce our taxation the same as the other English-speaking countries have done. President Coolidge says:

There is a limit to the taxing power of a state beyond which increased rates produce decreased revenue. If that be exceeded, intangible securities and other personal property became driven out of its jurisdiction, industry cannot meet its less burdened competitors, and no capital will be found for enlarging old or starting new enterprises. Such a condition means first stagnation, then decay and dissolution. There is before us a danger that our resources may be taxed out of existence and our .prosperity destroyed.

Just a word or two in connection with immigration. It is almost universally agreed in this country that instead of spending millions of money to bring immigrants to this country, such money would be better spent in the application of some scheme to keep farmers' sons at home. I have this suggestion to make, that where there is no room on the farm for the sons when they grow up, they should be assisted in establishing themselves as farmers, under a scheme such as that which was employed in connection with soldiers' civil re-establishment.

I have been several times in the United States consul's office in Windsor, which office has had to take larger quarters to enable them to take care of the rush for vises to enter the United States. A large majority of these applicants are from the farms or the small towns in Canada, and, I am sure they would welcome some encouragement to establish ,themiselves in this country as farmers. There seems to be no let up to the

The Budget-Mr. Robinson

emigration from Canada if one is to judge by the birth certificates required from the Ontario government and the crowds at the United States consul's offices. The number of vises issued at Windsor to native bom Canadian citizens during the peiiod from January 1 to April 30, 1926, with similar figures for the same period of 1925 given for the purpose of comparison, is as follows:

1925 1926

January

260 262February

219 295March

294 540April 1 to 30

235 5141,008 1,611

The London Free Press of April 17 of this year states as follows:

A ilarger number of Canadians have been passed through tbe office of

Unemployment and .the lack of a satisfactory guarantee of steady employment is said by the consul, G. R. Taggart, to be the reason generally given by the applicants if or vises. Another reason is said to be the lack of diversity of employment.

I have been asked many times why a car made in Canada costs so much more than one made in United States. From the Dodge factory in Toronto I have secured a statement showing how each hundred dollars of the increase is apportioned. The statement is as follows:

1. Duty paid Canadian government on import of raw materials, $35.05.

2. Increase in Canadian dealer's commission over United States dealers, due to increased investments and lessened sales field, $24.

3. Increased cost of materials purchased from Canadian vendors over and above the replacement of same from the United States due to Canadian increased cost of producing, $17.02.

4. Entering our purchase price on parts supplied by parent plant is a charge enforced by Canadian government in establishing a fair market value, $8.65.

5. Increase in Canadian direct labour cost, occas-sioned by smaller production, which production does not warrant the installation of improved labour-saving devices, $2.08.

6. Overhead expense, which can only be reduced to the United States overhead minimum by volume of production, which is at present impossible in Canada, $6.51.

7. Selling and commercial expenses which are occas-sioned by a lessened prospect ratio of sales, $6.69.

The Minister of Finance, at page 1647 of Hansard says:

While we all admit that Canada has more taxes than we would like to have, and more taxes than we had prior to the entry of Canada and of the whole world inito the war, nevertheless Canada is not taxed to a degree that would induce any of our

citizens to leave Canada and go and live in some other country.

This is not in accordance with the facts. A British subject whose income is earned and whose business is in the United States, while residing with his family in the border cities, where this whole American income is spent, is penalized for doing so. As an example, take a man who is a large owner and the general manager of a business, and who purchases and maintains a motor car for his use in the conduct of his business. Such a car is listed as an asset on the books of the corporation, and its operation is charged to the expense account so that its ownership can be very easily proved. Through an arbitrary and inflexible ruling of the Customs department many such persons have been forced over a period of years to pay customs tariff on cars so owned for the privilege of expediting passage from one's office to his residence. On the other hand to avoid paying such duty these persons could have an office boy

an American-drive them back and forth by bonding the car, as many Americans do, thus contributing not one penny in the shape of taxes, part of which would go towards helping to build and maintain these roads. Further, while spending no part of their income in Canada, they can drive their cars twenty-four hours a day for six months in the year, which is the period of the bonding limit. This is the grossly unfair feature of the regulation.

For the privilege of residing and spending one's whole American income in Canada, one is further forced to pay tribute in the shape of taxation, which, by comparison with the present rate in the United States, is excessive, the Canadian tax being approximately four or five times as large as one would pay to the United States government. From my personal knowledge, I could name dozens of well-to-do Canadian citizens who have moved to the United States owing to the comparatively heavy taxes in Canada.

The recent departmental ruling in regard to the stamp tax on cheques drawn on American banks is very unpopular with the banks in the border cities, and I presume it is the same at other international boundary points. Border cities bank managers positively know of Canadian firms, as well as American branch companies located in the border cities, who maintain accounts in Detroit banks on account of the stamp tax on cheques in general, and particularly because of the stamp tax on cheques drawn on American banks.

I would like to point out another fact that has developed, and which has been found to

Power Development

be most irritating to customers of the border cities banks, and that is that very frequently American cheques deposited by bank customers in the border cities, after stamps were affixed and the cheques forwarded to Detroit for collection, were returned for various reasons unpaid, and the stamps detached before reaching the Canadian banks who had forwarded them. The result is that if Canadian banks are requested to reforward these cheques the customer is obliged to pay again the stamp tax, because the stamps must reasonably be affixed. I was told by one bank manager that a concern in Detroit had a deposit of quarter of a million dollars in a Canadian bank, and that the whole amount was withdrawn on account of this tax.

Before I take my seat, Mr. Speaker, I would like to congratulate you on your reappointment to the high office you have held since 1922. I am a new member of this House, and for that reason I am not much versed in the intricacies of parliamentary procedure, but since the session began I have been greatly impressed with the fairness and impartiality which at all times Your Honour has exhibited.

On motion of Mr. Eraser the debate was adj ourned.

On motion of Mr. Robb the House adjourned at 11.50 p.m.

Tuesday, May 18, 1926

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

May 17, 1926