June 4, 1931

LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Where

is the baby now?

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

He went on:

Now, when this wonderful Canadian National railway system has more than justified itself, now that it is rapidly becoming in the nature of a great national asset-

That was in 1929.

*-now that we may look forward to a day, not perhaps in my lifetime, but in the lifetime of some here, when this system will start repaying the government of Canada part at least of the money it owes to the treasury, to the day when it will have a clean sheet, as it ultimately will have, in regard to its bonded indebtedness to the public; now that the system is in this, a thoroughly prosperous condition, this government desires to treat it as its own creature. Whereas in 1919 it tried to cast it out as base-born, now it wants to consider it as its legitimate offspring, and to profit by its success. Let me say, in concluding my remarks on this phase of the subject, that the National Railway system in this country constitutes a national monument to the ability and statesmanship and determination of a single man, a member of a former Conservative government, and subsequently Prime Minister of that government. It is to his ability and foresight, to his statesmanship and determination, that the people of Canada are indebted for this wonderful system of National railways.

Now that the road has had a deficit of $29,000,000 this year, those who were so anxious to claim paternity do not seem to want the infant even on their doorstep, and are proposing to turn it out in a cold world. My right hon. friend I think has not done himself or the road justice. For some reason it suits his purpose to be critical of the Canadian National Railways. I submit that the road is entitled to a fair presentation of its case, and to have its record put on the Hansard of this house just the same as any other public undertaking, and that the presentation which my right hon. friend made on last Monday did not do justice to that splendid experiment in national ownership.

May I read an editorial which sets out better than I could the attitude which I think , the people of Canada generally will hold with regard to the Canadian National Railways? It is from the Ottawa Journal of yesterday morning, June 3, and is headed, "Canadian National Finances." It reads:

Mr. Bennett's exhaustive review of the,,, financial position of the Canadian National Railways calls for serious reflection. It does not, however, constitute any basis for attacks upon the system by mere enemies of public ownership. The Canadian National manan, ment, during the last few years spent a deal of money. But they spent it, mainly, because the country demanded it, because Canada insisted upon the road giving efficient and first-

The Budget-Mr. Ralston

class service. This could not be given, the Canadian National Railways could not be placed upon a fair competitive basis with its great privately owned rival, without heavy expenditure, and this being so, little sense or fairness exists in any present cry that there should have been more of economy.

All of us demanded a Canadian National system with a first-class road-bed, and first-class rolling stock and equipment, and fine hotels and stations, and a lot of branch lines; and it was absurd and is absurd to suppose that all of these things could be provided without heavy capital expenditures. In the circumstances, therefore, no good will come from getting into a panic, and nothing but harm will come from any attempt that may be made by enemies of public ownership to use the abnormal conditions of the existing depression to try to damn the administration of the road or the principle under which it is being operated.

It is not that public ownership should be given a blank cheque, or that the public should be careless of its property; it is simply that the situation should be dealt with and regarded with fairness, and must not be permitted as the basis of a new attack by those who are too anxious to see the public ownership idea discredited.

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?

An hon. MEMBER:

Where is that from?

Mr. RALSTON; From the Ottawa Journal of June 3.

Mr. CASGRAIN; Friendly to this government.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

Now I come to matters to which my right hon. friend more particularly referred in wha-t is known as his budget. He was most particular to inform the house and the country that for the first time in a good many years we were getting a budget. The information which he gave, as I said before, was most thorough, but there were some things that I found missing even in that budget which was supposed to contain everything that a budget should. There were some ihings missing which most of us were accustomed to see and hear in the budgets that have been delivered in this house in the last three or four years. I did not hear, and am unable to read in that budget which my "ight hon. friend delivered on Monday, anything which would indicate that there was a surplus during the time that my right hon. friend was in office. I have here a few figures extracted from the previous budgets which have been delivered. In 1926-27 there was a surplus of $44,817,000; in 1927-28, a suiplus of $67,000,000; in 1928-29, a surplus of $81,000,000; in 1929-1030 an estimated surplus of $44,000,000, which actually, if the accounts are^made up correctly, amounted to $55,000,000. By the way, in that respect I do not think that my right hon. friend followed the usual custom. He did not give what was 22110-146

the actual surplus of the year previous to the year for which he was reporting. That has always been done in the past. The finance minister of the day when delivering his budget can only make an estimate because the budget is delivered so soon after the close of the financial year, and the practice has been for the finance minister the following year to inform the house what was the actual surplus for the year before. But I did not hear my right hon. friend make any mention of the surplus for 1929-1.930. I contrast those figures with what I find in my right hon. friend's budget, and I find this, that the gross deficit, not the surplus, for the year for which he was reporting, amounted to $82,844,358. Making a deduction for writing down of soldiers' loans, the net deficit, instead of the surplus the year before, is $75,244,973.

There is something else which was missing from the great wealth of information and statistics contained in my right hon. friend's budget speech; I heard nothing whatever of debt reduction. Let me give the house in round figures the debt reductions for the period between 1925-06 and 1929-30:

Annual Debt Reductions

1925- 26

$22,000,0001926- 27

26,000,0001927- 28

65,000,0001928- 29

55,000,0001929- 30

78,000,000

A total during the five years of $257,000,000 odd. Of course, my right hon. friend is not responsible for the printing, but tucked away in one corner of the page,-I had quite a time to find it-it will be found that instead of a reduction of the debt there is an increase in public debt of $92,000,000, less $25,000,000 which has to be deducted because of the refunding loan, leaving the net increase at $67,000,000. My right hon. friend made no extended reference to that.

There is still another omission. I do not find either in the budget or in the information he gave anything about reduction in taxation. There are some 27 pages of statistics spread on the record, but there is nothing about any reduction in taxation. I only refer hon. gentleman to this fact, that since 1924 the sales tax has been steadily reduced until we got it down to 1 per cent last year; that the tariff has been lowered, that the nuisance taxes have been taken off, that the income tax has been lowered, until we got to the point where we were saving the people $118,000,000 every year over and above the amounts which they would have had to pay in taxation had the old rates prevailed. I find in this budget, in

The Budget-Mr. Ralston

marked contrast to that record, the statement that in order to try to balance his budget, and even then he will not balance it, my right hon. friend has put on this year-the year he is going to administer; there is no chance for him to blame the Grits this time-

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Hear, hear.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

-he has put on this year $75,000,000 of additional taxation. That is the added burden that is to be laid on the backs of the people. That means $8 per head for every man, woman and child, or $40 for every family of 5 in the dominion, of brand new taxation this year. It means also that having gone well up the hill under the former administration, we are now slipping down to the bottom again under my right hon. friend's administration.

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?

Some hon. MEMBERS:

Oh, oh.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

I say again, under my

right hon. friend's administration.

And that is not the end of it. My right hon. friend himself suggests that that increased taxation of $78,000,000 will not enable him to balance his budget, that in order to balance it he has to have as much business done this year as last year with these additional sources of taxation, then he must borrow $18,000,000 on capital account, and he will still be $7,000,000 short. He said himself that he hoped that after he raised the increased taxation of 78 millions and capitalized the 18 millions there would be such a small deficit left that he would pay it by treasury bills. I am not a prophet nor the son of a prophet, but I predict that those treasury bills like promissory notes will turn into mortgages against the Dominion of Canada-they will become part of the funded debt. No, my right hon. friend's situation is simply this: He has $105,000,000 of indebtedness, he has $78,000,000 of increased taxation, leaving a difference of $27,000,000; about $18,000,000 he is going to capitalize; and he is still short $8,000,000 or $9,000,000 which he is going to pay, as he says, in treasury bills. These, Mr. Speaker, are some of the things which are missing from the budget speech of my right hon. friend.

But he emphasized in the course of his remarks that the expenditure of $400,000,000 last [DOT] year was wholly a Liberal expenditure except 2 millions for the Welland canal and 4 millions odd for unemployment relief. Let me remind this house and the country that my right hon. friend had an opportunity at the special session to change any of these amounts as he saw

Ralston.]

fit, and he did change a good many of them, he cut out a good many public works, but notwithstanding the fact that within four months after the Dunning budget was brought down he had an opportunity to change it, he did not do so, and that year includes eight months of his administration.

But that is not the worst of it. My right hon. friend let the impression go abroad that he was paring down and economizing this year and that expenditures for this year were being cut down by about 37 millions. The inaccuracy of that was exposed recently by my hon. friend from Antigonish-Guysborough (Mr. Duff). But I think it was also exposed by my right hon. friend the Minister of Finance himself last Monday, when he admitted that although the Liberal budget last year was $449,000,000 he himself has provided for expenditures this year of $430,000,000-not very much of a reduction. When you consider the fact that in the $440,000,000 are included special votes for the Welland canal and for unemployment relief, you are somewhat surprised to find my right hon. friend coming to this house in this period of depression, when he claims to be paring down the estimates to the bone, and budgeting for practically the same amount this year as we did last year. This is a striking commentary on his protestations of economy. I warn him now, although I do not think he needs the warning-that he has said he will not exceed the $430,000,000. I do not think he will exceed it, for he intimates that that total includes supplementaries as well.

Now, Mr. Speaker, the question naturally arises, why these expenditures just now? Let me mention one item which comes pretty close home to my hon. friend. One of the reasons for these large expenditures now is his attempt to make good, piecemeal at least, some of the election promises which he made last July, and so in just a sentence we find an announcement which is somewhat important. He says:

Included in the expenditures to which I have referred, contemplated for this year, are those provided by the main estimates, and the additional sums which we have provided for supplementaries-

Then note this:

besides the sum for old age pensions, increasing our contributions to the provinces from 50 to 75 per cent for this year only in respect of the total sums that are paid.

That is all there is about it; no blaring of trumpets, no headlines, nothing of that kind. There was a time when that was a headline promise, there was a time every newspaper in this country carried the promise

The Budget-Mr. Ralston

made by my right hon. friend that old age pensions would be paid in full by the federal government. We come now to a time of economic stress and strain and my right hon. friend feels he can get off with a contribution of another 25 per cent. He makes no apology, no explanation, gives no idea whatever as to when the balance of that pledge is to be fulfilled. I want to compare that laconic sentence in his speech with the following letter that I hold in my hand: Bennett's Pledge On Old Age Pensions Conservative Federal Headquarters Victoria Building 140 Wellington Street Redmond Code,

General Secretary.

Ottawa, Canada,

July 12, 1930.

To the people of Nova Scotia:

At Winnipeg I pledged the Conservative party to put into effect a National Old Age Pension Act. This pledge I have confirmed in every province in Canada. During my recent trip throughout the maritimes I have dealt with it at length.

Let me say again, that it was pointed out to Mr. King when the present old age pension bill was passed that the maritime provinces, owing to the financial obligation which it would entail, would not be able to adopt the measure. Yet the Liberal government put it into effect. With what result?

While the old people of your province were unable to benefit by the present act during the last two years, nevertheless through the contribution of one-half of the pension money from the federal treasury you have been contributing your share of the pension money going to the old people in other provinces. This situation cannot continue.

Mr. King says that in order to adopt a national old age pension bill, we will have to amend the British North America Act as it is now unconstitutional for the federal government to pass such a bill. I contend that if the dominion government can contribute 50 per cent as they do at present, they can contribute it all.

If returned to power on the 28th of this month, I pledge my party to pass a national old age pension bill by which the federal treasury will provide all the money required- thus treating all the old people alike, whether they live in the maritimes or in any other part of Canada.

Faithfully yours,

R. B. Bennett,

Leader, Liberal-Conservative Party.

Now I want to say to my hon. friend that the old people in Nova Scotia did not take that announcement with exactly the levity some of my hon. friends on the other side have shown. They took the right hon. gentleman at his word. We have now only a half implementation of that promise, and no one knows whether or not the province of Nova 22110-1461

Scotia will accept it. However, hundreds of people were induced to vote for candidates of my right hon. friend because of that letter, which they considered a personal pledge from a man who would not break his word and who would give them old age pensions, not next year or the year following, but immediately, as soon as he came into power.

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CON

Richard Bedford Bennett (Prime Minister; Minister of Finance and Receiver General; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

It does not say that.

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CON

Hugh Guthrie (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. GUTHRIE:

It will be done.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

I say to my hon. friend

that any people reading that letter would not take legal advice with respect to it; they would have no other idea but that the old age pension bill would be passed just as soon as the Conservative party came into power. If I mistake not, my hon. friend the Minister of Fisheries (Mr. Rhodes) made a statement that he would resign, I think within three months, if the old age pension bill were not brought in.

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?

Some hon. MEMBERS:

Resign.

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CON

Edgar Nelson Rhodes (Minister of Fisheries)

Conservative (1867-1942)

Mr. RHODES:

Mr. Speaker, I am sure

my hon. friend would be the last to wish to do me an injustice in connection with any statement I made. I made no such statement.

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LIB

William Duff

Liberal

Mr. DUFF:

The Minister of Fisheries said ninety-nine per cent, not one hundred per cent.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

I merely state that, Mr. Speaker, in order to indicate what I said a moment ago, that the old people of the province of Nova Scotia were entitled at least to take from that letter that an old age pension bill providing for the payment of one hundred per cent of the cost would be brought in at the very first opportunity. I notice my hon. friend the Minister of Fisheries does not deny the soft impeachment that he mentioned ninety-nine per cent instead of one hundred per cent.

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CON

Edgar Nelson Rhodes (Minister of Fisheries)

Conservative (1867-1942)

Mr. RHODES:

Mr. Speaker, the same

statement I have made with regard to the first statement of my hon. friend holds good with respect to the statement made by the hon. member for Antigonish-Guysborough. I did not rise to say so because I did not wish to interrupt my hon. friend in his speech.

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LIB

William Duff

Liberal

Mr. DUFF:

Under the rules of the house I must accept that statement. If it had been made down by the Rideau c'lub, I would say my hon. friend was not telling the truth.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

I say, Mr. Speaker, that a pledge of that kind, half implemented, is one of the reasons why my hon. friend to-day has

The Budget-Mr. Ralston

to budget as he has done, and place taxation on the backs of the people of Canada in order to pay the election promissory notes which he gave last year. Those were pledges which were given, perhaps irresponsibly, but now he is finding out how those chickens come home to roost on an occasion when he least wants them.

Now 'let me say a word more with regard to my hon. friend's boast in regard to his budget. He boasts that this is a budget, and I presume he pledges himself to the estimate which he has made as being a fair forecast of what is going to take place with regard to financial operations this year. My hon. friend quotes scripture in this house occasionally, and I want to remind him of this scriptural injunction:

Let not him that girdeth on his harness boast himself as he that putteth it off.

Let us wait until next year and see whether or not his predictions with regard to revenue and expenditure will come true. I wish I could believe that his forecast is correct, and that only to the extent for which he has budgeted the revenues would be reduced, but 1 am afraid that will not be so. I warn him that people on this side of the house, and not only here but throughout the country generally, are very much concerned as to the situation in Canada and as to the policies which he has adopted towards our trade.

There is one other matter which I notice is missing from this budget, something which was always a pet of my hon. friend when he was on this side of the house. That is, there is no provision in this budget, if you will believe it, for a sinking fund. I do not know that anyone was more insistent than my right hon. friend that a sinking fund should be provided in order to retire the public debt of this country. I have before me a quotation from a speech he made, in which he urged the then Minister of Finance, the late Mr. Robb, to put into force a sinking fund. He said- Hansard, March 13, 1928, page 1249:

The Finance minister said that the only way to pay off the debt was out of surplus. 1 suggest, Mr. Speaker, that there is another way in which we can pay off our national debt, and that is to pass a statute by which we provide that a given sum per annum shall be set aside to pay off the national debt of Canada. What will that do? That will impose upon the people economy.

I suggest to him that if he had thought of that a little ahead of time it would have imposed upon him economy in the matter of promises during the last campaign. Then he continued:

Why? Because when they come clamouring to my hon. friend the Minister of Public Works

'Mr. Ralston ]

(Mr. Elliott) for a wharf here or a post office in Guysborough, or a public work in some other community, the Finance minister will be able to say: It cannot be done because the sinking fund must be provided for.

Then he goes on in another place-Hansard, March 13, 1928, page 1249:

I say that we should place upon the statute books of this country at the earliest possible moment a provision by which a sinking fund will be set up such as they have in Great Britain and in other countries, so that we shall be enabled, within a period to be mentioned, absolutely to wipe out and eliminate the national debt of Canada.

That sinking fund provision is not to be found.

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CON

Hugh Guthrie (Minister of Justice and Attorney General of Canada)

Conservative (1867-1942)

Mr. GUTHRIE:

Give us time.

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LIB

James Layton Ralston

Liberal

Mr. RALSTON:

My hon. friend is always

asking for time, but he has had ten months already. If the next ten months of the administration of my hon. friends is as barren of results as the last ten months, then nothing will be done, because I do not know of any more futile administration than that which has gone on during the last ten months.

Then I want to refer to another matter in connection with this matter of debt and sinking fund, a matter about which my hon. friend knows a good deal and which he has just completed; I refer to the financial operation of the conversion loan. There is great satisfaction in Canada that the conversion loan has been so well received, but I do not think the right hon. Minister of Finance, when he retires to his room at night, really gives himself as much credit as at least the newspapers and his supporters give him with regard to the success of his loan. I ask him this: After all, is there anything so extraordinary about it? It is a simple, every-day operation.

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June 4, 1931