Will the hon. member give the meaning of the word skelp, so that the house may understand the matter more clearly?
Mr. CANTLEY': Skelp is the trade name given iby steel and pipe makers to strips of steel intended to be rolled or drawn through dies in the forming of ordinary merchant pipe. If I want to produce pipe with an internal diameter of one inch, I purchase or roll, as the case may be, a bar of steel, say, one-eighth of an inch thick and say four inches wide. For larger pipes I roll the steel wider, and for still larger pipes wider still, and so on, using an increasingly heavier material. The
The Budget-Mr. Cantley
material may be rolled to the width and thickness suggested, or it may be rolled first in the form of sheet steel of the required thickness and afterwards sheared to the desired width. Material produced in either of these forms is known to the trade as steel skelp for pipe making. I am at present referring to an industry which is able to import skelp at a duty of 5 per cent while it is protected by a tariff ranging from 274 to 30 per cent. I contend that there is class discrimination in this matter, and I say this for the reason that if material of exactly the same dimensions is imported by the users of steel for any other purpose they pay $700 per ton under the general tariff, whereas the concern which is using it for the mSnufacture of pipe gets it at 5 per cent and enjoys a protection on his pipe by way of a duty of 274 to 30 per cent. The products of the furnaces, forges and mills in Germany, of all continental Europe, and the surplus of the United States, are in this case accorded equal treatment with the British product, the principle of preferential treatment being entirely ignored. The whole productive capacity of Great Britain, of Europe and of the United States is placed at the disposal of the merchant mill operator and the steel pipe producers of Montreal and elsewhere, and they are able to import steel billets and steel skelp at the lowest possible world's figure, assisted by ballast rates of freight, the product being admitted into Canada at a duty of 5 per cent, irrespective of any interests save their own. It would appear to be a matter of no concern to the Minister of Finance or to the government that our Nova Scotia coal miners are to-day idle, or that many of our blast furnaces, coal washeries, open hearth furnaces and the great steel producing plants, each unit costing millions of dollars, are silent, with thousands of former operatives idle. On the other hand, the pipe manufacturers, whose raw material is imported skelp and whose operations are often carried on in a building little more than a glorified shed, equipped with a few small heal'-;:-furnaces possibly using waste gas from the city gas works and requiring only the simplest type of machinery, enjoy a protection of 30 per cent under the general tariff and 274 per cent under the intermediate tariff. This
Blast furnaces and steel mills 13,874
Subsidiary plants 101,887
merchant pipe so produced and so protected by the tariff finds itself in the centre of the consuming area of Canada and in the chief distributing centres of this country with a consequent low distribution cost.
The whole tariff history of the world cannot supply such concrete evidence of the total lack of a rational tariff policy or a more unfair, unjust and illogical application of the taxing powers resting in the Minister of Finance. . I invite the minister to consider all the facts relative to item 383; his commissioner of taxation has been thoroughly acquainted with the situation for a long time, and can readily give him all necessary information.
In 1920 the investment in primary iron and steel plants in the Dominion amounted to $120,000,000 in round figures, or 18 per cent of the total manufacturing investment of Canada; by 1926 this had fallen to about $88,000,000. or 144 per cent of our total manufacturing investment. In 1920 the value of our primary iron and steel products was about $139,000,000, or 21 per cent of the entire manufacturing production for that year, while during the three years 1924, *1925 and 1926 the value of these primary iron and steel products had fallen to an average of less than $37,000,000, or a drop of 70 per cent. To put it in another way, the value of the primary products of iron and steel in 1926 was only 8i per cent of the entire industrial production of this country. Looking at it from still another point of view, about 92 per cent of the value of the secondary iron and steel products of Canada is based on the fabrication of raw forms of iron and steel imported into this country, -while some of these secondary products enjoy the highest rates of duty imposed by our tariff.
The fundamental value of this great Canadian industry lies in the pig iron and steel produced; in other words the products of our blast furnaces, open hearth plants and rolling mills which should and1 under a properly graded tariff would provide the raw material for the secondary metal industries. I should like at this point to place on record the relative positions of the primary and secondary divisions of the industry as shown by the operatives employed and the wages paid during the years 1920 and 1926. The figures are as follows:
Wages and salaries paid
Wages and salaries paid 8.934,536 125.229.867
The Budget-Mr. Cantley
As shown by these figures, the secondary plants are about holding their own with regard to earning power, but certainly this is not the case with the blast furnaces and rolling mills.
I invite the Minister of Labour to consider the fact that in 1913 Canada had nineteen blast furnace stacks in operation with only five idle, while to-day we have but four producing furnaces, with SO per cent of the investment and employment capacity of Canada's iron and steel industry idle and unremunerative. This has been the case for several years past, and the wages earned have been only 40 per cent of those earned six years before. Is not the Minister of Labour (Mr. Heenan), interested in that situation? Let the minister ask the people of Sydney Mines, Glace Bay, Sydney, New Glasgow and Trenton to give him the facts with regard to empty houses, municipal bank overdrafts, distress assistance and the emigration of thousands of our best artisans, and having done this, I ask him to impress upon the Minister of Finance the gravity of our position.
Then I would invite the government to consider the matter from another angle. In Nova Scotia we did all the pioneer working out of the intricate and difficult problems of the steel trade as it is now practised in this Dominion, and I would remind the house that pioneering in industry is expensive. The first open hearth steel plant in Canada was put into operation at New Glasgow, Nova Scotia, in 1882, when the Scotia Company, to give it the short local name, in August of that year made the first open hearth steel and poured the first steel ingot produced in Canada. Here I would like to pay a tribute to the courage, faith, indomitable energy and Scottish persistence of three men, all natives of New Glasgow, who were the real fathers of the steel trade in Canada. They successfully overcame all the pioneering difficulties which came up in the establishment of the steel industry based on the use of native ores, fluxes and fuel, aided wholly by native workers. I refer to the late Graham Fraser, George Forrest Mackay and Simon A. Fraser, men with whom it was my great privilege to be intimately associated over a long period of years.
The New Glasgow Iron, Coal and Railway Company, organized by Graham Fraser and some intimate friends in 1890, shipped abroad trial lots of Pictou coal. These were not hand samples, bag samples or ton lots, but consisted of some hundreds of tons. This coal was sent to the Westphalen or black country district of Germany, where exhaustive
washing and coking tests were carried ont. The knowledge thus gained enabled us to determine the type of washery and coke ovens best suited to our fuel conditions. This information was put into practical effect in 1891, at Ferroma in the county of Pictou, where the first commercial coal washer and also the first rectangular retort coke ovens designed to produce blast furnace coke from washed coal were built and put into successful operation. This coal washery and these ovens were the first of their type on the North American continent. Ten years later followed the great development at Sydney and Sydney Mines, where eight modern blast furnaces with coal washing and coke oven equipment and by-product plants were established. During the war these plants first produced the toluol which made possible our great contribution to the demands for explosives for our armies and those of our allies from 1915 until the end of the war. Connected with these blast furnace plants, situated one on each side of Sydney Harbour, are seventeen open hearth melting furnaces with capacities of fifty, seventy and one hundred tons, some of which are of the most modern design on this continent. Those at Sydney Mines are fitted with secondary plant for fluid compression of steel, where great hydraulic presses exert a pressure of 4,000 tons per square inch on the plastic steel contained in reinforced ingot moulds thus displacing the inert gases and consolidating the metal, eliminating blow holes and surface cracks, and ensuring a more homogeneous, better and safer material for railway car and locomotive axles and large marine forgings, giving to these a degree of safety and dependability not otherwise obtainable. This magnificent plant with its accompanying ore piers, coal washers, coke ovens and blast furnaces, and refractory brick works, representing an outlay of many millions of dollars, and half our coal mining capacity, is to-day all idle, with a consequent lack of employment, lessened purchasing power for our people, less traffic for our railways, and a loss of one-half the population from a town of 10,000 people boasting large brick public schools with modern public utilities of water, lighting, sewerage and tram car service. There, where formerly visible and tangible evidences of success, optimism and progress prevailed, depression, discontent and despair now exist, due, Mr. Speaker, to the fundamental change in the former tariff structure of this country. These changes at first were small, but were followed year by year by others, all of the same unpatriotic and fundamentally vicious type, and all gradually but surely producing their dire effects on the great basic industry
The Budget-Mr. Cantley
of Canada. This is the situation which now exists and which the Finance minister to-day refuses or neglects to remedy in the slightest degree. He fiddles with cotton thread's and offers our coal and steel workers duty free foreign woollen yarns with which to dam their mitts and moccasins, while they and the spinners of Canadian yams go idle and in want. And that, Mr. Speaker, is the sum total of the relief offered the coal and steel industries by the tariff changes which the Finance minister has just presented to the house.
The facts as to the position of the iron and steel industry, and the paralyzing effect of the tariff, discriminating sis it does against this Nova Scotian industry, were presented to the tariff advisory board on May 26, 1926, now nearly two years ago, but, so far nothing is known as to the action taken by the board or the advice given by them. Meanwhile, incalculable loss of capital and wages has resulted, population has declined, distress, disappointment and unrest have followed, and we are yet without even any suggestion of sympathy or practical help from the Finance minister or the government.
As to coal, I shall not delay the house with any lengthy reference to the coal mining industry of Nova Scotia, the main facts as to which have already been fully put before the house, but will merely say that that industry as now carried on in Canada does not provide the continuity of employment desirable and necessary to the well being of those employed in it, and a radical readjustment of our dealing with the industry is imperative.
I should like to draw the attention of the house to a considered statement made by the Dominion Bureau of Statistics at the suggestion of the royal commission on maritime disabilities, which directs attention to the intimate connection between the coal and steel industries and the population of Nova Scotia.
Coal mining, while carried on in Nova Scotia for more than a century, received its greatest stimulus when the steel industry was taken up, first at New Glasgow in 1882 and further extended in 1891, followed by a great advance in production in 1900, due to the construction of large iron and steel plants on both sides of Sydney Harbour.
The relative importance of Nova Scotia as a producer of coal and steel is shown by the fact that up to about 1880 virtually all the Canadian coal output came from Nova Scotia, and up to a still later date, or about 1895, virtually all the pig iron and steel produced in Canada was made in Nova Scotia. Now while the tendency of later years has been to'diminish the relative importance of Nova Scotia
as a factor in coal, iron and steel production in Canada, it cannot be forgotten that these allied and basic national industries first attained importance in Nova Scotia. It is the chief misfortune of that province to be overshadowed now by the more rapid, if more superficial, progress of central Canada, greatly due to unfair legislation.
The extent to which the Nova Scotia coal and steel industry has suffered may be gauged by constrasting the continuous increase in the coal output of the province for twenty years prior to the great war and the disappointingly opposite trend shown since the close of the war, which downward trend is largely a reflex of the difficulties attending steel manufacture in Nova Scotia, arising out of unsatisfactory and unfair tariff and railway freight conditions. Notwithstanding these discouraging features the striking fact is that the only local increase in population that has occurred in Nova Scotia since confederation was due to and associated wth the coal and steel industries.
The increase of population in the municipalities in which the coal and steel operations were carried on during the thirty years period between 1891 and 1921 was approximately 74,000 persons. The total increase of papulation in the province between these two decades was 73,000, namely, an increase from 450,000 to 523,000. I ask hon. members to note this: but for the increase in the coal and steel districts, there would have been no growth in the population of Nova Scotia during the past thirty or forty years. The growth of the coal industry has created several new towns and greatly enlarged others, something which has not occurred in connection with any other industry in that province. But the emigration from the maritime provinces, and especially, from Nova Scotia, has cancelled the combined increase due to immigration and natural increase. But for the employment and the creation and distribution of wealth connected with the coal and steel industries, with which undoubtedly is associated all the growth in population in Nova Scotia in forty years, the emigration from Nova Scotia would have been even greater than it has been. The census of 1931 in all probability will reveal a decline in the population of such towns as Sydney Mines, Sydney, New Glasgow, and Trenton, which have been affected by the lack of employment in the steel industry, and to a lesser but no means negligible extent in the coal industry. This fact makes still more understandable the real sense of fear that assails the Nova Scotian who witnesses the decline year by year of the steel industry and the effect of this decline upon the production of coal.
The Budget-Mr. Dunning
These startling facts should command the attention of our friends in other sections of the Dominion, and especially the government, a'nd my respected friend, the hon. Finance minister to whom I appeal primarily. It is to him we look for that succor and relief which he can give, and that without permanent injury to any legitimate Canadian industry.
We on this side of the house are sometimes taxed with failure to present any constructive suggestions although we indulge in criticism of the government. The Finance minister intimated that he would welcome any workable plan looking to provision for a sinking fund or any suggestion that will contribute to the earlier retirement of our national debt. I now venture to suggest that he impose a duty of a dollar and a half per ton on all coal and coke imported into Canada. That duty would not exceed, say, 20 to 25 per cent ad valorem, taking the average value of such fuel at the point of entry, and the total tax collected could be placed to the credit of a sinking fund for the extinguishing of the national debt. Were this done, the minister would be able to retire annually from that source say twenty-five or thirty millions of dollars of our outstanding national obligations. Of course the sum thus available for debt reduction would be gradually lessened in proportion as our domestic coal replaced imported fuel. A further great advantage would be to increase largely the range of consumption of Canadian coal, develop our own enormous western coal deposits, provide employment for a large mining population, go far to prevent seasonal unemployment in our eastern mining districts, and within a reasonable time put Canada in an independent position in the vital matter of fuel for both domestic and industrial purposes.
Subtopic: DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE