March 11, 1929


The house resumed from Friday, March 8, consideration of the motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Hon. Hugh Gulthrie.


PRO

William Russell Fansher

Progressive

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

824 COMMONS

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

826 COMMONS

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.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

John Vallance

Liberal

Mr. VALLANCE:

Might I ask a question?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

Yes.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

John Vallance

Liberal

Mr. VALLANCE:

Does the swather come

under the same tariff item?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

Yes,

the entire machine comes under the higher rate. The combine is essentially a harvesting machine. It does the harvesting and the threshing at the same time. When the crop is to be harvested it goes around the field, picks up the standing grain, threshes it and delivers it in the wagon. In being hauled around the field you will readily understand that the machine is in the dust and dirt all the time and, therefore, it is not a long-lived machine. It is my desire to impress upon the members very strongly this contention: that this particular machine should be designated as a harvester. It is essentially a harvester machine, and should be designated as such. Take last year, for instance. There were 3,657 of those machines brought in, and you must realize that the production of wheat in western Canada is penalized to a very great extent when I say that it was only in 1926 that they first made their appearance. The present classification is not in keeping with the spirit of the revision of the machinery schedule made a few years ago when all harvesting machinery then in existence was put under the six per cent rate and I am further convinced that no such classification was then contemplated. I feel sure that all the members of this house, whether they be agricultural producers or not, will see the inequality that exists in placing this machine which is, as I say, purely a harvesting machine, in a classification which so penalizes the production of wheat. May I repeat that the motor that furnishes the power to operate the combine is taxed ten per cent, whereas the tractor that provides the motive power for the separator which threshes the grain in the ordinary way-the system that has been in use in western Canada for many years-comes in free. The motors attached to the combine and the tractor develop practically the same power, they are largely identical in design, and yet, because one is attached to the combine and

The- Budget-Mr. Fansher (Last Mountain)

becomes a part of it a tax of ten per cent is levied upon it while the other being detached and classified as a tractor comes in free of duty.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Grote Stirling

Conservative (1867-1942)

Mr. STIRLING:

Is this machine made in Canada at all?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

To the best of my knowledge these machines are not made in Canada. I understand that the Massey-Harris Company have been manufacturing them in the United States and shipping them across the line.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

John Vallance

Liberal

Mr. VALLANCE:

It would not make any

difference.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

As my

hon. friend opposite says, it would not make any difference. Other harvester machinery comes under the 6 per cent schedule. Why not this? This is a very high priced, shortlived machine. An ordinary separator will outlast two of them. To be compelled to pay the higher rate of duty on such a machine seems to me to be altogether at variance with the spirit governing the revision of the machinery schedules that were dealt with a few sessions ago.

To show the rapid rise in the value of the imports of this particular class of machine during the past few years I propose to give the house a few figures which I have received from Mr. Coates of the Bureau of Statistics. In the figures are included threshing machines, wind stackers, baggers and so on-all parts of the threshing machine. Prior to 1926- the year that combines, we might say, made their first appearance in western Canada-our importations of threshing machines amounted in value to S2,482,830. The increase in the value of our imports for 1927 corresponds with the increase in the number of these combines that were imported, the figures being practically double those for the preceding year, that is, $4,044,503. It is not to be supposed that any more threshing machines were imported in 1928 than in 1927, presumably the ordinary importation to keep pace with the development of the country, but we find a very marked increase in the valuation of the machines imported, and this is due principally to the greater number of combines included :n the figures. In 1928 the value of our imports under that schedule was 88,214,938.

It may be argued by those who advocate high protection that 10 per cent is not an unreasonable rate of duty; but this particular type of harvesting machine, which may be said to be first cousin to the threshing separator, is subject practically to a 20 per cent duty. So far as the number of bushels

threshed is concerned, the combine cannot do any more work in a day than the ordinary separator costing 81,600, but it costs the farmer from $3,500 to $4,000. But although the combine does not do any more work than the ordinary separator, there is a* saving of time and in other ways by its use. But we have to meet the changing conditions, and if the extra tariff duty on these machines has to be borne by the producers of wheat, then they are unjustly penalized; and if the harvest conditions of 1928 are repeated over a few more years, I am sure that many of us in western Canada will have to quit growing wheat. Therefore I appeal to the house and to the Minister of Finance seriously to consider this situation. The hon. minister in his budget speech said that new conditions are arising, and that it is the dirty of the government to meet these conditions. Let me quote his words, to be found at page 595 of Hansard:

In accordance with the fiscal policy of the government, the tariff changes to be submitted to-day are designed to reduce taxation and to lessen the costs of production.

I am confident, Mr. Speaker, that if I had the time I could prove conclusively to this house that these combines should come under the 6 per cent rate.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

George Reginald Geary

Conservative (1867-1942)

Mr. GEARY:

Will the hon. member allow this question-in the majority of cases is the reaping done by the combines, or does the combine follow the reaper?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

William Russell Fansher

Progressive

Mr. FANSHER (Last Mountain):

It is done both ways. In the northern areas where the wheat has to dry in the stook the swather method is preferable. I use one myself. In the dry areas where the straw is stiff and stands up for a long period the method is what we call the straight combine-straight from the standing grain into the machine. But the swather is a part of the combine-an essential harvesting part. About one-half of the machine is the harvester, the other half is the thresher. Of course, a certain amount of the value is represented in the motor that operates the machine. I wish to quote further from the Finance Minister's budget speech. At page 594 of BansaTd he is reported as follows:

In so far as we have a fiscal problem, our task would appear to be that of readjusting,-

Will the house kindly note those words?

-that of readjusting, as necessity arises, our customs tariff schedules to meet new conditions, of removing inequalities where inquiry proves such to exist.

I think the hon. minister will agree with me that the rate of duty on this particular

S28 COMMONS

The Budget-Mr. Fansher (Last Mountain)

machine is undoubtedly such an inequality as he had in mind When introducing his budget. Therefore, I appeal to him to give the matter his very serious consideration, and I trust that he will see his way clear to have the tnachine designated as a harvester to bring it under tariff item 445. In this way I can assure him that he will be conferring a great favour on those who are engaged in producing Canada's staple crop-wheat.

I would be remiss in my duty, Mr. Speaker, if I did not congratulate the hon. gentleman (Mr. Guthrie) who led the opposition in the absence of his leader on the very able speech which he delivered in criticism of the budget. I have already noticed that he referred to the prosperity mentioned by the Minister of Finance as not reaching some of the small towns and townships of the Dominion. In this I heartily agree with him. It is true that there is in this country a growing spirit of resentment at some portions of President Hoover's inaugural speech, and I am afraid that possibly our desire to retaliate will get the better of our good judgment, with the result that something rash will be advocated. But be this as it may, I feel that we have not a great deal to fear, no matter what tariff action is taken by the United States. True, our cattle industry may be thrown out of joint for a little while, our dairy men may suffer very materially for a short time, but I am convinced that in the long run the consumers in the United States are going to be heard from. If I might offer a suggestion in this connection, I would propose that while we are waiting to see what action is taken by our neighbours in the matter of tariff revision we should evolve a definite tariff policy ourselves. I would suggest a remedy, and in proof I would quote from the speech of the Minister of Finance (Mr. Robb), Hansaird, page 504. He says:

It is gratifying to note the steady development of inter-empire trade. Canada, the pioneer of the British preference, looks on empire trade as the keystone of its external trade policy and desires in every way to foster closer trading relations throughout the British commonwealth of nations.

I would just offer a suggestion in closing. In answer to anything that may arise from the tariff juggling which may take place in the United States, I urge that we put into effect the principle just quoted and that we materially reduce the tariff against Great Britain. Great Britain takes the greater portion of our agricultural products. She takes upwards of $300,000,000 worth of wheat and wheat products; some put it at $275,000,000, others at $280,000,000, while others again claim that it

is over $300,000,000. Now if we are allowed to ship such a large proportion of our exportable surplus to a country the size of Great Britain, surely we can consider giving her a very marked increase in the preference which she now enjoys in the markets of Canada. And we can do this as a very effective answer to anything that may be advanced in the way of argument in connection with the tariff raising policy of the new President of the United States.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

John Arthur Clark

Conservative (1867-1942)

Mr. J. A. CLARK (Vancouver-Burrard):

I am sure, Mr. Speaker, that you, like all the rest of us, in fact like all Canadians, perused with great interest Mr. Hoover's inaugural speech delivered on March 4, and I am sure also that your eye, as did the eyes of many others, fell upon one outstanding paragraph in that speech. I have no doubt that you looked through the speech to see what the policy of the United States was going to be towards this country, and it is rather significant that the paragraph in question should be so brief in a speech of such length. I should like to read the paragraph which relates particularly to the policy of the United States towards Canada and the outside world. That paragraph reads:

Action upon some of the proposals upon which the Republican party was returned to power, particularly further agricultural relief and limited changes in the tariff, cannot in justice to our farmers, our labour and our manufacturers be postponed. I shall therefore request a special session of congress for the consideration of these two questions. I shall deal with each of them upon the assembly of the congress.

A remarkably brief paragraph for a special session of congress. We in this country have never called a special session of parliament except in great emergencies, such as war. But apparently the point indicated in President Hoover's speech is considered in the United States as of sufficient importance to warrant the calling of a special session of congress. I think my hon. friend from Last Mountain (Mr. Fansher) who preceded me need have very little fear about what will be done by this government; all he need do is to follow the history of the Liberal party during the past seven or eight years and he may be fully reassured as to what that party's action is likely to be.

Mr. ERNST; Inaction.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

Yes, a policy of inaction.

Yet, Mr. Speaker, I am sure that you have with some alarm examined' the trade returns as between these two countries. Take for instance the year 1925. In that year we had an adverse balance of trade with the United States of $92,000,000. In 1926 that became

The Budget-Mr. Clark

$133,000,000; in 1927 $208,000,000; and in the fiscal year 1928 $222,000,000, and, for the calendar year 1928, $333,000,000.

I would point out that the New York Times, a very reliable newspaper, states that our adverse balance of trade with the United States for the calendar year 1928 was $427,000,000. Now, Mr. Speaker, is it not beyond comprehension that any member of this parliament can rise in his place and say, "Stand pat on such a situation"? In my opinion this is Canada's outstanding problem to-day. How are we going to remedy the situation? Can Canada continue to pay the United States $400,000,000 a year? Can the Minister of Finance (Mr. Robb) contemplate the situation with equanimity? A few years ago the Prime Minister (Mr. Mackenzie King) considered our balance of trade somewhat of a test with respect to our prosperity. I am sorry he is not in his seat; I should like to read to him his own words spoken, in his budget speech in 1926. However, I shall still read them. I quote from Hansard, May 18, 1926, at page 3485:

For the twelve months ending March, 1926, the visible trade balance of Canada amounted to $401,134,000, and that for the United States to $352,364,000. ... or a cool $50,000,000 less than our favourable trade balance in the same period. This fact is a remarkable demonstration of how Canada is holding her own in the markets of the world. The policy of the present administration, of cheapening the instruments of production, has operated to increase the volume of Canadian exports.

I direct the foregoing particularly to the attention of the Minister of Finance, in the absence of the Prime Minister, and ask him to examine the monthly summary of foreign commerce of the United States, which he will find in our library. Therein he will discover that the favourable balance of trade in the United States for the calendar year 1928 was $1,000,000,000 while the favoiyable balance of trade for Canada in the same period was just $127,000,000. Moreover, had1 it not been for a phenomenal crop our Minister of Finance would have presented us this year with an adverse balance of trade; because for the first three months of this year there was actually an adverse balance against Canada with all countries. But, as I say, due to a phenomenal crop the minister was enabled to bring down a statement which showed a favourable balance of trade. To-day, however-and I invite the Prime Minister's attention to this-in world trade there is a "cool" balance in favour of the United States as against Canada of $900,000,000 instead of a "cool" balance of $50,000,000 in our favour as was the case in 1926.

Surely, Mr. Speaker, these facts call for action; they called for action before Mr. Hoover delivered his inaugural speech and they call for action much more definitely today. I am sure you wondered, Mr. Speaker, as we all wondered, why the Minister of Finance delivered his budget speech on Friday, March 1, when he knew very well for months in advance that the President of the United States would deliver his inaugural address on March 4. I believe he did it at the dictation of the Prime Minister of Canada, who desires to dodge his responsibility.

It is very interesting to analyse our export trade with the United States. For the calendar year 1928 and really for the fiscal year 1928, since there is a difference of only about $4,000,000, our exports amounted to about $496,000,000 which, by the way, is less than in the years 1920 and 1921, when they ran well over $500,000,000. Of that $496,000,000, however, we find that $237,000,000 is accounted for by the exportation of forest products which the United States must have; practically one-half of our exports to the United States consists of our forest products, and it is very interesting to contemplate how completely they control us in this industry. We find that Mr. Graustein, President of the International Paper Company, comes over from New York, and, with some others gets a strangle hold on our resources; they create over-production and the next thing we know is that instead of Canada getting $80 per ton for her newsprint, a contract is made with Mr. William Randolph Hearst, whose publications always have been hostile to British traditions, for $50 a ton, a loss to Canada of $30 a ton, and this government permits that sort of thing to go on. I direct the attention of the government to a pamphlet called Forest Facts, published by the Department of the Interior, and from that publication I would like to quote a few sentences:

The forest resources of Canada are being depleted at the rate of about five billion cubic feet annually through cutting, fire, insects, and decay. If the reproduction and young timber are not protected, the stand of merchantable timber accessible for exploitation will not withstand this drain for more than twenty-five years. . . . Few people realize the urgent need which exists for a forest policy in Canada.

I wish the government of Canada would begin to realize that urgent necessity; one of their own departments publishes the facts but we see no interest taken by this government. No action was taken in the emergency which existed a few months ago in connection with the pulp and paper industry. It may be answered that this was a provincial matter, and it is true that Mr. Taschereau and Mr. The Budget-Mr. Clark

Ferguson stepped into the breach and have been able to do something; it is true that the provinces issue the licenses for the exploitation of these pulp resources, but the moment the timber is cut and is about to be exported it becomes a matter of fiscal policy; it also becomes a matter of trade and commerce and the responsibility devolves upon this government. The Minister of Finance was derelict in his duty during the past year in not calling into conference the heads of these few pulp companies and reading the riot act to them. It is high time that the men who have invested their money in the natural resources of Canada should be made to understand that with regard to our capital assets we will not tolerate any policy except one that gives to us a fair price for those assets. To-day we are not getting a fair price; we are sending to the United States annually about $250,000,000 worth of capital assets in the shape of forest products which we are not replacing, while the United States sends back to us products which are largely the product of American labour.

The policy of this government in regard to our great resources is also seen in connection with our industries, with one or two of which I will deal by way of illutsration. First let me take the sugar industry. In

1927 this country exported sugar to the value of more than $15,000,000; in 1928 these exports fell to $6,000,000, and for the calendar year of

1928 they were less than $4,500,000, a decrease of over $10,000,000 since 1927. I mention this because of the very interesting action taken by the British government to protect their sugar industry. On April 24, 1928, they introduced further safeguarding legislation with the result that the imports from Canada through the port of Bristol decreased to 645 tons, although in 1925 the imports from Canada had amounted to 6,193 tons. The effect of that policy on their importations from all sources is also very illuminating. For instance, in 1925 their imports through Bristol amounted to 62,024 tons, and this fell to 14,931 tons in 1928, showing very clearly the effect of a little safeguarding or protection on an industry.

My hon. friend from Last Mountain prayed that the government would not take any further steps in regard to protection of our industries as against Great Britain; in fact he advocated the repeal of all the existing duties against British manufacturers. It is very hard for one who has been brought upin the woollen industry, for example, to understand how anyone could have that point of view. On Saturday in this province, not far from where I was bom, I saw the plants of

three woollen mills, two of them closed and one which went bankrupt six months ago and which has been re-opened recently. In 1922, when this government came into office, according to statistics furnished by the bureau here, in thirty-seven identical mills there was an average of 4,333 employees. Since that year there has been a gradual falling off; I will not quote the figures for each year, but for 1928 the employees of these thirty-seven identical mills averaged only 3,683, showing the retrograde action in this industry. I point out, Mr. Speaker, that those figures only cover the thirty-seven identical mills and do not disclose the fact that dozens of mills have closed up altogether. No doubt the employees of such mills have migrated to the United States, but nevertheless we find members of parliament and citizens of this country actively advocating the further removal of duties from such an industry.

Let us look at the iron and steel industry. The Dominion Steel Corporation furnished the agricultural implement industry with nearly 6,000 tons of steel in 1903; in 1928 that figure had fallen to less than 900 tons. The same story would apply to the Nova Scotia Steel & Iron Company. The profits of the British Empire Steel Corporation fell off more than a million dollars, or thirty per cent last year. I have before me a summary of the trade of Canada with the United States for the calendar years of 1927 and 1928. The effect of the policy of this government upon the steel and iron industry is well illustrated in those returns. For instance, the importation of iron and steel products from the United States has increased from $113,000,000 in 1925 to a total of $295,000,000 in 1928; an astounding increase. In 1925 the Americans sent $10,000,000 worth of automobiles to this country, and in the calendar year 1928 that had risen to $40,000,000. In addition to that amount!1 they sent $48,000,000 worth of parts, or nearly $90,000,000 worth of goods in one industry alone. I say the Minister of Finance of this country has sold out that industry to the United States. The same story is told with regard to the agricultural implement industry. In 1925 we imported $6,000,000 worth of agricultural implements; in the calendar year of 1928 that amount had arisen to $39,000,000; another industry sold out to the United States. I suggest that the Minister of Finance is the greatest extravagance this country has. Any man who sells out industries with a total production in excess of $120,000,000 is a great extravagance for any country, and that is what our Minister of Finance has done.

The Budget-Mr. Clark

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

Does the hon. member suggest there should be higher duties ou automobiles and agricultural implements?

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CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

I suggest that the government is possessed of the power and has the information necessary whereby every agricultural implement used in this country could be produced in Canada without increasing the cost. The cost has gone up since my hon. friend's government tinkered with the tariff three or four years ago.

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

I am still waiting for an answer to my question.

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CON

John Arthur Clark

Conservative (1867-1942)

Mr. CLARK:

The hon. gentleman does not need to wait for an answer; what I have given is a complete answer.

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

I asked if the hon. member would raise the duties.

Mr. CLARK I would adjust the tariff in a manner which would result in these agricultural implements and motor cars being manufactured in Canada. That would solve the immigration problem and another minister, who is our second greatest extravagance, the Minister of Immigration (Mr. Forke), might then become an asset, because then and then only could Canada have an effec-tice immigration policy. When my hon. friend sees the folly of importing $120,000,000 worth of goods in two industries alone, every item of which could be produced here, he will then be in a position to do some good work for his country. He cannot do it now with the policy he is following.

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

The hon. gentleman will

not say whether that is his remedy; I have not heard of any other remedy except raising the duty.

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March 11, 1929