April 12, 1932

LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

Yes/ The tariff

was not imposed gradually at all, but with

ghastly suddenness. .At the special session the British people were given not simply a swat in one eye but all over the face by this government jacking up the tariff sky high on many British commodities, followed by a further raise in 1931, and now they are following last year's imposition of a one per cent import tax by an increase this year of two hundred per cent, and applying that tax to all commodities no matter where they come from. How can the government defend such a horrible piece of hypocrisy, preaching intraempire trade and practising exclusion? Really I have no language with which to describe it adequately. I shall have to get a new vocabulary, Mr. Speaker, to express what I think of it. When the government were in the midst of doing these things here is what the Minister of Trade and Commerce said at the special session of 1930. The government put up such a magnificent bluff on that occasion that we all thought that they were going to do something, that they were not going to make blooming asses of themselves. Here is what the Minister of Trade and Commerce said:

But we are going there-

That was to the Imperial conference.

-also in a spirit of good will.

If I gave my colleague to my right a cuff on the ear, Mr. Speaker, would he call that good will?

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LIB

Ernest Lapointe

Liberal

Mr. LAPOINTE:

No.

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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

Certainly not. But that is what the government call good will. The minister went on to say:

We are going there prepared to open negotiations with our sister dominions and the mother country for the most friendly cooperation in order to bring about an increase of trade between them and us.

Going to increase good will by putting up a trade barrier and treating our kinsmen in that unfriendly manner! Why, it seems to me that in their heroic endeavour to balance the budget they have succeeded only in unbalancing themselves, because nobody outside of a mental hospital would conduct himself as these hon. gentlemen on the treasury benches are doing with regard to this question.

Having raised the tariff in September, 1930, they gaily took the boat for the old country. Inside eight days after they got there the right hon. Prime Minister made a speech, not to the conference but to the whole world, in which he stated in effect the British government's propositions were not worth a hoot. Then he spent the rest of the time chasing the Right Hon. J. H. Thomas trying to round him

The Budget-Mr. Motherwell

up because he called Canada's proposals "humbug." Well, that may not have been diplomatic language, but it was true.

Now I come again to this three per cent import tax business. If there ever was an opportunity, as was so rightly said by the hon. member for Shelburne-Yarmouth yesterday, this government had that opportunity last Wednesday to redeem themselves by making a reciprocal preference offer to the mother country prior to sitting around the conference table at Ottawa in July next. Then it did not matter what might happen, the conference could not be a failure, with the wheat quota on the British side plus the ten per cent preference in the Chamberlain tariff. However small the offer it would have been a big thing for hon. gentlemen opposite to make, because as yet they have not made any budget preference offer to Great Britain. But the government missed that opportunity. It can be recovered yet by their backing up once more. We have had a lot of newspaper criticism regarding the little preparation that is being made for the coming conference. These hon. gentlemen opposite are preparing wittingly or otherwise, to make the Ottawa conference another failure. There is lots of preparation in this budget of the wrong kind. At one time we thought, Mr. Speaker, they were playing the wise part of putting these duties up to dicker them off when they came to close quarters. Well, you cannot fool the Right Hon. Philip Snowden in that fashion, you cannot fool the people in the old country who have been making diplomatic exchanges with foreign countries and the overseas dominions since way back; they know that part of the bargaining game and discount it accordingly. Are the government going to try to dicker this three per cent off in exchange for something? What is that old saying about setting a net in the sight of the bird? Well, that is what the government are doing, setting a net in the sight of' the bird, and thinking they are going to fool the "bird" by taking off this increase when they sit around the conference table. That may not be their purpose, but if it is not, what is their purpose at this particular time in placing further restrictions on inter-empire trade? I cannot denounce that too strongly. Is not that the offspring and spawn of Toryism intensified? Isn't it just what you would expect from a small-bore Tory government preparing to enter a great inter-empire conference-something that the whole world is watching? But what is the use of pursuing the subject further?

We are told, Mr. Speaker, that you cannot see spiritual things with the natural eye. It is just as true that you cannot see Liberal things with the Tory eye. That is what makes the big difference between the two parties, and yet superficial people will discuss these things and say, " Well, there is not much difference between the two old parties." But every day since this government has come into power the gulf has been getting wider and wider, until the two parties to-day are poles asunder. You cannot mix one with the other, neither can one understand the other. I suppose as I am talking now my hon. friends opposite are wondering if I am not a proper subject for a madhouse.

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?

Some hon. MEMBERS:

Hear, hear.

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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

Didn't I touch a

responsive chord? That is exactly what I am thinking of

their policies, and sometimes themselves. Therefore there is no use trying to reconcile the two viewpoints. They have their views and they are entitled to them; we have our views and we are entitled to them. The electors will decide between us in due course.

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?

An hon. MEMBER:

They did decide last time.

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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

Well, I do not

know that they will decide just quite the same next time, but we shall see.

The budget itself is therefore more odious than the budget of last year in the above respect. So much for the ways and means of getting revenue. The objective of the government is to balance the budget. They do it in two ways, by imposing new taxes and by reducing expenditures. How are they going about their policy of reducing expenditures? I see my good friend the Minister of Agriculture (Mr. Weir) in his seat. I am not going to blame him a bit more than the rest of the government in what I am about to refer to. Agriculture is staggering as it has never staggered since Confederation; it is down at the heels and out at the elbows as it never was in my lifetime, and yet in the face of that, the government comes down with estimates reduced by three and a quarter million dollars with respect to agriculture. Is that the way to hold up the chief industry of Canada, an industry that occupies nearly half the people and feeds them all? Is that the way to treat it? This is the avenue by which we are to come back to normal conditions of development. How are our industries to progress when agriculture is on its beam ends,

The Budget-Mr. Motherwell

also mining, lumbering, paper and pulp, and fishing? These are the primary industries of the country, and the major one of them they have swatted to the tune of three and a quarter million dollars, in the face of the government election promise, oft repeated. " We will put the power of the dominion exchequer and of the government behind the cause of agriculture." The right hon. Prime Minister said that in Woodstock, New Brunswick, he said it all over the land, and yet when it comes to a showdown he cuts the agriculture estimates right to the bone, so much so that many of the services to agriculture will have to be dispensed with or else paid for by the farming population. I do not know where they will get the money for the purpose. Down in the maritimes they depend very much upon inspection of their certified potatoes to hold the market in the United States, but that service is threatened to be cut off, or else charged for. Potatoes to-day are worth about twenty cents a bushel or less and the government are asking the potato growers of the maritimes to bear that load. I know the Minister of Agriculture was not a party to that, I feel sure he must have protested against it. Perhaps he might have gone further with his protest, but he is a new member and a new minister, and my sympathy goes out to him. But I wonder if he could not stir things up a bit before the supplementary estimates come down. Could he not also do something for our winter fairs? I know he is a genuine live stock lover himself. The government of which the Hon. Martin Burrell was Minister of Agriculture, and all the governments that have followed between that day and this have been anxious about promoting the prosperity of our live' stock industry as the chief cornerstone of agriculture. Why take away their grants at this time and leave them not only with loss of money but loss of morale, because of lack of sympathy on the part of those to whom they have the right to look for encouragement? That is the story of how they are trying to "save" money; what they cannot get from agriculture they are skinning off the poor civil servants, to the tune of 87,000,000 or $8,000,000. If all these prognostications contained in the speech from the throne had come true the government would not have had to resort to these questionable methods of getting revenue in order to balance their budget, which is not balanced and would not stay balanced if it were, so long as these hon. gentlemen remain in power and keep on destroying revenue by prohibitive or high tariffs.

Then I come to another matter. Hon. gentlemen opposite say we are making no constructive suggestions. Is there nothing constructive in the suggestion that the Minister of Agriculture (Mr. Weir) try to remove himself and the government from the charge of being more unfriendly to agriculture through that one act-reduction of the agriculture estimates-than was the case with any previous administration within my memory? This has been done at a time when agriculture is least able to stand it. It is like kicking a man in the ribs when he is down; in fact it is like kicking a man all over, in the ribs and everywhere else. I hope the Minister of Agriculture will respond to this appeal; he must realize the situation himself. If there is anything I can do I will be glad to help him, although I do not see how I can render much assistance except by giving hail Columbia to his leader and colleagues, which I aim trying to do now.

I do not think the previous government could have made the progress it did make in agriculture if we had .not had a sympathetic Liberal prime minister. I do know who is responsible for the building in which the Department of Agriculture is now housed; I do know who is responsible for that fact that for the first time since confederation the department is under its own roof, and that is the leader of the Liberal party. The present Prime Minister is the gentleman who is guilty of slashing the grants and estimates for agriculture,. I can just imagine him dismissing his cabinet some night, telling them to go to their offices and come back the next day with their estimates reduced by so many millions of dollars. It would not matter where the reductions were made; it would not matter who was hurt, whether it was a primary industry, whether it was the militia, the flying corps or anything else. That is the way they apparently made up their estimates over there, from all the evidence we can gather. We have no spy in the cabinet to tell us these things; we never hear a peep outside from hon. gentlemen opposite, but those who have been in cabinets before can read the evidence in the estimates and between the lines.

So much for that; I do not hear hon. gentlemen opposite jeering very much now. Now let me for a moment refer to the Hudson Bay railway, which was nearly ruined once by the Tories, who located the terminal at Nelson. I say that advisedly, that the mongrel Union government, which was in power part of the time, and the Tories almost ruined that road at that time. The Liberal government is responsible for moving the terminal to

The Budget-Mr. Motherwell

Churchill. The road can be ruined again, and it is no wonder hon. members from the west who are anxious about this road have some misgivings as to how friendly this government is to that undertaking. Of course it is finished; it was completed to salt water before the government changed, but the Tories got all the hurrahs when the first loads of wheat were sent out last year. But the insurance is so high as compared with the St. Lawrence rate that I do not see how we are going to develop trade via the Hudson Bay route unless these and other rates are lowered to those of competing points. It takes a long time and a great deal of effort to switch trade from an established route to a new one. Hon. members will recall that when the Vancouver route was opened, via the Panama canal, it took many years to develop it, and that port is open all year. It will take more effort and a longer time to develop a route which is open only four or five months during the year, so the insurance rates and other rates must be reasonable in the early stages at all events or the development will be disappointingly slow.. Just think; we have a new (port on the plains of the west to which we have been looking forward for fifty years. It was started by the Liberals and finished by the Liberals, but then hon. gentlemen opposite came along and by means of high tariffs and everything else put all the obstructions imaginable in the way of trade over that route.

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CON

Finlay MacDonald

Conservative (1867-1942)

The ACTING SPEAKER (Mr. MacDonald, Cape Breton):

The hon. member has spoken forty minutes.

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CON

William Earl Rowe

Conservative (1867-1942)

Mr. W. E. ROWE (Dufferin-Simcoe):

Mr. Speaker, after observation of the first budget presented to this [parliament by the Minister of Finance (Mr. Rhodes) I am in hearty agreement with the hon. member for Shelburne-Yarmouth (Mr. Ralston), chief critic of the Liberal party in this house, at least in one respect: I think it is a clear-cut and concise business program. The splendid style in which it was presented to parliament is further evidence of those excellent parliamentary qualities for which the hon. minister has been distinguished in his native province as well as in other parliaments.

I do not propose to follow very closely the somewhat rambling remarks of my hon. friend from Melville (Mr. Motherwell). I have the highest personal regard for the hon. member, and during his years in this house we have listened to him on different occasions with great interest. It is somewhat remarkable, however, that his speeches are becoming more conspicuous for the entertainment they provide than for the logic they contain.

fMr. Motherwell.]

In this country to-day we have very great difficulties confronting the present administration; the great economic crisis that has prevailed throughout the world has brought about unprecedented problems within Canada which have made the task of government more difficult than it has been at any time since confederation. It is not my purpose to contrast at any length the policies of the present administration, faced with these difficulties, with the lack of policy shown by the former administration under much more favourable circumstances. However, I venture to state that during those days that have been properly referred to as an era of prosperity, Providence smiled on Canada and with bountiful harvests and favourable world conditions the producers of this dominion secured rich returns. But I think it must be admitted that this temporary prosperity was something over which the previous government had no control and for which they should claim very little credit.

One recalls that immediately after the last election it was found necessary to call a special, emergency session of parliament to provide $20,000,000 for the relief of unemployment, which was supplemented by a similar amount provided by the municipalities and provinces. Something over $7,000,000 a week was spent in order to care for the thousands who were unemployed at that time.

We have heard a great deal with reference to low commodity prices, Mr. Speaker, and it is rather interesting to note that agricultural commodity prices have dropped by over fifty per cent. However, it is equally significant to observe that these commodity prices dropped almost forty per cent, between December, .1929, and the beginning of 1931, during the greater part of which period the party sitting to your left had charge of the government of this country. Therefore I douibt if hon. gentlemen opposite can find much glory or comfort in these difficulties though which we are passing, when we remember that they failed even to recogniz', the problem before going to the country, and failed to offer any reasonable solution for the unemployment problem or for the prevention of the unfavourable trade balance then in sight.

Many problems are confronting the government of the day, Mr. Speaker, but I believe they have been adequately met. Our financial obligations have been met one hundred per cent, and through the enthusiastic cooperation of the people of Canada and the skilful management of the former Minister of Finance, the present Prime Minister, our financial integrity has been maintained in spite of the trying

The Budget-Mr. Rowe

conditions which have existed during the last couple of years. There are many other problems facing this government at the present time. There is, for example, the problem of transportation, which has been well described as the second national debt of Canada, and there is the problem of balancing revenues and expenditures. The problem of balancing our trade has been met in a way that promises a substantial tirade balance in our favour in 1932. Transportation is one of the major problems before the government at the present time, as every citizen must admit; and encouragement has been given the management by the present government with a view to curtailing apparent extravagance in the conduct of the road. As a result of the encouragement which has been given to industrial activities in Canada by the "Canada first" policy of the government, we find that 142 new industries have been established in the dominion, and when normal times return -and I believe they will return sooner in Canada than in any other country-a good deal of assistance will be afforded our unemployed.

I know there are thousands to-day in this dominion who are praying for a return of the prosperity they enjoyed in stock market days, that era of plenty; but there are many more who are becoming more and more fearful for their very existence. We are no doubt passing through a serious economic crisis. There are those to your left, Mr. Speaker, who charge this government, and particularly the Prime Minister, with having made promises. Well, we know that the leader of the opposition has broken promises in the past, but there is one leader whose promises no one has doubted in these times of trouble. We have from him the assurance that he that tilleth the land shall have plenty of bread, and the unemployed in this dominion must in future establish their homes and seek employment on the land rather than in highly industrialized factories. In this regard I would refer you to the development that has taken place in this country during the last ten years, in which time the hon. member for Melville, was what one might call the manager of our great enterprise in Canada, namely, agriculture. Agriculture, as he has said, employs directly and finds homes for approximately forty-six per cent of the people of Canada. It has been well said that possibly two-thirds of the rest of the population depend indirectly upon agriculture and its allied industries, or at any rate are indirectly affected thereby. The general progress of the dominion depends upon the success of agriculture. If that is true,

then one is reasonable in assuming that upon the soundness of Canadian agriculture depends the future prosperity of this country. It has often been said that agriculture in Canada is the producer of one great commodity; but may I point out that after all agriculture embraces a multitude of important industries in this country. Some of these branches of our agricultural enterprise are capable of much greater expansion than others. Some are capable of vast expansion by means of improved machinery, while others can expand only by the employment of man power.

Before the war, in 1913, Canada produced five per cent of the world's wheat, and at that time she had ten per cent of the exportable surplus of the world. Since that time she has increased her production by 122 per cent, the major portion of that increase having taken place between 1920 and 1930. To-day she produces over ten per cent of the world's output and supplies over thirty-five per cent of the exportable surplus of the world-that is, exclusive of Russia. The Argentine, the United States and Australia, have had, of course, similar increases ranging anywhere from twenty-five to seventy per cent. Taking these facts into account, we find that the world's production in that ten-year period has increased by approximately twenty-five per cent, or 700,000,000 bushels in one year. It is not surprising, therefore, to find in 1930 double the world's exportable surplus on hand, or double the world's normal carry-over.

One would hesitate to hazard the opinion that this is an over-expansion, in view of the very nature of the product itself, because so much depends upon the weather conditions in the countries that grow wheat extensively. I do sav, however, that it makes uncertain the marketing of wheat independently of world depression, in view of the increased acreage, which has been about 30.000,000 acres since 1920. The consumption increase has been much less, and therefore only a failure of. crop in certain parts of the world ensures the safe marketing of wheat in the future. But I repeat that one would hesitate to say that we have had over-expansion. If we had an increased yield per acre of two bushels, next year there would be 600,000,000 bushels of extra surplus, or 100,000,000 bushels more than we have ever produced, and that fact must be taken into consideration.

Great encouragement has been given the production of wheat in this country. Special freight rates, for instance, with both railways, approximate $20,000,000 or $25,000,000 of advantage to grain growers in certain years. Then there are terminal facilities, seed grain

The Budget-Mr. Rowe

and so forth, all of which has considerably benefited the trade of Canada. I believe that in peak years it has approximated almost half a billion dollars, .representing new wealth in this dominion.

We have had, to some extent, an unbalanced development throughout this dominion. I am not attributing this all to the government that is no longer in power, for world conditions and the prices of wheat have in no small way effected that change. We find, again, that it is possible to produce more wheat in Canada with less labour than it has been at any other time in our history. It has been estimated, according to figures at Washington, that in the United States 20,000,050 acres of land have been released for the production of wheat as a result of the change from horse to mechanical power. The ground formerly used for the production of fodder, hay and oats, to feed the horses that were used for power purposes, is to-day, owing to the substitution of mechanical power for horse power, released for the production of wheat, and as I say, this represents 20,000,000 acres. On a smaller scale, the same change has been evident in Australia and in the Argentine. It has been estimated that the full time employment of one man can take care of from 1,000 bo 1,500 acres of wheat ground in Australia or the United States. I presume the same could be done in certain sections of western Canada if modern machinery were available. It is therefore reasonable to assume that 100,000 men could produce the total output of Canada's wheat at the present time.

I mention this to show what has taken place. Even in eastern Canada we have felt the trend of things in the west, for peak labour in western wheat production is no longer required. Not a single train left eastern Canada in 1929 for the wheat fields of the west, and I doubt whether one has left between that year and the present time. The combine and the tractor have played their part in this change. The rapid advance that mechanical science has made has also affected industrial as well as agricultural activity. So that it is not fair to compare the numbers employed to-day in any line of production with those employed five years ago. It is not uncommon to-day for a manufacturer to tell you that he can produce more at the present time with fifty men that he would have thought possible five years ago with one hundred. Machinery obviously has played its part in industry generally in Canada as elsewhere. But there is one field in which machinery cannot interfere with the labour man, one place where it

cannot rob him of his labour. I refer to mixed farming. Consider the districts that have been growing wheat for a number of years, having had to combat the stubborn sow thistle, tumbleweed, mustard, and so on, and you will realize that the rotation of crops is absolutely necessary. Every agriculturist in Canada realizes now that rotation of crops is becoming an increasing necessity. I know there are certain sections in this country which will be retained for many years to come for wheat production, but I know also that there are other sections where farmers are endeavouring to grow wheat which would be better adapted to mixed farming. I doubt if there is a farmer in this house who will deny that statement. Rotation of crops means that barley and other coarse grains which can be sown later in the spring allow for a longer cultivation of the ground in spring. Some fibre is given back to the soil by this method and I venture to say that if this step was taken we would have a larger live stock production and much of this grain would be consumed. I believe it is possible to consume in Canada over thirty or forty per cent of the present exportable grains such as barley and the lower grades of wheat. That is the surest and safest market, at least for the low grade wheat and the coarse grains which we are now finding difficult to dispose of in the markets of the world.

Wheat has not always been our main export. Even back in 1920 Canada exported $133,000,000 worth of live stock and dairy products, which was $16,000,000 more than the value of the wheat exported last year. I direct the attention of the house to the fact that despite these hard times the dairy industry produced last year $35,000,000 more than the value of the total wheat produced. I need only contrast these two phases of agriculture in order to impress upon the house the importance of the live stock industry, as was mentioned by the hon. member for Melville.

However, it is a rather peculiar coincidence that during the regime of his friends, from 1920 to 1930, we saw a lopsided development in agriculture. In 1920 we were in the export market and we sold to the United Kingdom 26 per cent of her requirements of bacon, while Denmark supplied less than 12 per cent. In 1930, ten years later, Canada sold 1| per cent of the requirements of the United Kingdom, while Denmark supplied 60 per cent. Sixty years ago Canada sold to the British market almost three times the amount of bacon she has been selling in recent years. This market should have been properly nursed and encouraged and at least maintained to a degree.

The Budget-Mr. Rowe

I appreciate the world conditions which have contributed to the change as well as the neglect of the former government. In 1910 we found that the production of thirty years previous had been increased by two or three times, and by 1920 this production had been increased again by five times. However, in 1930, instead of exporting to the United Kingdom twice as much as did Denmark, we exported less than 9,000,000 pounds while Denmark exported 600,000,000 pounds. It must be quite evident that a lopsided development has been carried on in this country, and I suggest that this market should have been retained for Canadian products.

Perhaps the house will pardon me for going into details but I think what I have to say is of national importance at this time. The live stock industry should be developed in order to solve to some degree our unemployment problem. This market in Great Britain which was properly our market, should have been retained. I have discussed this matter with leading manufacturers and pork packers, and I doubt if there is a farmer or packer in this house who will deny what I have to say. My information is that the processing of one hundred hogs into bacon will give employment to two men. It would require 2,560,000 hogs to supply the bacon for one half the sales in the United Kingdom which we have lost to Denmark, and this processing would give employment to 50,000 men.

The dairy industry is another factor to be considered in (this matter. I am not going to say that we should properly develop the export butter market; I know that has been said by hon. members opposite. I know that farmers of this house agree that the development of cheese would relieve the butter market in Canada and would automatically be of interest to the dairy industry. In 1904 we sold the United Kingdom 234,000,000 pounds of cheese, while last year we sold only approximately 85,000,000 pounds. In 1903 our sales of butter amounted to 34,000,000 pounds, and this market was maintained until 1925. I shall not go into the reasons why this market was not maintained and why we were finally forced to import over 50,000,000 pounds; we all know this story quite well and those who sit to your left, Mr. Speaker, must be tired of it. Had we retained our market overseas for the dairy products of this country, 400,000 more cows would be required in production to-day. As one who has sometimes milked a cow, I say -I leave it to the dairymen in this house to decide whether or not my statement is reasonable-that the feeding, stabling, housing and milking of eight cows and all that is

involved in the production of butter, cream and cheese so produced, would give employment to one man. The 400,000 additional dairy cows needed would give employment to 50,000 of those who are now waiting for government assistance.

If we had an assured market for the products of mixed farming, more people would be employed than the total number required to produce our wheat crop. I am in full accord with everything that has been done for the production of wheat-every year, one-third of the land cultivated on my own farm has been in fall wheat-but we need a more diversified production in agriculture. This method of agriculture offers an elementary existence to the people who are now hungry. It is the only industry which offers any apparent expansion; it is the only place to which a man can take his family and be sure that he will obtain a living. He can kill a pig or a chicken and will be able to obtain a living, at least until the sheriff drives him off his land.

I know it has been said that once we enter the export market, prices will be reduced and hardship caused to those on the farm. I admit that since we went on the export market with certain lines of our products prices have dipped enormously, there is no doubt about that. It has been stated in this house that the only way to solve unemployment is to have fewer people, the only way to increase prices, is to produce less. Canada has a staggering debt and a tremendous transportation problem, and these matters will always remain difficult of solution if those theories are carried into effect. My own personal opinion is that some assistance should be given to mixed farming. If such a plan were evolved it would encourage this type of agriculture. Take the production of bacon, for instance. Our exports last year amounted to 11,000,000 pounds; if this amount was increased even to 30.000,000 pounds, it would cost the treasury of this dominion only $600,000 to establish an export bonus of 2 cents per pound. If our exports of live beef were bonused by two cents a pound, allowing an increase of 25 per cent, it would cost $700,000. An amount of $1,000,000 spent on cheese would allow for a similar increase on that and an expenditure of $60,000 would allow for a bonus of three cents a dozen on eggs. This would mean you could establish a bonus system which would encourage the sale of our exportable surpluses at satisfactory prices, automatically stimulate the market at home and return to the mixed farmers throughout the dominion approximately $30,000,000 by the increase in prices of farm products. I believe it should

The Budget-Mr. Rowe

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LIB

Peter John Veniot

Liberal

Hon. P. J. VENIOT (Gloucester):

Mr. Speaker, I listened with rapt attention to the speech which has just been delivered by the hon. member for Dufferin-Simcoe (Mr. Rowe). I was especially interested in his remarks touching the price of farm products, and in his admission that we were bound on an exportable basis to have low prices for farm products, especially for butter. I was just wondering whether this was the same gentleman who visited the province of Quebec last summer and some parts of the maritime provinces two years ago, encouraging our farmers to pass resolutions condemning the Liberal government for the very low prices prevailing at that time for farm products, and laying stress especially upon the price of butter, which was then selling at 35 cents a pound and is now selling somewhere around 18 and 20 cents a pound. I wonder if the hon. gentleman who has just resumed his seat would dare go into the eastern townships of the province of Quebec to-day with the story he is telling now. I wonder if he would go down to Prince Edward Island, which he visited, and to Nova Scotia, and induce the farmers to listen to

The Budget-Mr. Veniot

his plea. I wonder if he would say to them now: In order to get a reasonable price for your butter I appeal to the government in power to-day to bonus you. My hon. friend is in favour of the bonus system to-day. Why? Because the system adopted by the party which he supports has not brought about results that he anticipated. Consistency is a jewel; there is no question about that, but I fail to see many jewels on the other side of the house. They certainly do not shine if there are any.

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?

An hon. MEMBER:

I see an emerald.

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LIB

Peter John Veniot

Liberal

Mr. VENIOT:

My hon. friend is thinking of the emerald isle.

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LIB

Paul Mercier

Liberal

Mr. MERCIER (St. Henri):

He means a dandelion.

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

Peter John Veniot

Liberal

Mr. VENIOT:

I wish to refer in passing to the speech delivered last night in this house by an hon. gentleman who dealt with the industrial situation in this dominion. He set forth the argument that because of an increase in industrial establishments in Canada under this government, unemployment had to some extent decreased. But the hon. gentleman forgot to tell the house how many factories and industries in this country have closed their doors since the present government came into power. He said that he made a tour of investigation to satisfy himself by so and so and so and so. I wonder if he toured the maritime provinces and went into the city of St. John, where in the last ten months some three industries have closed, throwing out of employment over twelve hundred men. If my hon. friend had wanted to be honest in his argument he would have also shown us the other side of the medal. He would have shown how many industries have dwindled and disappeared since this government came into power, as well as how many have been reported as being established in the dominion.

Before I undertake, Mr. Speaker, to give my reasons for opposing the method adopted by the present government to balance their budget, I wish to pay my compliments to the Minister of Trade and Commerce (Mr. Stevens). Last evening he made a speech in this house, and it was one of the most laboured attempts to defend the government to which I have ever listened, or which it has ever fallen to his lot to deliver. We all appreciate the ability of the Minister of Trade and Commerce, and when I saw that he had been chosen to reply to the financial critic of the opposition I certainly expected something sound. I expected that he would be able to shoot holes through the argument of the

opposition critic, but he failed, and failed utterly to do so. What did we find him doing? We found him rather attempting to attack and also wishing to have sympathy from this side of the house. His first utterance was this: "We are here to face

courageously the economic problems which confront the country, and so far the government had received very little assistance in the form of constructive suggestions from the opposition." Let me ask the hon. gentleman, Mr. Speaker, what use would it be for the opposition to offer constructive suggestions to our friends opposite? What have they done to prevent us from doing that which they blame us now for not doing? They have taken out of the hands of parliament the , very powers under which we could sit here and offer and discuss constructive suggestions. They have taken the power, which we on this side of the house have strongly opposed, to legislate, not as in the past, aboveboard and before parliament, but in the secrecy of council, and there to adopt and put into force policies without reference to this parliament. We on this side of the house at the present time cannot find entry to the executive council; therefore we cannot offer any constructive suggestions in that way. But notwithstanding -that, let me attempt to prove that the Minister of Trade and Commerce did not confine himself to the facts when he stated that the opposition offered no constructive suggestions. What is the record? Let us go back to the record of the Liberal party since we have been sitting to your left, Mr. Speaker. At the special session of September, 1930, the opposition strongly advised the government that the sky-high tariffs they were proposing to introduce would not remedy unemployment. We pointed that out to them in the strongest parliamentary language. To-day I will not say it is a matter of satisfaction to us to know that we were right; no, because it should not be a matter of satisfaction to think the government have acted in such a way as to render the situation worse to-day than it was when they took office. But, sir, we can point to our friends opposite and say: On a certain date we suggested to you that the methods you were proposing to this house to meet the unemployment situation would not operate successfully. Our honoured leader suggested that a non-partisan commission ibe appointed with power to administer whatever relief the government was prepared to give to the unemployed, either in cooperation with the provincial government and the municipalities or alone. The government did not accept our view. But what do we

The Budget-Mr. Veniot

find to-day? We find those very gentlemen to whom we again appealed in the session of 1931 to adopt a different and a better means to meet the situation, and to whom we gave the benefit of our views on that occasion, are themselves so convinced that their methods were too expensive and did not bring about the results that were anticipated that to-day they have called a conference of the provinces-the very advice which was given to them by our honoured leader in 1931, and which they then flouted on the floor o.f this house. We find they are in conference now with the provincial premiers, and if we are to believe the reports in the press we must come to the conclusion that our hon. friends opposite are about to abandon their unemployment policy of the past and are groping in the dark for a new policy. And yet the Minister of Trade and Commerce says that we have offered no constructive suggestions. If time permitted I could give several other constructive suggestions offered by the opposition to our friends opposite, but not listened to and certainly not adopted by them.

In reading the speech of the Minister of Trade and Commerce I have discovered what I consider to be a gem, if I may use that term. I am going to quote it. Referring to the hon. member for Shellburne-Yar,mouth (Mr. Ralston), he said:

His was a subtle, bitter, and I might say petty criticism of the government's position and difficulties. Not one syllable to indicate the difficulties which we are facing, and not one word on the causes of our troubles.

Those words fell from the lips of the hon. Minister of Trade and Commerce last night. Knowing him as I do, having listened to him for six years in this house delivering speeches in criticism of the Liberal government, I was somewhat surprised that he should complain of any bitterness in the criticism of others, because no public man in Canada ever used such a bitter tongue as the hon. minister used When, seated to your left, sir, he rose to criticize the Liberal policies of that day. But now that he is receiving in return an application of the very medicine that he applied to the Liberal government, we find him cringing under the lash. I thought the hon. gentleman was more of a sportsman, I thought that he who has been held up as bold and courageous in defence of the government could take a little criticism without pleading that the opposition was not treating him and his party right. Thin-skinned indeed must be the hon. minister when he cannot listen to criticism which compared with his in the past is but eulogy. And yet the hon. gentleman has the effrontery to tell us that our criticism

is bitter! I find that the hon. gentleman also gave a definition of a pessimist. I am not going to quote it, but if that is a true definition of a pessimist, then, Mr. Speaker, we are in the presence of a wonderful artist who can paint his own portrait without having to use a mirror.

Now I come to the budget. My experience in the administration of public affairs has convinced me that, if at all possible, every government should balance its budget. It is necessary to do so to maintain the credit of our country both at home and abroad, but when we have to use the means adopted by the government to balance its budget, the imposition of very onerous taxation, taxation that weighs especially upon the shoulders of the masses, when in order to balance the budget we have to introduce taxation that will take away the purchasing power of our population, then I think it would be better for this country if there had been no balancing of the budget. Because the moment you burden the people with too heavy taxation, the moment you place them in the position where their purchasing power is gradually but surely disappearing, that moment you retard the development of the internal industries of the country.

In that respect let me ask this question: How does excessive taxation affect us at home? I cannot better express my conviction on this point than by giving the following quotation:

Where trade is hampered or restricted by excessive taxation it follows that the measure of profit which may accrue to those engaged in it is correspondingly less, and that the cost of living to the individual becomes correspondingly more.

I agree with every word of that quotation, while I do not always agree with its author. The words I have just quoted were uttered by the present Prime Minister in 1927, and if that statement was true then certainly it is even truer now, but the Minister of Finance, in delivering the budget address, condemned the very policy laid down by his present leader just a few years ago. The right hon. gentleman went further in that speech; he added that increased purchasing power means increased trade, and surely if that is so the reverse is so also, and diminished purchasing power must mean a diminution in the trade of the country.

Starting with that principle, Mr. Speaker, I am surprised that the Minister of Finance could not find some way to balance his budget without imposing these heavy taxes. I am not the only one who differs with the minister; there are those in his own party who

The Budget-Mr. Veniot

The other day I heard Sir Josiah Stamp speak at the luncheon given by the Prime Minister. After hearing his magnificent speech, I was proud indeed that I had been invited. In dealing with discouragement and encouragement, Sir Josiah told of a visit which he had paid to the United States and said that the one thing he noticed was that public men seemed to be losing faith in their institutions. Had Sir Josiah Stamp been able to listen to the Minister of Finance deliver his budget address, I feel sure he would have applied those same words when speaking of the Canadian government. When we criticize we are told by hon. friends opposite that we are preaching blue ruin and pessimism, but if ever there was evidence of blue ruin and pessimistic feelings, it is to be found in the present budget and in the methods adopted by the Minister of Finance to try to balance the finances of this country.

I have given the reasons why I believe the budget could have been fully or at least nearly balanced without the imposition of this heavy taxation. In view of the figures given, have I not the right to ask: Where is that increased home market promised by the Prime Minister and which was to stimulate to such a great degree the internal business of Canada? Where are the new foreign markets into which he was going to blast a way for Canadian products of all kinds, and which together with the increased home market was to put an end to unemployment? Where is that great market for our agricultural products, to create which he was going to make the increased tariff fight for the farmer? The Prime Minister's increased tariff has failed to fight for the farmer and now the government comes along with increased internal taxation, perhaps in the hope that it will do some fighting for the farmer. I am afraid the only result of the fight will be to put the farmer out of business and keep him out of business just as long as this government is in power.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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

Robert Gardiner

United Farmers of Alberta

Mr. ROBERT GARDINER (Acadia):

Mr. Speaker, before I begin to discuss some of the proposals upon which I desire to say a few words to-night, permit me to take this opportunity to congratulate the Minister of Finance (Mr. Rhodes) upon his splendid presentation of the subject matter which he laid before the house last week. Realizing that he has been occupying his present position for

only a short time, and taking into consideration also the immensity of the task under present conditions, I think it is quite proper at this stage to congratulate him upon his excellent presentation. It does not follow, however, that I agree with everything in the budget proposals, but I shall come to that later. The subject matter really before the house is the amendment moved by the hon. member for Shelburne-Yarmouth (Mr. Ralston), with which I propose to deal later in my address, because it appears to me that a statement from this corner of the house should be made concerning it.

The subject matter of the budget is, as was stated by the Minister of Finance, discussed under five headings. As a matter of convenience not only to me but to the house generally. I shall cite them:

1. A brief reference to events which have so profoundlly disturbed international finance and the consequent reactions on our own situation.

2. The financial operations and accounts of the dominion for the fiscal year ended March 31, and in this regard it will be understood that the figures are not final but represent the closest estimates that can be made.

3. Canada's trade and commerce.

4. The estimated revenue and expenditure for the fiscal year 1932-33.

5. Ways and means for securing the revenues required to meet the estimated expenditures.

Subdivisions 2, 3 and 4 do not require much consideration from me to-night. Number 5 is very important, because it provides for ways and means by which the revenues are to be raised, particularly as it takes into account the deficit during the last fiscal year. But I should like for a few moments to discuss subdivision number 1, which deals with the breakdown of international finance and the consequent result upon conditions as we have them in Canada.

There is no doubt that international finance plays such an important part in the welfare of nations that we cannot avoid taking it into consideration. It would appear, however, that at present no country is taking any measurable steps to control international finance in order that we may eventually emerge from the conditions from which we are now suffering. Unfortunately for the Minister of Finance, in dealing with that particular phase of our economic problems, he did not even intimate to the house or to the country that the government was looking into this matter very seriously to see if it be possible for the government or parliament to take action having for its purpose the clearing up of the international exchange situation so that- trade between different countries may flow more freely than it is now doing. If the govern-

The Budget-Mr. Gardiner

ment is not paying heed to this important question, it is evading a serious duty, one which the government of every civilized country should undertake if we are to try to prop up the present economic system which is on the verge of total collapse. As I stated before, the government has given no intimation whether it is considering this matter, let alone whether it proposes to take action for the purpose of dealing with it. If the government is not doing this, it is evading a very important duty and responsibility.

Without doubt we are to-day in the midst of such a depression as we have never before experienced. It has been prolonged, to such an extent, indeed, that many people now feel there is no hope of recovery. I am, however, optimistic about the situation-not so optimistic that we shall be able to prop up this system so that it will function more efficiently than it is doing at present, but as regards the welfare of the masses of the people I can see a decidedly optimistic outlook when one considers the possibilities within our grasp. On many occasions we have discussed both in and out of the house our valuable heritage in natural resources, a matter which, so far as Canada is concerned, is one for congratulation. Very few countries on the face of the glolbe .have to-day such a wonderful and varied heritage in natural resources as we have in Canada. It is true we lack some that we need, but on the whole we have a tremendous number which can be used to provide all our staple necessaries of life. That being so, the people of Canada are in a very happy position if only we have the intelligence to make proper use of those natural resources. Furthermore, we have in this country, in proportion to population, an industrial plant second to none in the world. It is true in other countries there may be industrial plants that are larger, but for the immediate needs of the Canadian people we have more than sufficient of plant and equipment to utilize our natural resources so that every man, woman and child in Canada may be made .comfortable by being provided with all necessary food, clothing and shelter. Given these two important factors, why is it that to-day hundreds of thousands of our people are on the verge of starvation? Why is it that we have to provide sustenance through governmental and charitable agencies in order to keep people from starving? It would appear from these facts that our system has failed adequately to provide the people with what they require, and that we must give some consideration to that problem if we are to avoid disaster. Before I have finished I hope to be able to place some proposals before the house which may be of value in this direction.

Another matter that is of grave importance is the debt situation. We probably hear more discussion to-day about external debts than internal debts, but in my judgment our internal debts are just as important as are our externa! debts, and unfortunately these internal debts are growing and no doubt will continue to grow just so long as we work, at least in part, under the present economic system. The interest upon the national debt, for instance, which was created because of the war, has amounted in the period between the close of the war and the present time to practically the total principal of the original debt, and we have not reduced that debt by one iota. There is a problem that should engage the attention not only of members of this house but of the people of Canada, and more particularly that class of people who are interested in social matters, in order that we may devise ways and means not only to pay the interest charges on this debt but to reduce the debt from year to year so that it will eventually be wiped out. When it is remembered that a sum of money invested at five per cent and the interest reinvested every six months will double itself in fourteen years, it will readily be agreed that the statement I made a few moments ago with regard to our national debt is approximately correct. I may be a little out, but not very much; that is to say, we have already paid in interest charges on the war debt a sum almost sufficient to pay off the war debt itself provided we had not had those interest charges to pay. It would therefore appear to me that there are many fundamental defects in our economic system.

I was glad indeed to listen to the address which my good friend the Minister of Trade and Commerce (Mr. Stevens) made to the house last night. May I congratulate him on the manner in which he discussed some of the questions he brought up, and more particularly that of price levels and that of interest rates? If I may be permitted I should like to quote just one sentence from his speech of last night and then to make some comments upon it. At page 1910 of Hansard of yesterday the hon. Minister of Trade and Commerce said, speaking of interest charges:

No agriculturist, no industrialist and no merchant can afford to pay ten per cent interest for the money he uses in his business; it simply cannot he done; normal business will not permit of that rate of interest.

You will notice that the Minister of Trade and Commerce stated that ten per cent was too high a rate of interest for agriculturists and business men to pay. That is quite true, but I wondered, when 1 heard the Minister of Trade and Commerce make that state-

The Budget-Mr. Gardiner

ment, why he placed at ten per cent the rate which it was too high for agriculturists and business men to pay. Why did he not, for instance, say five per cent?-because under our present financial system, in my judgment it is almost as hard-I will go further and say it is just as impossible-for any agriculturist or business man to pay five per cent for money as it is to pay ten per cent and hope to keep away from the creation of debt. That we probably can never do. I appreciate the fact that the Minister of Trade and Commerce has given this matter consideration, and I think it would be in the interests of Canada as a whole if both members of the house and the people outside gave this question more study than we have been giving it in the past. My judgment is that any interest rate which is higher than the actual cost of the service can never be paid in full. It creates a debt which can never be paid under our present financial and economic system. If we were to take the time to analyze the situation I believe we would find that that statement is absolutely correct. Under our present financial system when our institutions lend money, particularly our banks and especially those banking institutions which are responsible in the first instance, for permitting money to go into circulation, if they charge a rate of interest that is above the cost of the service, I submit that we are creating a debt which can never be paid off; in order to meet those obligations in the past we have simply had to borrow more money to pay the interest which could not otherwise be met. Such is the nature of our present financial system. In the cost of the service in so far as our present banking system is concerned I include office costs, salaries, rentals, taxes, and even dividends to shareholders. I submit that when the interest rate to be charged to the customers of our banking institutions goes above that cost, we create a debt which can never be repaid under our present financial system. That is the main reason why our debts are growing and will continue to grow and accumulate just as long as we retain the particular financial system that we have at the present time.

Hon. members may ask, what are you going to do about it? My judgment is that there is only one remedy for that condition, and when we do remedy it we shall begin to make an inroad into some of the other conditions which arise out of it but do not seem to be closely connected with it. The only system I can see that would be effective would be the nationalization of credit and currency to be used in the interests of the Canadian people, with the Canadian people having the

use of that credit and currency on a basis of cost-because it would make no difference, even if we did nationalize the credit and currency of this country and made it a government monopoly, if the interest rate was higher than the cost of the service. We would then be in exactly the same position as we are in now, with the exception that the government would be making a profit and the people would become indebted to the government instead of the banking institutions So that even under a policy of nationalization of the currency and credit of this country we ought still to stick to the proposal that currency and credit must come into circulation at all times on a cost basis.

Last night my hon. friend the Minister of Trade and Commerce gave us some very illuminating examples with regard to price levels. He was quite right in stating that the currency and credit system of this country was at fault in so far as our present price levels are concerned. But what can we expect otherwise under our present financial system? The people who run our banking and financial institutions to-day are not considering first of all the welfare of the Canadian people; they are considering the profit which they can make out of their business. And we cannot blame them. Therefore, if my good friend the Minister of Trade and Com- ' merce has any idea at all of being able to control price levels by virtue of the volume of currency and credit in circulation in relation to the volume of goods and services in circulation, then I am afraid he will be very much disappointed at the outcome of such a policy unless nationalization of our banking and financial system takes place before that idea is tried out. Why should the people of this country be called upon to pay interest charges above the cost of the service for the very necessary medium of exchange that is required to distribute goods and services? One would naturally think that with the tremendous productive system we have at the present time, and the tremendous demand for the goods of this productive system, one of the things essential both to producer and to consumer is a medium of currency which will flow equitably and ensure that these goods are properly distributed. And when we put our finger on the profit which those make who are engaged in permitting money and credit to come into circulation, we put our finger on what is the most important problem of all.

I hope my good friend the Minister of Trade and Commerce will follow up his studies still further, and that next session he will have seen the light just the same as we in this corner of the house believe we see it, and

The Budget-Mr. Gardiner

that we shall have his assistance in advocating and demanding the nationalization of our banking and currency system.

Other things besides the control of currency through nationalization are essential to make effective our present productive system. A year ago my good friend and colleague from Wetaskiwin (Mr. Irvine) placed before this house a plea for national planning. I submit that one of the most important things after nationalization of the currency of the country is national planning-planning with the idea in our minds of providing the Canadian people with all the necessary food, clothing and shelter which they require from the natural resources of the country by our present machinery of production. Some system then, of national planning is essential, and the sooner we start on the job the better in my judgment, because if we do not do so, and if this depression continues, there is no telling where humanity will land by reason of our inability to plan nationally to take care of the interests of our people. Therefore I suggest again that it would be well for the government to take into consideration very seriously the creation of an economic research council such as was advocated by my hon. friend from Red Deer (Mr. Speak-man) in the resolution which he placed before the house this session, and which was halfheartedly accepted by the Minister of Trade and Commerce on behalf of the government. Such a research council to-day is absolutely essential, a council composed of the best brains of the different elements of this country, men who will set themselves to the task of planning nationally, not in the interests of a few people, but in the interests of the whole Canadian nation in order that eventually we may get away from conditions such as we have at the present time.

I might take a few minutes, Mr. Chairman, to call the attention of hon. members to what might might be termed the development of the capitalistic system. Unfortunately many people in this and other countries think that the capitalistic system has been in existence for many centuries. As a matter of fact it is the shortest lived of any system we have ever had on the face of this globe as far as any records show. It may be said that the capitalistic system had its birth in the discovery of steam and its application to driving the machinery of production. With that discovery the present capitalistic system became possible. Let me say before I proceed further, in case hon. members may misconstrue my meaning, that in my judgment the present capitalistic system under which we are working has done more for the human race than all

other former systems combined of which we have any record. The capitalistic system is certainly very efficient so far as production is concerned, but when we come to distribution it falls down, and falls down very badly.

Tracing briefly the history of the development of the capitalistic system, we find that with the application of steam to driving the machinery of production the inventive genius of the human race reached out to produce better and better machinery, so that this machinery to-day is capable of producing more and more than was possible with the machinery of former days, and with less labour. And how well has the human race achieved its objective! To-day we have a machinery of production so productive in comparison to the labour power required that its possibilities almost overwhelm the understanding of the average person. Undoubtedly so far as our present system is concerned there is no question about production. But I want for a minute or two to deal with one phase of the system which in my judgment the Minister of Finance should have given some consideration when he was proposing to this house the ways and means by which the necessary revenues of the public service might be provided. If you study very carefully the development of our present system you will find that in order to provide for the machinery of production the people have to take a certain portion of their consumable goods and turn them into permanent plant and equipment. In the past this has been done by what we call savings. Savings may be composed of profits or of actual savings from salaries or wages, as the case may be. These savings, however, represent purchasing power which the owners do not require to provide them with the necessaries of life. Therefore they have looked around and no doubt found that they could invest their savings to provide new plant and equipment which would be more productive than the plant and equipment used heretofore. That is the method by which we acquire the plant and equipment that we have in this and other countries the world over.

That being so, sir, let us look at the world situation as far as plant and equipment are concerned. Great Britain was the first country to develop the machinery of production to any extent, and very soon those who were making that machinery found they could not sell it all in Great Britain, so they sent it to other countries and exchanged it for whatever those countries could produce, or for money as the case might be. Eventually other countries became industrialized, so that to-day every country in the world, with the exception of three, is highly industrialized.

The Budget-Mr. Gardiner

That is a condition which this country never had to face before. So we have a new problem facing us. Within the borders of each country, with the exception of three, there is enough plant and equipment to provide for the needs of the people living in that country. What then are we to do with the surpluses produced in this and other countries, when other countries are capable of producing everything they require? It is true that in Canada we do not produce rubber or cotton, but we produce more than enough wheat and other commodities which can be exchanged for those goods. Even allowing for the exchange of these surpluses we still have the situation of the world having become industrialized, a condition with which the human race has never had to cope. This is brought to our attention more forcibly than ever because of the depression.

What is the situation in this country? We have noticed recently, that many loans have been floated by the Dominion government, by the provinces and by different municipalities. It is true that they have paid enormous rates of interest on those loans but, sir, if you look up the bank returns you will find that to-day there is more money on deposit in our Canadian banks than ever before in the history of this country. Why is that? It is because the people who in the past made profits or who saved from their salaries or wages cannot under present conditions find profitable investments for those savings. Generally speaking, there are only two sources of investment, either bonds of governments and municipalities, or new plant and equipment in order to produce more goods. Since we have more than ample plant and equipment in this country to-day, and since that condition obtains also in almost every other country, we are faced with the problem of what we are to do with these savings of the people.

It must be remembered also, Mr. Speaker, that these savings represent purchasing power to supply which there are goods already in existence, but just as long as those savings remain in the banks those goods cannot move. Therefore our industrial plants and equipment are slowed down, creating more and more unemployment and making a condition with which we are finding it increasingly difficult to deal. I submit that the Minister of Finance might have taxed those savings into circulation. If he could have devised some method of doing that, probably the depression from which we are now suffering would begin to lift a little, but just as long as those savings remain in our banking institutions,

and as long as they are not used for the purpose of providing new plant and equipment in the development of what we might term our capitalist system, I venture to predict that there will be no improvement in the depression now existing. It cannot be done. I have stated on more than one occasion, although not in this house, that if I were Minister of Finance just for long enough to bring in the budget I would take the attitude that under present conditions we are justified in taxing those enormous savings into circulation. I would even go so far as to say that in these days of depression we would permit the people with large incomes to enjoy an income of say $20,000 or $25,000 a year, but that we would take 99 per cent of all above that for the use of the state in order to improve conditions in this country. By virtue of such action the government would put those savings into circulation, through public works and services which are needed in every corner of this country, if it could not be done in any other way. I submit that the Minister of Finance missed a golden opportunity to do a real service for Canada, but I appreciate the fact that, having occupied his present position for only a short time, probably this was a little further than he dared go.

My time is nearly up, Mr. Speaker, and we still have to deal with the matter really before the house, that is, the amendment moved by the hon. member for Shelburne-Yarmouth. I have read and studied this amendment with a great deal of care, and there is at least one paragraph I can support, but the other portions of the amendment I consider very much exaggerated. Consider the last paragraph, for instance:

That a reversal of the present fiscal policy in relation to customs tariffs and an immediate resumption of parliamentary direction and control with respect thereto are essential to a revival of trade, and improvement in business, and to the ultimate return of prosperity in Canada.

I assume the hon. member, speaking for the party he represents, suggests in that paragraph that we should go back to the fiscal policy in effect at the time of the last general election. May I direct attention to the fact that this depression started before the previous government went out of office, so the policies which they advocate in this paragraph appear to me very weak so far as their ability to meet the present depression is concerned. If these policies, in which no doubt they firmly believe, are as effective as they are claimed to be, why were they not effective in 1930? At tfiat time they were not able to stop this

The Budget-Mr. Sullivan

depression, and we do know that even before July 28, 1930, the day of the election, we had a tremendous unemployment problem facing us. I do not know whether or not I am to understand from this amendment that this is the only policy suggested by the Liberal party to meet the present condition of depression; if it is, then I say it is totally inadequate to meet the situation. So, while as I stated before there are one or two statements contained in the amendment with which I quite agree, I think the policies suggested by my hon, friends are totally inadequate.

Representing an agricultural constituency, Mr. Speaker, let me say that I will always support lower duties on goods coming into this country. The primary producers cannot benefit from tariffs; that has been clearly demonstrated in the last two years, and we have only to consider some agricultural commodities to realize the truth of that statement. Furthermore we must always remember that the primary producers are the ones who create the new wealth which Canada enjoys each year. Under those circumstances, therefore, I will always vote for a lower tariff in order to reduce the production costs of the primary producers of this country. To that extent I will go, and I shall always be in that position of being able to support such a policy. But after all is said and done, I maintain that even that is not sufficient to overcome the depression which we are passing through at the present time. Something more drastic, something more fundamental is required than is contained in the amendment moved on behalf of the Liberal party in this house. Being unable, then, to accept the amendment, I am going to move a subamendment. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Woods-worth) :

That all the words after the word "that" in the said proposed amendment be deleted, and the following substituted therefor:

Whereas, in Canada there exists an ample supply of natural resources to provide for all primary needs, and

Whereas, we have developed an efficient industrial machine capable of producing more than sufficient of the requirements of our people, and

Whereas, notwithstanding this our external and internal debts are increasing enormously- large numbers of our citizens are in dire need and exist through governmental and charitable relief, and a large proportion are faced with declining purchasing power involving a lowered standard of living, and

Whereas, in our opinion these conditions are attributable to fundamental defects in the present economic system, and

Whereas, it is therefore necessary that parliament, the agency with the widest legislative 41761-123

powers, should take the initiative in the task of reconstructing national production and consumption with a view to the widest possible use of commodities on a basis of human needs, and

Whereas, the control of finance is a basic element in such reconstruction, affecting as it does industrial plant establishment and development, the distribution of goods and the price level of goods and services.

Therefore be it resolved, that in the opinion of this house, as a first step towards general economic reconstruction, our financial system should be nationalized, and provision be made to issue immediately sufficient money to bring the value of the dollar as speedily as possible to that point at which the major portion of our debts were incurred during the war; stabilize the dollar at this point internally and thereafter manage credit and currency issue to secure and maintain a stable price level within Canada.

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

John Alexander Sullivan

Conservative (1867-1942)

Mr. J. A. SULLIVAN (St. Ann):

This is my first address in this house-

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

Some hon. MEMBERS:

Hear, hear.

Topic:   THE BUDGET
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CON

John Alexander Sullivan

Conservative (1867-1942)

Mr. SULLIVAN:

-and I am certainly

very much impressed by the applause I am getting from the other side.

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

Paul Mercier

Liberal

Mr. MERCIER (St. Henri):

Your policy

is wrong but you are a good fellow.

Topic:   THE BUDGET
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CON

John Alexander Sullivan

Conservative (1867-1942)

Mr. SULLIVAN:

After listening to masters of rhetoric and dialectic I was reluctant to address the House of Commons, but this wonderful reception is certainly heartening. It brings to my mind a comment I read a few days ago by a French author upon another house of representatives of the people. Describing the play of passions and prejudices there, he ends by saying: "Car ohaque jour on se plonge dans un bain de haine"-"For each day they plunge into a pool of hatred." No doubt the author has drawn upon his imagination and perhaps upon his resentment for these words; but one thing is sure, and that is that the description certainly does not apply to the House of Commons of Canada. We may sometimes have had displays of passion, but on the whole we work together in perfect understanding and harmony for the happiness and prosperity of our fellow citizens.

May I be allowed to say a few words about the division which has honoured me with its vote? St. Ann is the oldest division on the island of Montreal. On its shores three centuries ago Chomedy Maisonneuve founded Ville Marie, and his monument, erected in the very centre of the division, speaks of his heroic deeds. St. Ann is the headquarters of finance, of railways and shipping in Canada, and we also boast three most important newspapers, the Montreal Star, La Presse and Le Canada. But we boast more particularly of the mutual understanding which exists between the different races that compose the

REVISED E/.1II0X

The Budget-Mr. Sullivan

division and which are an example to the rest of Canada of what we must do to make of this dominion a great nation.

We are now discussing the budget. The other day we heard the Minister of Finance (Mr. Rhodes) in this great pronouncement which the nation has accepted, and on Monday we had the pleasure of listening to another very distinguished member from the maritime provinces, my hon. friend from Shelburne-Yarmouth (Mr. Ralston). I have always had a great deal of admiration and esteem for the hon. gentleman, especially since he has chosen to have his office in St. Ann division. He proceeded to criticize the budget, and he did so by comparisons all along the line. He spoke of the conversion loan, credit for which the Minister of Finance had given the Prime Minister. The hon, member for Shelburne-Yarmouth would not give him any consideration. He said that the people of Canada made this conversion loan possible, that in fact 50,000 people in this country subscribed amounts of less than $1,000. Sir, this is the greatest compliment that could come from the people to the Prime Minister of Canada, because in subscribing as they did they expressed their loyalty to their country and their faith in the Prime Minister.

The hon. member was scandalized because we had voted $20,000,000 at the last session and because we were responsible for the spending of $140,000,000 to relieve the unemployed. During the last election, I said, as many others did, that we had spent hundreds of millions to save our allies. We said we were ready to spend millions to save our own kin, our own Canadians; that is what we did and that is what we are ready to continue doing.

In order to understand the feelings of the people it is necessary to have their opinions. I have before me clippings from different newspapers in Canada, and I find that La Presse, which cannot be considered to be a Conservative paper,-says of the budget "le budget est bien accueilli." La Patrie says that this is the best budget given to Canada in many years. Sir Charles Gordon, president of the Bank of Montreal, has stated that the government has taken the best step possible under the present circumstances. Mr. John T. Foster, president of the Montreal Trades and Labour Council, says that this is a commendable attempt to balance the budget and is pleased to note the new surtax on incomes. The Conservative party, which has always been accused of being a friend of the big interests and corporations, is commended by the president of the Trades and Labour Council. Mr. Beaudry Leman, president of the Banque

Canadienne Nationale, a very distinguished gentleman who is perhaps not a Conservative, says that this is a courageous budget. Mr. John Irwin, president of the McColl-Frontenac Company, says that it is a good budget and should serve its purpose.

I have stated before that my constituency is the headquarters of navigation in Canada. The Gibb report has been tabled by the Minister of Marine (Mr. Duranleau), and I presume this important document will be discussed at a later date. It is very important that the questions affecting the St. Lawrence river should be studied. In 1825, after the completion of the Lachine canal which completed the waterway 'between Montreal and the great lakes, the government in deciding to make a deep water seaport of Montreal arranged to dredge a channel in the St. Lawrence river 14 feet in depth by 150 feet in width from Montreal to the sea. In 1850 the citizens of Montreal took it upon themselves to make this channel more suitable to the shipping needs. The government refused to guarantee the principal or interest on the bonds and the commissioners had to borrow money from the public in order to provide the proper facilities for shipping. It was only in 1889, after many protests had been made, that the government decided to take the matter in hand and work was proceeded with until 1910. In that year the government decided to dredge the channel to a depth of 35 feet and increase the width to 400 feet and although the work has been proceeded with up to the present day, it is not as yet completed. The sum of $34,000,000 has been spent on this work, which includes $13,000,000 for equipment, and over $200,000,000 has been spent by the government on the different canals between the great lakes.

There is no question as to the advantage of having large vessels coming to Montreal. This city is the greatest transfer point between the central states, where there are fifty millions of population, and European countries. But Montreal has lost this trade and something should be done. I appeal to the Minister of Marine to complete the channel between Montreal and Quebec, because every improvement made for the benefit of the port of Montreal is an advantage not only to the city of Montreal but to the whole of Canada. Because of the non-completion of this channel the rates of insurance on vessels coming to Montreal are more than double those charged on vessels going to New York. Based on the number of boats and the tonnage handled, this additional insurance amounted last year to more than $3,000,000. This is a tremendous

The Budget-Mr. Sullivan

discrimination against the harbour of Montreal and prevents many boats from using the St. Lawrence river route.

The speaker who preceded me stated that the economic system of Canada must be wrong, but what about that of other countries? It has been stated repeatedly in this house that unemployment this last year was worse than it was two years ago. Unemployment may be bad in Canada, but there is no gainsaying the fact that the present government has done everything possible to relieve this condition. The hon. member for Shelburne-Yarmouth has proceeded by comparison. May I be allowed to proceed by the same method? What is the difference, as regards unemployment, between Canada and other countries in the last two years? I have under my hand some figures which came from the organ of the American Federation of Labour in the United States, and the figures for 1930 and 1931 are, in round numbers, as follows:

Country Year Number of unemployedGermany . . 1930 4,300,0001931 5,600,000Australia .. 1930 104,0001931 118,000Denmark .. 1930 74,0001931 91,000Great Britain.. .. .. 1930 1,853,0001931 2,262,000The mother country, where they have the dole, where they had a Labour government for so many years, and where they passed all possible labour legislation which may be invoked and which our good friends in the far corner opposite are trying to put on the

statute books of this country, had 1,853,000 unemployed in 1930, and just one year after, in spite of all this legislation, in spite of the socialist government in power at that time, the number of unemployed had increased to

2,262,000.

Number of

Country Year unemployedUnited States

1930 5,000,0001931 8,000,000A number almost equal to the population of Canada. Unemployment is a universal condition; it exists not only in Canada but in every other country in the world, and so long as we are willing to devote our best attention and energies to the solution of this

problem, no one can say we are not working in the best interests of Canada and of our unemployed.

In the course of the last election we were asked: Whom are you going to send to the

imperial conference? The people of Canada gave us their confidence and we sent the 41761-1231

present Prime Minister (Mr. Bennett). During the election campaign he had toured the country, saying "Canada first," not in the narrow sense that Canada would not trade with any other nation, but broadly. He went to the imperial conference and there, in the face of all England, he repeated those same courageous words " Canada first." Was he wrong when he was giving interpretation not only to his own sentiments and those of Canada, but to those of Australia, New Zealand, the Irish Free State and every other member of the British commonwealth of nations? Is it possible that only the opposition and Mr. Thomas were right, and that all the others were wrong? The Prime Minister said "Canada first." Mr. Thomas said "humbug." The Prime Minister returned to Canada and the leader of the opposition (Mr. Mackenzie King) said "humbug." Every member of the loyal opposition said "humbug." What has been the result? Was this a political slogan? No, it was an economic rallying cry. If it had been a political slogan, the people of England, who are essentially politicians, would not have accepted it; it would have fallen of itself. The result was that within one year there was a change of government in England. The further result is that the imperial conference will sit in Ottawa in the month of July and that this city will be the capital of the world for one month. The Prime Minister has been compared with many men. The dictator of Italy has been compared with him, and this was a great honour to Mussolini.

I do not wish to speak about the imperial conference, as it is a thing of the future, but I have great hopes of it. One sure thing is that the Prime Minister has been doing well for this country. I am sure the judgment of impartial history will be that the Prime Minister of Canada has deserved well of his country and of the British Empire and that he was one of the great men of the world.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 12, 1932