Mr. W. R. FANSHER (Last Mountain):
Mr. Speaker, in rising to make a few observations on the budget as presented by the Minister of Finance (Mr. Robb), I would like to make reference to the remarks made the other evening by the hon. member for Yale (Mr. Stirling). He reviewed a state of affairs which exists with regard to the apple-growers of British Columbia, and his observations no doubt attracted considerable attention. I do not desire to have my remarks considered as offering any advice to those who have found themselves in the position described by the hon. member, but I would like to mention that the wheat-growers in the three prairie provinces found themselves in a somewhat similar position in 1923. In that year the farmers of western Canada found that they were, producing their crops at a very serious loss. Many farmers had an actual cash loss of $3,000, and some farmers lost as much as $10,000. We had our backs to the wall and we had to devise ways and means by which we could benefit from our experience, and from the morass of opinion which was expressed at that time was evolved what is known as the western wheat pool. We did not believe that we could ask for protection and have the situation relieved in that way, but we believed in the old adage that mutual self help was the best help we could gelt and we proceeded to set up an organization which would put our product on the markets of the world at the lowest possible cost. In reviewing the situation at that time we discovered that the consumer of our wheat was paying a much higher price than was commensurate with the price we received for the product. I think we have succeeded to a very large extent in eliminating that large spread between the price the consumer has to pay for the finished article, the loaf of bread, and the price we receive as the producers of wheat. I am sure that we in the prairie provinces pay a sufficient price for a box of apples to net the producers a very handsome return. I can recall having paid as high as $2.75 for class C apples, and up to $3.25 for class A; I know that the cost of packing is about 55 cents and the freight is about 65 cents per box, and I do not see any reason why the prairie provinces should not be treated in the same manner with regard to apples as are the consumers of wheat. I do not see any reason why the producers in Yale
The Budget-Mr. Fansher (Last Mountain)
and other constituencies in British Columbia could not make some arrangement with the consumers which would eliminate this wide spread. If that were done we would be able to consume more apples and the producers would receive a greater return for them. I only offer this as a suggestion, and I would like to see another goodwill deputation visit our provinces with' the definite object of getting together on this matter so that we might bath be mutually helped.
It is not my intention to detain the house in reviewing the budget, as I have a specific matter which I would like to bring to the attention of the house. A situation has grown up very recently in western Canada which, I think, should receive the very serious consideration of the Minister of Finance. I want to congratulate the minister on the very clear and concise manner in which he presented the financial statement of the affairs of Canada, and for the few reductions in the schedules which he has brought down. He also gave us a very clear understanding as to the indebtedness of Canada. If I have his figures correctly, he gave the dead weight debt of Canada as $2,330,835,086, a rather colossal sum. Although most of this enormous debt was created during the war, we must remember that the interest on this large sum of money, as well as any reductions in principal, must come through the efforts of the taxpayers of Canada. I am pleased to note that there is no reduction in the income tax in the budget of this year. We did have reductions in 1927 and 1928, and I remember receiving letters, pamphlets and exhortations from various organizations throughout Canada urging that I support the Prime Minister and the Minister of Finance in the reduction of the income tax. Whenever I answered any of this correspondence I always stated that I was opposed to any reduction in this tax so long as we had a war debt which had to be met; so long as we had a war debt upon which the interest charges were accruing year by year. The income tax along with other taxes, was specially instituted to take care of the enormous debt thrust upon us because of the war. It is a tax which comes from those who are best able to pay. Those who come under the present schedules of the tax, in my opinion and I am sure in the opinion of many members of this house, are well able to pay that tax. It is a tax that is easily collected; there is no particular expense in connection with its collection. On the other hand, if it were done away with, whence would the interest charges come and whence would the amounts necessary for the reduc-
tion of our enormous debt be collected? They would be collected principally from the customs and excise taxes and even now, as I shall endeavour to show a little later on, the burden is very heavy on many of us. It is not my intention to go into the matter fully, but if we take into consideration the platform that was given us in 1919 and again in 1921, I feel that we are moving all too slowly along this line. In that platform certain commodities were specified that would be put on the fre.e list. The government has been in power for seven years and the last item on the list, namely, fertilizers, has been put on the free list. I would impress upon the minister the necessity within the next few years of putting on the free list the next item, that is, cement. In looking over the report of the hearing before the tariff advisory board we realize that the cement people can well do without any protection whatever in the production of that commodity. It is a staple building material and it enters into the cost of our production to a great extent so that the removal of the duty would be of great assistance to us.
Passing on I should like to comment on the talk of prosperity in the Dominion. I was pleased to note in the speech delivered the other day by the acting leader of the opposition (Mr. Guthrie) that he said the prosperity had not reached the small towns and townships throughout Canada. If we pick up the papers and read the bank statements we would think Canada was rolling in wealth, and possibly from their point of view they are stating what actually exists. Bank statements show unprecedented prosperity; brokerage houses and financial corporations show a very large increase in their operations and profits. Our Canadian National railway was never before in its history able to make such a showing as it did during 1928. The gross earnings were far and away above anything it was able to show in previous years. The net profit that our nationally-owned railway made last year was $7,000,000, not including the interest accruing to the government. That is a very creditable showing. I just want to point out where the major portion of this revenue came from. In western Canada we had an immense crop, so far as quantity goes; considerably more than 500,000,000 bushels of wheat were produced there last year and from that crop the railways received the tonnage on which they were able to make such enormous earnings. But the western crop in the aggregate is not paying the cost of production. The revenue from this immense crop which has created such prosperity, we might
The Bude/et-Mr. Fanaher (Last Mountain)
say in the upper strata of the financial world, has not brought prosperity to the men who produced it. I could name hundreds of farmers in my own constituency in western Canada who, when they drew out every bushel of wheat that was taken from the threshing machine and marketed the same, found the first pool payment on that wheat was not sufficient by several dollars to pay the cost of threshing which is a very minor cost in the production of wheat. That is a very serious matter and it is driving us in western Canada to look around for new methods of production. That is not all due to climatic conditions. True it is, we had a frost just when the wheat was ready to harvest. This wrinkled the bran a little in some instances but it did not harm the milling value at all. As was mentioned by the hon. member for Yale (Mr. Stirling) last week, their grading system in regard to apples militates against their profits considerably, and the same thing can be said with regard to grain in western Canada; the grading system under which we operate at present was not applicable to last year's crop. The producers of last year's crop are suffering to the extent of millions of dollars because they could not receive the intrinsic value of their product, and because of the over-production the farmer's plight is made even worse. True it is, we produced an enormous crop in western Canada last year. We are told that the surplus production of wheat throughout the world in the harvest of 1928 was more than 400,000,000 bushels, and yet we have an immigration policy which is bringing into Canada only farmers to settle here, open up new territories and produce more wheat to flood the world's market and in that way reduce the price. That is a policy which, I maintain, is fallacious. We should make a complete survey of the situation and see whether some better method cannot be found than bringing into Canada immigrants ostensibly to go on the land and produce where production does not show a profit. During the last number of years the position of the farmer has not been rosy. True it is, the 1927 crop gave us a little ray of hope, but it was dissipated when we started to thresh our last year's production.
This leads me to another phase of the situation which I want to draw to the attention of the house, and especially to that of the Minister of Finance. In his remarks in bringing down the budget he had these words to say, as reported in Hansard, page 595:
The constant expansion within Canada brings new problems. We should recognize that this generation has an obligation to build wisely for the greater to-morrow.
I want to bring to the attention of the house Canada's new problem. In western Canada we are not slow to adopt new methods of tillage, harvesting, marketing and so on. I might refer for a moment or two to what industries are doing. I remember well reading the report of the hearing before the tariff advisory board of the application for an increase in duty of fifty cents a ton on coke where one of the manufacturers engaged in the production of iron and steel threw across the table the remark that a certain institution in this country was a back number; that its machinery of production was out of date and that he himself was very strongly opposed to any advance of fifty cents a ton in the duty on coke, for the reason that he had spent several hundred thousand in putting into his plant new machinery, up-to-date methods of handling his product, and he felt that he should not be penalized to that extent because he wanted to keep abreast of the times. In western Canada in the last three years there has been an innovation in the harvesting of our crop and I want to speak particularly of the combine and the position in which it is placed through the tariff. I might draw the attention of the house to certain items in the customs tariff schedules which relate to harvesting machinery. Tariff item 445 specifies harvesting machinery as follows:
Mowers, mowing machines, harvesters, selfbinding or without binders, binding attachments, reapers and complete parts thereof: British
preference, free; Intermediate, 6 per cent; General, 6 per cent.
The machine known as a combine, which is coming into extensive use in the west, is not wholly a thredher; it is only part thresher and part reaper; it falls under section 60 of the Customs Aot, and section 60 reads as follows:
If an article is enumerated in the tariff under two or more names or descriptions, and there is a difference of duty, the highest duty provided shall be charged and collected thereon.
To prove my statement that this machine is new in western Canada, and that the farmers are not slow in taking up advanced ideas in either tillage, harvesting or marketing, I would like now to quote you a few figures. I wrote to the Departments of Agriculture in the three prairie provinces, and I received from those departments similar answers, as they quote the figures given by the Northwest Farmer in their census of the situation. I hold here in my hand that document to which I have referred. It has been compiled from information secured from all machinery companies doing business in western Canada that sold or dealt in combines, and I want you to
The Budget-Mr. Fansher (Last Mountain)
note particularly the rapidity with which the western farmer has taken up this particular machine. Combines first made their appearance in any number in 1926. In the province of Manitoba during that year there were two in operation; in Saskatchewan, 148 and in Alberta, 26-not a very large number when you consider the thousands and thousands of farmers in western Canada. But in 1927 twenty-one were added in Manitoba; 382 in Saskatchewan and 195, in Alberta, making a total of 598 put into operation in 1927.
Undoubtedly, these combines were proving their effectiveness and efficiency, because when we come to 1928, we see an increase of 611 per cent- 611 per cent in one year. In Manitoba that year, in addition to those already in operation, they had 206; in Saskatchewan, 2.356, and in Alberta, 1,095, making a total for the year 1928 of 3,657 new machines.
The grand total of those machines brought in and put into operation in the last three years was 4,431. These machines came in, and were classified under tariff item 447b, which reads as fouGowg:
Wind stackers and threshing machine separators, including baggers, weighers and self-feeders therefor and complete parts therefor: British preferential. 5 per eent; Intermediate, 10 per cent; General, l0 per cent.
I want to detain the house a little while in explaining this. The rate is 10 per cent. It is 5 per oent under the British preferental rate and 10 per cent under the general tariff. A thresher-separator, that is, an ordinary thresher-separator, costs to-day anywhere from $1,600 to $1,900, according to its size. It is set in the field and remains in a stationary position, and threshes all day usually. It is not drawn around the field, and it is not subjected to any thing like the wear and tear that a combine is put to. The tractor that furnishes the power for that separator comes in free, but the motor that furnishes the power for the combine is taxed 10 per cent. There is in this a great inequality. The combine costs anywhere from $2,000 to $4,000, and it tabes a $4,000 combine to accomplish in a day the amount of work that can be done by the ordinary separator that costs $1,600. It is a new method of harvesting. It gets our wheat in a better condition to the elevator. It keeps it away from 'the snow because, as we know, we very often have a snow storm early in the season which necessitates threshing the remainder of the crop the following year.
It is my contention that this machine should come under item 445 and should be taxed 6 per cent instead of 10 per cent. If the combine would last as long as the f&lr. W. R. Fansher.]
ordinary separator conditions would not be so bad. But this particular machine is shortlived, and, under ordinary circumstances, a farmer will require two of them in the period of time during which an ordinary threshing separator would last him.
Subtopic: CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic: FINANCIAL STATEMENT OF THE MINISTER OF FINANCE