March 6, 1928

LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Time.

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

Maxime Raymond

Liberal

Mr. MAXIME RAYMOND (Beauharnois) (Translation):

Mr. Speaker, the hon. Minister of Finance (Mr. Robb) concluded his speech on the budget by advising economy. J think we all agree in admitting that he himself gave the example by his brief speech. In less than thirty-five minutes, he gave a clear and precise

statement of Canada's financial and economic conditions; he showed with figures and facts to back it, that our finances were gradually improving and that, generally speaking, the country's affairs were prosperous. His statement, clear as to what relates to the past, optimistic as to the future, is of a nature to rejoice and encourage us.

Even though his speech was brief, it lacked neither value nor interest on that account- he however furnished matter for a long debate, and really I would have hesitated to rise at this phase of the debate, if it were not for the fact that the discussion on the budget proposals affords one of the few opportunities to members who sit in the rear of the ministerial benches to publicly express their views and put forth the suggestions which they believe to be in the general interest.

The study of the budget proposals shows that, under the Liberal administration, which followed those of the hons. Borden and Meighen, the period of deficits gave way to one of surpluses, our credit has been reestablished, and from the economic viewpoint, Canada occupies one of the most enviable places among the nations of the world. In opposition to this state of affairs, those who aspire to replace the present administration have had but criticisms to offer and nothing to suggest. It is moreover the candid admission of the hon. member for Fort William (Mr. Manion). Most of these critics have already been answered and I shall content myself with stating that in all public or private administration, the important factor is that revenues should exceed expenditures. That is how we distinguish a good administration from a bad one, and great credit must be given to the present administration for having succeeded in balancing the budget and keeping it balanced, while decreasing our debt and the rates of taxation.

The hon. member for St. Lawrence-St. George (Mr. Caban) moved an amendment in which regrets alone are expressed. One cannot carry on a government with these, and I confess that simply voting to pass regrets does not move me much. He regrets that the sales tax was not entirely wiped out. Yet, the hon. member is sufficiently acquainted with business methods to know that this total elimination would have brought on confusion in trade and bankruptcy among a great number of business concerns. Therefore, it is not to be thought of or desirable, and the Minister of Finance was quite wise in gradually decreasing it. He also regrets that the government does not find more work for our people. Is he not the one who taunted

The Budget-Mr. Raymond

the government for having reduced the tariff on automobiles, reductions which increased production and gave more work to our people. Finally, he regrets the unemployment, the emigration of our people and the absence of immigration. As regards unemployment, reports are contradictory; however, I note that it exists among our neighbours, the United States, a country that the opposition often take a delight to cite as an example of prosperity. I read in the Boston Post of February 8 last, that according to the incorporated Labour Bureau they, at present, estimate the number of unemployed in the United States at 4,000,000. As to emigration, it is established that it is gradually dwindling down, and that a large number of those who had left are returning.

However, what may be the case, it is important that we should know the real causes, so that we may be able to apply the best remedy. I shall not discuss the universal remedy of the Conservatives, which is protection; it is to them what Pain Killer was long ago in our rural districts, a cure-all.

The emigration of our people to the United States since 1919, is the ransom of war. Think over it, and you will find that war, the badly managed and exaggerated participation in it, is the principal and real cause of the exodus of our people to the United States. It took from our rural districts the young men to send them either to the battlefields or to cities, in the munition works. After demobilization, a great number who had borne arms, having acquired a likinig for travelling and adventure, refused to return to the land. While those who had gone to work in the cities, in the munition shops, found themselves without work. They had acquired a taste for city life, large salaries, luxury, but they had lost the one for the soil, and neither would they return to the farm. Owing to our exaggerated participation, wasteful and unforeseeing administration during that period, when the government carried on simply with borrowed capital instead of taxing war profiteers, trade and business were depressed; we were left with an enormous public debt, our currency had depreciated; while the United States which had entered the conflict a long time after us and in proportion to their means, found themselves in a far better economic situation. Their industries had not been disturbed and their currency was at par. It was then that we witnessed these young men, who had left the land, take the roads leading to the neighbouring republic.

Add to this the vilifying discouraging campaign, and forecasts of ruin by the Con-

servatives, and you will find therein the principal causes of the emigration of our people to the United States. Our friends in the opposition are rather late in giving the alarm. It is a war debt that we are paying off; it is a sequel to their acts. Note that between 1900 and 1914, United States citizens were immigrating to Canada. Farmers from Kansas, Dakota and Minnesota, had sold their farms at good prices to come to Western Canada and purchase other farms on better terms. A good proportion of the immigration during that period came from the United States.

The best means to stop emigration, and relieve unemployment if it exists, would be to bring the people back to the land. How are we to do it? By a campaign of education: Point out the beauties of rural life; show the advantages of owning property to counterbalance the desire for pleasures which the city offers. _ Through the efficient help of our public authorities, in establishing farm credits, allowing farmers long term loans to help them to establish themselves on farms, short term loans to purchase live stock and necessary implements, and current loans for the purchase of seeds and fertilizers. Our Rural Credit is a great step in that respect; with experience, it can possibly be improved and provide for all cases of need. Let the government grant, to city people who have previously lived in the country, the same advantages and even more than to strangers; let the government offer to transport free the families of people wishing to settle in the west or in more remote parts of their province, where, with the help of long term loans, they may settle decently and cultivate those lands. Our generosity, I think, should first be extended to our own people.

By teaching the art of agriculture in a way that it can be understood by all, and which includes new and more remunerative methods of farming. Take for instance Denmark, a small country forty five times smaller than the province of Quebec, but with the same population, where they specialize in dairy farming, they have succeeded in increasing the butter production, since 1891, at the rate of 249 per cent, while the number of cows have increased only 29 per cent. Let us give our farmers every possible chance of success.

Let us now deal with the question of immigration, a question both economic and social which should be borne in mind by all those who take an interest in the country's future.

For those who see in the rapid increase of the population, an opportunity to increase

The Budget-Mr. Raymond

their fortune, the selection of immigrants carries no weight; but to those whose aim is higher and better, who foresee the more populated Canada of to-morrow, co-operating in the common work of civilization, they find matter to ponder over and they advise caution. Hence, two schools: one would open wide the gates to immigrants, the other-and I congratulate the government of belonging to the latter-would restrict immigration.

The vastness and wealth of our country are not questioned, yet our population is not in proportion with our natural resources. How are we to increase it? By natural increase? It would be the best means which could be advocated, it is the normal development of a country; but it is found too slow a method. By immigration? That is another way, but what kind of immigration? To have no restriction would have the effect to draw the scum of other countries, the undesirable, the habitual unemployed, who would come and overcrowd our cities, and who always end by crowding the hospials or jails, and become a charge to society. Moreover, if national unity be considered, the peopling of Canada through the means of an intense immigration, is not desirable. A certain proportion must be kept between natural increase and increase by immigration; time must be given to assimilate the new element.

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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LIB

Maxime Raymond

Liberal

Mr. RAYMOND (Beauharnois) (Translation) :

Mr. Speaker, at six o'clock, I was discussing immigration as a means of increasing our population. What population do we wish to increase? Urban or rural population?

Our immigration policy should be the one which the interests of the country demands. Now, Canada's interest requires that our immigration policy should develop agriculture.

Is it a question of supplying labour for industry? No. Modem machinery tends to do away more and more with manual labour, yet greatly increasing the output. It is the soil which requires workers. Let our efforts tend in that direction. Let us bear in mind that agriculture is at the basis of the economic life of a country. It is the soil which feeds us. Agricultural nations are, for their existence, independent of men and events, while industrial nations are entirely dependent on both. For instance, look at England, a country seventy-five per cent industrial, with its unemployment crisis. Moreover, prosperity of trade depends upon the purchasing power of farmers. So much said for the economic side of the question.

Turning now to the social and national viewpoint, we still have an interest in drawing to our shores a rural immigration, which is more assimilable and more stable. Those who come to cultivate the land remain on it permanently, it enchains them. The same cannot be said of the workman who roams from one country to another. The foreigner, in the city, is always an unsettled workman. Things are very different with the farmer who builds a home, invests his capital and founds a family. "Farmers", said Bonald, "are rooted to the soil; the others are but placed there."

Since the interests of the country demand a farming immigration; let us seek it where it is to be found. Many would prefer bringing over British subjects. Quite right. But subject to their being of the class of immigrants which we need. I am in no way opposed to British immigration, but let us be logical. When you look for farmers, you do not especially seek them from the most industrialized nation, the one that is the least given to farming. England, far from being able to send over farmers, needs them herself. She has not enough. It is not race that should guide us in such matters, but the personal worth of the immigrants. France, since the war, has become a country for immigrants so as to fill up the voids left and therefore has little to offer in that respect; but we could find excellent farmers in Belgium, Slovakia, an essentially farming country, in Norway whose people have already brought wealth to Minnesota and Dakota. What we need are genuine farmers and not camouflaged ones, and I would suggest that each immigrant entering Canada, should have an identification card, showing his trade, professional or farming occupation, so to keep track of him.

Let our immigration policy be essentially Canadian, founded only on the needs and interests of Canada, and not based on that of other countries. Let us not take the risk of our country becoming the dumping grounds of the globe by opening too wide our doors; let this policy be one of welcome, but at the same time strict, selective of individuals but not of races. To give our country strength and prosperity, we must have industrious, healthy and orderly people, citizens desirous of making Canada their only country, and who, blending with the mass, will help us to make a great, united and free country both internally and externally, composed of various races who, without denying their origin, will give us the advantage of their genius and of their best traditions, so as to form "the Canadian nation" whose English, French,

The Budget-Mr. Raymond

Scotch, Irish and all other names will but be their Christian name, "Canadian" will be their family one.

Mr. Speaker, I now wish to draw the attention of the hon. Minister of Defence (Mr. Ralston,), to the proposed increase in the estimates of his department. That is a subject which does not seem to trouble the members of the opposition. I am not aware that we are threatened with war. Quite the contrary, nations are talking of peace, disarmament and are even signing treaties to that purpose. Our geographical situation is an additional guarantee of our security. Why then increase the expenditures of the (Department of Defence? Economy is advocated. Quite so. Let us first apply it to the expenditures which are not productive. Let us bear in mind that we have numerous needs, and that we must see to those that are most urgent.

We have voted large sums to develop the west, to help the maritime provinces and to accommodate Ontario. The province of Quebec, I think, has been most reasonable in her requests, notwithstanding the useful, if not urgent work, which the development of her territory necessitates. For instance, the construction of a railway in the Gaspe peninsula is strongly urged, it is needed to open up that part of the country which is rich in farming lands, forests, mines, fisheries and water-falls. It would be unfair to put off the carrying out of these works for unnecessary expenditures.

I am not prejudging the question. When the time comes to discuss in detail the estimates, the Minister of Defence will. I trust, furnish us with satisfactory explanations. For the present I am just calling attention.

The hon. member for East Lambton (Mr. Fansher), by a subamendment, has protested against the cutting down of the income tax. Although I am in favour of the income tax, I believe that gradually, as our revenues and finances will permit, there must also be tax reduction on that score.

However, if the Minister of Finance is willing to relieve every one a little from the burden of taxation, it must have been noticed that he was not disposed to acquiesce to every claim.

Some time ago, a delegation headed by Sir Herbert Holt, president of the Montreal Light, Heat and Power Co., came before the Minister of Finance to request an exemption from the federal tax, in favour of this company, which sells electricity, gas and a number of other things. Many, among those who are not in touch with the affairs of the company, must have been favourably impressed to see

Sir Herbert Holt, great financier, director of at least one hundred and thirty five companies, [DOT]-we are informed by the hon. member for Winnipeg North Centre (Mr. Woodsworth)- leaving his business to come and plead, not in his own behalf or that of the company of which he is the principal shareholder, but in favour of the poor consumer of the city of Montreal, who may be a victim of an injustice. He even pledged himself to have the consumer benefit from the exemption of this tax. What a laudable act! In his annual address, at the general meeting of the shareholders of the company, on the first February last, he also requested the federal members to use their influence to have this injustice cease.

The hon. Minister of Finance, after giving the matter due consideration, did not think proper to agree to their request and the day following the budget, Mr. Norris, vice-president of the company, proclaimed1 again that it was an injustice and appealed to all the citizens to protest. Let us examine, with your permission, the grievances invoked, and let us judge if there is an injustice done and if so, by whom was it committed.

The injustice would appear to come from the fact that the Ontario Hydro-Electric Company, which sells electricity in Ontario, pays no income tax. That is a fact, it pays no taxes, for the very good reason that it makes no profit. If the Montreal, Light and Power Company will do likewise and sell its electricity at cost price, it will not pay any tax. That is my first point!

There are in Ontario other private companies, for instance, the Ottawa Electric Co., which sell electricity and pay an income tax. Why should the Montreal Light, Heat and Power Co., not pay its income tax then, and where is the injustice? That is my second point!

The Montreal Light, Heat and Power Co., does not only sell electricity to the citizens of Montreal, but it also sells some to the United States, through the intermediary of the Cedar Rapids Co., of which it holds the capital stock, and it thus realizes profits. Why should it not pay taxes on this revenue? And where is the injustice? That is my third point!

The Montreal Light, Heat and Power Co., does not only sell electricity, but it also sells gas, and if I am not mistaken, it sells to the poor Montreal consumer, four or five times more gas than electricity. The Hydro-Electric does not sell gas. All companies that sell gas in Ontario are privately owned and pay income tax. Why should the Montreal, Light,

The Budget-Mr. Raymond

Heat and Power Co., not pay the income tax then? And where is the injustice? That is my fourth point!

The Montreal Light, Heat and Power Co. does not only sell electricity and gas, but it also carries on other business. It sells coal, stoves, lamps, toasters and other goods. It has even a number of stores in Montreal and elsewhere. All commercial houses in similar business pay income tax. Why should the Montreal Light, Heat and Power Co. not pay also her income tax and where is the injustice? That is my fifth point!

Not only that: Look up its financial statement for 1927, you will find that it has in its assets nearly $15,000,000 in investments, on which it draws revenues. Why should the Montreal Light, Heat and Power Co. not pay income tax on those revenues like all others, and where is the injustice? That is my sixth point!

If we were to exempt the Montreal Light, Heat and Power Co. from the income tax, to be fair, we would have to exempt the private owned companies of Ontario and elsewhere which sell electricity; to exempt all companies which sell gas; to exempt all merchants who sell coal, stoves, lamps and other articles that the Montreal Light, Heat and Power Co. sell -why not then all merchants-to exempt all those whose revenues are the outcome of investments. In other words, we would have to wipe out the income tax.

The president and vice-president mentioned a very high figure, representing the income tax paid by the company, and the impression gathered from this statement, was that the tax was collected on the sole profit realized on the sale of electricity in the city of Montreal, which is not so. Deduct all the profits which it realizes on the sale of electricity to the United States, on the sale of gas, on the business of the various articles which it sells, on its investments for an amount of over $15,000,000, and you will see that the amount of income tax which it really pays, in regard to the electricity which it sells to the Montreal consumer, is not very high.

I do not doubt the sincerity of those who accompanied Sir Herbert Holt when they interviewed the Minister of Finance, to request the exemption from' the income tax, but when we are aware of the manipulation carried on by this company for the last twenty-five years: increased capital, splitting of shares, change in name and juggling with figures, we have a right to question the motives of Sir Herbert Holt and his company and not put it down to philanthrophy.

If the consumer pays too high a price for electricity in the city of Montreal, and in fact he does, it is not on account of the federal

tax paid by the company, but to the exorbitant profits made at the consumer's expense; and when, under the plea that an Ontario company, the Hydro Electric Company, is not taxed, for among others, the good reason that it makes no profits, it asks, for an exemption of taxes on the profits realized, not only on the electricity sold to the citizens of Montreal, but on that sold to the United States, on the sale of gas and other articles in the various branches of commerce, also on its investments, it simply wants to ward off the public's suspicions who rightly claim lower rates for electricity.

Are you aware of what profits were distributed among its shareholders within the last twenty-five years? It is the direct successor of the Royal Electric Co., which was doing business ,in 1901, with a capital of $3,000,000; the latter's stock with the help of a good deal of "water" was diluted to the amount of $63,000,000. Through transactions carried on by Sir Herbert Holt, and share splittings, any person holding in 1901, a hnudred shares in the Royal Electric Co., for which he is supposed to have paid $10,000, now without having disbursed an additional cent, is holder of 2,250 ordinary shares, which on the stock exchange are quoted at $90 per share, and are worth $202,500, without mentioning a bonus of 750 preferred shares distributed in 1926, and which the company repurchased at $50 per share, that is $37,500, beside all the dividends paid to that shareholder since 1901, at a rate varying between 8 per cent and 60 per cent, on his initial investment. The profits of that company are so large, that it is obliged1 to conceal them under the guise of contingent funds: $500,000, insurance funds; $1,000,000, depreciation funds, indefinite amounts; investments and call loans about $15,000,000. Its current assets for 1927, exceed by $6,000,000 that of the year 1926.

If you now look up the financial statements of the company, you will note that each year, the president, Sir Herbert Holt, never forgets to state in his yearly address, "that the practice of the company is to share the profits with its consumers and to sell its products at a minimum rate, and he always hopes that, if business continues good, the consumers will, in the near future, be given lower rates." As you can readily see, the sharing is not with the consumer, but to his detriment. I think that the consumer has a better guarantee of getting his share of the tax paid on the sale of electricity in Montreal by the company, when the money is safely in the hands of the government.

That is how the company deals with the citizens of Montreal in regard to profits. Now. let us examine rates and see how it expresses its sympathy to the Montreal citizens.

The Budget-Mr. Raymond

Its sympathy consists in selling to the citizens of Montreal, electricity at the rate of 3J cents per k.w.h.; while it sells it to the citizens of Westmount, at the rate of 2 cents per k.w.h., that is to say 75 per cent dearer to the Montreal people. The Ottawa Electric Co. of Ontario, which pays the income tax, sells its electricity to the consumer at the average rate of cent.

Its sympathy for the Montreal people further consists in offering electricity, for industrial purposes, at the rate of $15 per h.p., to the Ontario Hydro Electric Co., which resells it at $22, while the former sells the same electricity to Montreal people at the rate of $35 per h.p.

Its sympathy also consists in exporting to the United States, through the intermediary of the Cedar Rapids Co., of which it is the sole stockholder, electricity at a lower rate, that is $12 per h.p.

Its sympathy is still further expressed by forcing the consumer to lend it money, which amounts, at present, to $800,000. Are you aware that a Montreal citizen can neither purchase gas nor electricity without first depositing $5 or $10.

That is its sympathy for the poor consumer. This deposit remains there until the discontinuation of the service, that is to say until his death. And what interest is he paid? Three per cent not yearly, but only when the deposit is withdrawn. Instead of borrowing money at the rate of 5 per cent, it forces the consumer to lend it the money at 3 per cent, and if you figure out what $800,000 represents m interest, you may judge what amount it holds without interest at the expense of the poor consumer.

I think you will admit that Sir Herbert Holt and his company, the Montreal Light, Heat and Power, are not entitled to pass as benefactors to the consumer, and you will not be astonished that the Minister of Finance did not seriously consider their request. When the government collect in the way of taxes, a small part of the profits which the company makes, they remedy, in a slight measure, the injustice that the company does every day to the Montreal consumer.

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

David Spence

Conservative (1867-1942)

Mr. DAVID SPENCE (Parkdale):

Mr. Speaker, I have listened to a great many speeches in this house and I must confess that many of them have been of a high standard and a constructive nature. I am sorry that my lack of ability will not enable me to preserve that high standard, I not having had much experience in speech making. I congratulate the hon. member who has just sat down (Mr. Raymond). He will be happy now -I wish I were in his shoes.

I congratulate also the hon Minister of Justice (Mr. Lapointe). We all recognize his wonderful ability and appreciate his power in this house. I love indeed his sense of humour, and maybe his sarcasm at times. However, notwithstanding his contention that the government 'has not ruined Canadian industry, may I say that it has. And when you ruin industry you ruin the business world, of which I have some knowledge. Why, the government has tried to control operations both domestic and foreign, by land and by sea. A few years ago you will remember, sir, the government attempted to put a fleet of boats on the ocean to compete with the merchant marine of the world, and so cut down freight rates for cattle and wheat, in order to make our honourable farmers believe it was doing something for them. Well, sir, you might as well try to fight a battleship with a canoe as put into commission the class of boats the government intended to subsidize in its attempt to cut down ocean freight rates, and had it not been for the members on this side of the house putting up a strong and vigorous objection, the country to-day would be losing thousands of dollars in that hopeless enterprise. Undoubtedly every time you attempt to change the old channels through which business has been done successfully for many years, you are interfering with business and upsetting the business world.

Now, Mr. Speaker, hon. members on the government side argue that we of the official opposition are the cause of the people leaving Canada. May I say, sir, there is nothing to it. Canadians who to-day are on the American side have every confidence in the Conservative party. During the election of 1925 in my own riding I read many letters from parents of young boys and young girls who were working in the States praying me to do everything possible to defeat the King administration. I said a moment ago that the Canadian people have demonstrated their faith in the Conservative party. As proof of my statement I point to the fact that during the month of the general election in 1925 and for the eleven months following more of- our people returned to the Dominion than in any similar period since, and of those more than 40 per cent came in the eleven months after the election, from November to the September following. That shows whether or not the people have absolute faith in the Conservative party. So why should we not stand up here and tell the truth to the people? Why should the people be humbugged and camouflaged?

I do not intend to worry the house with figures or statistics. Figures sometimes lie, and statistics are not always correct. My

The Budget[DOT]-Mr. Spence

intention is to make some observations regarding the present administration, observations which may be considered in the nature of criticism. First, I wish to congratulate the government on having in the party a minister so capable of manipulating the budget that it is said to be supported by all classes of people. -But the present budget, just like its predecessors, is gotten up for the express purpose of keeping the party in power, regardless of conditions throughout the Dominion. What we need to-day is a business administration, instead of a government that seizes every opportunity to evade responsibility. Since 1921 we have been getting government by special commissions and special committees too numerous to mention, at considerable cost to the country. Of course the administration has always seen to it that a majority of its supporters were placed on each special commission and special committee so that they would report as directed, that majority being in sympathy with the government's proposals. It is simply humbugging parliament and the Canadian people. Barnum once said that you might fool some of the people all the time and all the people some of the time, but you could not fool all the people all the time. Well, that is the only thing this government has succeeded in doing. Instead of wasting so much time concocting and manipulating schemes in connection with the budget purely for the purpose of keeping themselves in power, why do the government not submit a program of constructive ideas, some satisfactory agenda for the consideration of parliament? This may be considered radical coming from the Tory side, but let me say right here that I am no politician; my interest is Canada first. I do not believe in playing politics too much, and there is altogether too much politics played, particularly on the other side of the house. What we need is something that would enable us to make the best of our opportunities and not to throw away all our chances of promoting the prosperity of this country. I am confident that if the government took the members of this parliament into their confidence and asked for suggestions and advice as to the best means of promoting the welfare of Canada, the members on this side of the house would offer such advice in all sincerity, and the government would benefit more by that advice than they do from that of ministers in charge of departments. If the government are not directly asked for information they will scarcely volunteer it. That is the way politics has been played in the past at any rate.

The budget presented by the government this year seems to have acted as an opiate on hon. members on the other side of the house; most of them have been lulled to sleep and have slept until yesterday and to-day. The first evidence of any real pep that we have so far seen on the other side was injected into the debate to-day by the Minister of Justice. Are hon. members opposite afraid to offer suggestions or make demands of their party leaders? Hon. gentlemen on the other side apparently are satisfied simply because the Minister of Finance (Mr. Robb) has made certain statements which are supported by the Minister of Justice, the ablest representative of the government. I am not at all decrying the ability of the Minister of Finance, but the budget contains no suggestions that will make for the development of the country. It seems to be altogether of a destructive character.

I am going to offer some suggestions by way of a new system of obtaining information and of ensuring our rights as representatives of the people, and I hope the government will consider these suggestions. Why should not members of this house have an opportunity this year to express their views regarding the development of the St. Lawrence waterway? Why, and what is the reason? Where is the hidden hand that has prevented us from discussing that question? I have an idea myself as to what we* may expect, if not in the near future, certainly at some time, and hon. members may well wonder what will happen. Again, what is to prevent the government giving some assistance in the building of good roads through a contribution each year? And for purposes of exploring and developing the natural resources of this country a stated amount should be included in the estimates annually. That is the sort of system which would be followed in the conduct of business anywhere, and some business tactics should be adopted in government as well as in business administration. We should have also some sound system of immigration and colonization whereby we might retain our own Canadians and provide them with employment at home. If the government would only seek information and advice on this side of the house they would benefit considerably more than by indulging in criticism of the opposition. We have a serious problem to face in our endeavour to keep our Canadians in Canada. I say to hon. gentlemen opposite, "You are the government and you should do something. You are in power; we are not." If I were on the other side I * ould make the same criticism for the con-

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sideration of our own party. These are all matters that call for earnest consideration.

This government has tinkered with tariffs and meddled with the business world to such an extent that people in business have no pleasure being there; they would sooner get out. The government have made treaties with foreign countries altogether to the detriment of this Dominion. Our negotiators have not been capable in holding their own. If I were on a -committee negotiating a treaty with any country and I did not get the best of it, or at least a square deal, there would be no treaty. But in nearly every case our treaties have been to the disadvantage of this country. A treaty is a business proposition and we have a right to get the best deal possible. But we are not building up our trade under the treaties negotiated by this government.

Let me discuss for a moment or two the French treaty-and I will touch only those phases of it of which I know something. That treaty came into effect a few years ago; I will not bother the house with figures because they sometimes lie and I might make a mistake. Well, what have we got from it? The French treaty, generally speaking, has been a bad thing for Canada. I am connected with the fruit business and am therefore in a position to make the statement that this particular industry has been considerably injured by the treaty. Take our cherry business, for example. Since the French treaty came into force the great wholesale extract manufacturers and retail ice cream people have been bringing cherries from Italy and France by the carload and in casks at a cheaper rate than our people can grow this fruit. Many years ago we had a splendid cherry business in Canada, and I know what I am talking about because I have been in the industry for thirty-seven or thirty-eight years. We had a very good market for cherries but since the treaty has been in operation it has practically ruined the trade and the growers can scarcely meet cost of production. A few years ago there were magnificent orchards of Montmorency cherries; to-day they are being cut down with the axe. This is one industry that has been destroyed by the French treaty.

Then there is the silverskin onion business. Silverskin onions used to be a high class commodity for pickling purposes, used extensively by such people as Heinz; but under the French treaty these onions ready dressed for packing in bottles have been coming into the country from Holland at the rate of four cents per pound, while no grower in Canada can produce them at that figure; it takes at least five or five and a half cents a pound to grow this vegetable here. This is the effect

which the French treaty has had upon the fruit and vegetable growers of Canada. Is it not clear, Mr. Speaker, that this is too young a country to be making treaties with the older lands? In the last ten years we have developed the silverskin onion business and the requirements of the industry are considerable. It needs great care and attention to dry them if the right colour is to be obtained, and there must be suitable buildings in case of wet weather outside. Obviously, therefore, a great deal of bother is involved, so that the man producing them deserves the best consideration that can be shown him. But owing to the French treaty the business has gone to pieces.

The Australian treaty, too, has been very injurious to this country; we all know what the effect has been on our dairy industry. This industry has undoubtedly been seriously discouraged since the treaty has been in force and eventually it will be wiped out unless something is done and done in the very near future. The sheep industry also is practically ruined.

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

Some hon. MEMBERS:

Oh, oh.

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

David Spence

Conservative (1867-1942)

Mr. SPENCE:

Hon. gentlemen laugh, but

if they know nothing about business conditions in Canada I can assure them that there are those who do know. Due to the Australian treaty and the consequent lack of protection, the woollen business of Canada has been badly affected. Let me tell hon. gentlemen opposite that even the party who preceded them, the Conservative party, never gave the producers of sheep and sheep products the consideration they should have received; they should have had protection on raw wool years ago. But under the Australian treaty the business is suffering so seriously that it will not be long now before the only thing we shall have to eat will be Australian mutton. We shall not be able to produce a lamb chop in Canada; that will be a luxury reserved entirely for the millionaire.

In 1922 the present government started tinkering with our tariff. They first lowered the duty on textiles and then they reduced it on farm implements, in order to please certain interests and to obtain their support in this house. They then allowed raw material to come in free when used in the manufacture of farm implements, this being done also to please certain interests such as the Massey-Harris people. We all know how famous this concern is and how much money it has cost this country. That was the beginning of the interference with the tariff. At the same time, by lowering the duty on raw materials entering into the manufacture of farm imple-

The Budget-Mr. Spence

merits we ruined many factories which made parts for such people as the Massey-Harris Company. We hurt the workers in Canada and no one received any benefit, not even the farmers; those members of this house who are farmers and my hon. friends to my left will agree that there was no reduction in the price of farm implements.

Then this government decided to reduce the duty on automobiles, and they compromised again; you all know what they did, but I will just repeat it. They lowered the duty on automobiles to please their friends in this house, then lowered the duty on certain parts entering Canada and reduced the excise tax, which still held their friends who made automobiles. As you see, they were trying to keep in power all the time regardless of what happened to this country, and all the time they were losing revenue. My own idea is that the simplest, sanest and easiest way to keep this country running is by a customs tariff, and I would eliminate half the other taxes if I had anything to do with it. By tinkering with the automobile business we caused many more cars to be imported into Canada, which naturally reduced employment as well. There again the government followed the same system of knocking down and building up, in the meantime losing revenue.

Then the government lowered the duty on certain lines of cotton goods from 37i per cent to 30 per cent, afterwards allowing certain raw materials to come in free, which built the protection up to 40 per cent again. I received that information from a gentleman who is in the business, so I know I am making a true statement. The desire of the government, of course, was to please those friends who are in the cotton business by allowing the raw material to come in free and those friends are about the only ones who benefited; no one else could benefit by manipulations of that kind. Then the gov-emnment decided to allow machinery for woollen mills to enter Canada free, when two-thirds of the machinery already in this country is idle. From still another standpoint that is absolutely unfair, because many manufacturers who paid duty on the machinery they brought into Canada will be forced to write off hundreds of thousands of dollars from their capital accounts. That! is fen absolute injustice to the industry.

I suppose by appointing two plenipotentiaries to foreign countries the government expect to put Canada on the map, but to my mind this is pure vanity and a woeful waste of public money. To me it would seem to be inviting trouble to send a minister from

Canada to Tokyo, and I would suggest that the better plan would be to let John Bull continue to represent us.

Our tariff system is antiquated and unsatisfactory. Since the war the whole world has become revolutionized, and there is no reason why there should not be a revolution in our tariff system. Why not adopt a tariff system similar to that in force in the United States? I am glad to see the minister in his seat; perhaps he will consider that suggestion. The hon. member for Fort William (Mr. Manion) gave an illustration the other day of what happened to a mutual friend in Toronto who tried to build up a little business in Detroit. He shipped a consignment of dry goods to Detroit on which the duty was only 50 per cent, but before they were cleared through the customs house, by some system of manipulation, the duty was raised to 90 per cent and my friend in Toronto was forced to pay the return express on the goods. We should have some such elastic tariff system with someone in charge who knows how to operate it. I am not attempting to disparage the present minister, because I think he has done more to straighten out the customs business than anyone else, but I could give you many instances of embargoes which have been placed against our goods by the United States. About two years ago the Americans came to Canada and started to raise the price of potatoes; we wondered what was going to happen and where we were to get our supplies, because they had carloads of potatoes at the border and everywhere else ready to ship into the United States. I was afraid I could not get a sufficient supply in Ontario so I made a trip to Winnipeg, and not satisfied with going into the wholesale fruit and vegetable district I went to the stock yards, where I got in touch with a number of drovers from whom I started to purchase forty or fifty cars of potatoes. I was to complete my arrangements the following day, but when I came back to the Vipond wholesale house I received a wire from my own people telling me to " lay off " the potatoes, that the market had dropped fifty cents and the United States had raised an embargo against them. That is the system they have adopted, and you can never hope to get any business in the United States except the business they do not want themselves. In the yards at Winnipeg there were over fifty cars of potatoes ready to go to the United States, and the people who had bought them lost forty cents or fifty cents a bag; we were left "holding the bag" as usual.

I know something about fruit and vegetables. The fruit and vegetable growers and others interested in the distribution of these

The Budget-Mr. Spence

products waited on the government some time ago asking for increased protection. I do not hesitate to use the word " protection " because that is absolutely what I mean, and I understand the Minister of Agriculture (Mr. Motherwell) promised them a seasonal tariff. Did they get it? No, they only got the promise, which they always get from this government. A seasonal tariff, Mr. Speaker, is one which is high during the time when we have plenty of these products in our own country, thus preventing American fruit and vegetables from being shipped over here and killing the market. Then, when our own production is exhausted, the tariff is reduced in any way necessary to give the consumers of this country an opportunity to have a continuous supply of fresh vegetables. At the beginning of our season, however, starting with strawberries and asparagus and running right through the peach season, we should have a seasonable tariff, and I demand that the Minister of National Revenue take this into consideration, because it is the only thing that can save us. Competing as we do with states such as California, Tennessee, Louisiana, Texas, North and South Carolina, Maryland and others, where they grow from one to three crops a year more easily than our fruit growers can produce one crop, I say it is an unfair thing to allow these states to send their products to Canada when our own fruit and vegetables are plentiful, and we have a right to protect that industry as well as the Massey-Harris concern or any automobile factory.

Canada at one time had a fair market for farm produce in the United States, before the Fordney-McCumber tariff went through. I have shipped a good many cars of produce to the United States, and I was always compelled to pay both the freight and duty on every car I shipped. We do not follow that practice in Canada. In the year 1921 we sold the United States farm produce to the value of about $191,000,000, real farm produce dug out of the ground. In 1927, however, we only sold $64,000,000 worth of farm products to the United States, or a drop of almost $130,000,000 in that six year period. Are we to continue our folly of allowing the United States to send fruit and vegetables to Canada without more protection or consideration for the growers in Canada?

Let me remind my hon. friends from the province of Quebec that this applies to their province as well as to mine. Their farms are small and they produce mostly vegetables; their only market is the home market, and if they deplete the population of industrial centres such as Montreal and other smaller places, what will happen to the market? There

will be none. The same thing applies to Ontario, starting with Toronto and finishing at Niagara Falls; if the population decreases the market is gone; not only that, but the value of the land between Toronto and Niagara Falls is cut in two. The United States is a great producing country itself, and you cannot get anything in there while they are able to produce plenty of goods for their own market, and as a rule they are always able to do so. Once in a while they find themselves a little short, but that very seldom happens. Climatic conditions affect the production in some parts of the country but if there is a shortage in any particular district shipments are made from another part of the country in order to fill the demand. A few years ago, I think it was in 1918, the United States put an embargo on products coming from Holland, France and England. They would not allow them into the country, and a propaganda was begun there to raise the products in question at home and keep the products of other countries out, thus retaining the money expended on those products in their own country. We should take a leaf out of the United States book.

Under the same heading I will mention something of value to the wholesale trade that we have been asking for for years. It is something which I advocated in this house in 1922 and 1923-I refer to the imposition of a specific duty. What I mean by a specific duty is so much per pound, per crate, per box or per barrel, as the case may be. I pointed out on the occasions referred to that the trouble with the ad valorem duty is that dealers, if they so desire, may get special invoices for customs purposes only. At that time trucking from border points such as Buffalo was common, and there was not much chance for customs officials to check heavily loaded cars. However, that trouble has been eliminated or nearly so by customs checking up closely. Those who imported in car lots found it impossible to compete with the truck system.

For other reasons I still demand a specific duty. Customs regulations to-day are very severe and hard to understand, and the trade is continually getting new regulations which are not understood by those engaged in the business as a whole. Importers are put to a lot of expense and trouble getting advice, and nobody can afford to keep a lawyer on the job continually. No appraiser can give a ruling that is definite, and I may say that this applies to some officials higher up, in fact customs officials differ themselves as to certain rulings. The solution of the problem is to adopt the specific duty which will

The Budget-Mr. Spence

eliminate all misunderstanding, and simplify the work at the customs house. Let me give an illustration of this: If you have a carload of any commodity containing any number of packages and the duty is 50 cents a box there can be no misunderstanding. If there is any dispute as to weight the railway freight bill can be used. Therefore I say, Mr. Speaker, a specific duty will lessen the cost and expedite the work of the customs officials. There will not be as many officials needed because the work will have been simplified to such an extent.

I come now to the question of the dumping duty. I am not advocating that that duty should be abolished, but I hate to see the Americans getting the advantage of it. They made many thousands of dollars last year. Take, for instance, a car of California peaches that is quoted to you at a rate of 70 cents. It would be much cheaper in the long run if you were to buy at SO cents. The Americans know what the fair market value of our product is. They quote you the price of peaches at so much and you might as well take them at SO cents as pay 65 or 70 cents. It costs you more in the long run if you buy them for 65 or 70 cents than if you buy them for 80.

Then, again, take the purchase of celery or lettuce. You can, we will say, buy a car at the rate of $1 and they will quote you a rate of $1.50. You will accept the latter rate because the trade finds it better to follow the line of least resistance. The other day we had an interview with certain customs officials and we asked for a certain ruling provided the trade carried out all the customs requirements at the point of entry. We asked if we could be guaranteed any protection in the event of meeting all these requirements and we were told "No, you have no protection." I say that there would be none of these difficulties in the operation of the customs regulations if there was a specific duty imposed on all products.

Another matter of which we complain is interference with the old channel through which business has been proceeding. This may arise in connection with a ruling in the customs. If you buy a car of cabbage and it is shipped from the point where it is grown, it is often rolled out on to the railway because there is no place to keep it, and it is kept in movement. The result is that in the case of a car of cabbage the freight from California to Chicago is added to the cost, and then you are charged duty on the freight as well as on the goods.

There is another cause of complaint in the matter of the buying of rolling cars, where 56103-88

the duty is charged on the freight paid. No dealer will buy any more, and this will mean a loss of business to the Canadian national railways because they haul 75 per cent of these commodities which come into the city of Toronto; and the dealers lose as well.

Coming now to the continual claims on the part of the government that prosperity prevails in Canada and that the credit is due to them, I wish to say that if we had real prosperity every one of us would realize the fact. Prosperity comes periodically regardless of governments. I do not admit that real prosperity exists in Canada. There are too many unemployed here; too many failures in the business world, too many mergers and amalgamations, for me to say that we have real prosperity. The boom we hear so much about in large office buildings financed by American capital and promoted by speculative builders is no sign of prosperity. Stock market booming is even a less convincing sign. If we had real prosperity, business men would be using up all their energy trying to keep pace with the increase of business. It is a case of chasing business to-day, not of trying to keep pace with it. I would rather see our factories filled with workers than see our buildings filled with agents selling foreign goods and thus doing our own workers out of jobs, or filled with promoters of all kinds, gambling in stocks that are not sound and that are deceiving the Canadian people. I hope the latter state of affairs is not what my hon. friends opposite consider prosperity. The government claim that they are reducing taxation, but I cannot see how that is the case when taxes collected during the last five years are greater than in the five years previous. That is not my idea of a reduction in taxation.

With all our wonderful resources, with a land flowing with milk and honey, why should this country be lagging behind with a population of nine to ten million people and with not even the ordinary increase in our population? We have the best class of men and women in the world; they are hardy, healthy and they Should be happy; they are nearly all educated and fit for any job, but still this government has been moving along in the same lackadaisical way for the last seven years, fooling the people and keeping in power being their first consideration. If people engaged in industry and commerce paid as little attention to their business as this government does to the country's business, they would soon wind up in the poorhouse, but there is sufficient money in the treasury to keep everything going, and the people pay.

The Budget-Mr. Spence

Our educational system throughout Canada is fairly good. I know it is good in my province. We are spending millions of dollars in Ontario educating the youth of our country to develop the industries of the United States of America, thus saving Uncle Sam a good deal of money. After graduating from our universities, our boys and girls, for want of an opportunity to make a living, are leaving Canada. This is due principally to the exportation of our natural resources instead of having them manufactured into the finished article in this country. That is something that deserves our serious consideration. Freight rates are higher on the finished article and a distribution of our finished products by our own railways all over Canada would enable our railways to pay their way and employ more people. To-day we get only the low rates on the raw material and that is one of the principal reasons why the railways of Canada are not paying at present.

As someone else has said, I do not want to accuse the government of doing nothing. I wish to commend the Minister of Railways (Mr. Dunning) for his action in diverting the Hudson bay terminal to Fort Churchill in place of Port Nelson. I also wish to thank the government for the return of natural resources to the prairie provinces. If that has not been already done, I hope it will be done immediately.

I am glad to know that the revenue from customs is increasing, diue no doubt to a proper administration, and I will say that we are getting proper administration to-day. But that proper administration was brought about by the hon. member for Vancouver Centre (Mr. Stevens) who has made Canada millions of money and who has' received no credit for doing so. I will say this-and I know somebody will criticize me for saying it-the Canadian people in this case did not appreciate the hon. member's sacrifice, but this country has reaped a large benefit and now the administration will go on and the customs laws will be enforced1 by the hon. gentleman who is at present in charge. I did expect this year that- the government would assist in the elimination of smuggling by lowering excise duties on cigars, cigarettes and tobacco. We are losing revenue, particularly on cigarettes. I am satisfied that smuggling in cigarettes cannot be stopped and we might just as well make up our minds that we can no more enforce the law so as to stop cigarette smuggling than we could enforce the Ontario Temperance Act in Ontario, when it was the law of the province.

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

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. member's time is up.

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

George Gibson Coote

United Farmers of Alberta

Mr. G. G. COOTE (Macleod):

Mr. Speaker, I feel myself at a disadvantage to-night in following two such entertainers as the Minister of Justice (Mr. Lapointe) and the hon. member for Parkdale (Mr. Spence). I must say in all sincerity that with all his humour the hon. member for Parkdale has endeavoured to make some constructive suggestions to the government. The Minister of Justice this afternoon amused the house and himself by reading numerous extracts which eminently suited his purpose to show conflicting criticisms directed at the government's budget from the Conservative and the Independent members of this house. He then declared, I think rather categorically, that the government represented all the people and all the interests of Canada, but he failed to offer for the benefit either of those whom he represents, or of the members of the house, any analysis of the budget or its effect on the people or the country.

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

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

Liberal

Mr. LAPOINTE:

I had only forty minutes.

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

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

I have been in this house

for six sessions and I have never yet listened to a budget debate in which so little attempt has been made on the part of the government or its supporters to analyze the proposals of the budget or to explain just what they mean or what would be their effect upon the people of the country. In fact, as regards receiving any enlightenment from members of the government as to these proposals, the debate might as well have closed the day following the delivery of the budget speech and the vote might then have been taken. I do not however think the time has been entirely wasted. Some very interesting speeches have been delivered and some constructive suggestions have been offered during the debate.

Personally I feel that this budget covers too much ground for me to deal with it in detail in the space of forty minutes. First of all the budget includes a financial statement of the country for the past fiscal year, as well as a statement of the public debt, the railway finances, et cetera. In addition it contains a proposal to reduce the sales tax, a further proposal to reduce the income tax and a proposal to strike out 122 items from the customs tariff schedules and to substitute 159 new items, as well as to strike out 4 items of drawbacks of customs duties and to insert 10 new items. I should like to suggest that it is not necessary that all these proposals should be grouped together and the house compelled to concur in all these matters. I suggest that the financial statement should be given to the house by itself; that the

The Budget-Mr. Coote

house should be allowed to go into committee of the whole to consider the statement, or that the statement be referred to the public accounts committee without our having to agree to a resolution which proposes a reduction of the sales tax, a reduction of the income tax and between 160 and 170 changes in the customs tariff schedules. I suggest that if the minister wishes to introduce a reduction in the sales tax, it should be introduced in the ordinary way by resolution to be followed by a bill. The same procedure should be followed in the case of reducing the income tax, and also. I think, in regard to the minister's proposals in connection with the customs tariff. If this procedure were adopted, we could decide each proposal on its merits and the votes of the members would be recorded upon each proposal. But under this budget system, members who are absolutely opposed to any reduction in the income tax are being forced into the position of either voting in favour of the reduction or of defeating the budget, which we all understand means the defeat of the government, to be followed by the dissolution of parliament and a general election. It is unfair to the members of this house that they should be placed in that position. To my mind the democratic and businesslike thing to do would be to introduce each item separately and let each one be decided on its merits. I think the principle which I am advocating underlies the rule which was quoted by the Prime Minister (Mr. Mackenzie King) a few days ago in regard to the motion of the hon. member for Toronto Northwest (Mr. Church), which rule provides that papers shall be called for only on one subject at a time.

The speech of the Minister of Finance in delivering the budget was in my opinion much too short. He was not limited to forty minutes. He gave no reason for reducing the income tax; he dealt with that matter in a very few words. He gave no reason for reducing the sales tax; he dealt with that matter in less than two lines of Hansard. He did not say why the sales tax should be reduced; he did not say why it should not be abolished; he did not say whether it would not be wise to reduce it on the necessaries of life and leave it on the luxuries. I think the minister might also have given us some more information in regard to his tariff changes. As I said before, he has struck out 126 items in the tariff and inserted 169, with scarcely any explanation as to the effect of these changes. He dealt with that subject in one page of Hansard. I repeat, the minister was not limited to forty minutes like the rest of os, and I think he might have enlightened the 56103-684

house in regard to this matter-that is, if he knows just what the effect will be. As these changes have been made, I understand, as the result of the inquiries of the advisory board on tariff and taxation, I suggest that the minister might have the chairman of the board on the floor of the house to act as his deputy when these resolutions are being considered in committee of the whole. I think it as well to intimate to the minister now that the house will need a good deal of explanation in regard to some of these items.

Last year the minister gave as a reason for not making any changes in the customs tariff the fact that the tariff advisory board had not reported on the matters which had been referred to them, and he implied that he would make no changes in the tariff unless and until this board had reported on them. I should like to remind him that this is an advisory board on tariff and taxation, and if he takes the attitude that the tariff should not be changed until the board has inquired into and reported on the proposed changes, why does he take a different attitude in regard to taxation? Has the question of reducing the income tax or the sales tax been referred to the board? If not, why not?-especially as it seems to be the intention of the minister to eliminate both these taxes in the course of a period of years. I notice that when the hon. member for South Perth (Mr. Sanderson) was speaking he said he hoped that next year or the year after the income tax would be wiped out, and he hoped the sales tax would be wiped out entirely next year. I wonder why he did not, as a good Liberal, also express himself in favour of the customs tariff being wiped out, so that we should all be in the happy position of having to pay no taxes, except a little excise tax on liquors and tobacco, which the hon. member for Parkdale (Mr. Spence) wishes to have reduced; and it may be he is quite right.

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

David Spence

Conservative (1867-1942)

Air. SPENCE:

And make more money.

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

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

But as the hon. member (Mr. Sanderson) did not suggest wiping out the customs tariff, I presume he is in agreement with the hon. member for Parkdale and is in favour of raising all the revenue through the operation of the customs tariff. Surely this is a strange doctrine to be preached by a Liberal. I suggest to the Minister of Finance that he ask the advisory board on tariff and taxation to inquire into and report on the application and the administration of the income tax, as to whether the schedules are equitable, whether they are fair as between different incomes, and whether it is a greater brake on the Wheels of business than a tax on

The Budget-Mr. Coote

commodities, such as the sales tax and the tariff tax. The income tax has been persistently attacked by an organization calling itself the Retail Trade Bureau of Canada. Personally I should like to know who these people are that operate under that name, and I now invite them to inform the public, and especially the members of this house, whom they deluge with their circulars, who they are, just how many retailers they actually represent, and where they secure the necessary funds to carry on this intensive propaganda.

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

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

And how

much their incomes are.

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

George Gibson Coote

United Farmers of Alberta

Mr. COOTE:

I have met very few retailers who are opposed to the income tax. I believe most of the objection to the income tax could be overcome by proper changes in its application. The statement has often been made in this house that farmers are not paying their share of the income tax. I would like to see the advisoiy board on tariff and taxation investigate very thoroughly the administration of the Income War Tax Act to find out whether the farmers or any other class of people in Canada are not paying their income tax. Personally I want to see the act so administered that all who are liable shall pay.

I should also like to have the board report on the advisability of changing the application of the tax so that taxpayers should be assessed on their incomes over a period of three years. This matter has repeatedly been, brought to the attention of the Minister of Finance, but so far we do not seem to have been able to make any impression upon him. We have brought to his attention cases where farmers, and ranchers particularly-there may be others-have incurred a loss in two or more successive years, and the next year, having an income which made them liable under the Income Tax Act, have had to pay the tax although the profit in the good year was not sufficient to make up the deficit in the two previous years. There have been cases where a man has been assessed for income tax whose whole profits from the year's crop have been paid to the bank to cover the deficits incurred in previous years, and where the assessed was unable to borrow money to pay his tax. I have even heard of a case where a man was threatened with suit by the Income Tax department because he had not under these peculiar circumstances paid the tax. I would like to see the board investigate this whole income tax question very thoroughly.

I Mr. Coote.]

I wish now to draw the attention of the minister to one tax which he has overlooked and to a situation which certainly calls for some action on -his part. I refer to the excise tax on automobiles. In 1926 the tariff on motor cars imported from the United States was reduced from 35 to 20 per cent. In the discussion which then took place, and which is recorded in Hansard of 1926, page 3663, the late Minister of Customs, Mr. Boivin, estimated that it cost the individual consumer who imported a car from the United States approximately five per cent in addition to the twenty per cent customs tariff. This is owing to the fact that there was at that time in the United States an excise tax of 5 per cent payable by the purchaser of an individual car, and he had also to purchase a license for the car before it could be driven out of the country. The new prices on Ford cars which became effective after the budget of 1926 were 25 per cent higher in Canada than in the United States. Proof of this will be found on page 3663 of Hansard of 1926. On June 7, 1926, the present Minister of Finance introduced a bill to amend the Special War Revenue Act, to provide for the removal of the excise tax of 5 per cent from cars produced in Canada and valued at less than $1,200. When putting through the measure the minister was twitted by his Conservative opponents with handing back with his left hand 5 per cent of the protection that he had taken away with his right hand. In reply, he assured the house that he would not allow the manufacturers of automobiles to take any advantage of this 5 per cent. I will quote his own words as recorded in Hansard of 1926 at page 4133:

I hold in my hand a letter from the automobile manufacturers of Canada guaranteeing that they will pass this on to the Canadian people, and that the purchaser of a Canadian car will have all this reduction in the excise

tax I repeat that we have the

promise of the associated automobile manufacturers of Canada, of all the manufacturers of automobiles in Canada-it will be found on Hansard to-morrow morning-that they will pass this excise reduction on to the Canadian purchaser,-

I hope the house will take note of the following words:

-and I serve notice on them now, in the presence of my friends, that if they do not live up to that agreement we will find means of placing them in a position where they will have to do so or meet competition of the world.

I have recently secured information as to the Canadian price and the United States price of certain cars valued at less than $1,200 which are being made and sold in Canada by some of the automobile manufacturers who signed the letter referred to by the Minister

The Budget-Mr. Coote

of Finance. I may say that I found considerable difficulty in securing the factory price in Canada of some makes of cars, but I have here the prices of five different makes

which are represented among the firms who signed that letter. If I have the permission of the house I will place this statement on Hansard; it is not very long:

Canadian

price

Ford roadster 8495

Ford coupe 510

Ford tudor 640

Ford fordor 740

Sport coupe 710

Chevrolet roadster 625

Chevrolet touring 625

Chevrolet coupe 740

Chevrolet coach 740

Chevrolet sedan 835

Chevrolet Imp. sedan 890

Whippet coach 695

Erskine six coach 995

Chrysler "52" coupe 870

Chrysler "52" 2-door sedan.. .. 880

u.s. Percentage

price Increase of increase$385 $110 28.6395 115 29.1495 145 29.3570 170 29.8550 160 29.495 130 26.2495 130 26.2595 145 24.3585 155 26.4675 160 23.7715 175 24.4535 160 29.9735 260 35.4670 200 29.8670 210 31.3

May I say that this list shows that Ford cars are now approximately 30 per cent higher in Canada than they are in the United States; Chevrolet cars about 25i per cent higher; Whippet coach-the only car of this make on which I could get a price-29.9 per cent higher; Erskine coach 35.4 per cent higher; Chrysler coupe 29.8 per cent higher; Chrysler sedan 31.3 per cent higher. I think the prices which I have quoted are ample proof that our automobile manufacturers, with the exception of the Chevrolet people, are taking advantage of this removal of the excise tax on Canadian made cars and are not passing the benefit on to the consumer. I have read what the Minister of Finance said he would do under these circumstances. Perhaps I might read the last sentence again just to remind him of this:

I serve notice on them now, in the presence of my friends, that if they do not live up to that agreement we will find means of placing them in a position where they will have to do so, or meet competition of the world.

I do not expect an immediate answer from the minister, but I do think the house should know what he is going to do about it before these resolutions are disposed of. There seem to be two courses open to him: either remove the tax from imported cars as well as Canadian made cars, or replace the tax on Canadian made cars. If he replaces the tax on Canadian made cars, I think the proceeds should be turned over to the provinces to !be used by them in the building of highways. Personally I see no more reason for imposing an excise tax on automobiles 'than on most articles which are in general use to-day, unless the money is to be used in the building of good roads.

During the fiscal years 1919 to 1927 the federal government has collected in excise

tax on automobiles $34,722,000. During these years approximately twenty million dollars has been paid to the provinces to be used in the building of highways. As the federal government does not contribute in any other way towards road building, I think it is nothing but fair that all the excise tax collected should be turned over to the provinces for this purpose. There is no greater need throughout Canada to-day than for improved highways. I believe that is the general opinion of the members of this house. I would suggest to the minister that if he feels he does not need this ten per cent which he is taking off the income tax, he should use it to co-operate with the provinces in the building of a national highway. We claim to have now reached the status of a nation, but we have not a highway on which we can drive from one side of Canada to the other without passing through the United States. This ten per cent of the income tax, if spent on the building of such a highway, would mean a considerable increase in employment and a resultant improvement in general business conditions many times greater than will be secured by the return of the ten per cent to income taxpayers. I am informed that since 1917 the federal government in the United States has granted $650,000,000 in aid to highway construction, while our government has given $20,000,000. I suggest that a good way for the government to celebrate the jubilee of confederation would be to build a national highway from Halifax to Vancouver, and call it the jubilee highway.

Now, Mr. Speaker, I purpose to speak on two or three matters not mentioned in the budget, but they entail an expenditure of a small amount of money, so I presume it

The Budget-Mr. Coote

is appropriate to discuss them at this time. In 1925 a bill was passed through this house to give certain relief to the depositors of the defunct Home bank. The bill was amended in the senate, and at a conference between the house and the Senate an amendment was agreed to providing that 35 per cent should be paid on claims under $500, and a further 35 per cent on claims under that amount where the depositors could show that they were in need. Mr. Clarkson, one of the joint liquidators, was called hurriedly before the senate committee and asked on the spur of the moment to give an estimate of the probable amount which would be required to carry out the bill as amended. The amount as finally voted was fixed in accordance with this estimate at three million dollars. Most of this money has been paid out by the liquidators, but it would require a further sum of approximately $450,000 to pay the 35 per cent on claims which were approved. Unless such a sum is provided by parliament some of the cases where the depositors are in need cannot be paid. It is very clear that it was the intention of parliament to provide for 35 per cent to be paid on the class of claims I have already mentioned, and I think this house would be remiss in its duty if it did not make provision for payment of that amount. This is a matter which, under the rules of the house, rests entirely with the government. I am sure that if hon. members were given a chance to express their opinion on this matter free of party control they would certainly vote that the money be paid. I would urge upon the government that this amount be placed in the supplementary estimates so that the liquidators will be able to pay the balance of these claims.

I want to refer for a moment to the meagre salaries paid to some of our lower salaried postmasters. I am informed that statistics gathered by the Postmasters Association show that 10,000 postmasters are receiving from 20 cents to $2 a day, out of which all expenses of office must be paid by the postmaster. At the present time this represents a living wage of from $60 to $620 a year for all the responsibility these people are called upon to assume. The government demands honesty and efficiency in the handling of the mails; yet it pays a salary which is beggarly. An application has recently been made to this government by the judges of Canada for an increase in their salaries. If the judges require an increase then the postmasters require it a hundred times more. A little investigation into the conditions under which postmasters work, and the long hours which they have to put in, would make anyone realize that these men are not [Mr. Coote.l

being fairly dealt with at the present time. We sometimes see in the press the comments of judges on the meagre salaries being paid bank clerks; but while I agree with these criticisms which are often expressed, I think the banks are doing handsomely for their clerks compared with the way in which this government is paying some of the lower salaried postmasters.

I want also to say j.ust a few words regarding unemployment relief. In a country such as Canada there is bound to be a certain amount of unemployment in the winter time. I am led to speak on this matter because twice within the last three days I have been stopped on the street and a^ked by a man to give him the price of a meal. These men in both cases looked as though they were quite willing to work. One man assured me that he had walked from Ottawa to Britannia and back looking for a job shovelling snow and he could not get one that day. These men, unless they are to starve or be put in gaol-neither of which we wish to see-must be taken care of by the municipality, and it is the duty of the government to resume the policy of sharing with the municipalities this cost of relief for the unemployed. This policy was pursued by this government in the year 1926-27 when they paid out approximately $77,000 to the municipalities for that year. Surely this amount is so small that the government does not need to haggle over the matter. May I quote a few words from the Manitoba government's report on this subject:

The control of the immigration stream is in federal hands and it would seem reasonable to demand that at least a share of the cost of relief made necessary by unemployment caused by immigration should be paid by the dominion government.

The minister in his budget speech made reference to the fact that Canadians were returning home, and I could not help but wonder whether it was the millionaires returning because of the income tax reduction. In every budget debate which has taken place since I first came to this house as a member, the exodus of Canadians to the United States has been discussed at great length, at greater length perhaps than any other subject apart from the tariff. In my opinion the primary cause which is at the bottom of this condition has not been discussed in this house. There is only an invisible line dividing Canada and the United States; the soil and climate in those districts adjacent to the boundary are very similar and the reason why people leave one country to go to the other is mainly to better their economic condition. The economic position of the people is affected not only by the natural resources, soil and climate, but also

The Budget-Mr. Coote

by the artificial conditions which are determined by the legislation of the country and the control of finance and credit.

I wish to compare for a few minutes the control of legislation in Canada and the United States. In Canada the control of legislation is autocratic. In this house a private member cannot even introduce any bill which entails the expenditure of public moneys. He cannot even amend such a bill, even though it is to save the government a little revenue. We had a demonstration of this last year when the hon. member for Winnipeg North Centre (Mr. Woodswort'h) moved that the reduction of ten per cent in the income tax should be limited to incomes of $10,000 and under. That motion was declared out of order, and, strange to say, the members of this house upheld that decision. The member may, of course, introduce any other public bill, but the rules of the House of Commons are such that, in my six years' experience in this house, I can remember only one such public bill that ever finally passed and became law, and in that case the government set a special time for the bill to be given a third reading. The Prime Minister selects the cabinet; he can also dismiss them at will, so that it amounts to this; no legislation can be passed here unless it has the express approval of the Prime Minister. Under our system and the rules of the house, the absolute control of legislation is vested in the Prime Minister, and practically all the legislation passed by this house, exclusive of private bills, has originated in the cabinet. This is not the most objectionable feature of our system. The fact that the Prime Minister holds in his hands the power of dissolution of parliament at any time makes him an autocrat; in this case, makes him King in fact as well as in name.

Comparing our system with that in effect in the United States: generally speaking any member of congress may introduce any bill which in his opinion is in the interest of his constituents. If he can secure the support of a sufficient number of members of congress and of the upper house his bill may become law whether the president approves of it or not. True, the president may veto the bill, but if it be passed again with sufficient majority it becomes law in spite of his opposition. In the United States a large part of the legislation which is passed originates with the members elected by the people. In Canada practically all legislation of a public nature must originate with a prime minister, who secures the position because he was chosen leader by a party convention. In the United States the members of congress are elected for a term of four years. Any member can

vote for what he thinks is right; he cannot be sent home at the whim of the president, even if a measure favoured by the president is defeated. In Canada the Prime Minister has the power to dissolve the House of Commons any time he takes the notion. All of our members are more or less familiar with the threat that " if a government measure is defeated parliament will be dissolved."

The people's representatives have very little to say under this system of government. The government brings in a measure and says in effect, " if this measure does not go through we will dissolve this house." Naturally, unless it is a particularly obnoxious bill, it will go through. In some cases the cabinet possibly does get the approval of its own caucus, but I will venture the assertion that they did not do that with this budget. Did the government supporters or the group co-operating with them decide what the contents of this budget should be? I hope they are not responsible for it. If they are we may as well give up hope of any progressive legislation coming from that side of the house. I wish the people of Canada really to understand the situation that exists here; they would then see how difficult it is for their representatives to do anything worth while in their behalf. The Finance minister prepares his budget with the greatest secrecy; nothing which it contains is allowed to leak out- until he actually delivers his speech in parliament; then the house must accept it or it will be considered a defeat of the government to be followed by a dissolution of parliament and a general election. This is very largely true of the work of the whole session; the cabinet introduce whatever legislation they see fit and the members sitting on that side of the house are supposed to support that legislation in all cases. Party discipline is so rigid that it is almost an unknown thing for a member of the party in power to even suggest a reduction in any item in the estimates. In making this statement I would call to my support Hon. Herbert Marler, whose remarks will be found at page 527 of Hansard for 1925. Mr. Marler was at that time the member for St. Lawrence-St. George, and he said:

Perhaps on this side of the house I am looked upon as a black sheep or a yellow dog if I dare to suggest to the minister that I would like certain information on a particular item. It is exremely unpleasant to ask ministers on your own side of the house for particular information. It is a most unheard-of action on the part of any member on this side to dare suggest that a vote be cut down, or that certain action be taken with regard to it, or dare even to suggest that he should exercise his own intelligence in voting the money of the people.

The Budget-Mr. Coote

That was the opinion of Mr. Marler, who was ft very able member of this house. Under this system a private member, and especially a member of the party in power, is reduced to the status of a sort of glorified errand boy. I hope I may say this without giving offence, because I think we are all pretty much in the same position. A member can spend most of his time in Ottawa running errands to the various departments for his constituents, making an occasional speech on the budget and voting for all government measures. Surely no one would question the fact that we could get legislation more in the interests of the people if members of this house had the same opportunity of securing legislation as that enjoyed by members of congress, and I think it also safe to assume that the brains of parliament are not confined to the party in power and that the brains of the party in power are not confined to the cabinet.

If the system in the House of Commons is bad, that which obtains in the Senate is even worse. Members of that chamber are appointed not because of their ability but as a reward for services rendered to their party; they are appointed for life and are responsible to no one. They can block any legislation, with the exception of supply, and in the main they are representative of the reactionary element throughout the country. What chance have we to progress under these conditions? I consider this system to be at the root of many of our problems to-day. You may ask, "If this is the case why did not our people insist on changing the system?" The answer is because this system suits the parties, and the party leaders kept the people entertained with their discussions over the tariff and similar things. The older people were such ardent Liberals or Conservatives and were so engrossed in their party warfare that they never thought of improving the system, while the young people found it easier to cross the boundary line and secure a position than to stay here and fight against the disadvantages of such a system.

I would like to make it very clear that I am not advocating the adoption of the United States system of government. I have compared some features of their system with the Canadian system, because of the time which has been spent in this house comparing their tariffs and other matters with similar matters in this country; but I should like also to make it clear that I do want such changes made in our system as will give the representative chosen by the people power to initiate legislation, and to secure the removal from the hands of the Prime Minister of the

power of dissolution of parliament. Let us get away from that worn-out tradition that the defeat of a government measure by the house should be followed by the resignation of the government or the dissolution of parliament. Personally I should like to see a fixed term of four years for parliament, but as that would necessitate a change in the British North America Act possibly we cannot get that in my lifetime, because we are told Ontario and Quebec oppose it.

If I have time, Mr. Speaker, I should like to compare the control of finance in the two countries, although I shall have to do so in about two minutes. In Canada four banks control approximately 80 per cent of the banking and credit business of the entire country, while in the United States every city and town has its own bank owned and controlled by men whose interests are centred in the community. Their bank can grow only as the community grows, so naturally they do their best to retain all the bright and capable young people in their own community. If we are concerned about keeping our young people in Canada why not reform the system of government and give the representatives of the people a chance to do something for them? Let us remodel our banking system to make it serve the needs of the people in the outlying parts of the Dominion as well as those living in the vicinity of Toronto and Montreal. In my opinion it will be hard to secure any effective change in the banking system of this country until we make some change in our system of government-and in the rules of this house.

In conclusion, Mr. Speaker, I would say that I am opposed to this budget because it will reduce the income tax, which I believe to be the best method we now have for the collection of taxes. I object to the reduction of the sales tax on certain articles which we class as luxuries. I also object to the proposal to double the percentage of empire labour and material cost required on goods receiving the British preference.

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

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

Liberal

Mr. DEPUTY SPEAKER:

Time.

Topic:   THE BUDGET
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CON

Duncan Sinclair

Conservative (1867-1942)

Mr. DUNCAN SINCLAIR (North Wellington) :

Mr. Speaker, in opening my few remarks on the budget and the amendments thereto I wish to congratulate you on your re-election as Speaker of this house, and I hope (hat on this, my first attempt to speak, I shall have your kindly sympathy. I promise faithfully that I will be under the wire before the flag falls. I also wish to thank hon. members on both sides of the house for their kindness to myself since coming here. Like the old Scottish preacher who once said in opening

The Bridget-Mr. Sinclair (Wellington)

his sermon, "My dear friends, I want to say something before I begin," I should like to thank the Minister of Railways (Mr. Dunning) and the Minister of Finance (Mr. Robb) for the splendid assistance they gave me in the last election. I was very sorry to be so busy in the election that I was not at home when they visited my vicinity, but if they will only send me word next time they come I will be there to meet them and receive them in a hospitable manner.

I had no intention of making a speech this session, but in looking over the speech from the throne and the budget as brought down by the Minister of Finance I decided this was my time to get in, because I could scarcely say less than is contained in either the speech from the throne or the budget. With regard to the budget and the amendment thereto, I must say that I am heartily in favour of the amendment as proposed by the hon. member for St. Lawrence-St. George (Mr. Cahan). I regret that the budget does not contain a remedy for the unemployment existing in Canada, that no attempt is made to induce our boys and girls to return to their native land, and that there is nothing which will prevent the continuance of the alarming exodus to the United States. The budget contains no provision for the preservation of our own market for farm and dairy products, does not provide for the development of the natural resources of this country and does not abolish the sales tax. I suggest to the Minister of Finance and the government that the time has come when there should be no more tinkering with the tariff, a process which inevitably causes injury both to the manufacturers and to the farmers of this country. What I mean by that is that I think the tariff should be left as it is for at least the life of one parliament. Before I ever went into politics I remember how the managers of factories and the people who had their money invested in these industries were kept in a continual state of apprehension because they did not know what this government was going to do, or what industry would next be attacked.

I would suggest to the Minister of Finance that if he had outlined in the budget a national fuel policy for Canada, a national iion and steel policy for Canada, a national pulp and paper policy for Canada; if he had outlined policies whereby our natural resources could be turned into finished products in Canadian factories by Canadian workmen, he would have solved many of the problems which confront us to-day, and the Minister of Immigration and Colonization (Mr. Forke)

would not be condemned, as he is being condemned now, for conditions which have been brought about by the foolishness of this government. There is no doubt at all that our young people are leaving Canada in large numbers. There must be some reason for it, and there must be some remedy for it. Why not apply the remedy and stop the exodus from Canada of some of our best and brightest minds? Recently when crossing the border I got into conversation with a gentleman on the train. He asked me where I came from, and I replied, from Canada. During the journey I noticed some big factory buildings and asked him what industries they housed. He said they were pulp and paper mills. I asked, "Where do you get your pulpwood?" He replied, "From you foolish Canadians." "What do you mean?" I said. He replied, "Exactly what I said. If we could not get this pulpwood from Canada we could not manufacture it here." "What would that mean?" I inquired. He replied, "We would have to go to Canada." Now the question I ask is: Why not bring them to Canada? I would simply give notice to every pulp and paper manufacturer in the United States who gets his supply of pulpwood from Canada that one year from to-day the exportation of this pulpwood will not be permitted, and that they must be prepared to manufacture it in this country. These industries would thus be compelled to establish themselves in Canada and our boys and girls employed in those mills would return with them.

I wish now to make a few remarks on the Australian treaty as it affects our farmers. I cannot understand the attitude of the Minister if Agriculture and the government in this matter. I recall how the former member for South Oxford, Mr. Sutherland, pleaded with the government not to ratify this treaty. He warned them what would happen if they did so. What he predicted would come to pass iX that treaty were ratified has happened. I am absolutely opposed to the enactment of any law which injures the dairymen or the woollen industry of this country, whether introduced by a Liberal or by a Conservative government. I well recollect when every farmer in my own constituency kept from ten to twenty-five sheep. But they are not keeping them now. What is the cause of that? The government must be aware of this falling off. There must be a. remedy for it, and it is up to the government to provide that remedy. The facts given to the house the other day by the hon. member for Victoria B.C. (Mr. Tolmie) should convince the government that something should be done, and done at once

1082 COMMONS

The Budget-Mr. Sinclair (Wellington)

to save the sheep industry and the woollen industry. After reading the speech of the hon. member for Victoria, I was rather surprised to get in nay mail a circular from the Civil Service Association which contained the following notice:

Civil Service of Canada Position Vacant

Applications are invited from residents of the province of Ontario qualified for the position of

District Sheep Promoter-$2,040 per Annum.

The circular does not say whether the district sheep promoter is to have a Mc-Laughlin-Buick or a Ford car. I expect that he will have one. The minister will surely give him a Ford car, although he himself drives a McLaughlin-Buick. Just think of the government employing a man at this salary when the responsibility for the condition of that industry lies in the government itself! They spoil the woollen business and then they try to get some person to jack it up. It is a sad thing that only one-third of the woollen and worsted goods used in Canada is supplied by Canadian mills, and that the remaining two-thirds are imported. We could and we should grow enough wool in this country to supply all our needs.

I wish now to say something about the dairy industry. In order to show the condition of that industry in my own riding I am going to read to the house extracts from communications from the creamery men of North Wellington, showing what effects the Australian treaty has had on the dairy industry there. I will also place on record the importations from Australia and New Zealand under the treaty. I think we all agree that up to the time the Australian treaty came into effect the dairy industry was one of the finest industries in this Dominion, and thanks are due to the Dominion and the provincial governments in the past for the assistance they have always given this industry. Unfortunately the present government entered into this treaty with Australia. I am sorry the Minister of Agriculture (Mr. Motherwell) is so little interested in the dairy industry that he is busily engaged in talking with hon. members around him. I suppose he was very busy talking when this treaty was made, and that is why he allowed it to go through.

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

Some hon. MEMBERS:

Order.

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

Duncan Sinclair

Conservative (1867-1942)

Mr. SINCLAIR (North Wellington):

I now wish to give some figures showing the importations of butter from Australia and New Zealand. They are as follows:

Importation of Butter Before the treaty

Australia, 12 months ending December, 1925, 278 pounds; value $110.

New Zealand, 12 months ending December,

1925, 53,424 pounds; value $21,583.

After the treaty

Australia, 12 months ending December 1926, 2,995,740 pounds; value $1,095,988.

New Zealand, 12 months ending December

1926, 3,193,382 pounds; value $1,260,788.

Australia, January, 1926, 473,200 pounds;

value $181,645.

New Zealand, January, 1926, 570,185 pounds; value $203,870.

Australia, January, 1927, pounds nil; value nil.

New Zealand, January, 1927, 729,288 pounds; value $244,898.

Australia, 12 months, 1927, 376,096 pounds; value $135,160.

New Zealand, 12 months, 1927, 8,714,985 pounds; value $3,023,801.

Australia. January, 1928, 248,584 pounds; value $92,628.

New Zealand, January, 1928, 3,183,289

pounds; value $1,126,291.

With respect to the 278 pounds of Australian butter shipped during the twelve months ending December, 1925, the Minister of Agriculture, it seems to me, must have asked the Australians to send over a sample shipment, with the promise that if the butter was of good quality he would try to get them a good market in Canada. But to my mind the saddest thing of all is that in the month of January, 1928, New Zealand shipped into Canada 3,183,289 pounds of butter valued at $1,126,291. I should like to ask the Minister of Agriculture whether he is representing the farmers of Canada or the farmers of Australia.

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LIB

William Richard Motherwell (Minister of Agriculture)

Liberal

Mr. MOTHERWELL:

May I ask my hon. friend a question?

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LIB

John Ewen Sinclair

Liberal

Mr. SINCLAIR (Wellington):

I have never interrupted an hon. member and I have never interjected a question during an hon. member's speech. I will give the Minister of Agriculture a hint,-he is indulging in sleep, perfect sleep, from which it is time for him to wake. What was the excuse that the Minister of Agriculture made to the National Dairy Council? This is what he said:

Now we got a preference in the Australian market for certain exports like paper and pulp and motor cars, what are we to give in exchange that would be of some value to them? Supposing the present items were eliminated, what would you suggest to take the place of butter ?

I should think the Minister of Agriculture of any government is and should be the farmer's friend. Just imagine the Minister of Agriculture of this government sacrificing the interests of the farmer for motor cars, pulp and paper! I suppose the Minister of Agri-

The Budget-Mr. Sinclair (Wellington)

culture has a copy of every letter I hold in my hand, but just to show the house how the people in my constituency view the Australian treaty, I wish to read a few extracts from letters which I have received. The first one reads:

We just wish to draw your attention to the serious condition of the creamery butter industry in Canada. Up to 1926 we had a growing butter industry, which was developing into one of the leading industries of the country. Then the duty was reduced on the importation of butter, and the farmers to-day cannot afford to meet the competition of New Zealand and are cutting down on butter production, as fast as they reasonably can.

This is from one of the leading creamery men in my riding, and the saddest part of it is this paragraph in his letter:

To-day large numbers of female calves are being vealed because there is more money in producing veal than there is in producing butter, with the result that not only our present production is being lowered, but our future for years to come is being scarificed, in the shortage created by vealing the female calves. To add to this shortage a great many of our best milch cows are being bought up for the American market.

I would suggest that the government should give us the same protection as we had before so as to put us on even footing with other countries. The second letter is from another creamery man in my riding who says:

Beg leave to say that we feel that this treaty is not in the best interests of Canada, and especially not the producer of cream, who has to produce cream under entirely different conditions than that of Australia or New Zealand, whose climate permits the production of cream at much less expense, than the Canadian farmer can produce it, who has to stable feed at least six months of the year. There is no doubt about it that the effect of this butter being dumped on our market certainly has a bad effect on the price of the butter to the producer. In 1926 when this treaty became effective the butter market broke twenty cents per pound. This meant severe loss to the farming industry, and we believe that in the best interest of Canada as a whole that the same duty on butter coming into Canada from any country should be equal to the duty that we pay if we have to export any to Australia, New Zealand, or the United States. We trust that you will in the interests of your constituents and the Canadian farmer as a whole vote to have the tariff on butter from New Zealand and Australia placed at six cents per pound, the same as we have to pay on our butter going there.

This is a letter from another creamery man in my riding:

I might say in regard to New Zealand and Australian butter coming into Canada, we should have at least eight cents a pound protection, on account of the bonus that they receive. They allow them to sell their butter cheaper in Canada than in New Zealand or

Australia. I think that if we had eight cents duty on butter coming in it would be a great help to the farmers of this country, as well as the creamery men. I think we would be able to pay the farmers about four cents a pound more for butter fat at present, if it was not for this butter being dumped in here, as I can buy New Zealand butter cheaper in Toronto to-day than I can buy Canadian made butter.

This is another one from a man who holds office in the Canadian Creamery Association of Ontario. He says:

At our executive and annual meetings this question has been brought up and I feel safe in saying that at the present time eighty per cent of the creamery men of Ontario are against the Australian treaty tariff as it now stands.

This morning I received the following resolution from the Ontario Milk and Cream Producers Association:

The Ontario Milk and Cream Producers Association desires to place itself on record as being decidedly opposed to the clause or clauses in the Australian treaty which permit butter to be imported into Canada at the low tariff rate of one cent per pound, thus creating a situation that places the Canadian producer under very unfair competition and making it extremely difficult for him to carry on his business at a profit. Experience with the treaty so far has shown that Canadian dairying is working under a severe handicap, because of it and unless some remedial measures are undertaken, the butter producing industry of the Dominion cannot make the progress it should.

It does not seem reasonable that an agricultural country like Canada should import large quantities of butter while an industrial country like the United States is able to produce nearly all the butter it requires. I would therefore in all sincerity ask the Minister of Agriculture to lose no time in seeing that the Canadian farmer at least has the home market for his own product.

Let me say just a word about my own riding of North Wellington, which I think is the finest riding in the Dominion of Canada. We have a rural constituency comprising great big Irish, German, Scotch and English farmers and business men, aijd they saw fit to send your humble servant to this house to represent them. We do not ask the government for very much, but I would just remind the Minister of Public Works (Mr. Elliott), who I am sorry is not in his seat, that I see no mention of North Wellington in his estimates. We need post office buildings at Arthur, Drayton, Moorefield and Clifford, and I hope to see some provision made for these, or at least some of them, in his supplementary estimates. I am sure it was entirely an oversight on his part and not at all intentional that they were not included in the main estimates. I might tell him right now that I would just as soon he

10S4

The Budget-Mr. Ilsley

built a post office in the village of Arthur this year. It might help the government and it will not hurt me, because I am very anxious that the village of Arthur should have a post office.

In conclusion I hope and trust that we shall all work together, Liberals and Conservatives, United Farmers of Ontario and Progressives, Labour and Independent members, to make and keep Canada as it always has been, the brightest gem in Britain's crown.

Topic:   THE BUDGET
Subtopic:   DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE
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March 6, 1928