February 21, 1928

LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn):

Have you any

idea how many drills of Canadian make were sent into the United States last year?

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

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

That

would be a very difficult question to answer. A person would have to communicate with the customs authorities in the United States or with the implement manufacturers in this country, and I do not think the latter would be willing to give the information.

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LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn) :

I think twentysix is the number.

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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

What

is the point in saying that only twenty-six were sent into the United States last year?

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LIB

Edward James Young

Liberal

Mr. YOUNG (Weyburn):

That is the

figure shown in the trade returns.

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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

I fail

to see how that affects the argument in any way whatever. Here are the facts of the ease, sworn to by responsible men. We are suffering to that extent, and whether it is by reason of the manipulation of the tariff, or the cost of transportation, or some other factor, whatever it may be, we know we are being discriminated against. I repeat, it is from that condition we wish to free ourselves.

I have in my hand a copy of the resolution which was moved by the Hon. George Langley at the Liberal convention held in this city in the autumn of 1919. Mr. Langley is known to most of us in this house, and if I were to give him an appropriate name I should call him "the grand old man from Saskatchewan". He spent a great part of his life in that province, trying to do all he could for the farmers of western Canada, and he has a great many achievements to his credit. Reading over his speech when he moved this resolution, I can imagaine with what gusto he entered into it; and the brogue, which we all so like to hear, no doubt attracted and captivated his audience. I think due credit is coming to him for the courage he displayed in putting forth and standing by the resolution which I am about to read, a reso-56103-43

lution which I may say, by the way, was seconded by a gentleman from New Brunswick. I believe it was the same hon. gentleman who now occupies the position of Postmaster General (Mr. Yeniot). I wonder whether that gentleman will recognize these words:

That the best interests of Canada demand that substantial reductions of the burdens of customs taxation be made with a view to the accomplishing of two purposes of the highest importance. First, diminishing the high cost of living which presses so severely on the masses of the people, second, reducing the cost of the instruments of production in the industries based on the natural resources of the Dominion, the vigorous development of which is essential to the progress and prosperity of our country .

That to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery; farm tractors; mining, flour and sawmill machinery and repair parts thereof; roughly and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils, nets, net twines and fishermen's equipments; cements and fertilizers, should be free from customs duties, as well as the_ raw material entering into the same. [DOT]

That a revision downward of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption other than luxuries as well as on the raw material entering into the manufacture of the same.

That the British preference be increased to fifty per cent of the general tariff.

And the Liberal party hereby pledges itself to implement by legislation the provisions of this resolution when returned to power.

I want to review the situation so that we may see where we are drifting. So far as I have been able to ascertain from the closest scrutiny of the budget, particularly as it affects the customs tariff, there is practically no reduction that will benefit the great mass of consumers and the producers of this country. The cost of living will not be materially reduced. In the election of 1926 western Canada responded amiably to the sentiment that was expressed by those who were propounding the Liberal platform, and in this response they showed to the people at large and to the Liberal party that they were once more going to take these gentlemen at their word. The result was that only one representative who might be called a high tariff advocate was returned from western Canada. We were told during the election of 1926 that if the Liberal party were returned to power the 1919 platform would be implemented. We were also given this assurance in the fall of 1921. The Progressives, or the agrarian group in western Canada and also in Ontario, stood for this platform on the plea which was made to the electors, especially the farmers. This group had suffered considerably at the election in

674 COMMONS

The Budget-Mr. Fansher (Last Mountain)

1925, and the agriculturists were interested in the platform I have quoted. Now we have had two sessions, two budgets have been brought down, and very little change has taken place. _

I was very much interested in the question which the hon. member for Marquette (Mr. Glen) asked the Minister of Finance during the debate last year, and my confidence did not increase when the Minister of Railways (Mr. Dunning) gave the answer. I have been wondering what we are going to do. We have given an expression of opinion and we are doing what we can from this corner of the house to bring about or to make effective these promises which were given us. But I wonder what we shall have to take back with us when each of us from Saskatchewan returns as just one of the boys back home. What shall we tell them? What shall we have to carry home to them? Shall we be able to tell the people back home that there has been a reduction in the cost of the necessaries of life as well as of the implements of production? What will hon. gentlemen from Manitoba be able to tell their constituents when they return? Will they be able to say that they have assisted very materially in reducing the cost of living and lightening the burden which now bears both on labour and on the agricultural class? Hon. gentlemen from Manitoba are the doorkeepers, as it were, of western Canada. Are they going to assist us, or are they going to be instrumental in opening the doors to further burdens and to the laying of greater stress and strain on the agricultural industry? I hope not.

I recall an article I read not so long ago in regard to some of the discoveries which science is making. This article declares that a ship may be constructed and put out to sea without a single human being on board, being guided for miles by an electrical apparatus operated on the shore. As I thought of tins article a few moments ago, it struck me very forcibly and I wondered what impediment was being placed in the way of the government to hinder them from implementing this promise. I wondered whether it was the dynamic, which we hear of so frequently, of St. James street, that was directing the ship of state and keeping it in its present course. I hope that in the near future this budget schedule will be clarified so that we may better understand it, and that after all it will show that there is to be some alleviation of the burdens of which I have been speaking. Otherwise, if there is going to be no relief in this direction, I am afraid that a few lines

which I learned long years ago will be very apt. They will apply possibly to many of us from western Canada when we again appeal to our electors, and the last line of all will probably be the most applicable. In giving a description of the fall of the great nation of Greece, Byron said:

The isles of Greece! the isles of Greece!

Where burning Sappho loved and sung,

Where grew the arts of war and peace, Where Delos rose, and Phoebus sprung!

Eternal summer gilds them yet,

But all, except their sun, is set.

Will that be applicable to those who are responsible for this most momentous resolution which I read, but who are afraid to implement that resolution in their legislative program? In closing I would appeal to the Minister of Finance to have that courage of which we heard in this house a few days ago. I sincerely hope that he will give us, in this schedule which has been placed on Hansard, encouragement to look forward to some alleviation of the great burden of which I have been speaking.

There is one other matter which I should like to bring to the attention of the house, and that is the point of view of at least some of us in western Canada, certainly of those whom I represent here. I think I could not better describe it than in the following words, which I took from page 25 of the 1925-26 Canadian Annual Review:

The absorption of the Progressives by the Liberal party, whether in or out of office and under whatever guise effected, would postpone for a generation the attainment of necessary reforms, the re-shaping of national policies and the infusion into Canadian public life of that moral courage and idealism which slavish partisanship has well nigh destroyed.

I am asked whose words I am quoting. These are the words of the present Minister of Immigration (Mr. Forke).

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LIB

John Frederick Johnston (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER:

I am sorry,

but I must tell my hon. friend that his time is up.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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CON

Thomas Langton Church

Conservative (1867-1942)

Mr. T. L. CHURCH (Toronto Northwest):

Mr. Speaker, I do not want to show a lack of ordinary Christian charity towards the government who prepared this budget, but I fail to see in that budget any policy outlined

The Budget-Mr. Church

that will solve the economic ills which confront this country to-day. Whether it be the province of British Columbia, or the prairie provinces, or central Canada, or the maritime provinces, nothing is suggested for the alleviation of the economic troubles from which they are suffering, but there is a little tariff nibbling here and a little nibbling there, and over eleven pages of just such announcements, a heterogeneous mass of tariff items with many whereases 'and provisos, none of which will have any effect in relieving the country from its present economic ills.

The government proposes to do nothing to solve the problem of unemployment. Not one job by this tariff will they create for a Canadian boy in Canada. No policy is suggested which will have the effect of bringing back our young Canadians w'ho have gone to the United States. Nothing is to be done to induce those Canadians to return to their homes from which they have been driven by the policy of the government, a policy which encourages some of our brightest minds to leave Canada and make their homes in the country to the south. There is not one word in the budget about the preservation of our domestic market, especially for those Canadians who are engaged in the great industries of farming and dairying, nor is there the least sign of any effort to conserve our natural resources and our raw materials.

The budget speech can be divided broadly into three classes: Part one deals with the financial affairs of the country in general. Part two deals with taxation, and with taxation as amended by the budget. Part three consists of eleven pages of tariff nibbling changes in which there is a heterogeneous mass of details, with a little lowering of duties here, and a little lowering of duties there. The object of a budget statement given annually should be to reveal exactly the housekeeping operations of the nation. We find from the budget that the revenue for the last fiscal year was $419,480,000, and there was paid out a total sum of $364,665,000. If this were the sole information to be imparted well and good, but a true budget should reveal the actual operations of the government and its outside commissions for the preceding twelve months, including all their outside obligations. What would you think of a company which presented a balance sheet or.ly of the parent body, ignoring the operations of its subsidiaries although they belonged to the organization and were part and parcel of it? Yet this government ignores their outside obligations altogether. They figure out that they 56103-43J

have a surplus or a balance on hand of $54,815,000. Well, if anyone can discover that surplus in the shape of cash in the treasury he will prove to be a greater discoverer than John or Sebastian Cabot, or any of the other early navigators. The budget consists of a partial statement only. The government have not struck a proper or complete balance at all; they have ignored some of the most important obligations of the country. They have ignored the millions of bonds of the Canadian National railways guaranteed by the state. They have written off $16,000,000 in connection with certain soldier settlement lands, which figures if they mean anything at all mean a deficit. They have ignored the $4,000,000 of guaranteed bonds of the Montreal harbour commisison, and the $8,000,000 guaranteed the government merchant marine in connection with the steamship lines to the West Indies.

I have in my hand pages 4 and 5 of the annual report of the Minister of Railways laid on the table at the opening of parliament, which shows that the item of interest due the government, accrued but unpaid, in connection with the Canadian National railways increased by $32,089,853 during the year, and now stands at $193,951,356. Appropriations account, which stood at $453,935,303 at December 31, 1925, now stands at $437,412,032. What would you think of the Ontario government if they prepared a budget statement leaving out all the debt of the hydroelectric commission whose expenditures reach a total investment of $250,000,000 on cheap light, power and transportation? Would you call that a real financial statement? I remember how George Washington Ross, one time premier of the province, went up and down Ontario boasting that he had a cash surplus of $8,000,000. One day at a meeting in Middlesex county I challenged the statement, and Mr. Ross said that if I would con e up to the parliament buildings in Que rn's park he would show me the surplus in gold and silver in the treasury vaults. I accepted the challenge and went up there. Premier Ross did not show me any surplus but he said "Never mind, Tom; take a cigar." That is the way in which he dealt with the surplus in the olden days. That was the kind of surplus they had at that time. If a proper accounting system were carried out in all the departments of government, and a real financial statement were presented, a huge debt would be revealed about which the country knows nothing at all at the present time. In connection with our railway operations vast sums in the form

The Budget-Mr. Church

of interest and fixed charges have been written off and are not included in the financial statement of the Minister of Finance.

As regards this magnificent budget, the like of which has never been seen before, the government are spending money in Canada like water. When Sir Wilfrid Laurier was Prime Minister in 1896 the then administration could get along with about 136.000,000. To-day this business-like economical government brings down a budget amounting to 8364,000,000 a year. The Minister of Public Works (Mr. Elliott), who cannot find a enow shovel to clean away the snow in front of the parliament buildings, can find half a million dollars for a number of automobiles for the government. Any member of the cabinet who has not a large motor car bought within the past year is not fit to be called a minister. We hear talk about industrial and scientific research, but you cannot find a man with a snow shovel around the parliament buildings. I have never before seen such badly kept streets and sidewalks as there are in this city of Ottawa, the Washington of the north, in winter. It is time the government bought a few snow shovels instead of spending millions of dollars unnecessarily. The Minister of Public Works can get a nice vote for a post office town clock in the town of Glencoe so that he can tell the time on election day in West Middlesex; but when the question is one of cleaning away the snow in front of the parliament buildings it is impossible to get any snow shovels. We are not all hockey players and accustomed to using skates, and although there are some clean skaters on the government side, I would suggest an issue of skates to the members to use in getting to the buildings.

In this great city of Ottawa there is a wonderful give away commission called the Federal District Commission, headed by Hon. Thomas Ahearn, and according to the way they conduct their business they are spending money like water too-they have so much to give away to the Americans for nothing. The other day they proposed to give away eleven acres of land at Rockliffe for an American embassy although it is known that an embassy pays no taxes. They are taking a leaf out of the book of the government in the matter of spending money. The government pays no taxes in England on the magnificent edifice in London, Canada House, to house Mr. Larkin, who now has a new uniform, not a second or third-class uniform but a first-class uniform, if you please, because we are no longer a crown colony but a nation. The burden of that taxation has to go on the back of the British taxpayer who has his very bread and other necessaries of life taxed for a fleet to protect

[Mr. ChuTch.J

our shores while we refuse to pay our taxes in England. As I said, the Federal District Commission, headed by Hon. Thomas Ahearn, proposed the other day to give away eleven acres of land at Roekcliffe for an American embassy. Did anyone ever hear of the Right Hon. Uncle Sam giving away anything for nothing, or giving anything away down at Washington, for Mr. Massey's embassy, for which we had to pay half a million dollars and S120,000 for the maintenance of this magnificent minister in the city of Washington? I never heard of Mr. Ahearn giving away any of his own money in this way but he is ready, through the Federal District Commission, to give away this splendid public site for an American embassy. The government should have a house-cleaning in connection with the Federal District Commission if that is the way they conduct business. If that is the kind of commission it is, ready to give away public property in that way, the sooner the government gets rid of the Federal District Commission the better it will be for the so-called Washington of the north.

In regard to this budget, it seems to be a gamble between the spending branch and the revenue producing branch. The government have removed no taxes from the breakfast table of the workingman. The taxes of the workingman for the necessaries of life are to-day more than they ever were before. The revenues have been greatly increased; but the government still continue to pile on the taxes and nobody can find out exactly what the taxes are, because the revenues and the taxes are spirited away in these secret commissions to the extent, of some fifteen or twenty spread over the country from Halifax to Vancouver, spending the public money like water-trustee boards and guarantee government boards not mentioned in the budget. Does the government think this money which is raised by taxing the working people of this country comes down like the dew from heaven so that they can spend money like water in the manner I have indicated?

Last session we had the promise of the government that a conference would be held with the provinces and that something would be done towards abolishing the duplicate system of income taxes. The conference was called. Did they do anything? Nothing but make a football out of the question. On the Pacific coast there is a triple-header income tax, namely: Dominion income tax, provincial income tax and municipal income tax. The proposed reduction of ten per cent will mean nothing to the workingman, but it will mean

The Budget-Mr. Church

a great deal to those whose wealth is in the millions. The list of income tax exemptions is to be increased by allowing an exemption of $500 to those supporting dependents over twenty-one years of age who are incapacitated. In this country there are many who are incapacitated because they have not a job, and on this account some 600,000 have had to go to the United States. Many ol them are returned men who fought even unto death the battles of this country, and they are being incapacitated by this particular budget. Talk about the expulsion of the Aeadians down by the sea! That was nothing to the expulsion of thousands of former residents of my city who have had to go out of the country to find a job.

This magnificent budget which we have before us to-night contains eleven or twelve pages of tariff changes, a nibbling here and a nibbling there. There is insecurity, uncertainty and instability of the tariff, and nobody knows what to expect next year. Wait until you see what this travelling minstrel show, known as the tariff advisory board, does next year. Their work last year ha? resulted in eleven or twelve pages of tariff changes. Wait till you see what takes place next year when they have a whole twelve months to go. Woe be it to the maritime provinces when they deal with some of their industries! Woe be it to the industries of the province of Quebec! I do not see my good young friend the hon. member for Temiscouata (Mr. Pouliot) in the house tonight. He always makes a good speech. The other day he made a great speech at the assizes over in Hull so that not only the jury but the judge on the bench shed buckets of tears. If the government had given him a chance on a proper budget subject he would have moved to tears the members on the government benches. When the working classes out of work ask the government of the day for some bread, they are given a stone in the shape of the tariff reductions which are before the house to-day. This budget will be small comfort to the working classes of this country because there is no reduction applicable to the breakfast table at all and the budget will create no new jobs. The necessities of life stand as they were, but the government could find reductions for some of their multi-millionaire friends in the mining industry like the Hol-linger mine, and the newspaper industry by allowing press blankets to be brought in free of duty. These are two industries that are well able to pay taxes to help maintain the administration of this country, but they are

the people whom the government single out and think of first, last and all the time. These multi-millionaires who can well afford to pay taxes are the ones who are given free trade in press blankets and mining concessions.

The main tariff changes in this magnificent budget with its twelve pages of schedules affect the cotton and woollen industry. I have no doubt that one reason for these twelve pages of tinkering is due to the fact that the government. in anticipation of a general election two or three years hence are making a nice little gesture to the gentlemen on our left in anticipation of a larger vote west of the great lakes.

The budget debate is a time for taking stock, and I wish to refer for two or three minutes to the auditor general's report in regard to the expenditures of this country, because we have an antiquated machinery of parliament. The machinery of parliament as regards control over expenditures differs little from what it was a hundred years ago. A civil war was fought in England in order that parliament might control taxation and expenditure. Taxation is still controlled, but democratic control of the national budget made up of the estimates of the different departments is to-day not in existence.

As regards financing, the present system is ridiculous. It is the very reverse of that adopted by municipalities. Each spending department draw's up its estimates for the budget and possibly a spirited battle takes place between the departments and the treasury. There is a battle in the cabinet, and when the budget is approved by the treasury board and the cabinet it is presented to the house. The bureaucracy has increased in numbers and powers and the treasury board has never regained the control it surrendered during the late war. In 1896 the budget was $36,000,000 as compared with $364,000,000 in 1928. If a deadlock is reached over the estimates, they come before the cabinet composed of all the administrative chiefs and the scales are always weighed in the interests of the departments. Finally the budget is approved by the government as a whole and sent to the house, and it is all over as far as parliament is concerned. A few concessions here and there may be wrung from the Minister of Finance, but if he resists, the whole government will unite and stand behind him, because a defeat of the budget means that the govem-will resign.

Next come the estimates. In theory these have all to be approved by the House of Commons during the parliamentary session. Last year we had from fifteen to twenty

The Budget-Mr. Church

supply days. The minister chooses the estimates to be considered on these days, and some of the most important spending departments never have their estimates considered except for five minutes in the last rush at the close of the session. If a division is challenged, the government treats it as a vote of want of confidence; the whips are used to save the government, and the private members on the government side all line up with the government because if the item is defeated the government will resign. I say that it is a waste of time to consider the estimates under this antiquated system which is one hundred years old. There can be no detailed or useful examination of the estimates on the floor of the house. The estimates of a great many departments never come before parliament at all. The estimates of the Justice department, for instance, have never come before parliament since I have been a member, and the same with the Post Office department, Marine and Fisheries, Customs-and then in the dying hours of the session millions are passed without any discussion. [DOT]

Our system is different from that of the municipalities under the Municipal Act. In Toronto, for instance, the heads of the departments prepare the estimates, the board of control go over them and strike the tax rate; the city council reviews each item, and there is thus some control by the legislative branch over the executive. Under our system in this house there is none. We have a committee of public accounts, it is true, and the auditor general, but the public accounts committee hardly ever meets, and the auditor general meets you sometimes and hands you a blue book. When the public accounts committee does meet, it is simply a case of holding a post mortem. The public accounts committee might be known as the morgue or coroner's committee. They hold a post morten examination, the subject being anywhere from two to ten years old and in the case of the national railways, from ten to fifteen years old. It is no wonder our taxation is high under the antiquated system we have here.

If parliament is ever to regain any of its old control, our whole financial system must be reorganized, and a new modernized system arranged. There is such a system in vogue in France and in the United States which we might well introduce here. They have estimates committees, of which members of parliament are members. There should be a committee for all the big spending departments in this government and for groups of the smaller spending departments, and the (Mr. Church.1

members of parliament who serve on such committees should be looked upon as nonpartisan. If necessary they should sit in camera if business of a confidential nature is being disclosed. These committees should cross-examine the heads of departments, as the board of control in a large city does. There should be no voting along parliamentary lines, and the recommendations of the committee need not be looked upon as a reflection upon any particular department or upon the government. These committees would be a godsend for a great many hon. members because it would give them some work to do while they are waiting around in Ottawa for the taking of a vote upon some question or another in this chamber. It would also give them an added responsibility as members of parliament. I have no doubt that resistance would come from the great spending departments and from politicians to any such change, but it is the only way in which we shall ever get reduced expenditure, and the only way in which we can protect the interests of the great mass of the already over-burdened taxpayers.

I complain, Mr. Speaker, that Ontario and Quebec do not get sufficient recognition at Ottawa, although they contribute about eighty per cent of the cash taxes of Canada. The parliamentary system which destroyed the autocratic power of the monarchy and curbed the privileges of the second chamber has been a failure. To-day we have no government by the people, of the people, and for the people, and there cannot be any such thing so long as we retain a parliamentary system that is one hundred years old with little or no control over expenditure. That system has not justified its existence, because under it parliament does not exercise proper control over the government of the day, with the result that wre have increased expenditures all along the line. We already have a special committee to consider the estimates of the Canadian National Railways, and instead of that committee holding five or six meetings, it should hold twenty or thirty. The same principle that we have adopted in connection with the railway estimates should be applied to the estimates of all the other departments, including the national railways, and then I venture to say we should get some relief.

With regard to the tariff changes, in my opinion this heterogeneous mass of changes proposed by the minister is going to do the industrial provinces untold harm. My friends, the Progressives, are protectionists so far as their own affairs in the prairie provinces are concerned; they are free traders only

The Bridget-Mr. Church

when the industries of central Canada are affected. In my opinion a proper application of the doctrine of protection would solve all the economic ills that we have today. Protection is not a dead but a living thing. It will protect the manufacturer, the farmer, the artisan and the toiler; it will solve unemployment and make for a happy and prosperous and contented people. It would help the consumer as well, because no measure of protection should be adopted which ignores the consumer. I support protection as a principle, and not as a privilege to the few. Under a proper protective policy the automobile industry and some ten other native industries would become key industries in this country, employing tens of thousands of Canadians now exiled and driven to the United States.

The immigration question is wrapped up and correlated to the tariff. They are interwoven; one could not exist without the other. The first cornerstone of any immigration policy is to keep the population we already have at the present time, and the second is to adopt an all-Canadian allBritish tariff, and encourage British immigration. Some of the manufacturers were the worst foes of a protective tariff in wanting all for themselves. Right Hon. Stanley Baldwin and Premier Bruce of Australia were reciprocal protectionists. In my opinion the tariff board is nothing but a travelling minstrel show. Nero never fiddled while Rome burned the way this government is fiddling with the main economic question in this country by appointing a tariff board to make a political football of our major economic question

the tariff. I say, with no disrespect for the members of the tariff board, because they are a good lot of men, that if they would only go into the theatrical business or into the movies they would make their fortunes. If they would blacken up their faces, they would make the greatest minstrel show that ever took the road.

The tariff, Mr. Speaker, will always be in politics, thank goodness for that, because dear knows where the working class would be if it were not for the tariff being in politics for keeps. The tariff board has cost this country over a hundred thousand dollars, and they have produced nothing but talk. It has been one of the most mischievous bodies in this country for breaking down our industrial existence. It is just digging up material for the free traders. The tariff board to-day, in my opinion, is composed of nothing but a lot of spade and shovel men who are digging up a lot of facts about free trade for the government to destroy protection and trying

to foist free trade on the people. The farmers of this country do not believe in the policy of free trade, and yet the government are going to destroy every industry in Ontario and Quebec before they get through with this Yankee fad, the tariff board. There is not one word in the budget about the conservation of raw materials, the dumping of cheap, shoddy, European, German and American goods, neither is there one word about some form of social legislation or about sick and unemployment insurance for the masses of this country. This government have millions of dollars for the millionaire miner, for the millionaire manufacturer, for the million' aire newspaper publisher in the form of reduced taxation and tariff reductions, but they have not struck a cent off the taxes of the working classes or off the breakfast table of the masses.

The whole gesture in this budget speech is nothing but the first volume of reciprocity with the people of the United States. Canada does not want reciprocity if it could get it and could not get it if it wanted it. We want to be on friendly terms with our American cousins, but we should tell them at once, "If you want to do business with us you must do it on fair, just and equitable grounds, or not at all." Canada must stop buying 600 million dollars' worth of high class American goods-nearly all of wrhich could be made in Canada-and paying for them in our raw materials which are fast vanishing. In my opinion what this country wants is a national policy and adequate safeguarding legislation in relation to: (a) its raw materials; (b) its coal and other fuels; (c) its water-powers; (d) patents and trade marks; (e) dumping of foreign goods; (f) scientific research; (g) export of hard wheat to the United States; (h) timber and minerals; and (i) domestic and empire marketing. This would conserve our resources, build up the country and protect it from unfair and unreasonable competition, preserve our own markets for our own products, and our own work for our own workmen, and so stop the exodus to the United States and solve unemployment. Such a national policy is both a social and an economic necessity; it is in the best interests and welfare of Canada and the conservation of our resources.

Away back in '49 Horace Greeley's advice to the young men of his country-and, remember, that was when they started protection in the United States-was: "Go west, young man." To-day this government with its free trade gesture is in effect telling our youth: "Go south, young man." And the

The Budget-Mr. Church

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

Willis Keith Baldwin

Liberal

Mr. W. K. BALDWIN (Stanstead):

So

far, the present session of parliament has resolved itself into what I think one may describe as a fellowship meeting. There has been no cross-firing such as would give one, if I may use the expression, pep and energy for assault. However, we have just had an onslaught from the popular member who has just taken his seat (Mr. Church), and who I must say has always shown himself, if a hard hitter, at least a fair and square one; he hits those on his own side of the house just as vigorously as he does those on this side. As regards his references to this antiquated government, I would ask him whether he believes in the Mussolini form of administration, or whether he thinks we should reconstitute our administrative machinery to run this country.

We have just had the fifth budget from the present Minister of Finance (Mr. Robb) and throughout the length and breadth of Canada the people are paying tribute to the hon. gentleman's outstanding ability and the success he has had in putting the finances of Canada on such a satisfactory basis. If we go back in our history a few years we shall see to what an extent the revenues of the country were squandered largely in the mismanagement of our railways. We all remember, I am sure, those dark days when there were whisperings of death, and these wailings have done more to drive people from Canada than anything else that has ever been done in this country.

It is with no little pleasure that I gathered from the speeches delivered throughout the country by the leader of the opposition (Mr. Bennett) before the meeting of parliament that this government, in its administration of the country's affairs, should in his view be allowed to operate without undue antagonism; and I believe that this principle has been well observed throughout the session. There has been no unnecessary finding of fault with the government. When a budget such as that now under consideration could be brought down within so short a time from the opening of parliament, it is not to be wondered at that there is peace and prosperity in the country and that business generally is stable.

The hon. member who preceded me spoke about the lavish expenditure of the country's money. There is absolutely no ground for such a statement; I know that the government is not spending money with too free a hand. If I want money for a

fhe Budget-Mr. Baldwin

wharf or a post office or for the painting of a public building and I apply to the ministers they say, "We cannot raise the money. We must economize." We all believe in the Minister of Finance and we are confident that he will keep a firm grip on the purse strings. The extent to which he has reduced taxation in Canada and has been paying off the public debt is a matter for wonder and admiration. I regret, I am bound to say, that the Minister of National Defence (Mr. Ralston) has been allowed more money than I should like to see appropriated to his department, but we all know that the hon. gentleman is not a warrior at heart, and I have no doubt that the expenditures of his department will be directed more towards aviation than militarism.

We must be progressive in this country, which has amazing possibilities. Let us instil into the minds of our young people, our boys and girls, a proper appreciation of the greatness of this Dominion, and let us never forget that we are part and parcel of the British Empire, this wonderful commonwealth of nations embracing almost one quarter of the population of the earth and covering nearly a quarter of its surface. It seems to me that the Canadian people are losing their enthusiasm. It seems to me that patriotism and love of country, which should be drilled into our children, is being forgotten. However, let us remember that many of those who have gone to the United States would like to come back, if they only had the means with which to get back. Within the last few months I have had occasion to be in New York city several times, and I have seen hundreds of people who have gone from Canada to that city, many of them dejected and out of work, and the few who have made good admit that with the same hard work in Canada they would have done just as well. I want the people to remember that we must work and economize as we did during the war if we are to develop our great resources; let us work and strive and live frugally, and in that way we will more quickly bring about that development which we all desire. Let us live Sere as they did in the United States after ;he great civil war, when they were burdened vith a huge debt. The officers went back :o their homes in their faded blue uniforms, with no brass bands to greet them and no proclamations to receive them, but they went back to their affairs and started to work and economize, with the result that the United States has developed into one of the greatest and richest countries in the world. Within the last five years, through good administration, we have been paying off our national

debt and reducing taxation, and if we continue in this way we shall get on solid footing in short order.

There are a few things in the budget with which I differ; I would have eliminated the sales tax. It is laborious work making out five copies of those papers, which must be done whether or not anything is sold. Then the customs officials throughout the country do a little more work and demand a little more salary, and I believe it takes hundreds of clerks to audit all the papers and work everything out, because if a mistake is made the papers will be returned to remind you that you owe a few cents more than you thought. In addition to this, there are many ways of evading that tax. We will say there are manufacturers in Montreal who make clothing; not those firms advertising themselves as wholesalers, who send out travellers and carry on a regular trade, but those other men who do a large volume of business in the aggregate, and who sell their goods more cheaply than the legitimate firms. If you buy goods from these men you pay cash and get delivery, but you cannot get an invoice, and in that way they evade the sales tax. There is another objection to the sales tax with which we who live near the border are well acquainted. If you build a house just across the line there is no sales tax to be paid, while if you build a house on our side of the line you must pay the sales tax. I would suggest that the stamp tax be increased in some way which would bring an amount equal to the sales tax revenue, and we would then be sure that every penny went into the treasury There would also be much less trouble, because after buying stamps all that is necessary is to affix them.

This country has a wonderful future. The West Indies have always been dear to my heart. In this climate we have no tropical or semi-tropical products, and I have always believed that we should have political union with the West Indies, if that could be made agreeable to Great Britain and to those islands. How they would be represented in this country I do not know, but the idea is well worthy of consideration. Then we have Newfoundland just off our coast, a country with no great future if standing alone. Newfoundland should be brought into this Dominion, as was very nearly the case at one time, when for a paltry $8,000,000 the proposition was refused. That was a foolish move, because every dollar of that $8,000,000 would have been spent either in Newfoundland or in Canada, and would have done an immense amount of good. The size of the

The Budget-Mr. Baldwin

United States has been almost doubled even within my memory by small wars and by diplomacy, together with the expenditure of a few dollars here and there, until now there is nothing left for Canada on this continent north of Mexico. We need the best efforts of the leading men in Canada, working together, to round out this great country.

Another thought which is worthy of consideration is a preferential tariff within the commonwealth of British nations, which would bring them altogether to supply the needs of each separate part. I do not know whether or not this could be worked out, but it is ia wonderful theory. If one-quarter of the people in the world and one-quarter of the existing resources could be brought together under a preferential tariff I am sure the country to our south would be at -a great disadvantage as compared with Canada. That is a thought which everyone should consider carefully. There is nothing more wonderful for a Canadian than to remember that he is a British subject, belonging to the British empire.

Another subject which I have mentioned in this house previously, but which I feel justified in bringing up again, is the Hudson Bay railway. I maintain that no part of this great country can prosper without that prosperity being reflected in every other part. I represent a great manufacturing community, but I do not care whether improvements be made in British Columbia, Saskatchewan, Alberta, Manitoba or the Yukon, I feel sure that the benefit will be felt all over Canada.

Then there is the question of the deepening of the St. Lawrence and the development of power. I am proud of the government because of the prudent and careful manner in which they have acted in this matter. The diversion of water by Chicago is something which I think should not continue. Can we afford to expend millions and millions of dollars to deepen our great waterways when the city of Chicago is diverting water not only for drainage purposes but to establish a new waterway to the south and to develop idle electric energy? We cannot possibly do it, and I am glad that the government are prudent and are pursuing a policy of watching and waiting.

As regards the export of power to the United States, we can never afford to allow that. It must be remembered that once contracts are entered into they cannot be very easily terminated. My advice is to develop our own water-powers for our own purposes, and not allow the exportation of Canadian power to build up towns and cities in the United States.

We are making progress in this country, but if there is any member of the government with whom I sympathize it is the Minister of Immigration and Colonization (Mr. Forke). He has a great problem before him, and we should give him our united support in trying to solve it. I would allow everybody who is law abiding and willing to work to come to this country. That may be a somewhat extreme statement to make, but I have seen immigration pouring into the United States through the city of New York, and other ports, when they were entering at the rate of a million a year. The sole belongings of some of those immigrants were contained in a little tin box and a handkerchief, but they were people of great energy and physical vigour. They have helped to develop the resources of the country to the south, they have aided in building highways even to the very mountain tops, they have assisted in reclaiming the desert and making it blossom like the rose, and they have played their part in recovering ocean lands along the Atlantic in the same way as they have done by the building of dykes in Holland. I am not afraid of labouring men. If we are to have only hand picked immigrants I cannot understand how we are to handle those waste lands which are awaiting development in various parts of this Dominion.

A railway to Hudson bay is now under construction, and I hope that railway will meet with all the success which its friends anticipate. I recall that last year, when the St. Lawrence was frozen over, Hudson straits were still open to navigation, showing that all that was said during the debate in this house last session was not so far-fetched after all. It was said that the straits are open for about nine months of the year. It may well be that when the railway is in operation and the transportation of grain under way the new route will warrant the optimism which its friends entertain in regard to it. The construction of the Hudson Bay railway will be an important factor in developing the natural resources of the country through which it passes. The great results at the Flin Flon mines is an illustration of what we may look for in connection with mining development in that part of the country. We cannot achieve development without the expenditure of money. Wherever there are resources to be developed we must be prepared to put our hands into our pockets. The Peace River district is a most wonderful country. It is almost an empire in itself, and when opened up will make a tremendous addition to Canada's wealth.

The Budget-Mr. Baldwin

There is no occasion for being despondent. The future is bright with hope. Compared with the United States we are not so badly off. In the New England states there are thousands of people out of employment. In New York city people are working harder and longer hours than formerly, and there is a movement to reduce salaries. Banks are open at eight o'clock both morning and evening, and the employees have to work like trojans, while in this country we are living under much easier conditions. I would say, however, that too many of our young men are going to the cities and entering brokerage offices. In that connection I would state that just now a flood of circulars is going out from various brokers seeking to find out what worldly possessions you have. They want to ascertain whether you have any spare money. If you have they are prepared to advise you how to invest it. No doubt some of these people are honest enough, but others are seeking to get their hands into your pockets in order to relieve you of your money.

Personally I am a believer in hard work and frugal living. I rise at five thirty in the morning at home and work the whole day. When in New York recently I told them I felt as young as any other man in my community, or for that matter in the whole of Canada. Some of them believed it. Many people here look upon the United States as a land of promise, and believe that goods sell more cheaply there than in this country, but in the case of the chain stores, for instance, they do not sell goods over there any cheaper than similar goods are sold in Canada. The man who has saved money is in a happy position, and he will find it very convenient to be able to utilize the purchasing power of a little spare cash. But nobody will ever reach that stage who pays whatever anybody wants to charge him, and is always getting into debt.

I wish every man and every woman in the country would at least avoid spending money until it is actually received, instead of paying what anybody likes to charge and getting into debt for thirty days, so that they remain poor and go about the country with a grouch. But it is the same throughout the world; there are some who know how to look after themselves and others who do not, no matter how much money they get.

I have mentioned Sir Henry Thornton as being the greatest railroad man in the world. He has demonstrated to the world that he has a wonderful grasp of the railway situation in Canada. I mention this because years ago, when there was another leader on the other side of the house, he went so far as to say that Sir Henry Thornton's salary and every-

thing in connection with his administration was a farce, but my opinion is that great credit is due to Sir Henry Thornton for Canada being to-day where she is financially.

Mr. T. M. CAYLEY (South Oxford); Mr. Speaker, this is my first speech in this chamber, and after listening to hon. members who have been addressing the house this evening I could not help envying them their fluency and ease; I wish I possessed those desirable qualities in the same degree.

Canada welcomes another Robb budget. It again brings with it assurances of Canada's important place among the nations of the world and evidences of unsurpassed prosperity. Canada has never before enjoyed a 3'ear of such general progress and prosperity as that of 1927, and from the splendid reception the recent budget is receiving throughout this great Dominion it would appear that Canadians are quite content with the sound policies of the King government.

Gradually this government is undoing the lamentable tangles of debt and misadmin-istration handed them when they took over their governmental duties in 1921. Steadily from year to year since that time they have succeeded in lessening the burden of the Canadian taxpayer and at the same time they have improved conditions for all concerned. Expenditures have been carefully administered so as to keep pace with the growing needs of this young Dominion. From March 31, 1924 to March 31, 1927, the public accounts submitted to parliament, and certified to, show a reduction in the net debt of 8105,942,498, and for the fiscal year ended March 31, 1927, the reduction amounted to $41,800,000. The refinancing and reduction of the national debt in 1927 results in a saving in interest of $3,607,000 annually. The last Robb budget, according to press reports from day to day, shows that while there may be some minor points of difference, on the whole the people of Canada express themselves as satisfied with the wise administration of the government, and as confident in the Minister of Finance.

Are we prosperous? Canada, as I have already pointed out, has never enjoyed a year of such progress and prosperity as that of 1927. Production, distribution, manufacturing, transportation and foreign commerce exceeded all previous records. Labour was fully employed1 at wages higher relatively to the peak than the cost of commodities, this resulting in better living conditions, increased bank deposits, more life insurance written, a greater number of motor cars used, a wonder-

The Budget-Mr. Cayley

ful sale of radios and a general participation in the luxuries of life. Surely the records of our banking institutions and great transportation companies bear evidence of our decided growth and prosperity. The railways of Canada have never before moved a greater tonnage of merchandise than during the year just closed. While it is true that the net earnings of the railways have been decreased, this decrease was made for the pur-post of stimulating business, increasing wages to employees and lessening freight rates. In this way the shipper, the workingman and the consumer were permitted to become greater participants in the prosperity of the great corporations. Surely a policy that takes into account the happiness of all is one that should meet with approval in every part of Canada.

Immigration has not been neglected as some would lead us to believe. The minister of that important department of the public service has shown his policy to be in conformity with the wish of all Canadians, namely, to fill our vacant spaces with those who are physically, morally and mentally acceptable and who are willing to adapt themselves to conditions in Canada, the great essentials being fitness and adaptability. With a country such as we have, leading the world in many respects, with its wonderful resources and mineral wealth not yet touched, with it3 almost unlimited water-powers, the immigration problem should solve itself if Canadians themselves expressed a greater faith in their own country and greater confidence in its future. If we felt less disposed to advertise our neighbouring republic and more inclined to boast of our own advantages, people would come readily to our shores, capital would pour in to develop our resources, and our 32,000,000 horse-power of electric energy would soon be harnessed. We must, of course, have plenty of immigrants of British origin, people of our own stock, people proud of British institutions and traditions, who believe that as members of the great commonwealth of nations we can work out our own destiny under the British flag and contribute to the peace of the world.

In the discussion on the problem of immigration the government's attention has been directed to the suggestion that some step should be taken to extend to people of our own Dominion who would gladly undertake farming work, as much assistance as is now being offered to outsiders. Thousands of our young people are forced out of rural life to seek employment in the urban centres of Canada, or even in the big cities of the United States, because of lack of sufficient

means to meet the initial cost of starting farming operations. We are living under a new order of things, when more capital is required to commence farming than was needed fifty years ago. These are our own people, Canadians by birth, for the most part trained in the rudiments of farming and giving every promise of becoming successful citizens and of making valuable contributions to our Canadian citizenship and our national wealth.

Better care and attention should also be paid to the health and comfort of our citizens. We are annually losing too many children. The mortality rate of children under five years and of mothers is far too great. No doubt the government has considered this very serious drainage in our natural population, but we commend the matter again to his attention.

We also commend the government on the care shown in shaping its policies in such a way as not to injure any one section of the countiy at the expense of another. The people of South Oxford, whom I have the honour to represent, have always recognized the interdependence between the rural and the urban centres, and one element I am sure would not choose to reap any advantage at the expense or detriment of the other. We believe that the prosperity of each is wrapped up in the prosperity of the other. We are nevertheless of the opinion that greater consideration is due to rural Canada than is at present extended in comparison with the large amounts of public moneys that are annually expended in other directions. We believe that eight million dollars out of an expenditure creeping up towards four hundred million dollars is far too small an amount in view of the value of that great industry of agriculture. There should be no skimping in assisting the agricultural industries of Canada and in applying the forces of scientific research and technical training to that industry; and we are pleased to note that scientific research will this year receive greater consideration by way of an increased appropriation. Let it be urged upon the government that it renew its cooperation with the provinces in assisting technical education and in building up and maintaining national highways.

The jubilee year of 1927 was a testing time as to the unity and solidarity of Canadian sentiment. The test proved highly satisfactory, and showed the existence and .possibilities of a national consciousness among our citizens no matter what their race or creed might be. The discords of former times have disappeared, intolerance has given

The Budget-Mr. Cayley

place to tolerance, and the faith and hope of the confederation fathers of 1867 has been fully realized.

Before concluding, Mr. Speaker, permit me to direct the attention of the government to a class of public servants who feel that they are not receiving compensation commensurate with the services they are rendering; I refer to the rural mail carriers, who in all kinds of weather and over all kinds of roads perform nearly every day of the year their onerous and important duties. In view of the importance of the service rendered by these employees to Canadians in rural districts, and to the outlay for equipment and maintenance in comparison with those in many other branches of the public service, we claim that they are not receiving just consideration.

To the people of Ontario the fuel problem is one of great concern. We are of the opinion that Canadian coal should be distributed to the people of Canada, and that we should eliminate our dependence upon a foreign country for this important commodity and promote the development of Canadian resources and national unity within our own borders.

As to the appointment of a Canadian plenipotentiary at Tokyo, I would say that it is high time that Canada was relieving the motherland of some of those international duties that she may well handle-questions that wholly concern Canada and the orient, and which can best be handled by one thoroughly familiar with Canadian affairs. We note with satisfaction the announcement that Washington is preparing quarters in Ottawa for her representative here, and that these quarters will be commodious and will in no way detract from the attractiveness of this beautiful city.

On motion of Mr. Sanderson the debate was adjourned.

On motion of Mr. Lapointe the house adjourned at 9.25 p.m.

Wednesday, February 22, 1928

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE
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February 21, 1928