February 21, 1927

CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Yes, that is one, but I

shall not go into that now. It is the prerogative of the Minister of Finance, to which ever party he may belong, when he is bringing down his budget, to paint things in the rosiest possible light. It is his duty to do that, and I do not begrudge him it at all. But my hon. friend from West Calgary (Mr. Bennett), in one of those brilliant speeches of his to which

we all are pleased to listen, exposed some of the fallacies of the reasoning of the Minister of Finance. He pointed out that while there was in the budget of last year an apparent reduction, in taxation, there was actually a real increase in the amount taken from the people. Certainly it is a strange paradox when you can cut down taxation and yet take more money from the pockets of the people.

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LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

It always happens when

the Liberal party is in power. I fear that the Minister of Finance is somewhat of a financial Christian Scientist. He realizes that it is not so important to cut down taxes as to make people think you are cutting them down. I well remember a witticism of Mr, Dooley, that famous character of Finley Peter Dunne. He said that if Christian Scientists had a little more science and medical men a little more Christianity, it would not matter which you called in so long as you had a good nurse. Now the Minister of Finance is the financial nurse of the Canadian people, and I will admit that he has put over his financial Christian Science so well that he has made a great many people believe that they have had their taxes reduced, when as a matter of fact they have not been reduced to the extent he points out.

The Minister of Finance came into Ontario in the election campaign, and like another warrior of some centuries ago, I will admit that he came, he saw, he conquered. He impressed the people very much. He has such an honest, frank appearance, almost too frank at times. Outside of the Minister of the Interior (Mr. Stewart), the Minister of Finance is the most honest looking man in the present government, and on one occasion I remember pointing out in the House that the Minister of the Interior looks more honest than any man could possibly be. So when the Minister of Finance came into Ontario the people looked him over and said: Once more the Liberal party has given us an honest man. They had become almost hopeless of finding one in the Liberal party since my good leader and myself left it. They found the Minister of Finance was such a frank, blunt, honest gentleman, that they really believed him when he told them he had cut down the taxes of every man, woman and child in the country, for that is really what he said. The Minister of Finance, the Prime Minister and all the other ministers, and their friends too I suppose, stated that the taxes of every man, woman and child had been cut down by the last famous Robb budget.

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

Liberal

Mr. STEWART (Edmonton):

They did

not need to tell them. The people believed it.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

That is what I say; that is where the Christian Science came in.

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LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

The Minister of Finance forgot to tell them that while the automobile cuts he made may have perhaps lowered the price of automobiles, that did not affect the family of the ordinary workingman. He forgot also to point out that the ordinary workingman is not an income tax payer, and that the ordinary workingman does not give many receipts, from which the Minister of Finance took the tax last year. He might have added that the ordinary workingman in Canada has given many less receipts in the last four years than ever before, unless you take into account receipts for visas and passports to go to the United States; for apart from that the ordinary workingman has not had very much to give receipts for. I repeat what I stated last year: The only reduction made in the cost of living to the ordinary workingman in this country by the budget of last year was an occasional one-eent postage stamp on the letters he mails. I will admit that the present budget is a little improvement on that because the Minister of Finance this year has reduced the sales tax, and that will be of some benefit to the ordinary working people. But I would point this out in regard to the sales tax: When we went out of power in 1921, our sales tax was three per cent. It was raised to six per cent by the incoming Liberal government, of which the Minister of Finance was a member; was lowered to five per cent last year, and the minister now reduces it from five to four per cent, or reduces it, as he says, twenty per cent; so the sales tax is still about 33i per cent, to use the minister's own method of figuring, higher than when we went out of power in 1921. I fear that cutting it from five to four per cent will not make a very great deal of difference to the ordinary workingman.

The income tax has been reduced by this budget. There is nothing in that for the ordinary workingman of this country, for he does not pay income tax. We have also a reduction in the stamp tax on cheques and on notes and overdrafts, but the ordinary workingman does not indulge in any of those to any great extent, so the sales tax is practically the only thing by which the ordinary workingman will benefit by this budget.

32649-33J

I find myself sometimes propounding this problem to myself: How is it that this

government, which avows that it contains the only Simon pure friends of the workingman, that it contains the real tribunes of the people, finds it so difficult to give proofs in its budgets of its love for the workingman? I remember reading of Tom Moore, the poet, saying that he wrote for the masses and the classes, but not for the asses. The budgets of my good friend the Minister of Finance are for the classes, but not for the masses. That is his attitude in regard to the workingman.

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An hon. MEMBER:

Where are the asses?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

The asses are those who believe everything the Minister of Finance tells them in regard to budget taxation.

Oh, yes, I forgot one cut that the minister has made in this budget for the workingman, and that is in the excise duty on matches. Those pipe smokers who smoke more matches than tobacco now have the gratifying knowledge given out by the Eddy Company the other day that there will be a one cent reduction in the price of a large box of matches. So the workingman does gain a little there.

May I sincerely congratulate the Minister of Finance on one feature of his budget, and that is that he has quit, for this year at least, the tariff tinkering which did so much to bring about instability and depression in business, unemployment, and that exodus from our country which has been greater in the past four years than ever before in our history. At the same time I find myself wondering what has become of those boasts he made, as well as the Prime Minister and other members of the government, even the Minister of Trade and Commerce this afternoon indulged in them-that these cuts in the tariff have not only improved the industries concerned, but have improved the conditions of the ordinary workingman and have helped to bring about general prosperity.

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LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

If they have, why is it the Minister of Finance has stopped making cuts? What has become of that famous speech of my good friend the Minister of the Interior regarding the death knell of protection? What about those famous speeches from the housetops of the Minister of Immigration on the beauties of free trade? The real fact, Mr. Speaker, is this, that the Minister of Finance has at last come to the conclusion that we have been right in saying during the past

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four years that what Canada wants is a stable tariff policy. We have not been advocating a high tariff policy, but have been advocating a stable tariff policy, and I submit that the Minister of Finance should be thoroughly congratulated on his adoption of the views we have adhered to and expounded for the past four years.

After recess I propose to take up another subject of great importance to this Dominion of Canada.

At six o'clock the House took recess.

After Recess

The House resumed at eight o'clock.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Mr. Speaker, when the

House rose at six' o'clock I was congratulating the Minister of Finance on the fact that he had once more come back to the sane attitude of a stable tariff policy for this country. I was pointing out that his budget represents the attitude which has been advocated by the party on this side of the House for the past four years, and that we were all happy that the tinkering with the tariff, which had caused so much depression and unemployment and such a great exodus from our country in the past four years, had been halted for some time at least; and I was asking him why, if the cuts in the tariff which he had made in his former budgets were good for the industry of the Dominion, they had been discontinued.

I wish, now, Mr. Speaker, to devote a few moments to general questions affecting the country as a whole before coming to the constructive suggestion that I hinted at-a suggestion, it is true, applying largely' to one great section of our country, bur which if adopted would have a very marked and profitable effect upon the country as a whole. It has become more or less a trite saying on the part of our public men that Canada is confronted by many difficult problems, which are largely the outcome of geography. For example, it is said that we have on our hands a large railway problem, a serious taxation problem, a pressing immigration problem, a disquieting exodus problem, and perhaps a problem of sectionalism. In discussing these problems our public men in addressing various Canadian Clubs have divided our country geographically into four sections, although in some of my own' platitudinous speeches I have increased these to five. These five sections are easily discerned when one looks at the map of the Dominion. First, there is the eastern section comprising the maritime provinces; then comes Quebec and eastern Ontario, which should be taken as another great sec-

j ; . ,|#||[?

tion; next comes northern Ontario, which is often described as an uninhabited barren waste, but which extends for 700 miles from North Bay on the east to the Manitoba boundary on the west, and which I shall show in a moment is really a vast empire in itself; to the west again we have the prairie provinces; and, finally, across the Rocky mountains comes the fifth section comprising the province of my good friend from Vancouver Centre (Mr. Stevens)-British Columbia.

Each of these five sections, as has been pointed out many times, has its own resources, its own problems, its own aspirations and its own sectionalism; and if we are to progress as a nation, as has been said on frequent occasions-and I believe it is very true-we must in each of these sections treat our local problems rather from a national than a sectional viewpoint. In other words, we cannot develop this country in patches, we must look at all questions nationally, in a spirit of compromise, ready to do what is best for the Dominion as a whole, each section regarding the problems of the other sections in the kindliest spirit possible.

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Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Let me point out to you,

Sir, a few examples of the problems to which I refer. In the maritimes we have had the very fine, kindly, hospitable people there- people whom I had the very great pleasure of visiting during the recent elections, and who are represented in this House by I think a group of men as brilliant as any group representing any other section of the country, if not the most brilliant-I say we have had those very kind people in a veritable slough of despond by reason of the problems confronting the maritimes, which problems the Duncan commission was appointed to study and to find remedies for.

The Duncan report has been laid before this House, but I regret to say, Mr. Speaker, that I have failed so far to discern in the budget speech any intimation from the Minister of Finance that he is prepared in any way to make provision for any of those recommendations. And my good friend from Pictou (Mr. Cantley) in the question he put to the Minister of Finance recently did not receive very much encouragement in this respect. However, I do hope that before this session is much further advanced the Minister of Finance and the government will show that they are deeply impressed with the Duncan report and propose to give effect to a large part, if not all, of its recommendations. Personally I am not directly interested in the maritimes, but I am interested in the build-

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ing up of a great Canadian nation on this part of the North American continent, where my sons and yours may live and love and propagate their species, instead of being forced, as in the past, to go across to the United States to earn a living. Because of that feeling, I am looking at the maritime question as I try to look at the questions of the other sections of this country, from a national standpoint, the standpoint of building up a great nation in a great empire.

Then take Ontario and Quebec, which I have placed together, because despite all differences of race and creed these two sections have the same industrial, agricultural and economic interests, and even these sections have their troubles. We heard something of them here this afternoon, when the hon. member for Macleod (Mr. Coote) criticised the Minister of Finance because there were no more cuts in the tariff. That is an absolutely opposite attitude to that which I am taking, Sir. One of the problems of this great industrial section of Canada, eastern Ontario and Quebec, is that problem of a stable tariff policy. Old Ontario and Quebec have the big industrial developments of our country and they have the problem of regaining a stable tariff policy in order to carry on the industries of this country. You must have confidence in the country in order to carry on business prosperously and progressively, and I hope the members of this House from the prairie provinces will look at that problem in the same spirit I mentioned a few moments ago when I mentioned my standpoint in connection with the maritime question. They must remember that while they demand a number of things, they should consider the interests of this eastern industrial section of our country, and they should hesitate to destroy a tariff policy which, for a period of fifty or sixty years or more, has helped to build up the industrial life of Canada.

If you take Quebec alone, that province has its own problems, one of which was referred to by the Premier of Quebec in a recent speech when he said that it would be wise for the people of Canada generally to keep their hands off the British North America Act. In our country there are, unfortunately, what I sometimes call constitution mongers, people who are so worried about the constitution of our country, or so worried about the autonomy of Canada and so much afraid that we are subservient to some other part of the empire that they wish to put all the power of our people in the hands of this parliament. Mr. Taschereau, if I read his remarks aright as I think I did, stated recently that it was the policy of the people of Quebec

to guard those rights which they were given in the British North America Act, of which they are passionately fond, and that he objected to any of those rights being taken away by any other part of Canada. He contended that the act should remain as it is unless changed by the same parliament which put it into force. I believe that to be a- proper attitude; I believe this confederation may only be held together by looking at all matters in the light of the best interest of each portion of that confederation. The Prime Minister of Canada recently stated at a meeting in Toronto that if my leader and the present Minister of Justice (Mr. Lapointe) should get into an argument as to the rights of the minorities in the province of Quebec, the people of that province knew quite well from whom they would get the greater justice. I will not criticise that statement, but I will say that I am very sure Premier Taschereau was not worrying about the present government nor the present Minister of Justice, and neither would he have worried if our party had been in power. The Premier of Quebec was probably looking ahead forty or fifty years to the time when, instead of there being only two English speaking people to one French speaking person, there may very possibly be five or ten English speaking persons to one person speaking French, and he was fearing for the future of those minority rights which the French people of the province of Quebec value so highly. Again I say it is the duty of everyone to look at these problems in the same way as we looked at them when the question of confederation was first mooted.

I might, take another section before I deal with the problem of my own particular part of Canada, referring'now to the prairie provinces and British Columbia. They have their problems also, largely questions of transportation because of the great distance, in the case of the prairie provinces at least, to the seaboard. The situation is somewhat better now in British Columbia because of the Panama canal, but the prairie provinces have a long haul to the sea. It is true that Mr. Beatty recently stated that Canada has the lowest freight rates of all the countries of the world. I do not differ from him at all but, Sir, even though the freight rates are low, because of the vast distances over which our producers have to ship their grain to the markets of the world before it reaches seaboard, in comparison with the distances other grain-growing countries have to carry their products, even the lightest burden of transportation charges is quite heavy enough for the people to bear. Again I say it is the duty of those in other

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sections of our country to look at these problems aa broadly as possible, remembering at the same time that in Canada we have two great railway systems in which the people of Canada and the people of other countries have invested something like $3,000,000,000, and we must consider'the rights of these railways to a certain extent.

I would like to deal for a moment with the Hudson Bay railway, and then I will pass on to the problems confronting my own part of Canada. The Hudson Bay railway is another sectional question; the only people who are arguing very strongly for its completion are those in the provinces of Manitoba and Saskatchewan. I may say here and now, very frankly, that I have very little faith personalty in the Hudson Bay railway ever becoming a very serious competitor of the present railways as a grain carrying route. I am also free to admit that I may be wrong, but even with that feeling which I have expressed I have never opposed the Hudson Bay route, although it was wrongly said in the prairie provinces that 1 had done so. Yet I believe with many others that even if it turns out a failure, the millions spent there might be well spent if they bring about a better national understanding and a better general good feeling in our country than we have at present.

This afternoon the hon. member for Macleod (Mr. Coote) stated that Canada is an agricultural country, a statement which has been made very often. I am going to assume the risk of making a prophecy to-night, although I know that prophesying is a very dangerous game. I believe that within twenty-five years, instead of our greatest interests being in agriculture, Canada will probably have a far greater interest in minerals. Even in 1926, the past year, we produced minerals in this great country of ours to the extent of almost a quarter of a billion dollars, the exact figure being $243,000,000; that is the value of the products of our mines in the last year. It has been pointed out by geologists, and if you look at a geological map of our country you will find it to be so, hat 85 per cent of our country is potentially a mineral country, and only 15 per cent agricultural. If those figures are accurate, and I have received them from geologists whom I could name if necessary, then I think I have some basis for the prediction I made a few moments ago. In Canada we have a vast extent of pre-Cambrian rock, which is the oldest geological formation known in the . world, and it has been pointed out by these same geologists that all the rich mines in the world have 'been discovered in that rock.

The rich Rand mines in South Africa; the Mysore mines of India, and the rich Australian mines have been discovered in pre-Cambrian rock, and more than half the surface of Canada is made up of this formation. If you look at this geological map you will find that there is an immense horse shoe of rock almost completely surrounding Hudson bay, taking in northern Quebec, in fact nearly all of Quebec; all new Ontario; northern Manitoba, northern Saskatchewan and extending up to the Arctic regions. This area contains about two million square miles, more than half the total area of our country, and it is all made up of pre-Cambrian formation. That shield of rock was described very recently by the secretary of the Ontario Mining Association as the greatest undeveloped mineral field left in the world. Those are his own words; I am using his own expression, and I believe it to be correct from my study of the . matter. Mr. Corliss, one of the directors and general manager of the Mond Nickel Corporation, a very able and outstanding mining engineer who has been in the north country for about twenty years, in speaking of this same area stated that only 5 per cent to 7 per cent of that pre-Cambrian shield has ever been explored. That part includes a small section which juts down into the United States just west of lake Superior. In that 5 per cent to 7 per cent which has been explored we have the immensely rich copper mines of Michigan, which have been worked for nearly a hundred years and which turn out annually millions of dollars worth of copper; we have the immensely rich iron mines of Minnesota, which annually turn out about 60,000,000 tons of iron ore; we have also the Sudbury nickel mines, which supply 90 per cent of the nickel of the world, and which have turned out $700,000,000 worth of nickel since they were opened up hardly more than a generation ago; the rich Porcupine gold mines, and the ribh Cobalt silver mines, to say nothing about the Rouyn district in the province of Quebec, the Woman lake and Red lake districts of northern Ontario, and the rich mineral areas up in northern Manitoba. If, as Mr. Corliss states, in from five to seven per cent of our country lying under this pre-Cambrian shield we have found the immense riches I have just mentioned, what lordly dreams we might conjure up in our minds of the possibilities of the exploration of the other ninety or ninety-five per cent of that area of pre-Cambrian shield!

Let me take the liberty for two or three minutes of presenting to the House a few facts, and many such could be given. These are so startling that it is worth while perhaps

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to mention them because I think the question is a very important one. In the first place, look at the Hollinger mine, which I had the pleasure of visiting a few months ago. It is an immense gold factory which employs three thousand men the year round and which turns out in dividends at the present time about $6,000,000 a year. Eighty per cent of these three thousand men are Canadians and own their own homes, and the Hollinger mine is on the verge of becoming the greatest gold mine in the world.

Speaking of nickel, I mentioned a moment ago the fact that the Sudbury nickel mines produce ninety per cent of the nickel used in the world, that they have produced $700,000,000 worth of nickel since they opened up about a generation ago, and that they have paid about $100,000,000 in dividends.

Speaking of silver, the Ontario silver mines are stated to be adding one ton of silver a day to the silver supply of the world.

As to the district of northern Manitoba under this pre-Cambrian shield, the Flin Flon mine there is stated by authorities to-day to have $226,000,000 worth of ore already blocked out. A quarter of a billion dollars' worth of ore already blocked out!

In Ontario in 1910, roughly sixteen years ago, we produced $42,000 worth of gold; today we produce $31,000,000 worth, and the authorities declare that it will shortly become the second greatest gold producer in the world, second only to South Africa. Many other facts of this kind might be stated, if I wished to take up the necessary time. But the facts I have mentioned are so startling, so outstanding, it is a sufficient indication of what I mean when I speak of the importance of the great pre-Cambrian shield. And, Sir, it should impress upon this government the importance of the mineral aspect of our country which has not been sufficiently dwelt upon in the past. In fact I believe no government of the past has been sufficiently seized of the importance of the mineral development of our country. _

Now, Sir, to get closer to the problem which I am going to discuss, if you look at the map of Canada-and it is sometimes worth while looking at that map-you will find that the northern section of Ontario to which I have alluded is in area an empire in itself. It is 700 miles across and is wider than the provinces of Manitoba and Saskatchewan together. It has been described as an uninhabited barren waste, and yet that area is as great as the area of England and France together, having a population of only about 200,000 people, but on account of its richness in pulpwood we, in association with the province of Quebec, are

turning out much of the pulp and paper which is going to make an immense export from our country; and I have already mentioned some of the potentialities in regard to the minerals. But because of the scarcity of population up there and because of the small agricultural development, it is a heavy burden on the three lines of railways which run across it from east to west and from west to east. Any solution, therefore, which would bring about greater development, greater freight traffic in that section, would be beneficial not only to the railways, not only to that section, but as well to the country as a whole. In addition to that, Sir, any great development of that country-and it must take place ultimately- will mould into one mighty whole the two areas of Canada which that section divides.

Sir, besides the precious metals which I have briefly mentioned, and the fringe of which we have merely touched, we have in that section- and there are in other parts of the country which I will mention in a moment, for instance thf province of Quebec, from which my hon. friend the Minister of Justice (Mr. Lapointe) comes-there are hundreds of millions of tons of undeveloped iron ore. Mr. Corliss, whom I quoted a few minutes ago, states that the United States government geologists have asserted that we have in northern Ontario nine thousand million tons of thirty-five per cent iron ore or better, which at the present rate of use of iron ore in the United States would last that country itself for over one hundred years. In addition to that, other great discoveries have been made in the provinces of British Columbia, Quebec, Nova Scotia, and Manitoba, the Belcher islands in Hudson bay showing t'he occurrence of immense deposits of iron ore; and in spite of the existence of hundreds of millions of tons, perhaps thousands of millions of tons, we are not using one ton of Canadian ore in the blast furnaces and steel plants of the country. We are importing to-day about a million of tons of ore a year, two-thirds from the United States and one-third from Newfoundland; and we imported last year about $200,000,000 worth of steel products, quite a large proportion of which would, under a proper policy, be produced in this Dominion.

In the development of iron ore, coal is very important indeed-in fact, iron ore cannot be converted into pig iron and steel without the use of coal. We imported as well last year about $60,000,000 worth of coal, and we exported about $4,000,000 worth. Yet we have down in the maritime provinces, in Alberta and in some other sections of the country immense deposits of coal, in fact the second largest coal deposits in the world. We have

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also immense deposits of iron, which I have just described. Surely, Sir, with these vast deposits we should apply our brains to working out the problem of developing our own iron and steel industry from our own' iron ore and our own coal. And, Sir, it can be worked out; in fact to my mind has been worked out, and I shall give proofs of that in a few minutes-because I ^hall not take up a very great deal of the time of the House on this occasion.

Sir, iron and steel are basic elements of commercial progress in any country. If you look over the commercial history of the world you will find every country on the face of the globe which has gone ahead very rapidly commercially has based the foundation of its commercial progress upon iron and steel development. That is true of England, it is true of Germany, it is true of France, it is true of the United States. I could give figures to prove that but I do not wish to take up the time of the House in doing so at the present time. May I poipt out, as well, to those who are studying international affairs that the iron and steel valleys between Germany and France are the cause, to a great extent, of the periodical wars between' those countries. They are the cause at the present time of the difficulties in settling the problem between these two countries, showing the importance to any country of iron and steel.

Now before I go into further details, may I give you a few of the reasons why I am not a lone voice crying in the wilderness in regard to this great problem? In the first place an iron ore committee was appointed by the Drury government, the Drury progressive government in Ontario, I think it was in 1922. The committee investigated the whole iron and steel problem. They spent much time visting various parts of this country, they were men experienced in this question, they investigated the whole iron and steel problem of our country, and in 1923 when Mr. Ferguson had come back into power they made their report. They had not completed that report when Mr. Drury went out of office, they made their report to Mr. Ferguson. In brief their report was to this effect-that we could develop the iron ore resources of our country by a bounty, by a cooperative bounty, if I might express it in that way, given by the provincial and the Dominion governments towards that development. That report was accepted by the Ferguson government, they agreed to carry it out, and the question was put up to this government, here at Ottawa. But so far as I know no serious consideration has even been given it by this government. In 1924 I put a question on the order paper regarding it

and was informed by the Minister of the Interior that the question was still under consideration. So far as I know it is still

under consideration, and of course as we all know, that does not mean very much. In other words the Dominion government did not at all, so far as I know, cooperate in any way with the provincial government cf Ontario.

But I should like to point out to you, Mr. Speaker, to the Minister of Justice (Mr. Lapointe) and to my other Fremch-Canadian friends in this House, that Ontario is not alone interested in this great question. A few years ago in Quebec, around Chicoutimi, millions of tons of iron ore were discovered. It is described as titanic magnetic iron, and government geologists have passed upon this as being possible of economic development. That is stated in scientific issues of our government papers. Because of that immense discovery the Taschereau government in 1925 passed an act called the Iron Ore Premium Act, which is reported in an issue of Investigations of Mineral Resources and the Mining Industry, 1924, by the Department of Mines, as bringing forward the proposition that they would offer four-fifths of a cent per unit, that is, per one per cent iron, of any ore mined in Quebec and used in the steel plants or blast furnaces of that province. So the great Liberal government of Quebec, great at least from the standpoint of the Liberals, has come to offer a bounty for the development of the iron ore of that province. Surely if I have no weight with the Minister of Finance, the Taschereau government should have some weight. Here we are sitting to-night, midway between the Conservative government in Toronto and the Liberal government in Quebec, both of which have realized the imporL ance of this great question and have offered bounties for the solution of it, and we have the Ottawa government, sitting here midway between the two, which, so far as I have been able to discover, has made no move even to consider the question.

In 1926 the Canadian National Railway officials issued a booklet, a copy of which I hold in my hand, and a perusal of which is worth the time of any hon. member. If any hon. gentleman has not read that booklet on the mineral resources along the Canadian National railways in northeastern Canada, he should make it his duty to do so at once. In that booklet they give pages to the iron ore question. They state that the Vermilion ranges and the Mesabi range in the state of Minnesota extend into Canada and they conclude their article on pages nine and forty-seven by advising that this Dominion government-and

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I commend this to the Minister of Railways, who is giving me his kind attention-should cooperate with the provinces of Quebec and Ontario in the development of those ores by a bounty system. In addition I have letters from high officials of the Canadian National Railways to whom I wrote some years ago on this question. They point out to me that this is a vital question as regards not only Canada but the national railways, and at the bottom of one letter the following sentence is used:

I do not know of anything of greater importance to Canada than the development of our iron ore resources.

That the Canadian National take the attitude they do is, I think, a reason why this government should give the question some support.

But I have still another very good authority, a man who has the respect of all classes in this country, a man who certainly has the respect of all the Liberal party in this country, a man who is looked upon as one of our Canadian statesmen. I refer to the Right Hon. W. S. Fielding, who made two speeches in this House dealing with this question. One was in 1909 and the other in 1920. Naturally I did not hear the one in 1909, but I did hear the one in 1920 and I listened to it with pleasure. I took the trouble to look it up and I have on my desk the statement regarding this question. I will read just a couple of passages, although the whole speech dealing with bounties is worth reading. He was dealing not directly with the question I am supporting, that is, the giving of a bounty for these iron ores, but with the question of bounties for the iron and steel industry, which bounties, he pointed out, were instituted by the Conservative government under Sir Charles Tupper before the Liberal party came into power in 1896, and which he carried on. This is from Hansard of 1920, volume 2, page 2505.

Bounties on iron and steel originated with the Conservative government in the days of Sir Charles Tupper. The operations under them were not large. There was a small operation in the province of Quebec and another in the province of Nova Scotia. I have not the figures but I think no very large sum was paid out until after our government took up the question.

Then on the next page he says, and this practically sums up the conclusion to which he comes:

At all events the time came when the bounties automatically ceased, and to-day no bounties are paid. What was the result of that? Was there anything in the result which would justify that departure from free trade principles? I

am afraid my farmer friends will not agree, but I believe it is susceptible of proof that every dollar that was paid out by way of bounties on iron and steel, and millions were paid out-

By the way, between $18,000,000 and $19,000,000 were paid out.

-came hack to the Dominion treasury in the form of excise and customs duties on the new business created as the outcome of that policy. 1 think that can be established as a pure financial question, but there is more than that.

Then he goes on to describe the growth of the iron industry in Nova Scotia, New Brunswick and some of the other provinces. I made it my business, since reading his remarks, to look up the growth of that iron and steel industry, and it is worth while putting on record a few figures which are very expressive of the growth of the iron and steel industry after the bounty system had been inaugurated in this country by Sir Charles Tupper and supported by Mr. Fielding and the Laurier government, just as the old national policy of Sir John A. Macdonald was carried on by them in the same way. _

In a pamphlet called Iron and Steel, which I have under my hand and which was issued by the Statistics branch of the Department of Trade and Commerce, they point out that in Canada in 1924 there were 1,005 iron plants manufacturing iron and steel with a combined production of $371,000,000, and capital employed $537,000,000; men employed, 79,000, and wages paid, $100,000,000 per annum. What I am going to give now is of interest to my friends, particularly from the prairie provinces; I refer to the distribution of these different plants. The distribution is as folplants

Ontario 645

Quebec 174

British Columbia 69

Nova Scotia 36

Manitoba 32

New Brunswick 20

Alberta 18

Saskatchewan 6

Prince Edward Island 5

In other words, every one of the nine provinces of this Dominion had some of those iron and steel plants, the foundation of the progress and prosperity of which was laid in the bounties of the Conservative government, followed by the Laurier-Fielding government. If I may digress just for a moment, I should like to point out in this connection the progress that is being made in manufacturing generally in those western provinces. The Statistics branch of the Department of Trade

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and Commerce, in the same year, 1924, issued a report on manufacturing in the four western provinces. The figures are as follows:

Four Western Provinces Capital invested in manufacturing. .$458,000,000

Gross value of the products 384,000,000

Wages paid 76,000,000

I do not wish to go into details, but in order to explain the point a little further I may say that about one-half of that development has taken place in British Columbia and the other half in the three prairie provinces. Therefore, not only in iron and steel but in manufacturing generally the western provinces have profited by the policy which we advocate on this side of the House, and which was carried on for so many years by the Laurier-Fielding government for the purpose of assisting so far as they could in building up the industries of this country.

I have still one more reason, and then I shall have concluded with my reasons why this question is worthy the consideration of this government. I refer to the Duncan report, which I mentioned a few moments ago and which is of the utmost importance to at least one great section of this great country. The Duncan report deals with the different problems in the maritime provinces. It deals, among others, with the coal problem and it gives three recommendations for the solution of the coal problem of the maritime provinces. In the first place it says that the tariff board should immediately investigate the reasons for imposing, if necessary, a tariff on coal coming into this country. I believe that is being done by the tariff board at the present time. Secondly, it advises federal aid to coke ovens. That means a bounty system. Third, it advises that a bonus should be paid on all Canadian steel when it is made with Canadian coal.

I have given you, sir, the report of the Duncan commission, which backs up absolutely the attitude I am taking, and I hope that that report, not only in regard to coal but in regard also to other branches of industry in the maritime provinces, will be acted upon by this government in the very near future. I have cited to you authorities from all sections of our country and support from all classes in our country, support from political leaders of opposing parties and different sections, in regard to the necessity of this government giving some attention to the development of the iron and steel industry in Canada. There is this to remember. If you offer a bounty for the development of iron ore in this country and no Canadian iron ore should be developed, not one dollar will be lost to the treasury; in other words, failure will cost you nothing.

It might be asked why the United States is not giving bounties for the development of this industry. There are many reasons. In the first place the United States is an immensely rich country, and it is much more densely populated than Canada. In the second place they have richer ores than any that have so far been discovered in Canada. I have been over there and have stood on the brink of a body of ore that stretched as far as from here to Keith's theatre, into which trains were running, loaded with ore by means of steam shovels. That ore is very easily mined. Again, they have immense capital; they have their own railways and steamboats: and, as well, they have a tariff which has built up the iron and steel industry in that country.

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LIB

Charles Avery Dunning (Minister of Railways and Canals)

Liberal

Mr. DUNNING:

I wonder if my hon.

friend has given any thought to the side of this question which he touched upon a moment ago when he spoke of the very much better quality of ore, the higher iron content of the United States ores as compared with Canadian ores, from the point of view of how high a bounty would be required in Canada to make it more economical for Canadian iron and steel plants to use Canadian ore of the lower quality, rather than import United States ore as they are doing at present.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

- I have given a good deal of thought to that, but I do not wish to go too much into detail to-night. There are reports before this government and before the provincial governments. They have an act in the province of Quebec under which a bounty of four-fifths of one cent per unit is paid, which would work out at about 40 cents a ton of 50 per cent iron. To my mind, although I am not an authority at all, that would not be sufficient to develop our bodies or ore. But I have the impression that once our iron ore deposits have begun to be really developed we will find some richer types if ore such as they have in the United States. With all the immense deposits of iron ore we have io this country, surely the good God did not let all the good ore stop at the 49th parallel. Surely Canada has been treated a little better than that.

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LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Yes, they are better. I

noticed in the Financial Post issued just a few days ago an article dealing with Belcher deposits and saying that Captain Bernier was being employed to go up to Belcher island and take a cargo of iron ore from there to England for testing purposes; and if it is found worthy of being developed they are either going

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to carry the ore across to England or build some plant on the border of the Hudson bay, if they can get the water power they require.

Mr. James J. Hill, that great Canadian-American, wrote a book in 1910 from which I quoted in later years in this House. He stated in this book that those immense deposits of American ores would in from twenty-five to fifty years be well within sight of depletion. To-day the rich ores in the United States are being so rapidly depleted xhat they are beginning to use the lower grade ores, ores of a very much lower grade than they were using twenty years ago, and it is only a matter of time when we would bring in our low grade iron ores. I am one of those Canadians who do not wish the development of my country to take so long that we shall all be gone and forgotten before any of these immense deposits -9,000,000,000 tons-of iron ore are developed. I agree with Mr. Dooley when he says that he doesn't know what posterity has done for us that we should do so much for posterity. Let us do something for this generation, so far at least as the development of our iron ore and coal deposits are concerned.

I have another suggestion to make before I sit down. We have to-day a Minister of Mines who gives his spare moments, perhaps an occasional spare hour from his multitudinous duties as Minister of the Interior, to the question of the development of our mineral deposits. I believe that without increasing the size of the cabinet at all there are within the government a number of ministers who have much less to do than the Minister of the Interior, and this whole question of the mineral development of our country is so important that it might be well for the government to put this matter into the hands of some other minister who has more time than the very busy Minister of the Interior-I say this of him in no critical spirit. This mineral development is an important question. It is a question which if properly solved would help to solve in a very large way the railway problem of our country; it would help to solve our immigration problem; it would mean more work and more wages for our people; it would lower taxation in this country.

My good friend the member for West Calgary offered something constructive to this House. I am copying him, if you will, although I had this idea also, but I care not who gets the credit for this development if it should take place. I am quite willing to give the credit of this development to this government, and to give them my meed of praise if they will come forward and develop these great resources, but I do desire this great country of ours to be made a country

where our boys and girls can remain and find employment, and help to build this country up into a great Canadian nation. I hope, in other words, that this government, which I have abused perhaps as much as anybody-somebody behind me says, "not half enough"-I hope they will so act that they will prove to our boys, the boys who went to the front, if you like, that this is not only a good country to die for but a good country to live for.

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LAB

James Shaver Woodsworth

Labour

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

Mr. Speaker, as the various

budgets have come up in the last few years we have been trying from this comer to present as far as possible the distinctive viewpoint of labour with regard to the various points at issue. I take it that, since we will all acknowledge that labour is basic, what is in the interests of labour is really in the interests of the people at large. If we raise the level of labour we raise the general level. As one American economist puts it somewhere, the effect on the marginal people of the community is a good test of the value of any policy.

The Minister of Finance (Mr. Robb) has taken a very optimistic view indeed of the situation in Canada. He says:

The Dominion enters its diamond jubilee year with a happy outlook. Our farmers have, in general, enjoyed bountiful harvests; our industries are active and working well up to capacity, many indeed are working overtime; employment is at a high level and our transportation companies report a large volume of business; retail trade is brisk, money is plentiful and a buoyant spirit prevails.

While that may be true with regard to certain individuals or groups, I submit it is not true of very considerable sections of our community. It may be true that some have great prosperity, but I would point out that there is a great difference in these days between the rewards which are received by the ordinary worker, whether in industry or on our farms, and those which come to many who live largely by their investments. I have been trying as far as I could to get statistics from Canadian sources, but I find that our bureau of statistics is not adequately equipped to give matters of this kind the attention that they require. However, the general conditions existing here and in the United States are somewhat similar, and I suggest that a detailed statement of the conditions in the United States affords a very valuable sidelight on our conditions in Canada. Recently the United States Bureau of Statistics has been taking a census in which there is a survey of American statistics from

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1923 to 1925 covering some. 160 lines of manufacture. They find that the number of individual establishments is decreasing and that the number of workers employed in these establishments is decreasing. The statement is made that during those two years the compensation received by the workers decreased $5,000,000 while the employers' profits went up $380,000,000, or a net gain for the employers of $385,000,000. 1 can quite understand that in these circumstances the employers might take the attitude assumed by the Minister of Finance and consider that things were now very satisfactory. The figures also show that the output per worker increased from $3,157 in 1923 to $3,461 in 1925, an increase per worker of $304. During that same period those workers who were retained on the job had their wages increased an ever-age of $31 a year. In other words, for every dollar paid out in increased wages the employers added nearly $10 to the price of his product at the door of the factory. That is the evidence afforded by the United States Bureau of Statistics. What are the workers in this country to think of this condition of things? I was glancing over a labour paper some days ago in which there was some comment with regard to the enormous profits that were being made in the automobile industry, and a long list of figures was given from Motor Stocks, fourth edition. This was the comment on the figures taken at random from one of these reports:

The first figure shows that $1,000 invested in the Buick Motor Car Company, organized in 1904, returned in eleven years $710,000. What does this mean? It means that a man earning $1,500 per year (and that is more than the average worker earns), would have to work almost five hundred years to earn as much money as this one thousand dollars would bring by being invested for eleven years.

That helps us to realize the situation that exists. Then we ask ourselves, why work when it is easier to make more money by not working and investing in this way? A case is given in the press in connection with a man named James Cousens, who had been working as a bookkeeper at $75 per month. After spending years and years of energy in this capacity he was able to save $1,509. He borrowed $1,000 and lent the $2,500 to the Ford company and went to work in the Ford factory in 1904. Twelve years later we are told that Cousens, in addition to drawing a large salary from the Ford company, received $30,000,000 in dividends, and in 1916 he sold out his interests in the Ford company for $30,000,000. That undoubtedly is an exceptional case, but these exceptions help to illustrate the effects of a situation under which very large awards are

being given to those who invest and much smaller awards in every way to those who are actually producing. I should like to quote a statement given by our Dominion Statistician with regard to the distribution of income. He says: .

According to an authoritative study of wealth and income of the people made by W. I. King, and published by the National Bureau of Economic Research, some years ago, the income of the people of the United States is divided approximately as follows, according to the diffrent sources: landlords' rents, (using the term

landlord in a strict economic sense) one-twelfth; interest, two-twelfths; wages, six-twelfths; and profits, three-twelfths. This distribution of the national income would probably fairly well correspond to the distribution in Canada.

The Bureau's estimate of the national income of the people of Canada in 1923 or 1924 is somewhat over four billion. Using Professor King's proportions, we would estimate the total of income received as wages in Canada was something over two billions per annum in these years; that business profits were somewhat over one billion; landlords' rent perhaps 350 millions, and interest on capital 700 millions. The term "profits" as used here, of course includes the business profits of the 700,000 operating farmers, as well as those of the big corporations.

Then I turn to King's book for further illustrations of the distribution of wealth. He says:

In 1918 about eighty-six per cent of the persons gainfully employed have incomes of less than $2,000 per annum and almost fourteen per cent have incomes exceeding that sum. In the same year, about sixty per cent of the national income was divided among the eighty-six per cent of the gainfully employed who have incomes less than $2,000 per annum and almost 40 per cent of the national income was divided among the fourteen per cent of the gainfully employed who had incomes exceeding $2,000.

And one little table here:

The most prosperous one per cent of the income receivers had 14 per cent of the total income, .

The most prosperous 5 per cent of the income receivers had 26 per cent of the total income, .

The most prosperous 10 per cent of the income receivers had 35 per cent of the total income,

The most prosperous 20 per cent of the income receivers had 47 per cent of the total income.

I think it is high time that our bureau of statistics was able to furnish us as full statistics along this line as are being furnished by the United States departments.

Now I want to consider for a few minutes the statement as given us by the Minister of Finance. With regard to taxation I notice there was a decrease in the amount received for income tax of $8,671,961.57. There was, nowever, on the other hand an increase in the amount received for customs duties of

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$14,144,856.50. It is very significant indeed that whilst the proceeds from income tax are decreasing the proceeds from customs duties are increasing. That is, upon those who are least able .to bear the strain a greater burden is being imposed. Let us see what sums are "being extracted from the pockets of the people," to use the very graphic phrase of the member for West Calgary. The total amount received for taxation, according to the statement of the Minister of Finance, was about $343,000,000. That means $38 per head on an estimated population of 9,000,000, or $190 per family of five. Of this total the customs import duties alone, according to the minister's statement, amount to $141,500,000. That means $17 per head, or $85 per family. It is this particular kind of taxation that is steadily rising; already it is $85 per family; while the income tax received from a comparatively small group, who, however, own the greater part of the wealth of the country, is steadily decreasing.

For what are those amounts secured from the taxpayers of Canada? It is difficult for most of us to apprehend these large figures; it is much easier to understand proportions. Now let me give a few items upon which, according to the minister, we expended these revenues: Health expenditure, .19; scientific institutions, .27; labour across the country, so far as this government is concerned, .39. We talked for nearly two years about giving relief to the Home Bank depositors. The amount paid them represents . 13 of our revenue. These four items together amount to only .98 -less than one per cent to these very important calls on ,our exchequer. Now, supposing old age pensions were put into operation in all the provinces, the proportion which would be paid by the Dominion government, according to the present scheme, would amount to only 3 per cent of our income. Bear in mind that the minister has told us that the proportionate amount of our expenditure that can be directly attributable to the war was 45.18 per .cent. I think a comparison of these items will enable us to see that we are drawing enormous sums chiefly from the poorer sections of our community-the less wealthy, if you like to put it that way-and that on the other hand the greater part of these huge sums is going to the people who hold a mortgage on this country, and to whom interest must be paid on the war debt.

With regard to the proposed changes put forward by the minister, I would congratulate him on the reduction of the sales tax. I think that is a good move. But on the other

hand there is a 10 per cent reduction on all the rates of income tax, which will have the effect of relieving taxation on the higher incomes out of proportion to the relief granted the lower incomes. The same thing is true in regard to the two-cent stamp on all cheques, irrespective of value; two cents on a small cheque is an altogether different proposition from two cents on a large cheque. Thus throughout this budget, in almost every case we find it is the higher incomes or the higher expenditures that are being relieved. I am not quite sure, but as far as I can see there is one gain that labour makes in addition to the sales tax-cheaper matches. Since this is the one outstanding example, it may be well for us to consider how much it amounts to.

On each package of matches manufactured or sold: three-fourths of one cent for each one hundred matches or fraction of one hundred matches.

In recent years I have not had enough to do with household buying to know just how many matches we use in a year. I suppose those of us who are not smokers use about twenty packages. That would look to me something like a yearly saving of 15 cents! But supposing it is ten times that, what is a dollar or two saving in the annual budget of a family that pays through the customs import duties $85? Yet in view of this wonderful saving of 15 cents or a dollar a year the minister says that the diamond jubilee of confederation should unite us to work for the lasting prosperity and progress of this our glorious land. Should it? I would suggest to the minister that there will have to be some more changes than he has announced in his budget before a good many people become very enthusiastic over the prospects of prosperity. Some hon. gentleman suggests that as there is a poetical license there ought to be a ministerial license. Even then this is rather extravagant language.

For a little while I should like to turn to the alternative suggestions offered by the member for West Calgary (Mr. Bennett). I presume that the Conservatives are pretty well satisfied with this budget; they have offered no amendment. I presume that even the Minister of Immigration (Mr. Forke) must be fairly well satisfied with it, or he would not be where he is to-day. Let me examine the statements made by the member for West Calgary, for if we must accept some alternative to the Liberal proposals I suppose it would be along the lines he has put forward. After reading his speech with considerable care I am inclined to believe that he is a

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better lawyer than an economist. Apparently his ideal is largely that of a self-contained nation. As he says:

The domestic market is of the first importance to Canada-

And he urges that this market is:

-the only means by which we are able to build up the industrial life of Canada and bring to our shores a consuming population for our own products.

And again he warns:

Every time we open a channel of trade; every time we seek for our commerce an outlet; every time we develop for ourselves a means to send our trade and commerce to foreign lands, we place ourselves in a position where it may be possible for a foreign legislature to destroy that channel overnight with untold injury to the Canadian people.

I submit, Mr. Speaker, that that is mere rhetoric. We might as well say that every time we cross the street; every time we go for a walk; every time we take a meal and every time we inhale a breath we expose ourselves to some dangers. But do we propose to shrivel up and die because there may be some possible dangers in the ordinary course of living? I think we may understand that we must take the dangers along with the benefits which come from international trade.

The hon. member envisages a world filled with commercial enemies. That may have been true at one time, but to-day we are more and more living in a cooperative community; industrially, commercially and financially we are closely interlocked, and we are developing into a vast inter-related world. Only politically, as a matter of fact, do we maintain our independence with a moderate degree of success; otherwise we are closely related to all parts of the world. We all know that we have $2,000,000,000 of British money invested here, and that we have $3,000,000,000 of American money; that means that whether we like it or not, to that extent English and American investors are penetrating and controlling this country. They are crossing our international boundaries every time their money crosses. We must necessarily send our goods to every part of the world; to-day we are anxiously watching events in China and other parts of the world, which simply indicates that we have interests scattered over the world, and it would seem to me that we would be turning the clock back if we were to revert to the idea of self-contained communities with other communities as commercial rivals profiting at our expense. Rather I think we are advancing to the stage where the benefit of one is the

benefit of all, and where world trade flows freely there is mutual benefit.

The hon. member for West Calgary (Mr. Bennett) was very much perturbed because Canadian trade with various countries does not always balance, or because in some particular instances our imports are greater than our exports. In effect he says, "I found that from Switzerland we imported last year goods amounting to $9,170,000, while we sold that country goods amounting to only $1,310,000. Can we afford to establish a channel of trade with that community?" 1 should like to ask why not. These figures by themselves are of very little value, because trade is not always direct, and we have all sorts of.three-cornered, four-cornered and six-cornered trades We all know the place the clearing house has in ordinary banking affairs, and I submit that in the world's great clearing house it is a matter of comparative indifference on what bank my cheque is drawn. In our analysis of these figures we must take into account the larger and more complicated relations, not simply the figures which relate to the direct traffic between one nation and the other.

The hon. member seems to have conveniently forgotten the paramount importance of the domestic market when he bemoans the fact that the export of trade is falling. For the life of me I cannot see that this latter part of his discussion is at all consistent with his earlier remarks. He said, "I view with the greatest apprehension the diminution of our export trade; to the extent to which that trade is diminished, to that extent does it work a hardship upon the Canadian people." A little earlier it was the domestic trade that was of importance, now he bemoans the fact that the export trade is said to be diminishing. This kind of reasoning, it seems to me, is very characteristic of some of those who seek protection as the cure all for our social ills; they have not realized fully that we can export only as we import. Apparently such a simple consideration has not yet entered into the consciousness of a great many of those who are so keen on what they call protection. We export only as we import; the one process is absolutely dependent on the other. If we hinder importation we hinder exportation, and if we increase the one we are liable tc increase the other, indeed must ultimately increase it. It is by fixing attention for a while on one process and then forgetting it altogether and concentrating on an altogether

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different process that some of the advocates of this policy manage to win and apparently hold public approval.

The hon. member is somewhat consoled with the ten per cent reduction in the income tax, and hopes that in time the income tax will be entirely abolished. If we turn back to the figures I gave a while ago it will be seen that if the income tax is abolished the larger part of the wealthy people will go almost scot free. What would the hon. member substitute? To use his own words, "A universal turnover tax, a tax by which every man who buys something will be able to make some contribution, a known contribution, a percentage levy." Surely that is a brilliant scheme to fleece still further the man with the lower income. As I understand it, and I am subject to correction, we are banishing the sales tax but erecting a super-sales tax, a universal sales tax, one affecting all commodities notwithstanding the fact that a great many of these commodities are already taxed by means of the customs duty. I want to be fair to the hon. member. So I quote his own words:

... if we impose a tax based upon the expenditure of the people, then as the poor man has less to spend than the rich, his contribution will be correspondingly less, but because he exercises the franchise he will make some contribution to the life of the state in the form of taxation.

Really, the audacity of the rich and their representatives simply staggers one 1 I wonder whether they really believe that by their specious arguments they can any longer fool the great mass of the people. Perhaps it is only fair to think that they nave so long concentrated on their own view of this question that they have absolutely failed to realize the viewpoint of the majority who are not the beneficiaries of the present system. A man's ability to pay surely must be judged not by what he spends on the necessities of life but by what he has left after spending that money-the very part which, according to this scheme now propounded, would be exempt.

The hon. member has given us two new rules which should! apply with regard to taxation, two grand new principles which may be added to those of Adam Smith-universality and visibility. For a long century we knew nothing about these two principles! The world waited in earnest expectation. At last in the fulness of the time they have been revealed to us through the mouth of the hon. member for West Calgary. Visibility and universality! And what about visibility? Why, the hon. member would take away the

only tax that we have to-day that is clearly visible-the income tax. And what about universality? From those who have the large incomes-on which he says he would like to abolish entirely the income tax-he is removing the opportunity of paying to any considerable extent for the upkeep of the country. He is placing the greater part of the burden, according to this statement, upon those people who must pay for the necessaries of life, and who as they spend would have to carry the weight of taxation. It is rather interesting in this connection to note the plea that is made as to benefactions obtained from well-minded people. The hon. member states that in this new country hospitals have to depend on benefactions that come from well-minded people. On this there are one or two comments I should like to make, because the whole viewpoint that is put forth here is so very characteristic of one class in our community. In the first place I would say that the statement that the hospitals have to depend entirely upon benefactions is not correct, I know of a great many hospitals throughout my own part of the country, and the greater part of their income is not derived from benefactions but from taxation. It is quite true that some of the benefactors seek, where possible, to retain the right to sit on boards, and more or less manage the concerns of the hospital, but the greater part of the revenue comes out of public taxation. I should like to ask further why hospitals and educational institutions should have to depend upon benefactions? These institutions which minister to the primary interests of the people should not have to wait until some well disposed people come along and endow them. It would seem to me that the very first claim upon the resources of the country ought to be the hospitals and educational institutions. The implication behind this suggestion is that these public benefactors, who are the wealthy people, of course, know much better than the public where their surplus wealth should be placed. The raison d'etre of the income tax is that the public ought to decide where the surplus wealth is to be placed. And if we carry out the principle underlying the income tax still further it will remove this surplus wealth, because after all that wealth has been built up out of special privileges which have been given because of the protection afforded by the government or society at large.

A little earlier in his speech the hon. member for West Calgary suggested that the poorest man, in fact everybody who has the franchise, should contribute to the upkeep of his country. I would say much more should these well meaning benefactors who have

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grown wealthy through the arrangements that at present exist in society-much more should they be willing to do their share in carrying forward the larger concerns of our country; and I am a little bit suspicious, I must say, of philanthropists who would seek to avoid their obligations to the state which has enabled them to amass their wealth.

Further -the hon. member has a very interesting plan to suggest with regard to the paying off of our debt without our being conscious of doing so. I suppose you may characterize that as painless extraction. We in our Labour group believe in paying off the debt, but we believe also in that splendid principle of visibility; we believe that it should be paid off in, such a way that people would see who was paying it, and that the people themselves would decide who was best able to pay it. Now, in order to be perfectly fair I propose, for the benefit of those who may be present to-night who have not closely read the speech of the hon. gentleman (Mr. Bennett), to read a paragraph containing the scheme which he set forth and which is already 'being commented upon in our leading newspapers:

. Therefore I propose that the Minister of Finance should, after creating his four per cent consolidated Canadian securities, provide by legislation that a percentage to be hereafter determined, of the revenue of the insurance companies, amounting to a net total of over $110,000,000 this year and from the deposits of the Canadian people in our savings banks, amounting approximately to at least another billion and three-quarters, should he utilized for the purpose of paying off this $100,000,000 This four per cent security I would maintain at all times at par-a very simple process. Under our Finance Act, our Department of Finance operates practically as a federal reserve board, and all that the insurance companies would have to do if they require additional money would he to deposit, either through their hanks or with the Minister of Finance the four per cent consolidated securities and receive the money from the federal reserve hoard. -

Wei, I should like to congratulate the member for West Calgary upon his boldness in setting forth this scheme. I have thought over it, and it seems to me that it really involves the conscription of money at four per cent. I can see it in no other light than the conscription of money at four per cent. Even four per cent, however, may not be a bad thing from the standpoint of the insurance companies, for I notice in this morning's Mail and Empire of Toronto the following sentence referring to Mr. Bennett's proposal:

It might be welcomed by the insurance companies as a source of an irreducible return of four per cent, and as an influence to check the upwardness of other trust fund prices.

So it is possibly doing the insurance companies a good turn, now -that rates are falling so rapidly. The member for West Calgary spoke as follows:

I submit, Sir, that the time has come, for this parliament, in the exercise of its unquestioned authority and power, to say that these deposits of the people should be utilized to the extent necessary to provide for the maturing obligations not met out of surplus.

I am sure that the House ought to be very grateful to have this high legal authority assure us that parliament has unquestioned authority and power, but I should like to ask, why select the savings in the hands of the insurance companies and in the savings departments of our banks? What of other forms of wealth? Why limit the operations of this scheme to those particular kinds of wealth? Why should we not conscript every kind of wealth? I am inclined to think that the principles laid down by the hon. member would carry us a great deal farther than he would like to go. The hon. member tells us that "this country in the present moment of stress and strain should utilize the savings of the .people in the interests of the whole population"-surely a far-reaching principle. Personally I would substitute for the word "savings" the word "wealth". But let that go; the hon. -member would probably maintain that all wealth represents savings.

I am sorry 'that the hon. member is not now in his seat, but I should hope that he will be able to induce his colleagues to support a motion in his own terms which I propose to place upon the order paper:

Resolved that in the present moment of strain and stress, the time has come for this parliament, in the exercise of its unquestioned authority and power, to utilize the savings of the people in the interest of the whole population.

I propose to support the amendment moved by the hon. member for Macleod (Mr. Coote), because it is in line with the policy on which I was elected to this House and which, in the form of an amendment, I brought before the House several years ago. The Independent Labour party of Manitoba has these sections in its platform:

I. Abolition of fiscal legislation that fosters and sustains class privilege.

.2. Removal of taxes from the necessities of life.

3. Taxation of land values.

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4. After exemptions of small incomes, a steeply graded income and inheritance tax.

5. A capital levy for the extinction of the war debt.

I should like to dwell for just a moment in closing upon the last clause of the amendment:

And further that no systematic effort is being made to reduce our national debt, the interest on which absorbs so large a proportion of the revenues of the Dominion.

As the minister has informed us, the principal expenditures attributable to the war amount to something like 45.18 per cent of the total expenditure. Last year in bis budget speech the minister went on to point out other expenditures in addition to these. He referred to the heavy railway and merchant marine expenditures and other expenditures which grew out of war conditions. He said that during the war and demobilization period, large outlays were charged to ordinary expenses which, while not actual war costs, were directly attributable to war conditions. In addition to these there were heavy annual charges not taken into consideration in the summary submitted, for which the war is responsible. He stated that there might also be included the cost of housing the staffs connected with these services, which is now carried by the Public Works Department.

Therefore putting these items together I think we are safe in saying that practically one-half of the entire revenues of the country go to pay for the war, a large part of it being interest on the war debt. That means that there is a huge mortgage resting upon this country, and as long as we permit that mortgage to remain, a large part of our revenue must be used in paying the interest charges. Sooner or later we must frankly face the war debt. If you do not want to repudiate it, why not have a capital levy or in some other way deal with it? We are not suggesting in this amendment the manner in which that may be done. That is for the government to decide. But I would suggest that in ordinary business concern, the president, in reporting to the board of directors, would deal, not merely with current income and current expenditure, but with the mortgages carried by the corporation. We ought not to go along year by year simply accepting this war debt and spending the great part of our time and energy in collecting money from the poorer people to pay to the wealthier who hold the war debt mortgage. I have mudh pleasure in supporting the amendment moved by the hon. member for Macleod.

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CON

John Anderson Fraser

Conservative (1867-1942)

Mr. J. A. FRASER (Cariboo):

Mr. Speaker, in rising to say a few words on the motion before the House I want, in the first place, to congratulate the Minister of Finance (Mr. Robb) on taking holus-bolus and adopting as his own child, one of the most important principles of the Conservative party, namely, stability of the tariff. Unquestionably if there was one point that the Conservative party urged from time to time during the last session of parliament that I had the pleasure of being in this House, it was that what the country required was stability of tariff, and the Minister of Finance in his budget has adopted that as his own baby.

I want also to congratulate the minister on the fact that he is still trying to make the people of Canada believe that he is reducing taxation. He told the people last year that by some miraculous means that I have yet to ascertain he was reducing taxes to the extent of 125,000,000, and at the same time he was spending more money than he was the year before. How he bridged the gap I do not know; but having successfully made the majority of the people of this Dominion believe that he had done so, he promises to repeat the dose. In this budget he says that he is reducing the taxes of the people of Canada by 827,000,000, and still in his speech which is reported in Hansard he says that he is actually increasing expenditure by 16,000,000. There is thus a gap of $33,000,000 which he has to bridge in order to show the people where he is reducing taxation. So far as I can see he is increasing the taxation of this country by about $3.50 a head, if I know anything at all about mathematics. The majority however, of the people during the last election believed that the Minister of Finance was actually reducing taxation.

I want to extend further congratulations to the Liberal party. I desire to congratulate most heartily the members of the Liberal party from Quebec in that they have succeeded in imposing upon their Liberal friends from the western prairies the good old protective principle of the Conservative party, Because if there is one principle which is maintained in the present budget it is, as I said before, the protective policy of the tariff, and if there is one thing which the Liberals of Quebec are to be congratulated upon it is that no further reduction is to be made in the tariff during the present year. Therefore, as I said before, we are to have stability of the tariff for at least another year.

This afternoon the Minister of Trade and Commerce (Mr. Malcolm) made a few remarks regarding imports and export? of raw

The Budget-Mr. Fraser

materials. Some mention was made of the fact that we were exporting a considerable amount of raw material. The Minister of Trade and Commerce said that we were exporting about $50,000,000 of gold. I do not know exactly what he means by the exportation of $50,000,000 of gold; I suppose what he had in mind was commercial gold, not gold in its raw state. I do not remember the figures as to exportations of gold during the last year, but I believe they were somewhere in that neighbourhood. I want, however, to draw his attention to his own report, the report of the Department of Trade and Commerce for the year ended March 31, 1926, in regard to the export of some of these raw products. "What I think is meant by raw gold is gold in the shape of ore which is shipped out of this country and the values smelted in a foreign country. That is exactly what is happening in my own province of British Columbia, where large quantities of quartz are being shipped out of the country for the values to be removed on the other side of the line and the money sent back to this country. That is what I understand by the exportation of raw gold.

In the last annual report of the Department of Trade and Commerce there is given on page 13 a list of the principal Canadian commodities exported. Baw gold was exported to the extent, in round figures, of $25,968,000, of which, $11,360 went to the United Kingdom and $25,956,734 to the United States. There is an example of the export of our raw materials to foreign countries, the question that was under discussion this afternoon, and no one can deny that the United States is a foreign country. Let me call attention also to some other significant figures in the report of the Minister of Trade and Commerce. On the very same page I find our export of nickel. The minister stated this afternoon that we exported $1,000,000 of nickel, but he pointed out that we imported $1,000,000 worth of aluminum, which he said about struck a balance. I find on page 13 of the minister's own report that instead of exporting $1,000,000 worth of nickel, last year we exported $12,829,000, of which $4,000,000 went to the United Kingdom and nearly $7,000,000 to the United States. We also exported copper ore and blister to the amount of $13,945,000. That is another case of our raw material going out of the country to be smelted on the other side of the line and there fabricated into articles of commerce which are shipped back and sold in this country. Of pig lead we exported $13,292,000. We exported raw asbestos to the amount of $9,000,000, and

aluminum in pigs to the amount of $6,000,000 odd. We exported zinc spelter to the amount of $4,862,000. These items, all of which are the raw mineral products of this country- and this is not the full list; I am giving only the more important items that enter into our exports-total just around' $100,000,000. We export that amount of our raw materials to be smelted and fabricated in a foreign country into the finished products which are then shipped back here. Now if there is one thing that the Conservative party has always emphasized on the floor of this House and throughout the country it is that we should find some way to stop so large an exportation of our raw products.

Coming as I do from a mineral province, I have been very much pleased to see so many references in the speeches that have been delivered in this debate to the mining industry and the importance of mineral development. Last year very little was said on this subject, but I hope it will be discussed more and more as the years go by. I was very much interested in the remarks of the hon. member for Fort William (Mr. Manion) a short time ago, and I heartily concur in his prediction that in the next few years the mining industry will be one of the most important in this country. I am not so sure but what it is very nearly in the first place now. I should like to emphasize that conditions generally in this country cannot be more rapidly improved than by the development of the mining industry throughout the whole country. I have seen it stated somewhere- I cannot give the authority at the moment- that during the last twenty years there have been more minerals used all over the world than in all previous time. That is a significant statement, and it will be appreciated particularly by those who live in a country so rich in mineral resources as Canada undoubtedly is. Here is another significant statement. Since the year 1800 the population of the world has doubled, and since 1800 the production of iron alone has increased onehundredfold; so you see how rapidly the production of these metals is gaining on the population of the world, and the same applies to coal and many other minerals.

I should just like to point out the influence that the development of the mining industry has on the development of any country, and I would like the Minister of Immigration (Mr. Forke) to pay attention to this. No mineral has had a greater influence in the development of different parts of the world than has the mineral that is known by the name of gold. No mineral has had more to do with the colonization of different coun-

tries in the world than gold has had. A gold strike is one of the greatest colonizers that there is or ever has been on the face of the earth. When word comes of a gold strike, what do you find? You find that every man with any ambition is anxious to get into that country. I need not enlarge upon that, because you all know it is true. The discovery of gold in the Yukon is within the experience of us all. With the rush of men into a country where gold is discovered there springs up a demand for all kinds of agricultural products; for these men must be fed and the next thing you find is that those who are not so much interested in mining as in agriculture immediately start to develop agriculture in that part of the country, and long after the gold has been depleted the agricultural wealth of that part of the country continues to grow and expand. I need only mention, for instance, the development that took place in Australia; it was a gold strike that started the colonization of that country. Then look at what happened in California. Before gold was discovered in California there were very few people there, but the moment gold was found people were attracted from all over the world. They got to California just as fast as they could, and later on many of them started in agricultural pursuits, probably when they were not successful in mining. However, that may be, the discovery of gold, important though it was to California, was not one-hundredth part so important as the development of agriculture. Anyone who has gone there and looked at the wealth coming every year from the orchards and fields of California must realize the amount of wealth which is being distributed from that source. The initial impetus given to the development of that particular state at least was the discovery of gold.

I need only tell you what happened in my own province of British Columbia. In 1858, when gold was first discovered in the Cariboo district, what happened? There were then a few traders and a few wandering bands of Indians in that province, and nothing more; nobody knew anything about it. But as soon as gold was discovered thousands of people from all over the world were at once attracted to that province. These people went into a section which was absolutely impossible so far as the pursuit of agriculture is concerned, because it is far above those parts of the province where you can grow any kind of agricultural product. I refer to the original Cariboo gold fields, which were at an elevation of four thousand feet and produced practically no agricultural products. But the very fact of a population of ten or fifteen thousand 32649-34J

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going into that district brought about a demand for agricultural products, the result of which was that some of these men went down to the lower level where there were agricultural lands and started to develop them, and that development has continued to this time. So that from a population of two or three thousand in British Columbia when the development started we have at present 600,000 people, and their occupation is very largely agricultural.

I wish to draw the attention of hon. members from the eastern provinces to the present development in the northern parts of the provinces of Ontario and Quebec. Does anyone suppose for one moment that we would have had the development we have seen in the northern part of Ontario to-day had it not been for the discovery of precious metals in that district? Everyone knows the history of that development. Everyone knows that the object of the construction of the railway into that part of the country was to develop the agricultural lands of the district, and it was only by accident that the minerals were stumbled upon. But the impetus given to the development of agriculture in that northern country would never have reached its present stage had it not been for the minerals discovered there. The same thing applies to the northern part of Quebec and Manitoba, the development of which we have heard so much about to-night from the hon. member for Fort William (Mr. Manion). We from British Columbia feel jealous that there are so many of these things going on in the eastern provinces, because we know they are good things and we would like to see more of that kind of development in British Columbia.

Not only is the mineral industry of great importance to national development, but the same applies to almost every line of industry. For instance, we have on our hands what we are pleased to say is a great railway problem. That is one of the great problems the people of Canada have to solve, and nothing will solve it more quickly than a revival of or the giving of an impetus to the mineral industry, because taking all the railways together the mineral industry' is responsible for thirty-five per cent of the traffic accruing to them. I have seen a statement of the Canadian National Railways in which they attributed forty-seven per cent of their total revenue to the mineral industry. If that is so, surely it is important that every person in Canada should pay careful attention to the development of that industry; and it is particularly important that the government do so.

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I call attention also to the fact that out of every dollar spent in the production or development of the mine fifty cents is paid out for labour. Another important fact in regard to the mining industry, which will cause the farmers to realize that it is the best friend they can have, is that out of every dollar spent in mining twenty-five cents goes directly for farm produce. That surely should attract the attention of our good friends from the prairies, because last year the production from the mines of this country was $243,000,-000-a record for all time, I am pleased to say, so far as the mining industry of Canada is concerned. If twenty-five cents out of every dollar goes to the farmer to provide supplies and sustenance, it. means that $60,000,000 out of $243,000,000 goes directly to the farmer.

I wish further to show what this production of $243,000,000 will do for the labouring man. An expenditure of $243,000,000 in the mines means that labour is paid about $120,000,000. That means that 60,000 men will be supplied with an annual income of- $2,000. We all . agree that population is what we require, and anything that will bring a number of people to our Shores and help us to carry our load of debts is in the interests of the country. The miner is a good customer of the farmer, and the farmer in British Columbia knows perfectly well that if the miner is in a prosperous condition he himself has a pretty good chance of being prosperous too. This applies not only to British Columbia but to the whole Dominion. It is impossible to find a better market for farm produce than a prosperous mining community, and when mining is in a flourishing condition in British Columbia our farmers there are not worrying about overseas markets.

Now, I repeat, what is good for the railway and the farmer and the labouring man of this country must be worth while studying from a national standpoint. As I have said, mining stands third among our primary producers. As my hon. friend said to-night, 85 per cent of the Dominion is mineralized. Last year our mines produced per capita $27 of new capital. In 1890 our mineral production per capita was $2.23. So you see we are getting along pretty well, but there is lots of room for further development. Let this government and our provincial governments work together to put our mines on a still better producing basis. To accomplish this we require the co-ordinated efforts of all our people and all our governments, and I advise this government, so newly elected, that the mining fraternity of the Dominion expect it to pay a little more

attention to the mining industry than has been paid during the last few years.

Now let me touch a different angle of the mineral industry. I refer to the bearing that it has on our imports and exports. Last year we had a favourable trade balance of $401,000,000. It may be asked, what relation has our mineral development to our national trade. I propose to give a few outstanding facts to show how the two are very closely related. I should explain that the Department of Trade and Commerce classify our imports and exports under nine different heads. In speaking of our mineral trade I shall take three of those nine, namely, iron and its products, non-metallic minerals, and non-ferrous minerals, because I consider that they all have a bearing on our mineral industry. The trade returns are for the year ending March 31, 1926. I find our mineral imports amounted to $367,923,725, or 39.5 per cent of our total imports. Our mineral exports amounted to $196,780,192, or 14.5 per cent of our total exports. We established that credit of $401,000,000 in order to help pay our interest charges and our other financial obligations abroad.

I think the Minister of Finance will be interested in hearing what part our minerals had in establishing that credit abroad. Had it not been for the adverse balance in regard to our minerals, we would have had $171,143,533 more of a favourable balance of trade. It is an important question for our people to consider how we can bring that unfavourable trade balance to a position very nearly favourable. It is also very important that our people should understand the relation of that particular mineral industry to the general trade of the country. Therefore I am going to give some further figures for the benefit of hon. members and the public. These figures deal with the first four months of the last fiscal year, and they indicate how this debit balance in our mineral products is accounted for. I have shown by reading a few items in the trade returns that we sent out $100,000,000 of minerals in the raw state. Now I propose to show in what shape we are bringing them back. Taking the first four months of 1924, we imported in the form of castings and forgings $1,447,444 worth; for the first four months of 1926 we had increased that amount to $1,831,522, or 26 per cent. It was bad enough before, but, you see, it is growing worse. In those respective periods our imports of rolling mills products have increased from $13,508,740 to $16,564,143, or 18 per cent. Then take tubes, pipes and fittings. Can anyone in

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this House tell me why we cannot make those things in Canada? I am not an ironmonger and I do not know much about it, tout it seems to me that it should be possible for a good Canadian to manufacture tubes, pipes and fittings, and if a good Canadian cannot do it I can tell you where you may find people who can. You will find them on the Clyde in Scotland, and you can bring them here if you will show them where to get work. During the first four months of 1924 our imports of these materials amounted to $924,290, and during the first four months of last year they increased to $1,462,043, or 58 per cent. The next item is wire. Is there any reason in the world why we cannot make wire in this country? I would like some of our foundrymen to tell me that, because in the first four months of 1924 our imports of wire amounted to $878,561, and they rose in the first four months of 1926 to $1,204,666, an increase of 37 per cent. The next item is engines and boilers. In 1924 our imports amounted to $2,389,577, and in 1926 to $4,570,731, or an increase of 91 per cent. I want to say to the Minister of Finance that here is where some of his tinkering with the tariff last year came in, and on looking at these figures I am not surprised that he thinks it better to stop that tinkering for one year to see how it will work out.

The next important item is one which I wish my hon. friends from the west to notice. The imports of farm implements m the four months of 1924 amounted to $3,013,040, and in the same period last year they amounted $7,467,065, or an increase of 147 per cent. It seems to me that I heard something about a reduction in the tariff on farm implements last year. On the other hand our imports of machinery, except agricultural machinery, amounted to $9,029,850 in 1924 and $13,131,545 in 1926, an increase of 45 per cent. Then I think I heard something about a change in the tariff on automobiles.

Topic:   EDITION
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February 21, 1927