March 8, 1928

CON

George Spotton

Conservative (1867-1942)

Mr. SPOTTEN:

Who built the Grand

Trunk Pacific?

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

Frank S. Cahill

Liberal

Mr. CAHILL:

Who bought the railways

under closure? My hon. friend from South Wellington, who to-day eulogized the management. He could never do that when he and his Conservative friends were in control of the Canadian National Railways. But, as the hon. member said, you cannot divorce the success of the Canadian National Railways from the prosperity of Canada; and the prosperity which he spoke of must be attributable to the government of Canada-to the government of the day. If our railways were able to earn the dividends which he mentioned, it was only because of the good government which we have had since he and his friends left office in 1921.

My hon. friends reason that the debt should include guarantees of the Canadian National Railways. I do not know what system of book-keeping they would set up in order to show that two parties were liable for the same debt. If the Canadian National Railways are earning dividends on their debt to the public, why ^how it in the Canadian statement of Canadian affairs? If they were not, it would have to be added, as was done in the past, as non-active securities of Canada. That was the system adopted under the Conservative regime. They showed that advances to the Canadian National Railways were non-productive, and they were classed as non-active assets; the Conservatives did not figure that they would ever be able to realize anything from them. But when the Canadian National Railway system reached the stage where it was earning interest on its debt to the public it would be impossible to show in the Canadian statement a $40,000,000 guarantee of a loan and charge that as a liability against the Dominion government, while Charging the same thing against the Canadian National. There is no better way of dealing with the matter than the method followed by the Conservative party, nor is there a better method than that now pursued by the Minister of Finance (Mr. Robb). You

are not telling the public anything new when you say that the government have guaranteed the stock of the Canadian National Railways; the people know that. The people also know that under this administration interest is being paid on account of the debt-something which was never known before in the history of the railways under the Conservative administration.

My hon. friend complained of the huge debt of the Canadian National Railways. I realize that it is huge. But the hon. gentleman must take responsibility for a large part of that debt: he and his colleagues in the house insisted, by closure, on paying to the owners of the stock of both railways which they took over an excessive, exorbitant price, when they could have foreclosed and saved hundreds of millions of dollars to the Canadian people. Of course, the railway is heavily loaded with debt,'but to my hon. friends opposite must be charged the responsibility; it is not attributable to this government.

I notice that the party opposite are trying very hard to get into the good graces of the people again by their support of the Canadian National Railways. My hon. friend from St. Lawrence-St. George, however, apparently slipped, although he was quickly brought to time by his colleagues around him. The people of Canada know that the Canadian National Railways must be supported by public opinion if the system is to succeed, and I am very glad to see that our friends opposite are now taking the attitude that they too will deal fairly with the Canadian National.

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

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

Did my hon. friend learn

anything to the contrary from my speech?

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

Frank S. Cahill

Liberal

Mr. CAHILL:

I thought I did.

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

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

You are entirely mistaken.

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

Frank S. Cahill

Liberal

Mr. CAHILL:

Perhaps I am. Now, Mr. Speaker, during this debate I have listened with great attention to the criticisms of the budget by hon. gentlemen opposite, and the more I listen the more I am impressed with the greatness of that fine Canadian leader, Sir John A. Macdonald. Sir John Macdonald was a statesman who was both farsighted and ingenious; he was responsible to a large extent for the confederation of Canada and for the construction of a line of railway from the Atlantic to the Pacific. He helped in large measure in his time to develop Canada and Canadian resources and to make the Canadian people happy in Canada. But Sir John did propound one fallacy, the fallacy that protection is a cure-all, the fallacy that you can lift yourself by your boot straps, or that a nation can tax itself rich. My hon. friends of the Conservative party have lived for fifty

The Budget-Mr. Cahill

years or more in a somnambulant state: they have not evolved one new idea or thought except that which they constantly repeat, that protection is a cure-all for the ills of Canada.

During that early period of railway construction there was prosperity in Canada; we know that from statistics and from the history of the time. After the construction of the Canadian Pacific railway and the settlement in the west of a nucleus of farmers who proved to the world that western Canada was a profitable country to .farm in, that it was feasible to farm here,-after the construction of that road, I say, there set in the natural depression which follows construction works in any country. We wraited for ten years until that other great statesman came to the front-Sir Wilfrid Laurier. After the west had been proven Sir Wilfrid Laurier undertook to fill the vacant spaces in that part of the Dominion and instituted a railway construction program which offered employment to all the people who came to Canada. Every immigrant was able to find employment, was able to take up free land: and during that period we had a great influx of immigration and a time of prosperity. But since that day there has been no immigration policy so far as the governments of Canada are concerned. The present policy could not by any stretch of the imagination be called an immigration policy: a policy of assisted immigration, bringing in people at the expense of the taxpayers of Canada, is not to be considered an immigration policy. The Conservative party had never had a shred of policy that could be called an immigration policy. After all, there is only one immigration policy. Study the question as you will, look around as you will, there is only one immigration policy for Canada or for any other country, and that is a policy that will make for the best interests of all the people. That is the kind of policy that brought people to Canada before, and that is the only policy that will bring them again. As to this cry of the lack of an immigration policy, the lack of a policy by reason of the fact that there is no protection, the people of Canada have suffered under protection for many years, and on this point I should like to see a referendum taken in Canada on the question of lower or higher tariffs, on the question of free trade or protection. I am convinced that 70 per cent of the people would be in favour of a low tariff or of free trade. In this connection I am reminded of a policy which I believe would be useful to Canada; I think it is a platform that might well be adopted by the Liberal party. I refer to these words of Lord Macaulay:

Our rulers will best promote the improvement of the nation by strictly confining them-

IUi. Cahill.1

selves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment; by maintaining peace, by defending property, by diminishing the price of law, and by observing strict economy in every department of the state. Let the government do this: the people will assuredly do the rest.

That is a policy that might well be adopted by Canada. It is a policy that might serve as a guide for this country, a guide against legislating in favour of any class, a guide that would permit the government to legislate in such a way that all who come to Canada will have an equal opportunity to make their own living, to reap the benefits of their own efforts, without being handicapped by some of the legislation which has been on the Canadian statute books for many years.

We are handicapped in this country by our insane banking system. It is almost impossible to get people to advocate a change in that system. I have heard it remarked in the house that the only people who are opposed to the present banking system are the people who cannot get credit. It occurred to me, Mr. Speaker, that possibly those who supported the present banking system had notes coming due, and were therefore afraid to oppose the banks. However. the system is handicapping our people; it is one of the great drawbacks in the maritime provinces, one of the things which bring their representatives here year after year pleading with this government for assistance. From their association with hon. members opposite these representatives eventually came to the decision that something should be done for them by the government by taxing the people, and of course taxing themselves as well. That is a species of Tory socialism, that you can tax yourself rich. A great deal of their complaint is due to that very cause, just as the farmers in the west complained a few years ago until they evolved a plan whereby they marketed their wheat co-operatively and took conditions as they found them. By that process they have reaped more of the benefits of their labour than was previously the case. When those western farmers first attempted the co-operative movement, however, they were blocked by the banks of Canada and placed1 in a most awkward position. They had to go outside Canada for assistance in order to finance their undertaking, until finally the Canadian banks found they could not block them any longer and came to their aid. This system has accumulated the

MARCH 8, 1928 H27

The Budget-Mr. Macdonald (Cape Breton)

finances of Canada in the two great centres of the east, and until that system is changed it is impossible to legislate in such a way as will give equal opportunities to every Canadian. Until that time comes, and some adjustments are made in our present laws, it is useless for us to spend money on an immigration policy in an attempt to bring people to Canada to work under the same handicap. They realize what they are up against before they come here, and many of them refuse to enter Canada because they know that under our present conditions we are not doing all we can for even our own people.

While I am on this subject, Mr. Speaker, there is one poiat I should like to develop. Ever since I have been in this house I have heard the point stressed by both parties and by the different leaders that a preference of some sort should be given to the Britisher. That might be all very well if, by that preference, you are not putting the other fellow in the position of a second rater. Every time you say you have a first choice, all others must be a secondary consideration; they must necessarily be second choices. The man who comes to this country to live is very sensitive, and when you point out to him that you have a first, a second and possibly a third choice he does not care to be placed in anything but the first class. Every man who comes to Canada should be accepted as a Canadian; he should be allowed to grow up in Canada as a Canadian without any such classification. I venture to say that many members of this house, if not a majority of the members, are not descended from people coming from the British Isles; to them you say you prefer some person else. To the German settler on the prairies, to the American settler or to the man coming from any other country but Great Britain you say: You are only second choice. I believe the Minister of Immigration (Mr. Eorke), the members of the government and the members of the opposition in speaking on immigration matters should hesitate to classify any man coming to Canada as less than a first class Canadian.

If we would devote a little time and attention to really working out our problems, in a very short time we would have no immigration problem. I have listened for some weeks to a discussion of this budget, but I have failed to hear one constructive suggestion. Hon. gentlemen opposite have brought forward the old shibboleth of higher tariff, higher taxes; that is the only theory the Tory party can suggest for the ills of this country. Further taxation is to cure everything 1 II the parliament of Canada had devoted the

time spent in this debate to an earnest attempt to find out what could be done to stop emigration, to promote immigration and to assist the people already in Canada we would be very much better off. We have taken weeks to discuss a harmless budget, an amendment offered by the opposition which means nothing, and a subamendment from the Progressive comer which I think means even less. The debate has gone on long enough, Mr. Speaker, and I do not propose to prolong it; all I wish to say is that aftet the excellent speech of the hon. member for South Wellington I am quite convinced that the government is in a safe position and that I shall be justified in supporting the budget presented by my hon. friend the Minister of Finance.

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

John Alexander (1883-1945) Macdonald

Conservative (1867-1942)

Mr. J. A. MACDONALD (Richmond-West Cape Breton):

Mr. Speaker, I take this opportunity to say a few words with regard to the amendment to the budget moved by the hon. member for St. Lawrence-St. George (Mr. Cahan), which amendment may be taken as the policy of that portion of the house sitting immediately to your left. I do not intend to mince matters, so I may state now that it is my intention to vote against the tariff proposals of the Minister of Finance (Mr. Robb), because in them I see no solution offered for the many problems which face a large and important portion of this Dominion.

It is not my intention to take up the speech of the hon. member for Pontiac (Mr. Cahill); what I have to say will consist mainly of references to my native province and the constituency from which I come. Representing as I do a constituency on the island of Cape Breton, close to our great industrial centres; living in the heart of one of the greatest inshore fisheries in the maritime provinces-

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

Some hon. MEMBERS:

Louder.

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

Finlay MacDonald

Conservative (1867-1942)

Mr. MACDONALD (Cape Breton):

I would ask that my hon. friends opposite maintain order when I am speaking. I have a cold at present, and I am not going to put up with too much of that sort of thing.

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:

Order.

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

Finlay MacDonald

Conservative (1867-1942)

Mr. MACDONALD (Cape Breton):

As I was saying, I live in probably one of the greatest in-shore fisheries in the maritime provinces, and I feel it my duty to raise my voice in protest against the budget proposals of this government as presented by the Minister of Finance, because they offer no assistance to any of these great industries. I fully expected that at this session of the house the government would fulfil the solemn

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The Budget-Mr. Macdonald (Cape Breton)

promises which they made to the people of the maritimes on the hustings in that portion of the Dominion from time to time; practically every Liberal candidate promised definite and practical relief to the long suffering industries of the* maritime provinces. The Prime Minister also made the solemn promise that he would fully implement the findings of the Duncan commission, and he made special reference to our coal and steel industries, stating that because of the uncertainty of the conditions then surrounding those industries he would defer action until a settlement was reached.

In this suggestion the majority of our maritime members concurred, and we gave our whole-hearted support to the government. During last session we on this side of the house refrained from embarrassing the government with our endeavours to secure those rights which Sir Andrew Duncan and his associates declared were ours, but we did so only because of the definite promises made by the Prime Minister that he would fully implement the findings of that important commission. This is the third budget which has been presented to this house, Mr. Speaker, which shows the complete indifference of this government to the industrial development of Nova Scotia. The budget of 1924 when first introduced purported to deprive the agricultural implement industry of a considerable proportion of the meagre tariff protection it enjoyed, and this was done at a time when unemployment was rife in many of our industrial centres. Protests poured in to the government from manufacturers of farm implements, among which the voice of Hon. Vincent Massey was undoubtedly heard. And so great was the political pressure exerted that the government granted compensation to these manufacturers by placing iron and steel on the free list when used for the production of farm machinery. The net result was that a serious blow was struck at the iron and steel industry of the province of Nova Scotia, the effects of which are only too well known to all who are acquainted with the resultant economic conditions in that province.

It is distinctly disappointing to the people of Nova Scotia that this budget contains no mention of relief to the steel or coal industry, and gives no evidence that the government has paid the slightest regard to the recommendations in the report of the Duncan commission for prompt tariff consideration for those basic industries. The only tariff change in the budget relating to coal or steel is the provision of a drawback of 99 per cent of the duty on bituminous coal used in the evaporation of salt produced in Canada.

Once again, Mr. Speaker, our Nova Scotia coal industry has been made to suffer in the interests of an industry which finds its chief centre1 in the province of Ontario. May I point out, Mr. Speaker, that the Duncan report contained a definite recommendation that a bounty equivalent to 50 cents per ton on Canadian coal used in the production of steel should be1 granted for the encouragement of both our coal and steel industries in the province of Nova Scotia. You will find that recommendation at page 38 of the report. Last year the Prime Minister excused the government's failure to implement the recommendations of the Duncan commission by pointing out the unsettled state of the Nova Scotia steel industry. This pretext no longer exists. From a statement made in this house by the1 hon. Minister of National Defence (Mr. Ralston) I would infer that the government definitely refuses to apply the remedy which a commission of its own creation recommended should be applied for the upbuilding of the Nova Scotia steel industry until certain additional steps are' taken by the group in control of these industries. One of the minister's objections was the inflation of capitalization and the unwieldy and complex organization which groups some fourteen companies under one head. I should like to remind the Minister of National Defence that at the time this huge merger was mooted in 1920 the Liberal government of Nova Scotia of which he was then a member passed enabling legislation which brought about the creation of the very corporation which he now criticizes. If my memory serves me correctly, my hon. friend voted for the passage of that enabling legislation, and he now has the temerity to stand up in this house and take the attitude that the industrial workers of the province of Nova Scotia must continue to suffer hardship, misery and want solely on account of conditions which a Nova Scotia Liberal government, of which he was a member, were instrumental in bringing into being. I may tell my hon. friend that the very objections which he now raises were forcibly brought to the attention of his government and himself by the local opposition of which I was at that time a member, and I considered it my duty to vote against the legislation which was then enacted by the legislature.

Now, Mr. Speaker, I wish to refer to another great industry in my native province for which this budget makes no provision beyond a few items which practically have no importance or significance, and that is the fisheries of the maritime provinces. One would be led to believe from the proposals

The Budget-Mr. Macdonald (Cape Breton)

of the present budget that such an industry did not even exist, and from the past actions of this government it is obvious that industry has never given it very much concern. Sir Andrew Rae Duncan in his report to the government claims that the fisheries of the maritimes, in extent, in quality and in value, constitute one of our most important natural resources. According to figures compiled by the Dominion Bureau of Statistics and issued by this government there are 20,000 people in Nova Scotia alone who gain their livelihood in this industry, and the market value of their products is some $12,500,000 annually. This great industry is today on the decline, especially that portion of it known as our inshore fisheries. This can be evidenced by the number of closed homes in many of our fishing districts. Since 1914, according to the returns of Mr. Ward Fisher, fisheries inspector for the province of Nova Scotia, some 10,000 persons have left the industry. The war accounted for some of these, but the great majority were compelled, on account of the meagre returns which they received for their labours, to go to the United States where, under the protection of the Fordney tariff, they could receive a remuneration and enjoy a standard of living such as was not afforded to them in their native province. The county of Richmond has suffered probably, more in this respect than any portion of the province of Nova Scotia. In 1910 the number of fishermen employed was 2,113, and 212 people in our lobster canning industry. In 1921 there were 1,752 fishermen, employed and 164 men employed in our lobster canning industry. In 1926, the latest year for which returns are available, the number of fishermen had fallen to 1,370, and in the lobster canning indusary 120, and I am afraid it will be found that later returns will bring the number of fishermen in the splendid constituency of Richmond-West Cape Breton under 1,000. In one school section alone in little over a two-months period, 33 children moved to the United States together with their parents.

This condition was brought strikingly before the government by the Duncan commission. In the session of 1927 the government promised, through the Prime Minister, to take immediate action to remedy these deplorable conditions. The Prime Minister, while stating his willingness to do everything possible for the industry, threw in the teeth of every Nova Scotian the fact that the province of Nova Scotia rejected the proposed reciprocity agreement in 1911. Is the Prime Minister aware of the fact that that agreement did not grant the province

of Nova Scotia any concession in respect to fisheries that it did not enjoy from 1912 to 1922? When the Fordney tariff went into effect in 1922, it deprived Nova Scotia of a large market in the United States. What did this government do? It lamented, as at present, the defeat of reciprocity. Had it taken the initiative at that time, it would have sought out other markets in other parts of the world. The Fordney tariff rates were imposed at the instigation of the American Fishermen's Union, and this same union in 1921-22 would have compelled the high tariff government of the United States to abrogate the gentlemen's agreement which had been entered into with the Laurier-Fielding administration. This is the fate which has overtaken practically every trade treaty which Canada has entered into with the United States. The reason why the people of Nova Scotia rejected the reciprocity treaty was because they knew it could be abrogated at will; they had had the experience of what had befallen the reciprocity treaty of 1854. The people of Nova Scotia wanted something of a more definite nature than that which our Liberal friends offered. The Duncan commission asked for a separate Department of Fisheries under the head of the deputy minister, a man with practical fishing experience, who could make a survey of the industry and be in close personal touch with the conditions as they exist in the maritime provinces. On page 34 of the revised Hansard of 1927 the Prime Minister is reported as stating:

The commission's recommendation with respect to the appointment of a deputy minister whose duties will be confined to what at present constitutes the fisheries section of the Department of Marine and Fisheries, will be carried out.

This was on the 18th March, 1927, just a year ago. This is another promise of a Liberal administration that has not yet been fulfilled. I should like to ask whether public utterances, and as in this case, very definite promises made to this house and to the country, are to be held thus lightly?

As was stated by the hon. member for Queens-Lunenburg (Mr. Ernst), the Nova Scotia inshore fishing industry in the autumn of 1927 was in such a deplorable condition that indignation meetings were held in various places and, viewing the condition of the people in the fishing districts, the clergy of the diocese of Antigonish sent a resolution to this government demanding the appointment of another commission. In this they were backed by the provincial government who helped them in every possible way to organize an effective fishermen's union. I do not intend at the present moment to go into the

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The Budget-Mr. Macdonald (Cape Breton)

order in council appointing the commission, or to dwell upon its political complexion. Suffice it for me to say that the great bulk of the fishermen of Nova Scotia do not want and, indeed, emphatically resent their industry being made a political football.

It was not my intention to speak on the fisheries Until the report of the commission was brought down, but I have not the least expectation in the world that this report will be tabled during this session of the house. The commissioners are now in Montreal, housed in the Windsor hotel at the expense of this country, and they are in a quandary as to what to recommend as a solution to remedy the existing state of affairs. This industry must wait another year before anything of a definite nature is to be done and I feel that the government is only sparring for time in order to make another political gesture to (the fishermen of the maritimes. May I say to my hon. friends opposite that we of the maritimes have had too many political gestures thrown our way? What we want now is definite, immediate remedial action, and if that is not forthcoming, the few seats which this government holds in the maritimes will be even fewer than they are to-day when the next appeal is made to the province of Nova Scotia.

The hon. member for Queens-Lunenburg has made to this government certain suggestions every one of which, as a representative of a fishing community, I most heartily endorse. I would go even further and ask that fish landed from foreign beam trawlers, dry fish imported from Newfoundland, and fish shipped into central Canada from the United States, pay as high a duty as Canadian fish entering the United States. I would also ask that our fishermen be given long-term loans, such as have been granted to our Canadian farmers, in order to enable the fisherman to equip himself to prosecute his calling successfully. I would suggest also that a form of fishermen's insurance be created, because, as the law exists to-day, only tonnage boats can be insured, and as the majority of our inshore fishermen do not come under this classification they have no means of protecting themselves against loss. I also strongly urge that the twenty per cent reduction recommended by the Duncan report on westbound traffic be made to apply to fish from the maritime provinces routed to United States points.

The question of transportation should be taken up by the government and greater cold storage facilities provided. The salt and dried fish industry is practically a thing of the past, and if a fresh fish industry is to be maintained in the maritimes we must have

refrigerator boats and cold storage facilities. The government will tell us that this will necessitate a raid on the treasury. Let me tell my hon. friends opposite, and especially that group which sits in the far corner, that this industry has an interest in the treasury of Canada to the extent of around $4,000,000, and I feel that this money should be used for the development of cold storage facilities and cold storage transportation for the inshore fishermen of the maritime provinces. Under the Halifax award in 1873, $4,525,000 was placed at the disposal of the government of Canada for compensation due to injuries suffered by the fishing industry of the maritime provinces. From November 21, 1878 to May 17, 1882, the Dominion government had sole use of this money. In 1882 a portion of the interest on this money was by act of parliament made available in the form of bounties to the fishermen, the amount so used being $160,000 per annum. The point to note is that at five per cent per annum, which would be a reasonable interest return, the amount available for distribution should have been $226,250, without the principal being touched. Thus for forty-five years, from 1882 to 1927, the Dominion treasury has been enriched, at the expense of the fishermen of the maritimes, to the extent of $66,250 per annum. From 1878 to 1882, a period of four years during which no bounty was paid, the treasury profited to the extent of $905,000. In other words, there is a sum of accrued interest approximating over $4,000,000 rightly belonging to the fishermen of the maritime provinces. The legislature of Nova Scotia passed a resolution in 1921 supporting this contention and in the same year a similar resolution was passed by the government of Prince Edward Island. I claim that this money rightfully belongs to the maritimes and it should be either given to bonus the industry or used for facilities which will benefit the fishermen of the maritime provinces as a whole. Furthermore I contend that fishermen from the colony of Newfoundland should be precluded from sharing in this bounty when fishing aboard Nova Scotia fishing vesels during their seasonal employment in Nova Scotia fisheries.

The Minister of National Defence (Mr. Ralston) on Monday last made some reference to the fisheries of Nova Scotia. Those references consisted largely of time-worn platitudes and an attempt to belittle constructive suggestions put forward by an hon. member on this side of the house. One point in the minister's speech that stood out above all others was the studious way in which he

The Budget-Mr. Macdonald (Cape Breton)

skated over and avoided the greatest question before the fishing industry of the province, that of the beam trawler. Not only this house but 16,000 fishermen in Nova Scotia are wondering to-day where he stands. The hon. member for Queens-Lunenburg brought to the attention of the house the fact that the fishermen of Nova Scotia, and of the eastern part in particular, have been subjected to most unfair competition by landings of fish duty free from foreign trawlers. Does the Minister of National Defence approve duty free landing of fish by trawlers owned outside of Canada? He will have an opportunity to declare himself in that regard. The people of Nova Scotia and especially our 16,000 fishermen, would like to know where he stands. Why did the minister not declare himself on a second matter of very vital importance to the fishermen of Nova Scotia, namely, that of the institution of a department of fisheries with a responsible minister at its head? From his remarks it may be inferred that he was fairly well acquainted with the evidence given before the commission, but he did not mention anything about the appointment of a deputy minister as recommended by the Duncan commission or the establishment of a department of fisheries with a responsible minister at its head.

As to the inspection of fish and fish products, the minister said this was already being done. The only inspection that is being made is an inspection of pickled fish, and this has been done in a haphazard manner, and very often by political appointees with no fitness for the position, with the result that the inspection has been practically valueless. It is true that in Canso and Hawkesbury a fresh fish inspector was appointed last summer to inspect fresh fish landings in connection with the government fish collection experiments there, but the fact remains that this was an isolated instance, and that there is to-day no such thing as the inspection and grading of fresh fish, dried fish, or smoked fish products.

The minister boasts of the scientific research which is being carried on. No one belittles the work which is being attempted, but it is only a beginning. Included under this heading are such subjects as a complete survey of our foreshore to determine the extent of our resources-for example, of our scallop beds; a study of fish life, and a determination as to when depletion begins and conservation becomes essential; experimentation in the cure, marketing and packing of all kinds of fish, and provision by the establishment of competent inspectors in fishing communities for bringing home to the practical worker the results achieved.

The hon. minister dealt with another topic, that of markets, and boasts of what has been achieved. Does he not realize that while shipments of fresh frozen fish have increased, the entire benefit has gone to a few corporations, and was very largely the result of the landings by foreign trawlers? The problem of marketing is allied to that of transportation. Markets must be developed, particularly at home, by education and devising means of transportation, so that when they are developed the benefit may be passed on to the thousands of our fishemen who await and need them, and not be swallowed up, as in the past, by the charter of a few more European trawlers.

The minister talked of progress and improvement. Where does he find that improvement? Certainly not in the conditions of the thousands of fishermen scattered along our coast line. The minister boasts of the encouragement which this government has given the industry. Let me say that if these boasts are all the hon. minister has to offer, and if we are to have only the same kind of progress and achievement during the next five years, heaven help the fishermen 1 Why talk of steady progress and achievement when we have lost, in twelve years, 10,000 of our fishermen?

I should like to say a few words with regard to providing medical attention for our sick fishermen. Dominion legislation provides for what is known as a sick mariners' fund, to which the owners of shipping schooners in our interprovincial coastal trade contribute. It also applies to fishermen of tonnage ships. This is of great benefit to our sick seamen. We also have the hospital ship for the care and attention of our deep sea fishermen. The Workmen's Compensation Act in our province as it stands at present cannot be taken advantage of by our inshore fishermen because they are not employers of labour. Generally the fisherman himself is the labourer, and in order to come under the Workmen's Compensation Act he must employ three or more labourers; and then he would not as an an employer be eligible himself. In any event the fee demanded by the various compensation boards is prohibitive, and if made compulsory would put the fishermen at a great disadvantage. Even then no provision would be made-for sickness; accidents only woflld be taken care of. I have found in my fifteen years of practice among the fishermen of this country that accident is the exception. What we have to contend with is sickness brought on by the hazardous occupation which the fisherman is compelled to pursue in order to

1132 COMMONS

The Budget-Mr. Macdonald (Cape Breton)

gain a livelihood. Secondly, the fisherman, being underpaid for his services, is-together with his family-undernourished. Tuberculosis is prevalent among our fishermen; it is one of the most deadly diseases encountered in our fishing districts. Our fishing villages, located generally around our indentations and bays, are in most instances far removed from medical care. The poor fisherman, with the meagre earnings of to-day, is not in a position to secure the medical aid he requires for the protection of himself and his family. I would suggest to the government that our fishermen be placed on an equal footing in that respect with the deep sea fishermen, and that either a contributory system be adopted or a certain proportion of the Halifax award be utilized for the purpose of caring for our sick and invalid fishermen and their families.

With respect to railway transportation, I have in my hand a resolution passed by the municipal council of the county of Richmond, Cape Breton, as follows:

Whereas the fisheries of Isle Madame and contiguous waters in the county of Richmond are an invaluable asset to this municipality and the entire Dominion as well, and

Whereas the farmers of Richmond, keeping pace with the times, are conducting operations on a vaster scale than heretofore, but

Whereas many farmers from the eastern sections have left their farms being unable to carry on their agricultural activities at a profit owing to lack of railway accommodation, and Whereas the pulpwood, gypsum and other mineral resources of the county of Richmond are boundless, but their development is impeded owing to lack of adequate railway accommodation east of St. Peter's on the Canadian National Line, therefore,

Resolved, that this council in annual session convened, hereby memorializes the federal government to extend the present line of railway to St. Peter's eastward as far as Louisburg or Sydney, and to construct a branch into Arichat. the shiretown of Richmond, to be operated in conjunction with the main trunk line inasmuch as the federal government has acquired the present line to St. Peter's making it an integral part of our Canadian National Railways system, further,

Resolved, that the said government be memorialized to refund to this municipality the amount of Ten Thousand Dollars-$10,000- borrowed to pay for the right-of-way when the said line was opened in 1903, further,

Resolved, that this council considers these demands neither unreasonable nor unjust, but the just deserts of the county of Richmond as an integral part of this great Dominion, with a right to its existence and an opportunity to W'ork #ut its destiny as at present incorporated, and further,

Resolved, that copies of these resolves be forwarded to the Minister of Railways at Ottawa, and to every federal member in Nova Scotia with the request that they work in season and out of season for the consummation of these ideals so dear to our hearts and so vital to our interests.

Briefly, the resolution recommends that this government take under consideration the advisability of extending the Cape Breton railway, which now runs from Point Tupper to St. Peter's, eastward as far as Louisburg. The resolution also asks that the sum of ten thousand dollars which was borrowed by the municipality of Richmond to pay for the right of way when the Cape Breton line was built in 1903, be refunded to the municipality by the federal government, and further, that a branch of this railway be extended to Arichat, the shire town of the municipality. The construction of such a railway would be of great benefit to the fishing industry of Isle Madame, on which our shire town of Arichat is located, and also to the various fishing communities lying between St. Peter's and the town of Louidburg. The fishermen along this coast require railway transportation. A large proportion of the best farms and farming land in Cape Breton west and Richmond lies along the proposed route of this railway extension. There is available in this section of the country sufficient pulpwood to keep a 150 ton per day pulp mill going for the next forty years. This large pulpwood reserve cannot be utilized except by the construction of a railway. Almost every variety of mineral ore is to be found in this region, zinc, copper, lead, manganese, limestone, iron, coal, as well as building material. As regards some of these minerals, we are already beyond the prospecting stage. That vast quantities of zinc, lead and copper exist there, has been proven by a large corporation now carrying on operations in this district; I refer to the British Metals Corporation. They have spent upwards of $200,000 in development work in this district during the past year, and it is their intention to operate on a large scale as soon as spring opens. The industrial development of this area has been seriously hampered during the last few years owing to the lack of transportation facilities, and it is to be hoped that this government will immediately take steps to remedy the existing unsatisfactory state of affairs.

As regards the $10,000 claim which the municipality of Richmond holds against this government, I might explain that the municipality, having been refused consideration in the matter of railway facilities by both federal and provincial governments, guaranteed free right of way to any corporation that would undertake the building of a railway. A corporation was organized for this purpose, and the road was built as far as St. Peter's. The municipality of Richmond expended $10,000 in buying the freehold for the present right of way from Point Tupper to St. Peter's. The

The Budget-Mr. Howard

road was completed in 1903, and was operated by the Cape Breton railway company up to 1920 when it was acquired by the federal government and incorporated into the Canadian National railway system, and the municipality of Richmond claim, together with myself, that the federal government should now reimburse the municipality for the amount of money expended in acquiring this right of way. I may say, Mr. Speaker, that I strongly support the claim.

In 1926, under the Conservative regime, I brought the matter to the attention of the acting minister of railways, with the result that a departmental official was sent into the municipality. After consultation with the municipal authorities and going into the matter personally he recommended favourably to the Railway department. I would ask the hon. Minister of Railways and Canals (Mr. Dunning) to take the matter under favourable consideration and reimburse the municipality of Richmond for the money they expended in this connection. I do not feel that we are under any obligation to the revenues of Canada for any favours granted us in this respect, for the reason that valuable rolling stock, right of way and railway rights were acquired by the federal government in 1920 for the paltry sum of $100,000, and the railway has proven under Canadian National management to have been an asset rather than an encumbrance. I have it on authority that during the last year this was one of the few branch lines that earned operating expenses and was not a burden on the Canadian National railway system or on the treasury of this country.

Mr. CHARLES B. HOWARD (Sherbrooke): Mr. Speaker, permit me for a few minutes to join with those who have preceded me in congratulating the Minister of Finance (Mr. Robb) on the splendid budget that he has again given to the people of Canada. Not only do I congratulate him on this budget, I congratulate the entire government on. the success of its administration. It has frequently been said that they have been able to retain power, but it must also be said that they have been able to demonstrate by the increasing prosperity of the Dominion that Liberal principles are conducive to such general prosperity. The government have been able to provide for the necessary expenditures and at the same time reduce the net debt by $42,000,000, thus saving in interest at least $2,000,000 that otherwise would have had to be paid by our people. Even more important than this is the Finance minister's outlook on the future, for he states that on the estimated revenues for the fiscal year 1927-28 he believes that next year he will be

able to make a further reduction in taxation of at least $19,000,000.

Hon. members on the other side of the house have tried hard to show-and this point was particularly stressed by the member for St. Lawrence-St. George (Mr. Cahan)-that the net debt instead of having been decreased has been increased on account of the guarantees of Canadian National Railway bonds. In this connection I wish to quote a few lines from the speech of the hon. Minister of Railways (Mr. Dunning) to make clear the situation. He said:

All the debt of the Canadian National Railways to the people of Canada is now_ treated as part of the net debt of the Dominion. . . that portion of the debt of the Canadian National Railways which is owed to the public, and on which the railway is earning the interest, is not a part of the net debt of Canada, but is a charge against the railway.

And rightly so. But the hon. Minister of Railways was perhaps too considerate of hon. members opposite or too gentle in his manner to make a contrast between the condition of the Canadian National Railways to-day and in the past, something that I claim is most important to consider in the interests of the taxpayer. The facts of the case are these. In 1921 under Tory administration $42,000,000 was taken out of the pockets of the taxpayers to pay the railway deficit, while to-day the system has earned $42,000,000, enough money to pay interest on all the debentures in the hands of the public. And this in spite of the fact that between 1921 and to-day freight rates generally have been considerably reduced. As to the condition of the railways of Canada to-day, I would quote from the Montreal Star of Monday night, as follows:

Canadian Pacific traffic earnings for the month of February show an increase of $1,608,000. while those of the Canadian National increased $2,636,797, making a combined increase of $4,244,797 over February of last year.

I was sorry to hear the hon. member for St. Lawrence-St. George criticize the Canadian National railway system and its management, but I rejoiced to-day when the hon. member for South Wellington tried to reinstate the Tory party in the confidence of the people by praising the Canadian National Railways and Sir Henry Thornton. Undoubtedly the sentiment throughout Canada is that the criticism of the hon, member for St. Lawrence-St. George was unjust and unmerited. I congratulate Sir Henry Thornton on the splendid spirit that he has engendered in his employees. I wish to pay tribuate to the employees of both our railway systems, and to assure them that the successful operation of these railways is due more to their co-operation than to any other factor.

The Budget-Mr. Howard

Now, Mr. Speaker, I turn to an item in the budget that has not been .referred to very much on this side of the house, and has not even been mentioned by our friends opposite, but nevertheless to my mind it is one of the most important things in the budget. On page 508 of Hansard the Minister of Finance shows that he has a surplus of nearly $55,000,000, but he has reduced the net debt of Canada by only $39,000,000. Naturally this raises the inquiry: Why is not the whole of the surplus set aside in reduction of the national debt? The explanation is simple. The government had to face a loss of nearly $16,000,000 on account of the poor administration of their predecessors. The government could not decrease the net debt of the country to the full amount of the surplus because after the war the Tory government d-evised a scheme to rehabilitate our returned soldiers by placing on farms those who wanted to take up farming. I do not criticize the motive; it was splendid. But I do criticize what happened. The figures in the budget show exactly what did happen. These men sent their friends throughout Canada to purchase farms, and in my own section, as well as in other sections, the prices paid were according to the degree of friendship which existed between the purchaser employed by the government and the man who had a farm for sale. As a result the government to-day is revaluing the soldier settlement lands and trying to give to the returned men, who paid a great deal more than their farms were worth, a square deal, and so in a small way recompense them for the great service they rendered their country overseas.

At this juncture I might contrast the direction of the policy of soldier re-establishment under the Tory government in 1920 and 1921 with the administration of the department under the present government. I wish to congratulate the Minister of Immigration (Mr. Forke) on the splendid work he has done and is doing in this connection. I can assure the house that in the eastern townships, in which of course I am more particularly interested, we have one of the finest committees on revaluation to be found anywhere in Canada. That committee comprises men who are not politicians but who enjoy the complete confidence of the entire district which they are endeavouring to serve. I am sure that in that section the soldiers will secure justice. And we owe them justice. The fact still remains, however, that the Minister of Finance could not further reduce the debt this year by $16,000,000 on account of the money wasted by the Tories in the purchase of those farms. One more

suggestion I would offer in regard to the treatment of our soldiers. I trust that, even if it may not appear on the statute books of Canada, our government and our government officials will stretch a point, if they have to go out of their way in some cases, to give full justice to these men or to their wives, families and dependents when perhaps their case does not absolutely come within the letter of the law.

This brings me to another item in the budget speech which I wish to touch upon, namely, the 'refunding scheme. Everyone is cognizant of the fact that throughout Canada nearly all of the financial institutions and trust companies are quite keen on gome scheme of refunding the war debt. For my part I think it would be a splendid thing, but I was pleased to read, on page 509 of Hansard, in the budget speech of the Minister of Finance, the following words:

" I submit that until Canada is nearer the pre-war rate of taxation, annual reduction of taxes is as important as reduction of debt. Our policy is to reduce both."

With which I agree. I submit this for the consideration of every Canadian citizen: This generation, from 1914 to 1928, has suffered to pay the price of the war; in 50,000 Canadian homes there is the vacant chair which indicates their participation in the war. Some of our financial men have lost hundreds of thousands of dollars as a direct result of the war, and more than ever our working and labouring population is still bearing the brunt of the struggle. Why, then, ask this generation to curtail still further in order to pay off the debt of the country? Have we not done our share? Let us reduce taxes and use the surpluses we have each year to build up Canada and to make this country a greater place to live in than it is to-day, so that we may beable to hand on to the future a heritageworth while. Let us leave to our children's children the paying off of the war debt, seeing that we have done our share, and especially in view of the fact that it is inthe best interests of this Dominion for us

to leave to posterity, after we have played our part in the war, a going concern, a country greater than it is to-day.

I am reminded of the picture painted in the house the other day by the hon. member for Fort William (Mr. Manion). Certainly the hon. member was experiencing one of his off days when he depicted all the closed factories throughout Canada. As he painted that picture I wondered what he was referring to, and I came to the conclusion that possibly the hon. member for Fort

The Budget-Mr. Howard

William had passed through Oshawa on the day the automobile factories were closed while the employees were in Ottawa in a delegation.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I was referring to the

closed factories in my own constituency.

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LIB

Charles Benjamin Howard

Liberal

Mr. HOWARD:

In view of the hon. gentleman's remarks, I think perhaps it might be just as well for me to cite some facts regarding my own home town, Sherbrooke, the queen city of the eastern townships, one of the most beautiful and prosperous cities in Canada, ideally located, even if it is small. I want to call the attention of the house to the fact that during the calendar year, 1927, the figures of exports to the United States alone, apart from supplies to our home market in that little section of the country known as the eastern townships of Quebec, amounted to $19,251,000. This quantity of products, through the only consular district, Sherbrooke, was sold and shipped to the country to the south of us. This mirrors the prosperity of our people. Last night I received a local newspaper in which I find that the surplus of Sherbrooke for the past year amounts to nearly $2,000,000, while the operating surplus in the electrical department, which is run under municipal ownership, is $245,000. Furthermore, the municipal tax rate in the city of Sherbrooke for the next twelve months has been reduced from 12^ to 10i mills on the dollar. All I can say to the hon. member for Fort William is this: If next summer the hon. gentleman finds things in Canada so bad I shall be glad to have him come down through our section of the country where I promise that we will demonstrate to him that Canada is still prosperous. That the people throughout the country are patriotic has been fully shown by the wonderful celebrations which took place on July 1 last. In my own town we had on that day a celebration which was second to none in Canada.

Our farmers are coming back to their own, and I say this advisedly. I want to congratulate the Minister of Agriculture (Mr. Motherwell) on his decision to extend during the next two years the restricted area as far east as St. Francis river. We in that part of the country are affecting the markets of the United States by our exports to such an extent that I find, in another item in the newspaper, the statement that in Washington the other day a delegation of farmers insisted that the United States government should raise their tariff in order to keep out our products which are being shipped from this section of Canada. As regards unemployment, I can only say that it is practically non-existent in my town. Every member of parliament knows, from his position, how quickly men call upon him when they are out of employment; so when I say that during the last six months only two persons have interviewed me looking for jobs, the house will realize that unemployment is insignificant in Sherbrooke-that in fact it does not exist.

Now I want to say a few words regarding the tariff. And first of all I want to congratulate the tariff board on the splendid work it has done in the investigation of cases brought before it. I make this statement after careful consideration, and not as a member of parliament. On several occasions the manufacturers of my town asked me to come to Ottawa with them and sit in at the hearings of the board. I did so and was surprised to see the manufacturers putting up their case on one side and the Consumers' League, on ' the other side, advancing its arguments in the interest of the taxpayer. The result is that there has been worked out a scheme which is reflected in the budget and with which we are satisfied in the city of Sherbrooke, even if two of our industries had their raw material slightly increased and one of the others, in the woollen line, had yarns put on the free list. I trust however the time will come when the tariff will be taken out of politics entirely. When I look at the tariff I cannot see why we should disagree with the western members of the Liberal party or even with some of the broad-minded members in the far corner. In the city of Sherbrooke we have two silk industries manufacturing silk stockings and garments which have a protection of 25 per cent against other countries shipping similar materials into Canada. Yet the prices of their products as sold to the consumers of Canada are exactly the same as the prices for which the American manufacturer sells to the United States consumer, so our manufacturers do not take advantage of that tariff of 25 per cent. That is what I call playing the game fairly.

I would also call attention to another industry which is carried on in the city of Sherbrooke; I refer to the manufacture of tire fabrics. This industry sells practically all its output to one concern in Toronto, to which the hon. member for North Simcoe (Mr. Boys) referred the other day. He congratulated the rubber people on their extraordinary showing, and demonstrated that the small tire used on the Ford car was actually selling for less in Canada than in the United States. But I may tell the house, Mr. Speaker, that that is made possible only because an industry in Sherbrooke, employing

The Budget-Mr. Howard

one thousand hands, is shipping its raw fabrics to Toronto, and in spite of a 25 per cent tariff protection the average price last year on its total output was only 6 per cent over the price in the United States. That is the policy of this party, in contrast to the policy outlined in two extraordinary speeches coming from the opposite side of the house to which 1 listened.

In this section of the country we use a great deal of coal; our labouring classes and our poor people all use coal, and I am foing to take home a good many copies of the speeches of hon. gentlemen opposite in which they advocate a duty of $1.50 on. coal coming from the United States. I want to tell the people in my constituency that the Conservative party want the people to pay $1.50 a ton more than they paid this year for their supply of coal next winter. As a matter of fact, while I am deeply interested in the. working classes and the poorer people, who need the government most, I am also frank enough to say that the people in the constituency of Sherbrooke do not expect the government to feed them every morning; they are willing to work for what they get.

Now I come to the reduction in the income tax. I do not know that my ideas in this regard will coincide with the ideas of other hon. members of the house, but first I want to congratulate the Minister of Finance for the reduction he has made this year. At the same time, I want to give my opinion of what I think should be done eventually in this regard. I believe the reduction should be oomtinued until the rate is about one-half the present rate, which I believe is too high. I should also like to see the tax on corporations reduced to 5 per cent, which is quite reasonable. Then I should like to see the exemption raised by $2,000 next year, $2,000 the year following and $2,000 the year following that, until no person in Canada with an income of less than $9,000 will be called upon to pay income tax.

In this connection there is another point which I should like to bring to the attention of the house. A number of people were fortunate enough to buy tax exempt victory bonds, but I am sure if you look around this house, you will find no one, with the exception of my deskmate and the leader of the opposition, who owns any of those bonds. However, in 1931 bonds will come due to the value of $52,000,000 from which the treasury' of this country has not received a cent in taxes in the past ten yeans; in 1933 tax exempt bonds totalling $446,000,000 will come due, while in 1937 we shall have to

redeem bonds of this class to the value of $326,000,000. making a total of $824,000,000 irom which the treasury of this country has not received a cent in the past ten years.

The one thing to-day which saves Canada from bolshevism, communism and socialism, is the fact that we have never adopted the principle that everyone should pay alike; that principle is not followed by any profession in Canada. Consider the medical profession; if the leader of the opposition were taken to the hospital and operated on for appendicitis I am sure his bill would be $1,500, and rightly so. If another member of this house should undergo an operation for appendicitis he might be charged $250 by the same doctor. But if Jimmy Jones, in my town, were taken ill and rushed to the hospital and operated on, if there were any charge at all I will bet the same doctor -would not charge him over $35. So I say I am glad that in Canada we have recognized the principle that those who have the most should pay the most, and therefore I am not in favour of the further reduction in the income tax. As one hon. member in the far corner said, we could relieve one hundred thousand of the income tax payers, by raising the exemption, and anyone whose income is over $9,000 deserves to pay something into the coffers of this country.

Then there is the question of prosperity in Canada. In the Financial Times of this week, which represents public opinion in the financial centres of Montreal, I find this statement with regard to Canadian stocks:

Net gain in capital value of $743,302,691.

That means there was an increase of almost a billion dollars in the value of Canadian stocks last year. I am pleased with that state of affairs, because it denotes the general prosperity of Canada, but I have just a word or two of warning to add. I have every respect for the Department of Finance, and the value of that department was demonstrated last year when a certain trust company tried to put something over on the people of this country and were not allowed to do so, because1 the Department of Finance said, "No, you cannot go ahead doing business unless you put more capital into your concern." I say this advisedly, that we do not want to load Canada with the burden of over-capitalization, because when stocks are split, when values are increased and water is put into the stocks there are only two possible results in a general way; either the cost of their product to the consumer is increased or the wages of the employees are lessened, and I do not want to see either of these things happen. So I hope that this government will be able in

The Budget-Mr. Howard

the neaT future to place on the statutes of Canada a law which will provide that any corporation increasing its capital must first secure the consent of the Minister of Finance.

Now, Mr. Speaker, I will ask you to call it six o'clock.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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LIB

Charles Benjamin Howard

Liberal

Mr. HOWARD:

To complete the argument I was advancing when the house rose at six o'clock I should like to make this statement: We all remember the famous reduction in the duty on automobiles. It is not necessary to review the facts with respect to it except to say that when a fair proposition was made to the manufacturers and they were asked to reduce the price to the Canadian consumer, of cars manufactured in Canada, they refused absolutely to do so. They persisted in maintaining the price at the American retail price, plus the Canadian duty of 35 per cent. Then this government reduced the duty on automobiles and the price dropped to exactly the amount of that reduction in duty. I would suggest again to the manufacturers of automobiles that they cut the price of their cars in Canada 15 or 20 per cent, and if they would do so that we should put back the duty to the original rate of 35 per cent in order to keep out imported automobiles, and yet give the Canadian consumer the benefit of the reduced price. I make that suggestion in the hope that the manufacturers in Canada are willing to play the game with the Canadian consumer, and with the idea that the tariff may be used to keep out American or other competition without increasing the price to the consumer in this country.

During the past two weeks we have heard in this house speech after speech criticizing what I consider a mere detail of administration. Surely in olden days the Conservative party not only indulged in criticism of the general policy of the government but suggested remedies for whatever they considered defective in that policy. The course pursued by the Conservative party to-day in regard to the McConachie case illustrates the straits to which they have descended. Now I view that particular matter in this light: I am not prepared to state that any mistake was made, but I do say this: If the government has

allowed the person in question to enter Canada, I suggest, and I think we are in duty bound to do so, that the whole family be taken *back to Scotland, that their home be repurchased and that they be re-established there.

But in spite of the sympathy I personally feel for the family under the conditions, I am still prepared to say that we must keep up the quality of our immigration regardless of the quantity. I am not surprised considering the speeches of opposition members, that the figures of immigration are not larger than they were during the past year. Only this week the leader of the opposition (Mr. Bennett), for whom I have the greatest respect, made a speech in the city of Montreal, and I wish to read an extract from that speech as reported in the Montreal Gazette of Monday, March 5th:

Canada selling her estate, says Hon. R. B. Bennett.

I do not believe that Canada is selling her estate. I defy any member on either side to prove that such is the case. But I would ask this question: Outside of criticism of a mere

matter of detail in the particular case alluded to, what policies or general suggestions have the opposition made to the government outside of a suggestion that a duty be imposed on coal? I pay this tribute to the hon. member for Toronto Northwest (Mr. Church): he at least has the courage of his convictions to the extent that he has placed a motion on the order paper asking the government to go ahead with the deepening of the St. Lawrence waterway; but in spite of the fact that a great many hon. members opposite come from Toronto, or from that section of Ontario deeply concerned in this matter, not one single member on that side has advocated a policy that would mean increasing our immigration and increasing our prosperity.

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

There is lots of time for that.

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LIB

Charles Benjamin Howard

Liberal

Mr. HOWARD:

I refer particularly to the deepening of the St. Lawrence waterways. As to the remark of my hon. friend, this debate is practically over. |

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CON

Horatio Clarence Hocken

Conservative (1867-1942)

Mr. HOCKEN:

You will hear from us about it.

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LIB

Charles Benjamin Howard

Liberal

Mr. HOWARD:

A great many articles have been written and a great many suggestions have been advanced with respect to this proposition, and in almost every instance the only objection to it is on the score of cost and its international features. As I stated this afternoon, I am not worrying one bit about the cost to Canada. I think that as Canadians we ought to spend in the development of this country the money available in our surpluses, and if there is one thing which in my opinion would develop Canada it is the expenditure of possibly $600,000,000 on the deepening of the St. Lawrence waterway.

The Budget-Mr. Howard

During the three sessions that I have had the privilege of being a member of this house I have heard hon. gentlemen opposite ask this government many times to stop Chicago from stealing the water of lake Michigan for the purpose of diverting it into the .Mississippi river. If the opposition are so much concerned about the interests of Canada, let them cease criticizing the Immigration department oveT the McCon-achie case and make some constructive suggestions that would really be in the interests of this country. The diversion into the Mississippi river of 8,500 cubic feet of water peT second from lake Michigan is a serious matter to Canada. When we utter those figures rapidly it does not seem to be a very serious matter, but those who are acquainted with the city of Sherbrooke know that power is developed there on the river Magog. That power has helped make Sherbrooke what it is. Now the mean flow of the Magog river is 550 or 600 cubic feet per second. In other words the water that is being taken from lake Michigan, and which belongs to Canada, is fourteen times the mean flow of the river which furnishes power to Sherbrooke. The biggest argument against this development is its international feature, but my position in that regard is that I have every faith in Canadian statesmanship and I am not the least bit afraid to treat with the United States on that subject. If that project is carried out, one thing we know it will do is put a stop to the building of a canal from Buffalo to the Hudson river and in view of the extent to which our Canadian trade is already going via New York surely it is imperative that we make every possible effort to divert this trade through Canadian channels.

As regards the power development in the St. Lawrence river I am sure that the people hardly realize, when they criticize the project, that of the total fall in the river between Kingston and Montreal only 93 feet is in the international section while 115 feet is in the all-Canadian section, so that in any case Canada stands to benefit by more than 75 per cent of the total power development. Some remarks that I made the other day on this subject were misquoted and I wish to correct that error now. If this scheme goes through we shall interest not financially but morally the large section of central United States and also the state of New York, which is interested in the power end of the scheme and they will be a large factor in stopping the Chicago steal. Speaking as a man from Quebec, I believe if the deep waterway were built for no other purpose than the fact that it will permit a development of power near

the city of Montreal, that it might be a good thing to have this power in the hands of the government rather than allow it to pass into the control of private individuals.

If we are so much interested in the prosperity of our country, let us remember that in the past this prosperity has always been due to some great government work being undertaken. For instance, the time that my section of the country went ahead was when the Grand Trunk railway was built through the eastern townships. In fact from that section the people came in delegations to Montreal, the then seat of parliament, and asked the government to undertake some governmental work during that period. When the great Canadian Pacific railway was built through Canada, there was, as was stated again this afternoon, a wonderful period of prosperity. If we want a successful immigration policy; if we want to bring people into Canada; if we want to make Canada prosperous, let us go ahead with this scheme, and even if we create a false prosperity during the next ten years and spend $500,000,000 or $600,000,000, the effect will be that it will make two jobs in Canada for every man and create an employment situation such as is essential to the development of our country.

In closing, Mr. Speaker, I may say that the first budget of the Liberal administration in May, 1922, showed a deficit of $81,000,000, and to-day, after six years under this government, and including two months and thirteen days under Tory administration, there is a surplus of nearly $45,000,000. So much for Liberal administration so farl

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CON

William Kemble Esling

Conservative (1867-1942)

Mr. W. K. ESLING (West Kootenay):

Mr. Speaker, it has been said that when a compliment goes from those who sit on your left to those who sit on your right it should be accompanied by a brick, but to-night I am going to omit the brick and to acknowledge and to thank the Minister of National Revenue (Mr. Euler) for his courtesy in connection with a matter which materially affected a mining section of my district. Had he taken the course which the case justified and adopted stringent measures, the pay of a number of miners would have been materially affected. It would have prejudiced a number of miners working leased properties; it would have jeopardized the position of a number of creditors, and it would have retarded, at least temporarily, mining development. The minister was very considerate and generous;

I may say that the matter was satisfactorily settled all round, and I am glad to be able to make this acknowledgment.

The Budget-Mr. Esling

I want also to congratulate the Minister of Agriculture (Mr. Motherwell) on the successful installation of a pre-cooling plant at Wynndel, in my district. It has been a great aid to the berry and fruit growers, and while it was completed only last year it served a very effective purpose, a particular instance being cited in connection with some thirty tons of strawberries. These strawberries would otherwise have been a total loss, but they were saved by the ability to put them in this pre-cooling plant. They were processed and cooled to freezing point; then they wore packed in barrels and shipped seven weeks later netting the owners some four thousand dollars. Shipments from this district, namely, the Creston district, in 1927, amounted to just over half of a million dollars; it is one of the banner fruit and berry districts of British Columbia. The yields were as follows:

Forest products $225,000

Fruit and vegetables 255,000

Poultry products 35,000

Live stock, and so on 10,000

There were 92,376 boxes of apples shipped, which brought 8133,000. And next to apples come the strawberries. Creston is a wonderful strawberry district. They pick the berries in the morning and the next morning without change of cars they are on the market at Calgary.

I have this little memorandum of production from the Creston Review which I should like to put on Hansard:

The great revenue getter was strawberries with an outgo of 30,000 crates, for an intake of $60,000. In addition to this 15 tons went out for jam manufacture, and another 30 tons were processed and shipped to Toronto for making soda fountain cordials, flavourings, etc. Of this creditable total it must be stated that fully 75 per cent was produced at Wynndel.

Of raspberries 6,716 crates were marketed, worth $15,113, and when to strawberries and raspberries is added the value of the loganberries, blackberries, gooseberries exported, Creston district can claim a 1927 berry crop worth not less than $85,000. Red and black currants, placed at 1,526 crates, were worth about $3,000.

Probably no other district in the interior of British Columbia has such splendid marketing advantages or such a promising future. Extensive reclamation projects are in view which will add materially to the vast area of fertile land in that district.

I should like to say just a few words about the budget, because that portion of any budget in any country which contains even a suggestion of reduced taxation is always a good political gesture as indeed is any measure likely to lighten an individual's financial burden; and nobody knows this better than 56103-72J

the Minister of Finance (Mr. Robb) himself. He had experience in the last campaign; instead of going from place to place excusing and explaining and denying and defending the shortcomings and the sins of omission and commission of his colleagues and his party generally, he simply talked about reduced taxation and he got away with it. It may be very truly said that many of those who sit on your right owe their membership in this house to-night to the policy adopted by the Minister of Finance of merely talking about reduced taxation.

As regards this reduction of ten per cent in the income tax, while a ten per cent reduction sounds very fine it does not mean so much when one remembers that Canada has a population of 9.000,000 people of whom only 116,000 pay this income tax, so that practically 8,900,000 are not affected by this reduction to the extent of one penny. It means that the rank and file of the population of Canada, people earning say less than S3,000 a year, will not benefit to the extent of one penny. Nor does it mean anything to the mani on the ten or twenty-acre plot of land who depends for his living on the sale of farm products, vegetables, poultry and so forth. While this cut in the tax does lessen the burden on the big fellow, I think everybody agrees that it is the big fellow who should pay the bill, and if there is one fair tax in Canada it is the income tax.

Had the budget provided for the total abolition of the sales tax by the end of 1928, as urged by the Conservative amendment, practically every wage-earner and every small farmer in the Dominion would have benefited. I think people seldom realize when they are paying a sales tax. A family of five, a man, his wife and three children, living in a moderate v;ay, will have to pay a tax of $20 per year on their clothing, but simply because the sales tax is not marked on the bottom of the bill people fail to realize that they are paying it. Or take the case of a man who is building a house. He seldom realizes that he is paying sales tax on the materials entering into that house, whereas as a matter of fact it is estimated that sixty per cent of the cost of a 63,000 house goes into material, and on that the man is paying sales tax: in other words even under the proposed reduction in the sales tax the man who puts up a $3,000 house will still pay $52 in sales tax.

I want to speak of my own particular district for a few moments, because naturally every member is interested in emphasizing the conditions in his own district. I want to show how the tax anodes in some communr

The Budget-Mr. Esling

ties. In the town of Trail, for instance, during the past five years, the expenditures on dwellings, business blocks and public improvements have amounted to $2,206,000, on which sales tax amounting to $53,000 has been paid. In addition to that we have a very progressive industrial institution in that city, which in the last five years has paid approximately $180,000 in sales tax on the materials used in their construction work.

When you buy a motor car, no matter how cheap it is, you have to pay a sales tax of from $25 to $40 on the car. My district, as well as the adjoining one represented by the Minister of Health in this government (Mr. King), who is the minister for British Columbia, is composed almost entirely of wage earners and small farmers, and they would have retained a very much larger proportion of their pay cheques if the sales tax had been abolished last year as urged in the amendment moved by the leader of the opposition. He then urged the total abolition of the sales tax on clothing, and I find by Hansard of March 17, 1927, that the hon. member for East Kootenay (Mr. King), the minister for British Columbia, in whose district, as I said, there is a very large percentage of wage-earners, was not very solicitous then about the families of the wage-earners because he voted against the amendment to abolish the sales tax on the family wardrobe.

It is to be regretted that the Minister of Finance has not seen his way clear to abolish double taxation on dividends. There is one thing a young and growing country needs, and that is outside capital to aid in developing its resources. The investor is naturally prejudiced against a country in which his returns are taxed twice as compared with a country in which they are taxed only once. At the conference on taxation that was held in October last, the Dominion government was requested to discontinue the practice of double taxation, and I regret that it has not done so in this budget.

I am now going to refer to a matter which might perhaps more properly be brought up when the estimates are under discussion, but I bring it to the attention of the government now because the need is,urgent. I refer to the necessity for the immediate construction of a public building in Trail. It has been announced by the government that an item for a public building in Trail will be noted in the preparation of the supplementaries, but as this must be approved by the cabinet in council, I wish to make a few observations in its support. Last session the Minister of

Public Works (Mr. Elliott) said that it was the policy of the government to erect public buildings only where the accommodation was inadequate and the necessity urgent. That is a sensible and businesslike policy with which I agree, and I propose to show that the needs of Trail come under that head. There can be no excuse for not erecting a public building in Trail on the ground of lack of funds, because the Finance minister in his budget speech stated that there was a surplus of $54,000,000 and estimated revenues sufficient to meet the needs of a growing country. A site for a public building was bought and paid for in the city of Trail in September of 1925, and I have a letter and a wire here dated September 27, 1927, from the resident architect at Victoria, saying that the matter was of great urgency, as indicated by a telegram from the Public Works department at Ottawa. It was of great urgency then, Mr. Speaker-that was just four weeks before the election-but unfortunately since that time nobody in the government has been interested in the matter. According to the 1921 census the city of Trail had a population of 3,020, and that number has increased to-day to 8,500, or approximately 9,000. To show the deplorable lack of accommodation in the post office, I would point out that there are from three to five families shar-in a post office box, and 500 additional boxes are needed to meet the applications on hand. Nobody wants the government to spend money foolishly, but I say that the men going off shift from the great industrial plant at Trail are entitled to adequate postal service, and the most deplorable feature in Trail at present is the post office and customs accommodation. There is located at Trail the largest metallurgical plant in the British Empire, treating lead zinc ore from the richest mine in the world. The mine has ore blocked out to a value in excess of one billion dollars. The plant produces pure gold, silver, lead, zinc, copper, antimony and by-products to a value of nearly forty million dollars a year. It furnishes 10 per cent of the world's lead supply and 7 per cent of the zinc supply. It produces daily 400 tons of lead, 300 tons of zinc and 70 tons of copper. It pays more than one per cent of Canada's total freight bill by rail and water. The company is capitalized at $15,000,000, while to-day the shares are selling on the open market at a price equivalent to a total value of $165,000,000.

The permanency of the city for which we are asking this public building is emphasized by the fact that the company has loaned its employees $700,000 for the purpose of

The Budget-Mr. Esling

erecting homes. The company itself has erected a $100,000 store building, a $100,000 hospital-and, by the way, it is the last word in hospitals of its size-and contributed $35,000 to a memorial building. It has also advanced money and made possible the construction of an artificial rink at a cost of $50,000. The life of each employee is insured under the group plan. After a certain period of service with the company an employee is retired on pension. The company maintains the largest herd of pure-bred Ayrshires in the Dominion for the purpose not only of supplying the residents of Trail with milk, but of furnishing a bottle of milk every day to each of the men employed around' the lead furnace. At Christmas-I just want to show you that this company is intensely human-each married employee receives a gift of $50 in cash and a turkey; each single employee a gift of $25 in cash and the equivalent of a turkey in merchandise. After three years' service an employee is given a share of stock, the market value of which to-day is $274. As I said before, it is an intensely human institution, and the pity is there are not more in Canada.

Trail's payroll is nearly $5,000,000 a year. The company, together with the community, pays annual taxes to the province and to the federal government of $2,000,000. Last year they paid into the federal treasury in taxes a sum equivalent to six times the total expenditure on federal public buildings in British Columbia, including rents, repairs, and mortgage interest on a federal purchase in Vancouver. Although the federal treasury has received this immense sum, the federal government has not in thirty years spent one solitary dollar in Trail, with the exception of the $11,000 Which it paid for the purchase of the site to which I have referred. Every street in the city is paved with concrete, and the sidewalks are of cement. In the past five years the company has done construction work to the value of $7,000,000, and the city has issued building permits for dwelling houses and local improvements to the value of $2.000,000. The customs and excise duties collected in Trail for the fiscal year 1926-27 amounted to $120,000, and the post office revenue for the same fiscal year ranks Trail No. 9 out of 931 post offices in the whole province.

Now, Mr. Speaker, these facts would indicate that there is certainly good reason for urging the erection of a post office in Trail. It was only a few days ago that I received a telegram from the city council asking that the government be urged to have such a

public building completed this year, as the situation is urgent. First of all, there is a. lack of accommodation, and then there is urgency. The hon. Minister of Public Works stated his policy was to erect public buildings where there was a lack of accommodation, and urgent necessity. Here both conditions prevail. The telegram contains this paragraph :

The rent of the present building has lately heavily increased, with the consequence of an increase in box rents, making these box rents higher than anywhere else.

I wish particularly to impress upon the minister the lack of accommodation. I have a letter from the Ratepayers' Association of East Trail which says:

As the company is daily adding to its number of employees the congestion becomes greater. With so many cars in our city it is dangerous to send children after school hours and too far for our wives to make the trip,-

I may say this refers to East Trail, which is about a mile from the post office.

-so it falls on the men to call for the mail on the way home, and they soon tire waiting in this line, and go off home without the mail.

There is further evidence of lack of accommodation. I have also the report of the post office inspector dated September 16, 1926, in which he recites:

That there are 1.047 boxes in the Trail office; that the postmaster could rent 1,500, that he estimates in three years Trail's population will reach 12,000.

Then the inspector adds:

I would respectfully request that a public building be proceeded with as soon as possible.

There you have the inspector himself recommending the construction of a public building as soon as possible. He also suggests that the post office contain 2,100 boxes instead of 1,047 as at present. Surely that is further evidence of lack of accommodation. He further suggests that the new building should have three times the present square feet of floor space. This is more evidence of lack of accommodation. Now let me give an extract from the Nelson Daily News, pulished at Nelson, fifty miles from Trail. In an editorial I find the following:

The Nelson Daily News hopes that the request of the Trail board of trade for a public building will receive in this case a little more than the usual "earnest consideration".

And here is another passage from this editorial:

There are conditions of congestion; that Trail post office is notorious.

Let me quote further from the editorial:

The present post office quarters now rank as wholly inadequate and temporary.

The Budget-Mr. Esling

In a letter dated February 3, 1927, the hon. Minister of Health of British Columbia writes me as follows:

I am thoroughly conversant with the matters of that district, and it was with a view of giving better accommodation that I recommended the purchase of property in Trail some time ago, it being my intention to advocate the erection of a suitable building on the site.

I hope the Minister of Health (Mr. King) in meeting of the cabinet council will advocate the erection of this building.

I have another letter. It is from the deputy postmaster general:

As to post office accommodation, the district superintendent reports that the present premises are inadequate and that a new and suitable building should be erected. A recommendation to this effect has already been forwarded to the Department of Public Works and it is understood that the matter is under consideration.

I have also a letter from the Postmaster General himself as follows:

I may say that the construction of public builidngs is a matter of policy resting with the Minister of Public Works, but I have already made representations to his department that the accommodations at present provided at Trail are totally inadequate and have urged the erection of a suitable public building.

I think I have shown that the policy of the Minister of Public Works applies to Trail.

Last year Canada celebrated1 its sixtieth anniversary. Flags were flying, bells were ringing, and everybody rejoiced from coast to coast. Altogether it was a wonderful celebration, one that would have gratified the fathers of confederation could they have witnessed the festivities and observed what has been accomplished in Canada in the sixty years from the time those strong and able colonial statesmen framed the act which gave us our constitution. They would have rejoiced to know that we to-day have an educational system in Canada equal to any in the world1; that we have a transportation system which encircles the globe; that we have huge water power developments and industrial activities; and that we enjoy all the modern comforts of the most advanced nation. It would, I say, have been an inspiring revelation to the fathers of confederation. Following that celebration came the imperial conference, from which Canada emerged with an allegedly mew constitutional status. We have been basking in the sunshine of absolute autonomy; we have been negotiating commercial treaties; and we have been sending ambassadors in every direction. All this makes a thrilling and inspiring picture to hang in the gallery of world progress, because Canada is a great and independent nation,

I want to give you another picture by way of contrast. The affairs of this great and independent nation are to-day administered by a government which, without a hearing, without any charges upon which to proceed, and against the written protests of ninety per cent of a community, saw fit to remove a little country postmaster in order that they might appease the appetite of some hungry Grit who wanted to possess himself of the office, the actual remuneration of which is less than one dollar per week. There is located on the Arrow lakes in British Columbia a little community known as Renata. That community is composed of just sixty-one adult souls, all thrifty, enterprising and industrious fruit growers. In the early part of 1927 a vacancy occurred in the post office and fifty-five of these sixty-one persons signed a petition for the appointment of the storekeeper; the other applicant was a Liberal returning officer, road boss and justice of the peace. The Postmaster General must have done so inadvertently, but he appointed the storekeeper, and I have a letter which states that the Liberal returning officer made the boast that within six months he would be postmaster in that community. Well, within not six months but precisely nine weeks from the day of the appointment of the storekeeper word was received, not from the inspector, not from the department, but from the Postmaster General himself-the Postmaster General of this great and independent nation-firing that little country storekeeper whose remuneration was less than one dollar per week. The community protested; it forwarded its protest to Ottawa. But nothwith-standing that fact their representations were ignored; their protests were of no avail. As a community they got together and said, We will not go to the new post office, but will patronize the postal service of the river boats. And to show that they were in earnest, I may mention the fact that whereas the receipts of Renata post office for the last nine months under the new Liberal appointee have been $70, for the corresponding nine months of last year they amounted to $162. The people send one of their community out to the new Liberal post office to get their mail and they bring it to this little store where it is distributed.

I asked for a return of the correspondence in this matter, and naturally enough I expected the correspondence which led to the dismissal of the former postmaster. All I received was the correspondence that took place after his dismissal. There was one letter in which the statement was made that it had been deemed advisable to make the change because of a

The Budget-Mr. Lucas

change of site. But the site which suits the people is near the wharf, the only outlet for the community, whereas the office of the new postmaster is half a mile out of town, inconvenient to the people of the community. This is a picture which hangs in the gallery of public opinion and shows the political degeneracy of this government. I will add this, however: My personal regard for the ministers on the other side is too great to allow me to think for one moment that the majority of them would condone such a removal. But a government must be judged by the company it keeps, just like an individual. I do not know what part the minister from British Columbia played in this particular affair, but the fact remains that he was the sole survivor of the last Liberal wreck in that province, and anyone wanting a job would naturally appeal to his influence. That was why I asked for the return.

I w'ant to say a word about mining, because of the new activity in the development of our mines. The advances which have been made in metallurgical research warrant the conclusion that it will not be long before the value of the mineral output of Canada equals that of wheat. The value of last year's wheat production was approximately $450,000,000, while last year's mineral production was valued at $241,000,000. With the advances in metallurgy we are now able to treat more complex ores and ores of lower grade, and under this development northern Ontario and Quebec as well as Manitoba will, it is fair to assume, show a healthy increase in mineral output. Experiments in the recovery and utilization of the iron content of the smelter slag are proceeding at Trail, and I hope before long we shall be turning out iron there in addition to the other products.

In this connection I should just like to say that we in Trail, in common with the rest of this Dominion, should feel extremely proud of the fact that last week, in the city of New York, Mr. S. G. Blaylock, manager of the Trail smelter, was awarded the James Douglas gold medal by the American Institute of Mining and Metallurgical Engineers for the greatest commercial achievement in metallurgy. The history of this award dates back to the time of the war, when the allies were paying 45 and 48 cents ,per pound for zinc, the supply of which was practically controlled by a New York syndicate. Mr. Blaylock and his research staff at the Trail smelter solved the process of separating zinc from ores, as a result of which the Trail smelter was able to supply the allies with zinc at 15 cents per pound. I think, Mr. Speaker, that if the federal Department of Mines would step on it and speed up its research department some day we might hope for equal honours to be achieved by that department.

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

William Thomas Lucas

United Farmers of Alberta

Mr. W. T. LUCAS (Camrose):

Mr. Speaker, before entering into a discussion of the budget proposals I wish to say a few words with regard to some remarks made by the hon. member for Lisgar (Mr. Brown) last evening, when he spoke of the preference for the Conservative party shown by certain hon. members in this corner during the session of 1926. In my opinion the hon. member for Lisgar is the last person in the house to bring up the question of the famous 1926 session, because one of the most humorous incidents which comes to my mind when I think of that session is the awful agony the hon. member went through whenever the fate of the Liberal party was at stake. With regard to my own position I simply wish to say that I have never attempted to make any apology for the stand I took on that occasion. I submitted that stand to the electors of my constituency, and my presence here to-day is their judgment of that stand. I am prepared to let it go at that.

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

March 8, 1928