March 6, 1928

LIB

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

Liberal

Mr. LAPOINTE:

Take the iron and steel industry of Canada. In 1922 there were 77,077 employees and in 1926 103,510-in 1926, when all these plants were closed, according to my hon. friend.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I did not say that.

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LIB

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

Liberal

Mr. LAPOINTE:

The wages in 1921 were $98,363,983 and in 1926, when conditions were so bad that our people had to go to the United States, they amounted to $137,640,065. My hon. friend referred also to the agricultural implement industry. In 1922-

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Time.

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LIB

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

Liberal

Mr. LAPOINTE:

I am sorry; perhaps I

shall have another opportunity to give the figures.

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. R. K. SMITH (Cumberland):

This is the second time I have had the great privilege and honour in this house of following the eloquent hon. minister (Mr. Lapointe), who has just spoken. I listened with a great deal of pleasure to the first twenty minutes of his remarks-and they were the best part of his speech-in which he quoted extracts from speeches delivered by hon. members on this side of the house. I waited patiently and very attentively to see whether the minister would quote the speech on the budget by the Minister of Immigration (Mr. Forke) either of this year or last. That speech was not quoted and will not likely be quoted by any hon. member opposite because he refuses to speak on these budgets.

I would not undertake to follow in detail the speech of the Minister of Justice, but I might say this with respect to his criticisms of us on our attitude towards the so-called prosperity of this Dominion. I often wonder whether the government of the country, by threats and by attempted ridicule, seeks to gag the members of the opposition for their attacks on its administration of the Dominion's affairs and the country's general condition. I should like to turn back the pages of Hansard-I have never done so, but I am sure I should not be disappointed-and find out

just what the attitude of hon. gentlemen opposite was towards the then government when they themselves were in opposition. I am sure it will be found that they were just as energetic and just as strong in their criticism of the Conservative party as we are critical of the government to-day.

Now, Mr. Speaker, in a very humble way I am going to endeavour to answer as best I can some of the statements made yesterday by the Minister of National Defence (Mr. Ralston), and in so doing I should like it to be understood that what I have to say will be said in the very best spirit and with every mark of friendliness and respect for the high position which he now holds, remembering the brilliant lawyer he is and the gallant soldier he was. The minister commenced his speech by a reference to the bounty on steel in Canada, and I would base my comments on the reference, which will be found in yesterday's Hansard. The minister said:

It is suggested that the steel industry has one to the demnition bow-wows because of the act that there was a drawback put on the duty on agricultural implements. I want to remind my hon. friend-

Referring to the hon. member for Pictou (Mr. Cantley).

that the steel industry in Nova Scotia never got its real foundation until the legislation of 1897. which was introduced by the Hon. Mr. Fielding in this house, and I think he will also agree with me that from that time on the Bteel industry in Nova Scotia prospered. Mr. Fielding gave assistance to the industry first in 1897 for a period of five years. In 1899 this assistance was made continuous for another five years, but at a diminishing rate.

I want to say that Mr. Fielding did not give the first assistance to the steel industry in the province of Nova 'Scotia in 1897. The first assistance to the steel industry by way of bounty was given in 1883 by the then Conservative government, and these were further extended in 1894 and, I believe, in 1895. It is quite true that after the Liberal party came into power in 1896 there were more generous increases made in connection with these bounties in the budget of 1897, but that was only after a slashing cut had been made in the tariff on iron and steel-as one hon. member says, a cut of 50 per cent. These bounties were to take the place of that cut, as was explained at the time by the then Minister of Finance, but they were to last only for five years, starting at a certain level and gradually diminishing. The tariff was always sure and dependable, and the steel industry knew exactly where they stood, but under these bounties they could not be certain of their protection. It is true that the bounties were

The Budget-Mr. Smith (Cumberland)

renewed from time to time by the Liberal government, but, in 1911 the then Minister of Finance, Mr. Fielding, stated that the steel industry of this country had reached the point where bounties were no longer necessary, and that as they expired they would be abolished. I find that in the session of 1911 a question was asked by a member of the house in this connection, to which an answer was given by Mr. Fielding. This will be found at page 6614 of volume 4 of the debates of the House of Commons for the session of 1910-11, and is as follows:

I would like the Minister of Finance to make some plain statement with regard to the renewal of the bounties on iron and steel wire, rods, et cetera. I listened with a great deal of interest to his utterance this afternoon upon that question. Rumour has it, and one cannot turn a deaf ear altogether to rumour, that the minister has under consideration the renewal of these bounties. I would ask him, as he did not make himself very plain upon that subject this afternoon, and did not even mention that he had under consideration the renewal of these bounties, if he would make a plain statement as to whether he is considering the renewal of the bounties on iron and steel and if so when he proposes to make a statement to the house upon that subject.

To that question Mr. Fielding replied as follows:

The bounties on a number of articles of iron and steel expired on the 31st of December last past. The bounties on iron rods will expire on the 1st of July ensuing. There is no intention on the part of the government of renewing them.

Mr. Fielding also stated that the bonusing of the steel industry had not cost the Dominion treasury one dlollar through these bounties; the extra duties which were collected more than offset the amount the government paid out in bounties, and I think he mentioned two places in particular, New Glasgow and Sydney where these duties were collected which substantiated this statement. I should like the house to know that these bounties were not inaugurated by the Liberal party at all, also that in 1911, as stated by Mr. Fielding, the policy of that party was to abolish the bounties. The steel industry in Nova Scotia received its start and commenced to grow under the Conservative policy. It is true that it expanded later on, as all other industries usually do in course of time, but the real credit for giving this industry a chance to start must be given to the Conservative party. If any hon. member of the house is particularly interested in the question of the bounties on steel, I would refer them to a question answered most fully in the senate debates'of February 27, 1912, in which is included a complete table of the 56103-67i

bounties granted, to whom the money was paid and how long they were continued.

The Minister of National Defence also made reference to the fact that the maritime provinces lost their best chance when they turned down the reciprocity pact of 1911, and I am speaking now with particular reference to coal, because other hon. members on this side of the house will deal with the fisheries and other matters. Coal is an important and basic industry in the province of Nova Scotia, as you all know, and is on the free list in the United States under the Fordney-McCumber tariff of 1922. As hon. members know, however, an exception is made with reference to countries which have tariffs against the United States as we have; the United States tariff will seek the tariff level of those countries. In this connection I would refer anyone interested to paragraph 1548 of the United States tariff, page 76. We have the same opportunity now to take advantage of reciprocal free trade in coal with the United States that we had in 1911 in other natural products if we wish to take it, and wipe out all duties. I ask the government, and I ask the Minister of National Defence, whether they or he would be in favour now of wiping out the duty on coal, thereby allowing American coal to enter Canada and our coal to enter the United States free of duity. That weapon is in the hands of the government; they could inaugurate such a policy immediately. I hope they will not do so, because it is our policy to secure an increase in duty for the industry, and I hope that some day we shall get it. It is within the power of the government to have free trade in coal between Canada and the United States, if they so desire. I ask the government, would they adopt such a policy to-day? They say we did not do so in the reciprocity election of 1911 in other natural products, but will they do so now with regard to coal? I ask the question in vain; there is no answer.

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CON

Hugh Guthrie

Conservative (1867-1942)

Mr. GUTHRIE:

It is a very hard question for them to answer.

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

The Minister

of National Defence mentioned other things with respect to the steel industry, and what was to be done under the Duncan commission report. We were led to believe last yeaf when the Prime Minister (Mr. Mackenzie King) made a statement in connection with the report of the Duncan commission that the report of that commission would be implemented in its entirety. That was the impression that was conveyed to all of us and to the country, and the phraseology adopted by the Prime Minister at that time certainly

1060 COMMONS

The Budget-Mr. Smith (Cumberland)

led me to that conclusion. But I drew the inference from the speech of the Minister of National Defence yesterday-I do not wish to misquote him in the least, and if I am making a misstatement I want to be set right -that the government had not made any commitments with respect to implementing the Duncan commission report in that connection; that there has been no definite promise in that regard, and that no serious consideration will be given to the question of bounties on steel, as recommended, until certain conditions are met and adhered to. That, Mr. Speaker, is the impression I gained from the minister's speech and I hope it is wrong. That is certainly not the impression of the people of the maritime provinces, it was not the impression I gathered last session when this matter was under discussion. We expected that when Besco was unscrambled, and when some particular group had secured control of the affairs of the company so that it could be properly managed, something would be done for the steel industry by way of a bounty as set forth in the Duncan commission report.

The Postmaster General (Mr. Veniot) made a very straightforward statement in the city of St. John on the eighteenth of last January when he said that the matter of a bounty to the Sydney steel plant would be divulged in a few weeks in a manner that would make every maritimer proud. What are we to understand from these two statements, that of the Minister of National Defence, and that of the Postmaster General to which I have just referred? Are we to understand that nothing will be done for the steel industry in the province of Nova Scotia before certain conditions are met and adhered to as set out yesterday by the Minister of National Defence or are we to understand, as stated by the Postmaster General, that something will be done in the very near future that will make every maritime province citizen proud? These are the things we should like to know, and we have a right to the information. There are conflicting statements between two ministers of the crown on this important matter and it is scarcely fair to these gentlemen themselves, to say nothing of the people in the maritime provinces, not to have a decisive answer from the government in this connection. There never was a time in the province of Nova Scotia when the steel industry needed assistance more urgently than it does to-day, and resolutions in favour of such assistance are being passed by public bodies throughout the province. Boards of trade are taking the question up and forwarding resolutions to the government. Hon. gentlemen opposite blame

us for weeping and wailing in connection with the question of maritime rights. Do they expect us simply to come here and have our pictures taken, or do they think we should give expression to the thoughts and the wishes of the people of Nova Scotia who sent us here? We are not going to be gagged by any talk of that character, which is nothing more or less than a cheap variety of balderdash. One of the resolutions referred to was passed by the Lunenburg board of trade, and you would be surprised to know, Mr. Speaker, that the president of that body, who signed the resolution calling upon the government for immediate action towards implementing the recommendations of the Duncan commission report, is none other than the president of the Liberal Association for the province of Nova Scotia. A copy of this resolution has been forwarded to the Prime Minister, the Premier of the province of Nova Scotia, the member for Antigonish-Guysborough (Mr. Duff), the member for Queens-Lunenburg (Mr. Ernst) and others. Another resolution to the same effect has been passed by the board of trade in the city of Halifax. While in the board of trade at one particular city there may be a preponderance of one political opinion, and in the board of trade of another locality a preponderance of political opinion of an opposite character, I should judge from the resolution forwarded from the town of Lunenburg at least that the majority of the members of the board of trade there are not of the same political faith as those who sit on this side of the house. The situation as regards the steel industry in the province of Nova Scotia is critical; it never was more critical, and the need of government assistance, as I have already said, is urgent. There is talk about prosperity in this country, but men who cannot get employment do not take much stock in that kind of talk.

The Minister of National Defence said yesterday something to the effect that the steel industry in the Dominion could not be so badly off because the Canada Steel Company appeared to be quite prosperous. Quite so. The Canada Steel Company enjoys a protection of between 30 and 35 per cent, in addition to being located at an excellent distributing point where it enjoys easy access to ready markets.

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CON

Thomas Cantley

Conservative (1867-1942)

Mr. CANTLEY:

And gets a bounty as

well.

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

Yes, a bounty as well, as my hon. friend points out. Down in our part of the country the industry is manufacturing primary steel, not the finished article, and enjoys a protection

The Budget-Mr. Smith (Cumberland)

of only about 9 per cent. The Canada Steel Company is so situated that it can take advantage of what is called the wave of prosperity, which only exists in spots here and there throughout the country. On the other hand in our part of the country we enjoy no such advantage, because the government has provided no facilities to help us. I think it is the right of those of us who are here as members to place these matters before the house. If we did not do so we would be shirking our duty, especially when boards of trade and others are pressing upon the government to give some relief to this industry, and our functions and duties as members of parliament, particularly those who happen to be on the opposition side of the house, would be, if the government had its way, simply to come into this chamber and sit and listen. In all sincerity I ask the Minister of National Defence (Mr. Ralston), for whom I have the greatest respect and admiration as a man, to see that something is undertaken by the government without further delay to grant to the steel industry in Nova Scotia what was recommended by the Duncan report and what the people of that province thought they were going to get as soon as the British Empire Steel Corporation was in a position where it could be properly controlled.

Another statement was made by the Minister of National Defence with respect to the inflated value of the stock of the British Empire Steel Corporation. It is quite true that the paper value was inflated; the company was over-capitalized, as was admitted by all; but still this was only an inflation on paper. The company never paid any dividends on the common stock and I do not think they paid any dividends on the second preferred stock, so that whatever inflation there was in that company was only a paper inflation. Surely that could not be a reason for refusing assistance. To say that because there was some kind of paper inflation in that company you cannot do anything because it will only be throwing another bone into the ring for somebody to fight for, or placing on the bargain counter something which will further embarrass the situation, does not seem to me to be sound reasoning, and now I think this company is in a position where, if it can get some government assistance, the assistance which was recommended and which the people of Nova Scotia expected it to receive, it will have a chance for its life. If not, I doubt whether it will survive.

In the east we feel somewhat perplexed and have rather gloomy apprehensions over

the government's attitude towards industries in eastern Canada. If the government succeed, by the methods which they have been adopting in the last budget, in preserving any sort of co-ordination in this country, they will do something that has never before been successfully achieved in this country by similar tactics and policies. The only benefit that we in eastern Canada derive from this budget is a reduction in the sales tax, and I admit that we get a little benefit there. There is not in the budget one other thing that I know of by which we in the maritime provinces benefit. We are willing and anxious to abolish the sales tax, to do away with all these taxes that bear so heavily on the shoulders of our working people, and the abolition of the sales tax is the basis of the amendment which was moved by the hon. member for St. Lawrence-St. George (Mr. Cahan). Hon. members opposite made a great hue and cry against certain Conservative members who voted against the budget in this house a couple of years ago because it contained some good things and, in our opinion, some bad things. I wonder if they will vote to-day for our amendment, which certainly contains a good thing for the working class in this Dominion. It seems to me that it would be a splendid thing to go to the people and say: We have relieved you of a great burden by abolishing the sales tax. I wonder if those same hon. members who were so critical of our attitude then will be with us to-day and will vote for an amendment which we propose. Wait and see. If at least two Liberal members from Nova Scotia are true to form, I think we can get a couple of votes for our amendment.

The question of the coal industry has been so thoroughly gone into on many occasions by different members on this side of the house that it would be a waste of time on my part to take up the matter in detail this afternoon.

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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

W hat is the hon. member's remedy for the situation in respect to the coal industry in Nova Scotia?

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

If my hon.

friend will look at the speech delivered by me on the address, he will find that very point elaborated.

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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

Do not elaborate it. Just state it.

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

I will state it. In the first place my hon. friend has the impression that it is tariff protection alone that we are after in order to cure this situation

1062 COMMONS

The Budget-Mr. Smith (Cumberland)

That is not the case. The tariff is only one factor, although in my opinion it is the most important factor. We must have a higher tariff on coal.

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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

How much?

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

Enough to

shut out United States coal. It may be $1.50 or $1 a ton. I remember that my hon. friend last year interjected the remark that a tariff of $6 a ton would be required-that information, I believe, was supplied by the fuel board-to shut out United States coal from Canada; but that did not apply particularly to the coal of eastern Canada; it had especial reference to coal in other portions of the Dominion. Beside the question of an increase in the duty there is the question of lower and still lower freight rates, subventions for shipments west of Montreal and the establishment and government assistance of coking plants that will be compelled to use all Canadian coal. It seems to me that is the basis of a national fuel policy in this Dominion. I was glad indeed to hear the remarks of the hon. member for Inverness (Mr. Macdougall) the other night in answer to the remarks of the Minister of Railways (Mr. Dunning) who said in effect that he did not know just what a national fuel policy was. It cannot be explained in any better way than was done by the hon. member for Inverness a few days ago.

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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

Did my hon. friend ever

make any computation as to how much the reduction in freight rates and the subventions should be in order to effect what he desires?

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

I have not

made an accurate computation, and the question of the computation is, in my opinion, of secondary importance. The question of shutting out United States coal that comes in and destroys our Canadian market, that puts our Canadian miners out of work that disrupts mining conditions, especially in a province like Nova Scotia, is the question of primary importance. United States coal can be shut out and we should proceed to do that. We can develop a coal market in this Dominion and mine and sell our own coal here, instead of sending over $100,000,000 to the United States every year to buy foreign coal.

Of course, I know that some will say that the coal industry in Nova Scotia is not economically sound. The Minister of Immigration is reported to have so stated in the city of Toronto a few years ago. The simple fact is that if it is said there are mines there which are not economically

sound to operate you can say that of every industry in Canada that enjoys the least bit of protection. You could have said that about the great steel industry in the United States when it began. You could have said that the American policy relating to steel was not economically sound in shutting out all foreigners from their market in order to develop the steel industry in that country. You can say that of every industry that enjoys the least bit of protection, but in the long run the industry will develop, with protection just like the steel industry in the United States has developed, to a point where it is not only economically sound, but where it can outdo the world both in price, production, and the marketing of its products. If we develop in Canada a national fuel policy, can any reasonable person doubt but that there will be a decrease in the quantity of coal we import and a corresponding reduction in the price of the product? Last year we imported nearly twenty million tons of coal; we use in Canada a little over thirty million tons. The coal industry in this Dominion represents in money invested about $150,000,000. Are we going to allow this industry, which has been stagnating for years, and which is of a spasmodic character as to its operation to die simply because it is claimed by some theorists to be economically unsound? I think not. I think the lesson of the United States steel industry is as pertinent as anything could be. Give our industry a chance to get on its feet; give it a market for a while to see what it can do. As to its being economically sound or unsound, let us first give it a trial, even if it takes $6 a ton-and it certainly would not take anything like that, but if iit needs $1.50 a ton, as was suggested by the hon. member for Pictou, the industry should receive that assistance; and then with lower and still lower freight rates, with subventions west of Montreal, with coking plants established which will be compelled to use one hundred per cent Canadian coal, I think we can hope to revive this industry.

It will be said, what about the British Columbia coal fields? That has been mentioned in this house by the hon. member for Comox-Alberni (Mr. Neill). The British Columbia coal fields sell about half a million tons of coal a year to a district in the United States which is very far removed from the coal fields of that country, and no matter what the tariff was, British Columbia could hardly lose that market, owing to its distance from the United States coal mines and the long rail haul that would be necessary to enable the consumers in that section of the country to the south to get American coal.

The Budget-Mr. Raymond

Laying that aside for a moment, I make this suggestion-I have not perhaps given it the thought I should have done before presenting it to the house, and I therefore leave it just as a suggestion. In Australia, one of our sister dominions, they have a policy under the Paterson scheme, of bonusing Australian butter to the extent of six cents a pound. I maintain that in this country, if it is necessary to the development of a national coal and fuel policy, and also to the protection of the mines in every portion of the Dominion, including British Columbia, we could well afford to pay the difference between the present duty and what the duty might be when it is fixed at a point high enough to keep out American coal. We must take drastic steps to stop the importation of American coal into this country. The increased importations are alarming; they are mounting higher and higher every year.

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LIB

James Lorimer Ilsley

Liberal

Mr. ILSLEY:

Is it not true that the coal mines of Nova Scotia produced about one million more tons in 1927 than in 1926?

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CON

Robert Knowlton Smith

Conservative (1867-1942)

Mr. SMITH (Cumberland):

It is quite

true that there has been an increase in the coal mine production of Nova Scotia. That is due in a small part to the gradual regaining of the Montreal market, which was lost during the war. There will probably continue to be a Slight increase in the production of coal mined in the province of Nova Scotia because we may regain even a little more of that market, but I say that we should have all of that market, and we have only about half of it to-day. Instead of producing between six and seven million tons a year in Nova Scotia, we should be producing twelve million tons.

The Minister of Justice when he was speaking said, in substance, that the policy of the government was to lower the tariff without injuring any legitimate industry in this country. For his benefit I should like to read a communication which is in direct contradiction to the remarks of the hon. minister. It is a letter I received from the Oxford Woollen Mills, of the town of Oxford, Nova Scotia. It reads:

We were stunned to read the portion of the Robb budget dealing with the textile industry.

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March 6, 1928