February 28, 1928

LIB-PRO

Robert Forke (Minister of Immigration and Colonization)

Liberal Progressive

Mr. FORKE:

No, never of the same

character.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

-certified by his own officers to be unfit to come into this country, both physically and mentally.

The returns are there to prove what I say.

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

Robert Forke (Minister of Immigration and Colonization)

Liberal Progressive

Mr. FORKE:

I do not like to be criticized before the country as being cruel or inhuman when the law is there.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

The minister will get lots of criticism before the session is over, he may be sure of that.

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

Robert Forke (Minister of Immigration and Colonization)

Liberal Progressive

Mr. FORKE:

That does not help the girl. I think I have probably suffered more over that girl than any member of this house.

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

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

I am glad

there is one minister over there-of course he has not been there long-whose epidermis is not so callous that it cannot be penetrated. It is pretty hard to get through the skins of some of them, but there is a sensitive spot in my hon. friend although it takes quite a while to reach it.

Now I wish to direct attention for a minute or two to the situation of our daily farmers in Canada, and what this government has done to make their situation worse. In 1926 our exports of dairy products-cream, milk, butter, cheese, condensed milk, milk powder, casein and eggs were as follows compared with 1927:

Cream

Milk

Butter

Cheese

Milk (condensed) . Milk (powder) .. . Milk (evaporated)

Casein

Eggs

Reduction $ 488.341 215,595 2,264,266 2,603,361 428,917 125,202

453,224

Increase

1,090,788

31,555

$36,336,464 $5,556,158

(Decrease in one year)

Totals

856 COMMONS

The Budget-Mr. Edwards .(Frontenac)

In 1926 our export of these commodities amounted to $41,892,622. In 1927 it had fallen to $36,336,464, a decrease in one year of $5,556,158 in dairy products alone. In 1925 Canada's exports of butter were 24,553,000 pounds, and our imports were 193,000 pounds. Our farmers were supplying Canadian tables and exporting over 24,000,000 pounds a year. The Australian and New Zealand trade agreements changed all that by permitting butter to come into Canada for one cent a pound. Our exports for the year ending March 31, 1927, dropped by 13,425,500 pounds, and our imports rose to 7,190,267 pounds. For the year ending November, 1927, Australia and New Zealand sent us 10,122.866 pounds of butter, and we sent them $3,503,833 in payment, every dollar of which should have gone into the pockets of Canadian farmers instead of into the pockets of Australian and New Zealand farmers. We are up against the Paterson plan in Australia where three cents on every pound of butter manufactured there goes into a pool, and where a bonus of six cents a pound is paid on every pound' of butter exported. Now it costs less than three cents a pound to bring butter from Australia and New Zealand to Vancouver, and butter from those countries shipped from Vancouver to Montreal can be carried at the rate of $2.30 per hundredweight. On the other hand British Columbia butter has to pay a rate of $3.58i cents per hundredweight. The rate from Regina or Saskatoon to Vancouver is 2| cents a pound, so that the price of butter in Saskatoon and Regina is fixed at 2i cents lower than the price of New Zealand butter when it lands in Vancouver.

I wish to give here some figures brought forward by the hon. member for Victoria (Mr. Tolmie) illustrating the effect of this on Canadian production: Taking the production of an average cow as 200 pounds of butter a year, our importations from Australia and New Zealand last year would keep 50,000 cows in Canada busy throughout the year, and allowing 10 cows for each farm, would establish 5,000 farms in this Dominion. There is a spread, as everybody knows, between the winter and summer prices for milk. There is evidence of that right here in the city where the difference is 40 cents per 100 pounds. In Montreal the spread is 90 cents per 100 pounds. The dairymen in Australia and New Zealand have a decided advantage over us because their climate allows their cattle to graze out the year round, consequently they can produce more cheaply than we can in Canada. Yet we are giving them the advantage of our market in this country at a cent a. pound. At a season of the year when

the costs of production in Canada are at the highest we allow Australian and New Zealand butter to enter Canada and damage the dairy industry in this country. In the countries named their summer is in operation at this time; it is their flush season. Protests have been entered from all the dairy councils throughout Canada against this unfair competition but nothing has been done to rectify the evil. In addition to the injustice already complained of the government allows Australian meat to come in at half a cent a pound, and it is a well known fact that the Australian government pays a bonus of over $2 on every carcass of beef shipped out of that country. That is sufficient to pay the freight when that commodity is shipped to our own shores. Is it a fair deal to the farmers in this country to be put up against competition of that kind? I submit that it is not.

We imported eggs to the value of $1,826,782 last year, mostly from the United States, Britain and China, but we do not export many eggs to the United States because that country collects a duty of 8 cents a dozen upon our eggs while we allow their eggs to enter this country at 3 cents a dozen. In the same way we cannot avail ourselves of the butter market in New York. When butter was selling in Montreal at 37 and 38 cents a pound it was priced in New York at 50 cents a pound. Why did we not send our butter to New York? For the reason that the United States protects their farmers and dairymen by imposing a duty of 12 cents a pound on our butter thus making it impossible for it to enter.

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Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

And our price is that

much less.

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CON

John Wesley Edwards

Conservative (1867-1942)

Mr. EDWARDS (Frontenac):

Yes, our price is that much less. I am not going to discuss the various trade agreements entered into by this government. Suffice it to say that Canada has lost out in every agreement which this government has made with other countries. We lost out in the case of Australia. We not only lost through a reduction in our exports to that country while their exports to us increased, but we have had to pay from $1,500,000 to $2,000,000 extra in duties on imported raisins. That was part of the deal. We lost again in the case of New Zealand, our favourable balance with that country decreasing by more than $5,000,000 in one year. The same story is true in regard to our treaty with France, an unfavourable trade balance of $S 500,000 increasing to $13,500,000. As regards the West India agreement, a balance in our favour of $500,000 was changed in one year, by the magic touch of this government

The Budget-Mr. Girouard

by way of a trade arrangement, into an unfavourable trade balance to the tune of 82,000,000, and yet we are subsidizing steamers to carry their products to Canada.

Mr. WILFRID GIROUARD (Drummond-

Arthabaska) (Translation): Mr. Speaker, the

hon. member for Frontenac-Addington (Mr. Edwards) who has just spoken is well known in the riding which I have the honour to represent. We notice that he still continues to occupy a seat on the front benches of the opposition and takes a leading part in the proceedings of his party. He has broached a great number of subjects and I do not intend to follow him in all his rambles. I simply wish to make a note of the admission which he made at the outset of his speech; that in the latter part of June, 1926, when Mr. Meighen grabbed power in violation of constitutional practice, he did not have the confidence of the people of this country, and therefore had no right to take over the reins of government. That was then our contention, and the people at the last general elections were of the same opinion. This is the reason why the hon. member for Frontenac-Addington occupies again a seat on the wrong side of the house.

Allow me, Mr. Speaker, to now congratulate the hon. Minister of Finance (Mr. Robb) on his statement as to our financial situation. Ever since he has been at the head of this important department, the country has had but praise for his administration which has given the government an opportunity, thanks to the substantial reduction in taxation, to introduce measures favourable to the country's development and progress. I listened quite attentively to the various speeches delivered by members of the opposition, and I may state that the whole debate has shown how very acceptable this budget was to the whole country. Two amendments were moved, on which we shall be called upon to vote. One, which is really but a request to increase the tariff, is put forward by the official opposition-it bears with it a pleasant smile for the large interests-the other, without any consideration whatsoever for the needs of our industries, takes the government to task for not having reduced the tariff sufficiently. It seems to me that the task of preparing and putting into practice a fiscal policy consistent with the needs of a country like ours presents the greatest difficulties. Faced with these two clashing amendments, Sir, one can readily see all the wisdom and foresight of the leaders of the Liberal party who intend to give the country a policy which will be most fair towards the claims of the various provinces, but which will also take into consideration the needs of the great mass of consumers of this country and the necessity of protecting our industries. Therefore, the present budget, like all those which the hon. Minister of Finance (Mr. Robb) has brought down in this house, is one that we can call truly Liberal.

The opposition, through their leader, have proclaimed that this year at least it would forsake the old beaten tracks where it was in danger of being engulfed and would bring into the discussion of the country's affairs a constructive criticism. We were therefore prepared to listen to some announcement which would have given us hope that it would break with the past. We looked, listened, waited, but nothing happened; in vain did we wait. It is-Mr. Speaker, you have heard them before-always the same complaints repeated with the same lack of sincerity. The opposition seems always depressed, it traces before our eyes such gloomy pictures that, at times,

I wonder if it would not rejoice itself, for purely political purposes, in seeing a less flourishing state of things in this country. The opposition is well aware-one must give it credit-that years and years will elapse before it. can sit to your right, Sir; but is this a reason to utter but empty complaints and wish to revive this campaign of disparagement, which can only depreciate Canada in the eyes of other countries. Instead of talking at random of mills closing, why does the opposition not rejoice with us and the people of this country, at the prodigious trade boom which took place in 1927?

To-day, our country, so far as the importance and value of its international trade is concerned, occupies one of the first places among the nations of the world, under the present economical rule our industrial development has made great strides. Thus for the period comprised between April 1 and December 31, 1927, our total trade amounted to $1,793,000,000, of which $823,000,000 is for imports, while we have exported goods amounting to $970,000,000, leaving a favourable trade balance of $147,000,000. Why does not the opposition, who so often boast of their broadmindedness, set aside for once their party spirit so as to congratulate the government on the considerable reduction which has been effected in the debt of the country? Why not cease criticizing-which would be depressing if it were taken seriously -seeing that never since the war our finances have shown up so well? Yet, Sir, if there is anyone in this country who should rejoice of this improvement, it is the opposition for they are responsible for the enor-

85S

The Budget-Mr. Girouard

mous debt contracted from 1914 to 1921. Within the last five years the debt has decreased by more than $144,000,000; revenues now exceed expenditures; a cash sum of $47,000,000 has been paid by the government to meet bonds maturing in 1927, and by this transaction the government economizes $3,000,000 each year on the interest alone. These are the conditions which make possible a reduction of ten per cent on the income tax, and a reduction of twenty-five per cent on sales tax. The government, although in no way hampering the progress of the country, wished to practise economy and took the means to curtail expenditures. To have a clear idea of this, we have but to remember that in 1921 the Conservative government were spending $528,000,000, and that in 1927, these expenditures diminished by more than $163,000,000. That is evidence of the good administration of the present government which more than ever has the confidence of the people.

The Liberal party has fulfilled the pledge given in 1921: drag Canada out of the chaos where the Conservative administrations had plunged it. Our finances are now in excellent shape and the future of our country is more alluring than ever, especially if we take into consideration that we are but at the beginning of a period which, by its prosperity and activity, gives us the most assured guarantees of a constant development and progress.

Another question to which I want to refer is the farm loans. One will readily recall that the present government had introduced, during the course of the 1926 session, a bill in relation to agriculture which had been passed by the two houses. Unfortunately, the Governor General of that day, acting in concert with certain members of the Conservative party, had made the signing of it impossible, thus delaying for a year the enactment of legislation destined to efficaciously help the farming class by the means of long term loans. The Liberal party again brought down this bill during the session of 1927, and I wish to state, sir, that the farmers of the riding I represent greatly rejoiced at hearing that this measure had been adopted.

I wish to congratulate the Quebec government who, at their present session, will bring down the necessary legislation to insure its operation. This shows clearly the desire of both the Quebec and Ottawa Liberal governments, to unite their efforts in order to favour the farming class of our province.

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

Joseph-Théodule Rhéaume

Liberal

Mr. RHEAUME (Translation):

Hear,

hear I

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

Wilfrid Girouard

Liberal

Mr. GIROUARD (Translation):

May I

now, Sir, draw the attention of this house to certain events which happened in the course of last year, and especially to the importance attached to the visit of certain high officials who have visited Canada since last session.

I must say that, personally, it is not without certain apprehension that I see ministers or other officials of the departments for Foreign Affairs or Secretary of State for the Dominions, arriving from London. Their right to visit our country is not disputed; they are welcome to admire its beauty and note the marvellous development which is taking place from year to year.

I think, however, that our welcome should be rather a cold one when-to carry out an idea of propaganda which, I am inclined to think, is not the product of a Canadian's brain-we are told what line of conduct our country should follow under certain circumstances. One would really be led to believe from what they say, that we are unable to manage our own affairs, unless we conform to suggestions not in keeping with the needs and destinies of the Canadian people.

The Mail and Empire of Toronto, recently charged the right hon. Prime Minister (Mr. Mackenzie King) and the hon. Minister of Justice (Mr. Lapointe), with trying to draw us away from the British ties, because of their attitude at the last imperial conference, but, sir, one of the reasons which justified the confidence of the large majority of the people in my county, was their wish and desire proudly expressed to see our country represented by men who, by their words, acts and line of conduct in the past, had proved that they were worthy to represent and assert the Canadian viewpoint.

The policy of the Liberal party-and it should be accepted, I think, by all those who are broadminded and are moved by patriotism -is to create for the country we live in, the most complete autonomy, both at home and outside. Those who come to visit us should bear this in mind.

Mr. Ewart, an authority on constitutional law, speaking of Mr. Amery's visit and his propaganda, stated that Mr. Amery-being fully aware of the advantages which his government would reap by being able to control in case of war, the financial and military resources of Canada-had tried and was trying to create a state of things which would make certain this control. Is it necessary to add, sir, that we should oppose such an attempt; that there is cause to ask all these high officials to travel less or at least to travel elsewhere than here, when the purport of such visits is to spread imperialistic propaganda. Mr. [DOT]

The Budget-Mr. Stinson

Amery works in the interest of his government, but is there not cause to wonder at the fact that members of the cabinet in London can thus absent themselves for months, when in their own country there are so many important and intricate questions capable of taking up all their time and attention. We also must preoccupy ourselves with the interests which are our own. We equally have questions and problems to solve, bearing in mind our needs, geographical situation, aspirations and future as a Canadian nation.

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

Thomas Hubert Stinson

Conservative (1867-1942)

Mr. T. H. STINSON (Victoria, Ont.):

Mr. Speaker, the budget speech of the Finance minister (Mr. Robb) grows in importance to the people of Canada year by year, and is awaited with anticipation and concern by increasing numbers. It is unfortunate that this should be the case as there should be some settled policy upon which the business of this country can be built up, instead of being on the basis of a yearly tenure only.

The problem of the tariff has been one of the most persistent and controversial in Canadian history, affecting as it does the wellbeing and prosperity directly or indirectly of every citizen. As early as 1876 Sir Wilfrid Laurier declared himself a moderate protectionist, admitting that protection was a matter of necessity for a young nation in order that it may attain the full development of its own resources. The national policy as enunciated by Sir John A. Macdonald in 1878 was to benefit and foster the products of the farm, the mine, the forest, the sea, and to give employment to our labourers, and thus build up all the interests of this great Dominion. The importance of manufacturers in our national well-being is strikingly indicated by our population figures. Since 1891 our urban population has steadily increased until now it is one-half of our total population. Apart from the actual number of factory employees it is obvious that in any city or town the wholesale and retail merchants, the banks, the professions, the real estate agents, and the municipality itself are largely dependent upon the factory as the dynamo of their prosperity. If the factory is ruined by trade reverses, the city and town must suffer the same fate. Consequently any ill-timed and thoughtless tariff change is a matter of vital concern to the city and town dweller. He is as directly interested in the tariff as the manufacturer, and surely nothing should be done to endanger the well-being of nearly half our population.

It should be the purpose of the government to direct and mould the business policy of our country for the development of the natural resources, and thus give employment

to our citizens. A nation cannot exist without people, people cannot exist without homes, and homes cannot be maintained without money; and money can only be obtained by (he multitude by work and labour. Therefore, if a government fails in its duty to so direct its policy as to foster and provide work and labour at fair remuneration, it fails in its duty to the people.

The test of a good budget should then be: What does it contain to create industry in order that the foundation of the nation may be maintained in the building up of happy and contented homes? Does the present budget contain one tariff change that will develop a job capable of employing an additional Canadian boy in Canada or bringing one exiled Canadian back from the United States?

It is agreed on all sides that our great need is population, and if that is the case, the government must find ways and means of employing the population we have and making new jobs for those we desire to add to our population. Consequently the efforts of the government should be bent to the task of creating work in Canada, and our efforts should be directed towards building up a balanced population. The farmer says: If you bring in

more farmers and settle them on the land you are creating more competition for me which will help to lessen the price of my product. The labourer says: If you bring in more

labourers, there will be more competition for the available jobs in Canada. Therefore it is necessary to build up a balanced population to a point where Canada will present a fairly harmonious economic unit-where the burden of taxation may be so distributed over more shoulders that it bears lightly upon all: where our vast over-expanded transportation machine may be operated efficiently and economically, and where local consumption of industrial products may be large enough to give industry and consumer the benefit of savings incidental to quantity production. We cannot overlook the fact that the first duty of a young nation is to make itself economically secure.

It is time Canada took stock of herself, of her resources and her institutions, and commenced to formulate national policies in keeping with her peculiar conditions and limitations. There is somewhere a point in population where Canada as a business and productive unit would function under reasonably normal overhead cost, which point can be approximately ascertained. The goal should be to maintain by a vigorous immigration policy, and when the time comes by a "closed door" policy, a fairly balanced population in terms of occupation and to

.860

The Budget-Mr. Stinson

sustain the proper equilibrium by wise legislation and executive direction, so far as such may legitimately and effectively be done. We should strive to reach our effective minimum population. Where is that point? We have a mile of railway for every 178 inhabitants; the United States has one mile for every 400. This would indicate railway efficiency when we reach a population approximately twice as great as we now have. The same proportion no doubt would apply to the balance of our public facilities and plant. In a general way we are equipped as we stand for a population double of that we now possess.

A study of the economic value to Canada of a new settler is illuminating. Incidentally it is shown that over 163 million dollars have been brought to this country by immigrants. Professor Irving Fisher calculates that the capitalized productive value of the average individual to the state is $3,000. What Canada and many other countries have suffered from during recent years, and what has given rise to general unemployment, is not necessarily over-population but unbalanced production. With untold mineral and forest wealth, and with millions of acres of the world's richest agricultural lands lying idle and undeveloped while the world is clamouring for food, surely there should be no widespread unemployment if corrective methods were employed by our governments. All our great natural resources are of little value to the nation until developed by the genius of man. Could not the unemployed workers of the British Isles be set to work in that development if our government would bend its energies towards making some arrangement with the British Government in some way and under certain conditions to supply the millions of dollars necessary over a period of years for this purpose? Ingenuity, foresight and energy could no doubt work out a solution for the development of our natural resources in Canada with British capital.

In considering the social value of the citizen we cannot overlook his performance as a consumer of the commodities produced within the state. This has an important bearing on employment and general prosperity. Canadian industry produces goods of a gross value of 2,781 million dollars. Of this Canada exports goods amounting to 453 million dollars. The balance divided by population leaves an annual per capita consumption of manufactured articles of $243.30. This clearly demonstrates the enormous value of the home markets to Canadian labour and industry and incidentally the vast significance to be at-

tached to a policy having for its object the augmentation of Canada's consuming population. Every man, woman and child added to our population is a potential consumer to the extent of $243.30 of manufactured goods.

Mass production is the essential element in successful modern industry. Canadian agriculture will suffer by reason of inflated prices leading to a higher production cost until our general consuming population reaches a point where our industries can function more effectively and thus reduce commodity prices resulting in a lower cost of farm operation and living all round. Until we can bring about a spectacular increase in population, the present handicap of high commodity and operating costs cannot be removed. The present policy of this government of striking at industry here and there, a policy which curtails expansion, retards development, and drives money into safe investments of government bonds instead of into industry, will never solve the question, and imports will never make a market here for what the farmer has to sell. The home market now absorbs 837 million dollars' worth of agricultural products as against our export market of 600 millions. The per capita consumption of farm products in Canada amounts to $87.50. The western farmer producing almost entirely for export receives little benefit from the home consumption of farm products, but with our population doubled, the domestic market would loom up as a very important factor in his sales. At present he is at the mercy of overseas countries, which are now striving with every nerve and with more or less success to promote decreasd agricultural imports. At any time he may be virtually Closed out by tariff walls, as happened to his animal products in the United States. There is every indication that he may in a short time have to compete in the Liverpool market with Russian wheat. This would be a serious thing to our western farmers; consequently if a larger home market can be created for him it will be greatly to his advantage.

The policy of the government of this country should be to protect our farmers and give them the full benefit of our home market. The farmer in this country to-day is competing with his fellow farmers in other countries under conditions of absolute unfairness. The product of the foreign farmer is brought into this country under a relatively low tariff, or none at all. while he is forbidden access to other countries save over a tariff wall. The farmer must now surely realize that he was sacrificed by the present government in the negotiation of the Australian treaty, and which treaty was afterwards extended to New

The Budget-Mr. Stinson

Zealand without our getting any corresponding compensation from New Zealand. At the time this treaty was negotiated the general duty on butter coming into Canada was 4 cents per pound, which by the treaty was reduced to 1 cent. The Australian government also fostered a scheme among its farmers to pay them a bonus of 6 cents per pound on all butter exported, to which fund the farmers of Australia 'contributed. With this bonus fund and the decreased duty our market has been flooded with Australian butter. The bonus fund allows the Australian to carry his butter to Vancouver without cost, as the amount of the bonus pays the transportation charges. Australian and New Zealand butter can be shipped on a through rate from Vancouver to Montreal at $2.30 per 100 pounds. The rate for the British Columbia producer to Montreal is $3.58^ per 100 pounds, so you observe the Australian can ship to Montreal, pay the freight and 1 cent per pound for duty and lay it down for 28i cents per 100 pounds less than our British Columbia producer. Saskatchewan and Alberta are similarity affected by this unfair competition. The western provinces were building up a large dairy industry prior to this unfair competition. In 1910 Saskatchewan produced 1,548,000 pounds of butter. In 1925 this had increased to 15,946,000 pounds. Saskatchewan producers are now feeling this unfair competition, with the result that their production was some 4,000,000 pounds less in 1927 than it was in 1926. The same story is told of Alberta, and the decrease in butter production between the years 1926 and 1927 is quite as much as in Saskatchewan. If the average Canadian cow produced 200 pounds per year, the production of some 10,000,000 pounds now imported from Australia and New Zealand in one year would keep 50,000 cows busy the year round in Canada, and would give jobs to a large number of people in caring for the cows and the handling of the product. Why should this government put millions of dollars in the pockets of the farmers of Australia and New Zealand to the detriment of our own farmers? The United States maintains a duty against us pf 12 cents per pound on butter, with the result that we only shipped 17,774 pounds of butter to them in 1926. They are out to protect their own fanners and keep the home market for their own people. If we kept our home market in butter for our own farmers there could be occupied an additional four or five thousand farms in the Dominion of Canada.

Now again, if it is the duty of a government to formulate a policy to create work and labour in its own country, then I should

like to call the attention of the government to another industry that can be saved to Canada and a payroll built up here instead of being built up in the United States. The duty on our wheat entering the United States is 42 cents per bushel, while we maintain a duty of 12 cents per bushel against the United States. There is a large export business for flour ground from Canadian hard wheat, and the United States government, interested in helping industry and keeping payrolls in the United States, allows Canadian wheat to be brought in and milled in bond in the United States and shipped out to compete with the Canadian flour in the world market to our disadvantage. By section 311 of the Tariff Act of the United States, and under treasury regulations relating to bonded warehouses, wheat may be imported into the United States without the payment of revenue or duty on the condition that the flour product is exported. Under general customs regulations a refund or drawback of 99 per cent of the duty paid may be obtained when the product of imported wheat is exported, but to secure the drawback under these conditions the flour exported must contain a mixture of at least 30 per cent of the product of domestic wheat. The quantity of Canadian wheat milled under drawback regulations is not large, so the chief problem arises in connection with the milling in bond provisions, which offer a much more favourable opportunity to the United States millers.

Milling in bond has been increasing by leaps and bounds. The quantity milled from July 1921 to June 1922 was 6,172,837 bushels; for the same months in 1922 and 1923, 9,280,787 bushels; for the same months in 1923 and 1924, 13,904,837 bushels; and from July 1, 1927, to January 28, 1928, 10,000,000 bushels, which makes the quantity now . over

15.000. 000 bushels per year. The flour product of this quantity of wheat would be in excess of 3,200,000 barrels of flour, while the offal by-product would be 118,000 tons. During that period 3,200,000 barrels of flour made from straight Canadian wheat were sold abroad under United States trade names in direct competition with the product of Canadian mills. In the same twelve months Canada exported to countries other than the United States 12,000,000 barrels of flour.

Out of a total demand abroad for

15.000. 000 barrels of flour of Canadian quality, United States millers supplied no less than 20 per cent with free Canadian wheat for this export trade. United States mills have certain advantages in rates and positions which enable them to sell in competition

The Budget-Mr. Stinson

with Canadian mills. The United States miller has an advantage over the Canadian miller by reason of the fact that a mill at Buffalo pays lower transportation costs on Canadian wheat than does any eastern Canadian mill. The offal from the grinding of the Canadian wheat in the United States has a splendid home market where there is a deficiency of the product. Prom the mill to the seaboard the United States miller at Lake Erie points has an advantage under existing freight tariffs, due to his position, of 2J cents per 100 pounds in freight rates. This difference in export cost of 5 cents per barrel alone makes it possible for him to take away business from Canadian mills. What does it mean to Canada?

Manufacturers' costs of converting wheat into flour, including labour, selling expense and overhead, but not including the cost of bags, may be1 safely estimated at 65 cents per barrel. At this rate the cost on 3,000,000 barrels would be $1,950,000. This amount is paid out in the United States in the year instead of being distributed to labour and capital in Canada. If Canada had milled the additional quantity, our railway companies would have moved 15,000,000 bushels of wheat to Canadian mills and would have moved 3,000,000 barrels of flour and 118,000 tons of offal from Canadian mills, whereas this wheat actually moved direct by water from Fort William and Port Arthur to the United States ports, chiefly in United States lake vessels, and no part of the product afterwards used Canadian routes. The loss to Canadian railway companies on the movement of the wheat to the mills and the flour to the seaboard is in excess of $1,500,000; on the 118,000 tons of offal, if distributed in Canada, it would be $679,000. or if exported, $550,000.

Since 1921 one of the largest milling industries in the world has been built up at Buffalo. The wheat that was formerly brought from Fort William and the Georgian bay route and by rail from Midland through Lindsay and Belleville to the seaboard, is now being carried by American boats to American ports and our railways are losing that advantage. Lindsay, which is a Canadian National divisional point, is suffering in railway employment by reason of the fact that our grain is going to Buffalo and is also being routed other than through Canadian ports. Surely our Canadian National Railway needs all the business the government can put in its way. Wages paid by the Canadian National at Lindsay in 1927 were some $200,000 less than the wages paid in 1921. An additional output of 3,000,000 barrels of flour

for our Canadian mills would mean an increase of approximately 15 per cent on the total output of all merchant mills in Canada, which would have a very marked effect on costs and prices from which Canadian consumers would have benefited because of the keen competition among Canadian mills for the domestic trade. This would also have enabled the millers further to extend their markets abroad for Canadian flour by meeting competitive prices. Canada loses the advantage of the sale of this flour under Canadian trade names. It is exported as a United States domestic flour and helps that country to retain its reputation in the world market for the best grade of flour, and the effect on Canada is unfavourable. In selling, the United States miller may represent the flour as a product of Canadian wheat or he may not. If he does not, the impression is created that perfect substitutes for Canadian wheat and flour can be found in another country and that these Canadian products have not therefore the special values that may be justly claimed for them.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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

Thomas Hubert Stinson

Conservative (1867-1942)

Mr. STINSON:

Mr. Speaker, when the house rose at six o'clock I was discussing at some length the importation of our wheat into the United States duty free for the purpose of milling in bond. The question of the by-product is very important. The bran and shorts produced in the United States from this Canadian wheat amounts to some 118,000 tons, and Canadian dairy and live stock interests lose the opportunity to use this large supply of the best of all feeding stuffs. The effect of a larger output would be reflected back in the cost to the farmer. To encourage the development of Canadian dairy interests there should be available a superabundant supply of bran and shorts at as cheap a price as possible. To-day the farmer is paying $35 per ton for bran. All these direct and indirect losses do Canada when measured in dollars represent a sum total so large that the matter must be recognized as being of national concern.

The magnitude and importance of the Canadian milling industry is clearly shown by the returns published in the Canada Year Book. The capital employed in 434 flour mills is upwards of $65,000,000; salaries and wages paid exceed $7,000,000. The purchasing power of the industry as represented by the amount paid out for materials and supplies is upwards

The Budget-Mr. Stinson

of $125,000,000, and the value of the product is upwards of $150,000,000-a net difference between the two of $25,000,000, which represents the values created in Canada. This industry ranks second to the pulp and paper industry in value of products.

An export duty on wheat could not in any way have a prejudicial effect on the price of Canadian wheat, nor would it in any way affect the Canadian farmer other than to his advantage. The prosperity of the Canadian farmer is fundamental to the development and success of the milling industry, and in advocating this duty I do so in the belief that it would not depress prices or restrict opportunities for sale by the primary producer. On the other hand I think it would strengthen the position of Canadian products with advantage to every Canadian industry. If this flour were consumed in the United States, which it is not, it would mean that a market for Canadian wheat which otherwise has been limited and uncertain would be enlarged by the use of wheat in that way. But under existing conditions no increase in the demand for Canadian wheat is brought about. If there is no increase in consumptive demand, there can be no effect on the basis of prices. The United States miller cannot be as substantial a support to the market as the Canadian miller, since the former can drop out of the business the moment he finds it equally profitable to grind United States wheat, while the Canadian miller must always be a bidder for Canadian wheat. It is by special laws and regulations of the government of the United States that the American miller has been put in a position to do this business. It is the policy of that government to give all the employment possible to United States labour and capital in its milling industry, even when the main product is not required and is even denied access to the domestic

TT1 t*1c fits

The principle of export duties has already received recognition in Canada. An export duty on electric power is not different in kind from an export duty on wheat for milling in bond in another country, nor are the reasons for the former any stronger than those for the latter, as imports of Canadian wheat into the United States for actual consumption in that country are absolutely negligible under the present tariff and merely permit the export of a little more United States wheat or flour in competition with Canadian products abroad. The general application of an export duty would not in such case be open to objection on the ground that it might restrict the market for-Canadian products.

Let me read a paragraph from a letter written by a Canadian now living in New York and looking after the export business of one of our Canadian companies:

You will recall that I wrote some time ago about the situation in Cuba and that the United States mills were getting all the business there on account of the preferential tariff of 35 cents per barrel which the Cuban customs authorities granted on all shipments from American mills, whether the flour was made from Canadian or American wheat. In order to compete we were obliged to buy our flour for Cuba from Buffalo mills and in the past six months have bought about 60,000 barrels.

That milling company is not using to-day more than fifty per cent of its capacity by reason of this unfair competition. No Canadian flour enters the United States for consumption, as their duty against our flour is $1.04 per 100 pounds, while the duty Canada imposes is 50 cents per barrel. Their duty shuts out our flour, while we imported from the United States in 1927 some 45,860 barrels of flour. Why discriminate against our farmers to this extent?

It is surely time that the people of Canada should think in terms of a Canada first policy for the development of our iron and other mineral deposits, our coal deposits, our forests and our water-powers, which development will bring at the same time settlers to our fertile acres which have earned for Canada the title of "the bread basket of the worldT Why should we not bend our energies towards finding ways and means of developing the Alberta coal fields and creating a market for that coal in Ontario, thus keeping many millions of dollars at work at home instead of supplying them to the United States workers?

Ontario is importing annually approximately three million tons of anthracite coal from the American coal fields, whereas the province of Alberta has 14J per cent of the world supply; 21 per cent of all the coal on the North American continent; 72 per cent of all the coal in the British Empire and 89 per cent of all the coal in Canada. In fact her resources are sufficient to supply Canada's needs for the next eighteen centuries.

There would be three great advantages in procuring Alberta coal for Ontario. First, a constant supply of coal for Ontario would be assured. Then empty grain and box cars, idle on sidings during a period of from three to six months during the year when the grain was not moving, could be utilized, thus benefiting the national railway. Finally, the transportation of coal by rail would be productive of more westbound freight and hence greater revenue for the national railway, as well as more employment, which is one of our ever present problems.

The Budget-Mr. Stinson

The province of Ontario has been spending one hundred millions annually in the United States for coal-thirty millions for anthracite, and seventy millions for bituminous coal. Bankers inform us that money has a turnover from three to ten times in every year, consequently we are making available for circulation in American channels three hundred million dollars annually from the coal which we are purchasing there. We must bear in mind that a large part of the railway cost is labour, that 75 per cent of the cost of mining coal is labour and that the money, spent in the United States last year, namely 30 millions of dollars for anthracite, if spent for Canadian coal transported over Canadian roads would have provided twenty thousand jobs for men at $1,500 per year in this country, and in addition would have provided a purchasing power in our western provinces with which they could have bought manufactured goods from Ontario and Quebec. On the same basis if you calculate the number of jobs which would be provided if we purchased seventy millions dollars worth of coal in Nova Scotia, now purchased in the United States, another forty-six thousand jobs would be provided for workmen in Canada.

Surely a duty rests upon the government to find ways and means of providing a freight rate so that this coal can >be brought in to the province of Ontario, when you consider the great benefits to be obtained from the same. If the hundred million dollars which is now being spent year by year by the people of Ontario for coal which they are purchasing in the United States was spent in Canada, sixty-six thousand more jobs could be provided in the Dominion and taking five people to the family an additional 330,000 people, could be kept here. The purchasing power of Nova Scotia and Alberta for manufactured goods made in Ontario and Quebec would then be tremendously increased, and the national railway benefited by the increased westbound freight which must necessarily be created, and which would be carried at a profitable rate. We have no coal problem in Canada; our problem is a problem of transportation, and transportation only. It is a problem which this government should find a solution for, and I sincerely trust it will tackle and solve it in the near future.

Striking at industry will never develop a nation. This country must have a protective tariff so long as the other nations maintain one, and the sooner the government comes out boldly in the matter and preaches what it partially practises the better for all concerned. This year's budget estimates that more revenue will be raised from the tariff

duties than before, and yet you hear sounded from the government side of the house occasionally such expressions as the "death knell of protection," which unsettles, hampers, and curtails industrial development.

We are also told that the government has reduced taxation. What is the fact? The money to be raised by the budget comes from the people; the amount to be raised is $7,500,000 more than the amount raised in 1027. We have the same number of people from which to extract this money, consequently the people who paid in taxes last year the money necessary to run the country are called upon to pay this year $7,500,000 more than a year ago. There cannot be any reduction unless you have more people to pay the taxes or the government reduces the amount to be spent.

I should like to see the government give consideration to the poorly paid country postmasters and rural mail carriers. These parties give efficient and honest public service and are insufficiently remunerated for the services performed. I should like to see the government grant a further sum for the relief of Home Bank sufferers who come within the classification as laid down in the statute and who have not been paid by reason of the fund being exhausted before their claims were reached. All those in the same class should be treated alike. Further I should like to see the road grants re-established to the provinces in order that the ever increasing tourist industry may be further developed.

As citizens of Canada let us strive for a balanced population in terms of occupation. Let us give consideration to the things necessary for the development of agriculture, our mines, our forests, our fisheries and our factories, and thus lay the foundation for a great nation such as our natural resources are capable of supporting. Let us build that development on a basis fair and equitable to all in order that we may have a happy and contented people where everyone may have free scope for individual enterprise and individual development. To-day the opportunity Canada offers to men of mettle, of imagination, and of enterprise is greater than ever before.

I heartily endorse and support the amendment moved by the hon. member for St. Lawrenee-St. George (Mr. Cahan).

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

Donald Ferdinand Kellner

United Farmers of Alberta

Mr. D. F. KELLNER (Athabaska):

The Budget-Mr. Kellner

the United Kingdom had a very much more difficult position to face than either of the other countries under review. For instance, she had to make a readjustment in trade. Her foreign commerce was largely gone when the war was over and she had to cope with an unemployment situation with which neither of the other countries had anything to compare. It has been necessary for her to spend millions of dollars in dole's to her unemployed, and along with that she was disappointed in her foreign loans. A large number of countries which owed to the United Kingdom money, which unquestionably it was thought would be repaid in order to meet her carrying cost, did not make payment, and it was a marvellous occurrence that the United Kingdom was able to reduce her indebtedness to the extent she did. The United States also had their problems, not so outstanding of course as those of the mother country, but they too were disappointed in their foreign loans. They had not the handicap of unemployment to the same degree as other countries, but they had to make a readjustment in their whole trade structure. On the other hand Canada has suffered somewhat, but not to the extent that either of the other countries has. She has been a large shipper of farm commodities and of the necessities of life, and regardless of the financial situation in which the other countries find themselves, they invariably have to purchase those commodities. Our problems have been much less than those of the other countries that I have mentioned, and certainly our achiev-ments have been far less than theirs.

Suggestions are frequently made by the Minister of Finance, and others, who are not wholly in accord with him as to ways and means of paying off the national debt. The minister seems to take the view that the outstanding accomplishment which he can offer to the people of Canada to-day is that of refunding our loans, and by that process he hopes greatly to reduce the amount of interest that we shall have to pay. The present leader of the Conservative party (Mr. Bennett) last year advanced a suggestion which I am a little sorry has not been tried out, because I believe, if it were taken up with a reasonable amount of energy, results would follow.

While I am on that point I should like to suggest that there may be other ways which have been overlooked of making payments on our national debt. At this moment the amount of Dominion notes in circulation is very small-$172,000,000-and against that we have a gold reserve of $100,885,000, which covers not only Dominion notes but savings in savings banks. I do not know what perfMr. Kellner.]

centage of it should be attributed to our note circulation, but I know there is something less than fifty cents on the dollar-to be accurate, between 42 and 43 cents on the dollar-in gold held in the treasury against our note circulation. At the present time we have in Canada gold-iproducing mines that are mining and shipping abroad quite a considerable quantity of gold. I wonder what would be the matter with the government making a purchase of say $25,000,000 worth of that gold and paying for it with Dominion notes, and then issuing another $25,000,000 against that gold reserve. In that way you are not changing by one iota the amount of gold behind your note issues; consequently the argument we usually hear that you are going to inflate the currency will not hold because you are not inflating it; you will have precisely the same amount of gold behind your issue that you have to-day. Furthermore, with that $50,000,000 of note circulation we would have a smaller note issue than we had in 1924 or 1923 or practically any year preceding that from the time the war started. You would have a smaller note issue; you would have the same amount of gold behind your issue, and therefore you could not be accused of inflating your issue. On the other hand you would have at your disposal $50,000,000 which would not bear anj interest whatever, and as power is given to the government to do that if they see fit, there is no reason in the world why they should not do it.

No debate on a budget in this house would be complete without a discussion of the tariff. Formerly it used to dwindle down to debate on the merits or demerits of a tariff, but this year I notice that members are getting a little away from that. The other evening a Liberal-Progressive member said that this was the beginning of a reduction anyway, and I wondered why he did not stay with the Prime Minister's suggestions of last year or the year before that it was a step in the right direction. But I cannot help wondering and more or less marvelling at the attitude the government is taking in claiming that its popularity was based largely on the budget of 1926, because it brought down a budget providing for reductions in the tariff. If we are to take the words of the Minister of Trade and Commerce (Mr. Malcolm), he told us this afternoon about one industry in connection with which the tariff had been reduced and the output and the number of employees had been increased. Tffen he told us about another industry where the opposite had taken place where the tariff had not been touched and yet the industry had gone on

The Budget-Mr. Kellner

to better production. From that I take it that it does not matter one iota whether the tariff is touched or not, and if a great deal of popularity accrues to the government for reducing the tariff, it seems to me that they should reduce it.

There is one thing in connection with the tariff which I would certainly like to see carried out. We have a low tariff government in power, and I wish they had the courage of their convictions and would make a reasonable reduction in the tariff. If they are not satisfied to do that, I am not too sure that it would not be a good idea to elect a Conservative government and see if they would have the courage of their convictions and increase the tariff.

I have often wondered if it would not be possible to consider this whole matter of the tariff on a different basis entirely from what we have been doing. The discussion usually develops into a great argument whether tariff protection or free trade is most beneficial to the country, although it has been repeated time and again that there are practically no free trade advocates. I do not think we shall ever get anywhere by conducting a debate of that kind other than possibly to determine which are the more able debaters. As has been pointed out on numerous occasions, the history of both parties since confederation shows that both Liberal and Conservative governments have adhered to about the same tariff policy, so I presume we may take it for granted that so long as we follow the course we have been following in the past there will never be any material change in the customs tariff.

But suppose, on the other hand, these customs duties were levied on a basis of controlled price-and what I mean by that is that you make it known to the producer of an article made in Canada that you are prepared to give him protection upon one condition, and that is that the selling price of that article is in line with the selling price in other countries. After the 1926 budget was brought down, the Liberal government were very quick to go out through the country and point to the great reductions they had made in the automobile duties, and they tried to take a great deal of credit to themselves for doing that. But to-day, Mr. Speaker, the price of the Ford car in Canada is twenty-six per cent higher than it is in the United States. The element of protection was not changed one iota by those reductions in the tariff. When we used to point out in former days that the Ford car or any other car sold on both sides of the line was sold at a higher price in Canada than 56103-55*

in the United States, it was quite a common reply to say that the Canadian car was a better car than the American, that it contained equipment that you did not get in the American car. That argument will not go now, because when the new Ford car came out this year hundreds of orders were taken on the model sent over here from the United States; in fact, the Canadian factory was not operating at the time they were taking orders for the Canadian Ford car. It seems to me that those who advocate protection are going to have a real job on their hands to convince the people of Canada that they should pay $600 for a car in Canada that costs $400 in the United States. I do not believe the people of this country will ever come to a frame of mind when they will sanction such a disparity, but it seems to me that the results which we hope for from tariff protection could be obtained if we went to the manufacturer-I mention the automobile just for the sake of convenience -and said: Your industry will be protected

provided you are prepared to put your product on the Canadian market at a price in line with the price for the same article in the United States market, and unless you get into line with that price we are going to lift this tariff and permit the entry of the foreign product. That policy need not necessarily be limited to one commodity; I do not see why it could not be worked out to cover practically everything. It seems to me that anyone who understands the present tariff regulations and their application could easily work out a scheme that would carry out the suggestion I have made.

The Minister of Finance, speaking on the budget made a very extensive comment on the favourable trade balance, and took considerable credit to the government for that. In my opinion his statement was misleading. I do not think we can issue an accurate statement of our trade development if we pay absolutely no attention whatever to the interest on our public debt; for that is one debt that must certainly be considered in the finances of any country. I do not believe the statement that was put on Hansard by the minister in any way at all presents to the people of Canada the true financial situation as it exists. If we do not take into consideration the interest on our foreign loans we are certainly overlooking an essential factor which imposes a considerable burden of taxation upon the average individual in this country.

There is another matter in that connection. Frequently the discussion would lead one to believe that trade is carried on between nations, and that some outstanding achievement has

The Budget-Mr. Kellner

been brought about by the activities of the government. There may be some truth in that suggestion, but there is a whole lot in it that is not true. Trade takes place between individuals, not between countries at all, and if individuals are prosperous there will be a large trade; if individuals are not prosperous there will be a small trade. For the government to claim that any prosperity we may have in Canada is due to their efforts is to claim something that they would have a good deal of trouble in substantiating. We have had several foreign visitors of more or less distinction in this country within recent months, among others, Hon. Herbert Hoover of the United States, and Premier Baldwin of Great Britain; and it is a remarkable thing that in the speeches they have made since they returned to their native land both have given credit to the cooperative organizations of the United Farmers for the better conditions in Canada. I think any government or any individual that wants to be fair must give a certain proportion of the credit for that betterment of conditions to the co-operative marketing organizations in western Canada. Mr. Hoover in his speech on returning to his native land said that he believed the farmers of the United States would benefit to the extent of at least twenty-five cents a bushel in the sale of their wheat in the current crop year-not because of anything they had done themselves but because the Canadian farmers had organized a pool for marketing their product. Now if our Canadian wheat pool is worth twenty-five cents a bushel to the American producer I do not think there is any question that it is worth a whole lot more to the Canadian producer, and when the Canadian producer benefits to that extent in the sale of his crop, undoubtedly that improvement is going to be reflected in the trade of the nation. Premier Baldwin stated that the producers in Canada had discovered a way of looking after themselves, and he pointed to the fact that whereas England was paying doles to her unemployed, the people of Canada had the habit of going out and solving their problems for themselves. He commented favourably upon our organization and was not at all stingy in the compliments he paid to it.

Another very unsatisfactory condition in western Canada is the lack of credit for those engaged in agriculture. The present branch bank system does not pretend to cater to the needs of our farmers in the west, particularly those in the frontier districts. I have known a farmer with sufficient assets to entitle him to a substantial loan refused an advance of a few dollars on the ground that "he was outside their loaning area." I do not know just

how far he was outside their loaning area, but the fact that a farmer who carries on a considerable business, whose reputation for honesty is good, and who has ample assets to secure a loan, cannot go into a bank in western Canada and borrow a few dollars, is certainly not a desirable state of affairs, and I do not believe we shall ever meet the credit requirements of western Canada until we introduce legislation which will provide for the establishment of small banks with a capitalization running from 310,000 to $15,000. I am well aware that a lot of people will get very much excited about such a suggestion and will point to the number of small banks that have gone broke, especially in the United States. Well, sir, I am not so sure that that is any greater calamity than having a lot of our farmers go broke simply because they cannot get any credit, although their assets are sufficient to justify a loan. Besides, the limited capitalization of the type of bank that I have in mind would necessarily limit the extent of the loss in case of failure.

Nearly every hon. member who has so far taken part in this debate has paid some attention to immigration, and I suppose I would be very remiss if I, too, did not deal with this subject. At the present time our federal and provincial governments, our railway companies, and numerous other organizations are engaged in immigration activities. So far it seems to me that their combined achievements have amounted to about this: Year an and year out a certain number of our people in western Canada are leaving their farms for various reasons, but usually because they are not making sufficient money to justify their holding on. The efforts of our various immigration agencies may have resulted in enough immigrants being brought in to take the place of those who have left Canada, in other words, we may have kept pace with this loss, but certainly I do not think we are ahead of the game. Our immigration program is costing from eight to ten million dollars a year. I wonder if we would not make real progress if we spent a like amount in bettering conditions on the farms of western Canada. I have in mind the assistance that was given to a number of immigrants who settled in my constituency; homes were built for them, land was broken, wells were put down, and they were given equipment to start farming. That is all very well, but I would point out that the native born Canadian who is farming beside those people can get absolutely no consideration whatever from our immigration authorities; or

The Budget-Mr. Ryerson

from our government he could not even find a bank out there to lend him enough money to pay his taxes. It does seem to me that if you are going to ignore absolutely our people in this way-I should not like to stop at the native born, but I think they are entitled to first consideration-there is no hope of bringing in a great number of immigrants and retaining them. And in view of the fact that the United States quota law applies to all but native born Canadians, it is apparent that for the future those of our immigrants who are dissatisfied with their prospects in this country will not be able to go over into the states, and the only ones who will not be stopped at the boundary line will be our native born. So it would not surprise me at all if eventually we reach the point where we will no longer be able to speak of our native born-they will all be in the United States.

There may be those in this house-I hope there are not-who think that the immigrants we are now bringing in are equal to the men and women born in the Dominion. I am not prepared to admit that, and never will be. Within a short distance of this city, down through Ontario, there have been raised what I believe to be the most moral and the most physically fit, and the most intelligent people in all the world. I have in my recollection a family down there that I knew well. There were six sons, and if they laid themselves down they would form a line about forty-one feet in length. They would weigh upwards of two hundred pounds apiece. Six better samples of physically fitness could not be found in this or any other country. Five of those boys are now resident in the United States. That fact alone is, I think, something of which we should be thoroughly ashamed. And they were a very moral people. You could go into home after home any morning and you would find them starting the day with a chapter from the holy book, and at night, too, there would be family prayer before they went to bed. In that whole community I very much doubt if a single person has troubled our criminal courts. Compare their record with what happens in many of our cities, where you will find that most of the offences have been committed by people ninety per cent of whom were admitted to this country within the last three years. Then there is a greater cost in educating the children of these immigrants. In a school in my own district a school teacher had a class of thirty children, sixteen of whom could not speak the English language. Does anyone for a moment suggest that those children can make the same progress educationally as English-speaking children? And is it fair to the teacher to expect her to have to devote a large portion of her time to teaching those pupils the tongue which they must understand before they can take up their school work? I hope when the estimates of the Immigration department are being considered this house will see to it that whatever help is extended to foreign immigrants along the lines I have mentioned shall also be extended to any Canadians who require it.

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

Robert Edwy Ryerson

Conservative (1867-1942)

Mr. R. E. RYERSON (Brantford City):

Mr. Speaker, I have no desire to appear as a pessimist, or in any way to minimize the prosperity of this country wherever that prosperity is in evidence; but, sir, claiming to possess some knowledge of business conditions and of the bitter problems of many of those living in the industrial centres of this country, I regret that I am forced to the conclusion that in this matter the boasted prosperity is unevenly divided and a large portion of our population have no share in it. The real prosperity of any country cannot be measured by the wealth of the few or by the statements and reports of banks and other financial institutions, but rather by the happiness and contentment of the large masses of her people.

Sir, many industrial centres in Canada have suffered in the past in different ways as a result of the tariff tinkering policy of this government-a policy which more and more would appear to be a deliberate, studied plan, conceived and carried out with a view to embarrassing and crippling the manufacturing industries of this country. And may I ask, to what purpose this policy of destruction? My answer would be-to meet the demands of a group in this house who maintain this government in power and who upon every occasion advocate the wiping out of every shred of tariff protection save that which protects their own interests. This system of selecting one important industry after another for attack has resulted in a general feeling of doubt and uncertainty throughout the manufacturing trade as to which will be the next to suffer.

We are told repeatedly by hon. members opposite that the tariff reductions in connection with farm implements and automobiles has not injured these industries; that the free entry of and drawbacks on parts and materials which go into the manufacture of these articles have fully offset the reductions in tariff. To what extent this may be true only the heads of these industries can answer. But, Sir, what about the steel and iron industries affected, and the thousands of men employed in these industries and in the plants turning out castings

The Budget-Mr. Ryerson

and parts? Surely there can. be no doubt as to the injury in this respect. Many of these plants are now idle or working part time and their employees scattered.

In correctly estimating the effect of tariff reductions on the farm implement industry this important fact should be given full consideration: Prior to 1924, when the last revision took place, this industry was greatly depressed and in a bad way, largely as a result of previous attacks in the way of tariff reductions, in which cases the compensation allowed in the way of drawbacks and free entry of materials was not sufficient to offset the tariff reductions. Many of the small plants were crippled, dividends were cut, or ceased entirely, and it was only by economics in management, resulting in half time employment, reduced staffs and reduced wages, that the larger and stronger plants were able to survive.

Further relating to this matter I have before me a report issued lby the Department of Trade and Commerce which therefore should be correct, giving a summary of the trade of Canada for the years 1926-27. I have also added the figures which I received from the same source for 1925, in which will be found a record of the total imports into Canada of farm implements during these three years, as follows:

For the year 1925.. .. $11,234,839For the year 1926.. .. 17,630,949For the year 1927.. .. 26,101,338In other words, a total for the three years

of the enormous sum of $54,967,126. It will also be noted that the increase in the year

1926 over that of 1925 was $6,398,110, and in

1927 over the same year, $14,866,499. These figures should furnish food for thought to every hon. member in this house and to the country generally. The startling increase in imports in this one industry, following so closely upon the almost entire wiping out of tariff protection, leads to but one conclusion if this policy is continued and extended, namely, the ultimate crippling and wiping out of all manufacturing industries. On the other hand, sir, taking this one industry as an example, a policy that will retain to our own manufacturers as far as possible the home market, would undoubtedly result in the great growth and development of this country, which I am sure we all desire, and which would be followed up by a real prosperity in which all classes of our citizens would share. Further, sir, to my mind, it would go a long way towards a solution of the immigration and emigration problems of which we have heard so much during this debate. Who in all this land, Mr. Speaker, would suffer by reason of such a policy? I contend that the reten-

tion of our home markets would so increase production and decrease manufacturing costs that prices to the consumer would at least be no higher; in many cases they would be lower. The increased population and decent living wage for the workingmen and women, which would follow would provide additional markets for all farm products and greatly assist and stimulate that industry.

I have no intention, Mr. Speaker, of criticizing the intricate, technical and confusing schedules of the tariff changes contained in the budget. The full effect of many of them upon the industries concerned can be determined only by time and experience. However, I presume they are the results of investigation and study by the tariff board, with the able assistance of the talented gentleman who poses as the representative of that phantom organization, "The Consumers' League," but who, I am credibly informed, in reality represents only a small group of Liberal and Progressive members of this house who sponsor and finance his position.

I had intended to refer at some length to the 'woollen industry, but, Sir, the entire case for this industry has been so clearly and ably set forth in the speech of my hon. friend from South Waterloo (Mr. Edwards) that little more remains to be said. The branch of the woollen industry confined to the weaving of blankets and woollen fabrics, and the spinning of yams for the same, has for the past few years suffered largely as a result of insufficient tariff protection under the British preferential tariff. And may I at this point make my attitude quite clear on the question of the British preference? I am in full accord with a policy of preference in trade, not only with Great Britain but with all members of the empire. At the same time I contend that this preference should be mutual, and not to the disadvantage or injury of any Canadian industry. In all cases of tariff preference care should be taken to see to it that the items in the general tariff are high enough to allow for the prefe-ence and still maintain a reasonable protection of our own product. Many of these plants were forced out of business or temporarily closed, and fully 40 per cent of the looms were idle during the past year. Practically all plants now operating are working at not more than 50 per cent capacity. The combined woollen industry appealed to the tariff board and were given a hearing. The particular branch I have mentioned placed all the facts in their case before that board, and were confident that some measure of relief would be granted them in the budget. What consideration did

The Budget-Mr. Ryerson

they receive at the hands of the Minister of Finance? There is not one thing of benefit in this budget for them. On the other hand, the free entry of yams which they now spin themselves may have the effect of bringing about the scrapping of that portion of their plant which is now used in the preparation and spinning of yams, and in throwing out of employment those engaged in this process.

Now, Mr. Speaker, I should like to refer briefly to the proposed changes in the tariff schedules under item 1060, which provides a drawback of 80 per cent. The item is as follows:

Newsprint paper, machine finished book grades of paper, not coated, coated or super-calendered book grades of paper, when imported under tariff items 197, 197a, or 198a.

When used exclusively in the production in Canada of magazines or periodicals, including farm journals, printed, published and issued at regular intervals, and_ enjoying second-class postal privileges, containing critical, informative and descriptive articles on various subjects, current topics, political and other news or reviews, criticism or other informative matter, or fiction, being bound, wire stitched or otherwise fastened together.

No doubt this change is proposed ini the interests of the publishers of the papers and magazines enumerated, but, sir, may I point out that if we wipe out 80 per cent of the protection on this product, the American paper industry will benefit at the expense of our own paper mills. As having a direct bearing upon the subject I should like to quote a portion of an article published in the columns of the Mail and Empire of January 26, under the signature of a prominent and much esteemed lady resident of Brantford, which deals with this very matter in an intelligent and illuminating manner. I regret that time will not permit me to read the whole article, but the important part is as follows:

To the Editor of The Mail and Empire: Sir,- .

A trade report from Ottawa in to-day s (Monday's) Mail and Empire dealing with Canada's decreased exports and increased imports during December, showing a drop in our favourable trade balance of nine million dollars, in the month, prompts me to offer for publication a letter, written by myself and published in Saturday's edition of our local paper. It is as follows:

"In a recent industrial edition of the Milwaukee Sentinel is an advertisement by a Wisconsin paper company which has branches in several cities in the state and also in Port Arthur, Ont. It is entitled 'The Story of Consolidated Newsprint', beginning thus: 'From the first

bites of the axes in the hands of sturdy Canadian woodsmen 'Consolidated' trained men guide the spruce pulpwood on its journey to the paper machines, etc., etc.' This newsprint concern represents but one phase of Winconsin's marvellous industrial prosperity, which is

largely contributed to by Canada and Canadians who are content to remain 'hewers of wood and drawers of water' to Uncle Sam. In the Fox river valley, Wisconsin, between Appleton and Green Bay, are 37 of the largest paper mills in the United States, turning out not only newsprint but every grade and kind of paper commodity, and great fortunes have been based on the industry. The story of the poor school teacher who 15 years ago left a $1,200 job to go into papermaking and who now controls a fortune of $18,000,000 is no secret, and he is but one of many millionaires in Wisconsin, Michigan, New York and Maine who in a few years made their fortune by small initial investments in the pulpwood and paper business. Of the twenty million dollars paid last year to the 14,000 workers in the 59 papermaking establishments of the state, which turned out 100 million dollars worth of paper in the year, I venture to say that not one-sixteenth of one per cent of those wages was spent upon imported goods of any sort. United States manufacturers, backed up by the rest of the people and insisting upon being protected by a sane tariff policy, would supply all their needs. Whereas, according to our Dominion Bureau of Statistics, the people of Canada last year spent eleven million dollars on imported paper alone! This astounding fact in face of that other indisputable fact that the forest wealth of Canada from Nova Scotia to Vancouver Island is being depleted, exploited and exported by the huge pulpwood and paper manufacturers of the United States."

In concluding my remarks, Mr. Speaker, I desire to direct the attention of the Minister of Finance and the government to the lack of relief in this budget for an important industry which clearly placed its position before the tariff advisory board and the government, and which is now threatened with disaster. I refer to the binder twine industry, and in this connection I desire to read two resolutions which were passed by the Brantford Board of Trade and the Brantford City Council. Perhaps I may be permitted simply to place these resolutions on Hansard.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

It will require the unanimous consent of the house.

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CON

Robert Edwy Ryerson

Conservative (1867-1942)

Mr. RYERSON:

Very well; I will read them. The first is a resolution passed by the Brantford Board of Trade, as follows:

Whereas the prosperity of Canada depends, in no small degree, to continuity of employment and a fair wage to its industrial workers;

And whereas in recent years there has been a determined effort by powerful foreign interests to flood the Canadian market with commodities produced in countries where the scale of wages and standard of living are much lower than in Canada;

And whereas believing that justice to Canadian manufacturers and Canadian industrial workers demands a steady domestic market under fair competitive conditions;

And whereas the Brantford Board of Trade believes that certain industries in Brantford are adversely affected by these conditions: -

Now therefore the council of the Brantford Board of Trade urges that the Canadian gov-

The Budget-Mr. Ryerson

ernment and dominion tariff commission investigate fully and impartially all instances where large quantities of goods produced in foreign countries under unfair conditions are dumped on the Canadian market, and that measures be taken to prevent irreparable injury to Canadian industries.

The resolution which was passed by the city council has reference to the Brantford Cordage Company, the largest manufacturers of binder twine in the British Empire and one of the largest industrial concerns in the city of Brantford. It is as follows:

Whereas it has been brought to the attention of this council that the said company is manufacturing at a disadvantage and is subject to unfair foreign competition;

And whereas it is desirous that all assistance possible should be given the said company to obtain relief from this dumping of foreign product on our market.

It is resolved that in the opinion of this council it is desirable that the federal government be requested to take immediate action to give relief to an industry the loss of which would have disastrous effect on the industrial situation of our city, and that copies of this resolution be forwarded to the Hon. Minister of Trade and Commerce and Robert E. Ryerson, our local representative in the federal legislature.

In conclusion I appeal to the Minister of Finance to give consideration to these resolutions and to the interests of the industries concerned before it is too late.

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CON

Milton Edgar Maybee

Conservative (1867-1942)

Mr. M. E. MAYBBE (Northumberland, Ont.):

Mr. Speaker, I am very sorry to see so many empty benches on the government side this evening.

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LIB

Ernest Lapointe (Minister of Justice and Attorney General of Canada)

Liberal

Mr. LAPOINTE:

What about the empty benches on your own side?

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CON

Milton Edgar Maybee

Conservative (1867-1942)

Mr. MAYBEE:

The remarks which I wish to make deal with a matter of very great importance and I should have been very glad to have all the members of the government hear them. Much discussion has taken place concerning the present budget, but the questions at issue are so important and affect my constituency as well as the country at large to such an extent that I could not let the opportunity pass without making some comments relative to it. It seems to me that there is an apparent reluctance on the part of hon. gentlemen opposite to attempt to defend the pronouncement as set forth in the budget.

I should like every hon. member to behold for a moment a picture which impresses itself on my mind. I can see the industries of this country drawn up in a line, a defenceless line, with the basic industiy of agriculture forming the background. I also see the adopted policy of the government with their guns trained on this line of industries. First there is sniping at an industry here and then sniping at an in-

dustry there, the shot in every case passing through the industry in the foreground anc lodging m the agricultural industry immediately beyond. Sometimes only a right wing or a left wing is lopped off, but the effect is always to injure agriculture. For the business of the agriculturist is to feed the workingman and his family and to supply certain raw materials to various industries. When these industries are prejudicially affected, and men and women are thrown out of employment, less produce is accepted from the farmer. The latest bomb fired by the administration in its budget wiil dismember the left wing of the woollen industry-the right wing having been shot off by a previous budget of this government-and will complete the demolition of the sheep breeding industry.

From all time two factors have stood out preeminently, so far as production is concerned, in agriculture: First, fertility of the

soil, and second, freedom from noxious weeds. In connection with the first point I may say that sheep are unsurpassed by any live stock as a fertilizing agency. In the second instance, the Department of Agriculture is spending money in devising ways to eradicate weeds, including decoctions of chemicals, but the pasturing of 25 sheep on every 200 acres would eradicate more weeds than all the chemicals discovered. And yet for all that, the sheep industry is doomed to destruction under this administration. We have unlimited grazing lands, and even on rough hilly land, where other stock would perish the sheep do well. We Canadians, perhaps more than any other country in the world of like importance, require woollen products for clothing, but this government puts a premium on the importation of silks to clothe our wives and daughters, and delivers a blow to the woollen industry.

I am informed by prominent sheep. breeders that any class or breed of sheep can be raised in this country. In confirmation of these remarks, I shall read a letter recently received by a member of this house from Mr. Robert Miller,-ex-president of the Toronto industrial exhibition, a recognized authority on stock breeding and a leading agriculturist of Canada-with full authority to make its contents public. Mr. Miller says in part:

It is my belief that sheep are at once the most necessary and under a fair chance, the most profitable animals on the farm. Many times I have said truthfully that there had not been a year in my experience that sheep had not paid a profit on my farm. That was some years ago when I was importing great numbers and breeding as many as my land would support. For years I have not kept any sheep, because of the uncertainty of the market, because of the neglect of those in position to

The Budget-Mr. Mayhee

do so, to hinder trash of all kinds being sold as all wool. Great quantities of mutton have been coming from New Zealand and Australia so that our market has been most changeable and unreliable. All this has made sheep breeding and feeding the most changeable and unreliable of all farm operations. One year it would be good and the next year the very opposite, so much so that many like myself had to change to something else or lose what we had saved.

James Douglas of Caledonia has been quoted in the press as stating that the Australian treaty is the last straw, and it looks to me that way. Mr. Douglas is one of our most prominent farmers and breeders and he has been most successful as a cattle breeder and was also very successful with sheep. In conversation with him a short time ago, I asked him about the interviews reported and he said it was true, and he believed if a change did not take place he would have to quit keeping sheep.

It seems to me a great pity that an industry in which so many families were engaged in a small way, in many cases their only profit making animals being their small numbers of sheep, a very few cows and some hens, should have their whole hopes blasted as they have been by the Australian and New Zealand treaties.

The very best people that we have in this country are' the modest and quiet living people in country places, who by their industry, frugality and economy rear their children, give them their little education, provide their food and their clothing from the lambs that they produce, from the wool, the butter and eggs that they can spare. While this is being done they are building character into the children that vrill make great men of them, big men that will take the foremost positions in world affairs.

It was humble peopl* like that, that laid the foundation of this country, and if their fondest hopes are 1 o be attained, if this country is to become tile great nation that they hoped and prayed for, then the men and women that are to build the superstructure on the foundation they laid must come from that same source.

Men calling themselves statesmen have attacked the very homes of those people and traded the little chance and preference they had in their own Canadian markets away to other countries, so that men in big business might make their business bigger yet. They have sacrificed many thousands of our best and most deserving for the benefit of the mighty few that are well able to take care of themselves.

In spite of the fact that sheep are no longer to be relied on as profitable directly, I believe that I with mans' others will have to keep more of them in order to destroy the weeds that are fast taking possession of our fields since sheep have been discarded.

In Great Britain sheep have been the mainstay of the farmer and the farms. Without them they could not fertilize their farms, they could not keep them clean and they could not pay their rents. We have just as good land and climate here for the rearing of sheep as they have in Great Britain and we should have as good a market here if the people knew that mutton and lamb is the most wholesome food that human beings can have and if they knew that it is, when bred right, fed right, and prepared right, the greatest luxury too.

Then I wish to read a few passages from a letter written by the vice-president of a woollen industry in. my constituency. The gentleman in question says in part.:

We were very disappointed in reviewing the tariff schedule to see that nothing has been done in a constructive way to alleviate the present deplorable condition under which the woollen industry is trying to operate.

It had been felt that after placing before the advisory tariff committee the manufacturers' position, some assistance would have been given to the woollen cloth manufacturers, instead of which we have received another very definite set back by the entry into Canada, free, woollen fabric in the gray weighing six ounces. This finally disposes of the flannel business for which the Campbellford mill has been justly famous for a number of years. We have endeavoured in the past few years to make a certain amount of flannel to keep the citizens of Campbellford employed and this was only accomplished at a loss to the company, but with the additional reduction in the tariff it is impossible for us to carry it. This is one more fabric that has been lost to the Canadian industry.

This is the industry which this government is sacrificing, with the result that hundreds of men and women are thrown out of employment and are leaving for the United States if they can find the wherewithal to take them there.

The following figures were compiled and submitted by the Canadian Woollen and Knit Goods Association:

Raw wool imported and retained for manufacture in Canada

Imported Domestic

Year pounds pounds1922.. .. .. 12,412,914 20,204,5671923.. .. .. 17,156,902 9,855,9721924.. .. . . 18,376,652 9,530,3371923.. .. . . 13,544.482 9,484,4541926.. .. .. 13,292,727 9,038,233This shows a steady decline in the manufacture of woollen goods. In 1923, it was found in 124 mills that an average of 40 per cent of the machinery was idle and undoubtedly more is idle at the present time, but this government will relieve this situation by admitting machinery free. In 1926, $43,000,000 worth of woollen and knitted goods were imported. If this had been manufactured in Canada in addition to what was manufactured here, all our Canadian mills would have been working day and night. Let us compare the policy of this government with that of the Minister of Agriculture of Ontario, as set out in the following:

Hon. John S. Martin, Minister of Agriculture for Ontario, informed the members of the Ontario Sheep Breeders' Association, at their recent annual meeting in Toronto, that the government, in order to encourage sheep raising. is prepared to supply groups of farmers with ewes, pure-bred rams and expert advice on their handling. Farmers desiring this

The Budget-Mr. Maybee

assistance must organize themselves into groups.

To each member of a club the government will give eight good ewes and the free service of a pure-bred ram for two years. Preference will be given to clubs whose members agree on the same breed of sheep. Payment for the original flock will start the second year, when the government will be allowed to choose three lambs from the increase. This payment of three lambs will continue for four years, when a farmer will receive full title to his flock. The government expects this policy will help to reduce the weed menace.

After a commission had investigated1 the cost of production in Great Britain as compared with that in Canada, the Hon. Mr. Fielding said on the floor of this house in 1904, as reported in Hansard, volume 3, at page 4365:

They-

Meaning the manufacturers in other countries.

-are not worrying about the good of the people of Canada. They send goods here with the hope and the expectation that they will crush out the native Canadian industries. And with the Canadian industries crushed out what would happen? The end of cheapness would come, and the beginning of dearness would be at hand. Artificial cheapness obtained to-day under such conditions, at the expense of dearness at a very near day in the future, is not a system of which we could approve or which any of us on either side of the house could encourage.

Yet we find this government encouraging it. A so-called tariff advisory board has been instituted by this administration to investigate these matters, but it has proven to be a patronage committee rather than a tariff commission. It has degenerated into an absolute farce along with the civil service commission, but, withal, costing this country hundreds of thousands of dollars.

The dumping of fruit and garden products on our markets continues. If you walk down the streets of any of our towns or oities you will find on display in the windows of stores apples from Washington and Oregon, and vegetables from Mexico and other southern countries. No finer apples or vegetables can be produced than are grown in the constituency which I represent as well as in scores of other places in Canada, and yet we are debarred from the markets of the United States. It is within the jurisdiction of this administration to preserve this market for the benefit of our producers and to stop this dumping, and I would suggest that, if the wealthy wish to eat out of season dainties that are produced in this country, they should be invited to contribute to our national treasury..

The dairy industry appears to have been singled out for a broadside " barrage " from this government, and I should like to call the attention of hon. members to the fact that

fMr. Maybee.]

the county of Northumberland is noted for its production of high-class dairy products. Last year it stood second in eastern Ontario in the production of first grade and specials on cheese, a number of makers scoring one hundred per cent. The dairy industry is suffering from serious and unjust competition on account of the Australian treaty whereby butter from Australia and New Zealand is entering this country on a payment of a duty of one cent per pound. This butter is produced under summer conditions with no overhead expense with which the dairymen in this country are confronted for costly buildings and winter feeding, and the Australian dairymen receive assistance by way of a bounty of six cents per pound on exportations. One result in my county-and I am sure the same thing prevails in many other sections-is that hundreds of splendid dairy cattle have been sold and shipped across the line. The outcome will be greater importations of butter this year, with the dairymen being gradually forced out of business. It seems remarkable that this government would negotiate a treaty whereby Australia could increase at will the duty on automobiles coming from this country, and yet this government is unable to rescue the dairymen of Canada. It appears that the treaty has been of no advantage to either country and very disastrous to Canada. Even the Canadian Council of Agriculture, an avowed low tariff organization, is strong in its condemnation of the treaty.

The United States tariff commission has found that it costs 35.5 cents more to produce a gallon of cream and 4.3 cents more to produce a gallon of milk in the United States than it does in Canada. The present duty on cream going into the United States is 20 cents per gallon and on milk it is 2i cents per gallon. The National Milk Producers of the United States are demanding an increase of fifty per cent in the duty and it is within the power of the president of the United States to grant this. This would make the duty 30 cents a gallon on cream and 3j cents a gallon on milk. In all probability this request will be granted and, if congress takes a hand in the matter, the duty will likely be still further increased. This will be disastrous to milk production along the boundary where scores of cheese factories, on account of the advantage of this market, have been closed and disorganized, and it shows the futility of depending upon foreign markets and sacrificing the home market. If the figures are correct, the difference in the cost of production shows the high state of efficiency of the Canadian dairyman; but what advantage is this if he

The Budget-Mr. Maybee

is to be taken out and shot before daylight? In 1926 we exported to the United States more than 7,000.000 gallons of milk, valued at $1,245,392, and 5.374,131 gallons of cream, valued at $8,050,912. If we lose this market, what then? I have no criticism to offer of the United States government, but I feel that we should at least have our own home market.

In regard to our immigration policy, I think it is generally conceded that before this country can achieve that prosperity and prominence that is absolutely within the confines of possibility, we must have more population; in fact, if we had sufficient population in this country, profitably employed, many of our greatest problems would be automatically solved. The present government are spending huge sums of money to bring settlers to this country, only to pass them out through the back door to the United States. But what is infinitely worse is that they are not giving our own boys and girls the advantages which they are offering to the foreigners, and while one of our own is worth many foreigners in the progress of this country, they too are going to the country to the south of us. Sir Robert Falconer, President of Toronto University, in his report on the university, is quoted as follows: It is not unreasonable for people to complain that many Canadian university graduates are going to the United States, according to Sir Robert Falconer, President of the University of Toronto. .

Graduates of Toronto are to be found in every state in the union, says Sir Robert Falconer in the president's report in the university, and he continues: "It would seem that a fair estimate of the number of our graduates of the past decade of Canadian birth who are at present in the United States is between 900 and 1,000, that is to say about 11 per cent of the total. Though this number is too large for the healthful growth of our country, it is, I believe, much smaller proportionally than in other walks of life."

The large post-war classes, Sir Robert believes, could not rapidly be absorbed in Canada during the time of readjustment and there is not much doubt but the exodus in those years was greater than normal. Nevertheless', the condition is considered so serious that Sir Robert Falconer advises, "that every effort should be furthered_ by means of employment agencies and otherwise that will hold out to our graduating classes the opportunities of our own land."

In my humble judgment this government is working at the wrong end to accomplish any satisfactory results.

A national policy must be inaugurated in this country to develop our natural resources, and enable us to export our products in the finished state instead of, as at present, in the raw state. The export of 1,500,000 cords of raw pulpwood last year brought us

$15,000,000. Now if this quantity of pulp-wood had been manufactured into finished paper products in Canada it would have brought us anywhere from $90,000,000 to $150,000,000. If the $7,000,000 worth of raw asbestos that we shipped to the United States last year had been manufactured into finished products in Canada before being shipped out of this country, we would have received $77,000,000 for it. The difference in these amounts would have been largely made up of wages. If our nickel, copper and other minerals had been converted into finished products in Canada last year they would have brought us many millions of dollars. With our imports steadily increasing and our exports rapidly declining, with a population of nine million importing goods to the value of nearly three million dollars a day, with our own Canadian investors buying government and municipal securities rather than investing in Canadian industrial enterprises, how can we expect British capital to be invested in this country? As his gracious majesty the King was pleased to say, "Canada has slept long enough; it is time to wake up."

As a national policy for Canada the Montreal Daily Star has put forward in concise phraseology a suggestion which is worthy of consideration, as follows:

1st-Apply the system of protection in full measure to secure the home market for the producer. .

2nd-Bonus the manufacturer on his exports to enable him to undersell trade rivals in foreign countries.

3rd-By a rigid system of inspection compel the manufacturer to sell for home consumption at cost with a restricted margin of profit to be determined by an independent tribunal when the policy in inaugurated, and thus convince the consumer that he is not being called upon to pay the equivalent of the duty.

4th-Provide strict preventive laws carrying heavy penalties for the evasion of the enactments governing the strict application of this policy. . .

Critics may maintain that such a policy is revolutionary. It is revolutionary, but Canada has been stagnating too long, increasing our population at a snail's pace while our neighbours under a tariff that is almost prohibitive have been going forward by leaps and bounds, exporting to the countries of the world on a tremendous scale.

In conclusion, Mr. Speaker, when our needs are so urgent as they are at present, I wish to say as emphatically as I can that it is imperative that the government consider suggestions from some other source if they have no progressive policy of their own to offer.

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LIB

Joseph-Arthur Denis

Liberal

Mr. ARTHUR DENIS (St. Denis) (Translation):

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February 28, 1928